Dragon Mart Project Suffers Setback after Local Authorities Deny Building Permit

By Navarro, Carlos | SourceMex Economic News & Analysis on Mexico, May 1, 2013 | Go to article overview

Dragon Mart Project Suffers Setback after Local Authorities Deny Building Permit


Navarro, Carlos, SourceMex Economic News & Analysis on Mexico


Promoters of the controversial Dragon Mart project in Mexico suffered a major setback when the municipality of Benito Juarez in Quintana Roo state denied a building permit for the megaproject. The decision, announced in late April, raises some doubts on whether the project would proceed, although promoters have taken a couple actions that might allow Dragon Mart Mexico to survive: they filed a lawsuit against Benito Juarez, which includes the resort city of Cancun, and also raised the possibility of moving the project to some other site in Mexico.

The Dragon Mart project, sponsored in part by the Chinese government, was proposed for a 120,000-square meter site in the community of Puerto Morelos, just outside Cancun and within the borders of Benito Juarez. The sprawling facility, modeled after a similar center with the same name in Dubai, would be the largest exhibition and commercial center of its kind in Latin America. The complex is intended primarily to showcase products manufactured in China to potential customers in Mexico, the rest of Latin America, the US, and Canada, but the site would also offer spaces for products from other countries to be exhibited.

Opposition to the project began to build in late 2012 and hit a crescendo at the beginning of 2013 (SourceMex, Jan. 16, 2013). Opponents included Mexican business groups, particularly textile and footwear manufacturers, who were concerned that Dragon Mart would make it easier for shoes and apparel from China to be sold in the Mexican market. Environmental advocates raised concerns about the size of the project and the negative impact on the ecosystem in that part of Quintana Roo.

In announcing its decision to reject the permit for Dragon Mart, the Benito Juarez administration cited environmental concerns, including the site's high density, which had been increased from the proposal first approved by Quintana Roo state's Instituto de Riesgo e Impacto Ambiental (INIRA). The site has been proposed for an area of 557 hectares, with 3,400 exhibition or retail spaces.

"The Dragon Mart project did not meet the requirements to grant a construction license. A deep analysis of the issue was made," said Mayor Julian Ricalde Magana.

Decision based on input from technical committee

Ricalde Magana pointed out that a broad group of experts formed the technical committee that made the recommendation to reject the project. "Based on the analysis made on the project by the Colegio de Arquitectos de Cancun, the Universidad La Salle, the Centro Mexicano de Derecho Ambiental (CEMDA), Fundadores de Cancun, and Ombligo Verde, we agreed with the determination that there was no reason to approve a permit for the Dragon Mart," said the mayor.

CEMDA, an organization that monitors the legal aspects of environmental protection in Mexico, issued a statement after the decision. "The project does not comply with the criteria established through the Programa de Ordenamiento Ecologico de Benito Juarez and with the applicable construction rules," said the environmental organization.

Voces Unidas por Puerto Morelos, a civic group formed to oppose the project, also expressed satisfaction with the decision. "We do not know whether we definitely killed the dragon, but we cut off its head," said hydrologist Guadalupe Velazquez, a leader in the organization. "The citizens won this battle."

The Centro de Estudios Economicos del Sector Privado (CEESP), in a study released in the aftermath of the decision by the Benito Juarez government, said the denial of the permit was appropriate. The study noted that the decision was not a knee-jerk reaction by a government entity but was made in consultation with important sectors of the community.

The CEESP study said communities should reject projects that do not conform to the "good practices of commerce and competition."

The Benito Juarez government's decision to deny the permit to Dragon Mart was good news, at least for now, for Mexican manufacturers. …

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