Pace at Trump Ocean Resort slows as investors weather downturn; developers remain upbeat despite zero construction.

Amid rumors of failure to secure financing and reports of having no construction permit from the city of Tijuana, Trump Ocean Resort in Baja California is continuing development of its $200 million-plus condo hotel resort, albeit at a slow pace.

The 444-unit "condotel" project in Punta Bandera is by Los-Angeles-based developer Irongate and The Trump Organization.

A condo-hotel, also known as a hotel-condo, is both a condominium and a hotel.

Due to a confidentiality agreement, Irongate would not disclose details of its financing arrangements.

"With that said, we have been working closely with one of the largest banks in the world, which is actively investing in Mexico development," said Carlos Palafox, director of development for Irongate.

Palafox also rebutted claims that the development did not have proper approvals or permits.

The first tower of Trump Ocean Resort was initially scheduled to be completed in late 2008, according to marketing material prepared at the time.

Palafox said he anticipates a completion date for tower one in the fall of 2010 with a second tower completion set for six to 12 months later.

No construction work is currently being done.

Credit Crunch

"The delay is a direct result of the credit crunch market conditions affecting lending institutions around the world," said Palafox. "We will proceed with the remainder of the construction once the financing of the construction loan of tower one is closed."

Several resort and residential real estate experts knowledgeable about the Baja region declined to speculate on the financing.

Thus far, developers have completed the excavation for the first tower and completed installation of the underground drainage for the construction site.

Foundations and the remainder of construction are planned to commence by year end, according to Irongate.

The project is Irongate's second project with Trump. The two are also developing the Trump International Hotel and Tower Waikiki Beach Walk in Honolulu.

The project in Hawaii sold out in its first day on the market. All 464 units sold for a total of $700 million, with individual units selling from the mid-$400,000's to more than $9 million for a three-bedroom penthouse.

The hype of the Trump name also set record sales records in Mexico. On the opening day more than $122 million in sales were recorded at Trump Ocean Resort. As of early August, more than 230 units sold for a total value of $150 million.

Sales prices at Trump Ocean Resort have not been lowered as they have across the Baja coastal market. Units in the two tower project range from 500 square feet to 2,200 square feet. Prices go from $300,000 to more than $1 million. Plans include a spa, fitness center, pool area, and restaurants.

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