$2 billion Mexico resort shelved over feared impacts

MEXICO CITY?? A Spanish developer said it would go back to the drawing board after Mexican President Felipe Calderon on Friday canceled a $2 billion tourist development in Baja California, bowing to opposition by environmentalists that said the plan was a threat to a nearby coral reef.

Planned by Hansa Urbana, the Cabo Cortes project was to have included lots for 15 hotels, golf courses, a large marina and an airstrip on the southeastern tip of Baja.

But the proposed project is only 6 miles from the Cabo Pulmo National Marine Park and its renowned coral reef system.

"The Cabo Cortes project will not be carried out," Calderon said, citing its uncertain environmental impact. He pledged to help investors develop a sustainable new project in its place.

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Hansa Urbana said it plans to submit a revised proposal that would strike a balance between economic development and "environmental sustainability." It did not provide a timetable.

Hansa's original proposal envisioned a 10,000-acre development covering a picturesque landscape of white sand beaches edged by mountains and desert about an hour's drive from the Los Cabos International Airport.

The Environment Ministry first approved the project in 2008 and Calderon's announcement caps years of legal battles over permits that were granted and then revoked due to environmental concerns.

The decision by Calderon, who hosts a summit of leaders from the Group of 20 economies in Los Cabos on Monday, was hailed by environmental groups that have campaigned against Cabo Cortes.

"We consider it a great achievement for all the citizens who voted for the conservation of Cabo Pulmo," said Alejandro Olivera of Greenpeace Mexico.

Calderon, a conservative, is in his final year as president and legally barred from seeking re-election. The fate of any new development likely will fall to his successor.

(c) Copyright Thomson Reuters 2012. Check for restrictions at: http://about.reuters.com/fulllegal.asp

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