Dec. 1--SAN JOSE DEL CABO, Mexico -- For many Houstonians, it takes only a vacation and one look at the Sea of Cortez from the Villas Del Mar residential development and they're hooked. 

That's what happened to the late Kenneth Schnitzer. 

In 1994, Houston developer Schnitzer and business partner Ron Hatfield took a four-day golfing vacation in Los Cabos -- the Mexican towns of San Jose Del Cabo and Cabo San Lucas and everything in between. 

Schnitzer returned to Houston with plans to purchase property from international real estate developer Don Koll, build himself a vacation home and a handful of villas he could sell, with an option to buy land to build a handful more. 

"I looked at him like he was crazy," recalled his son, Doug Schnitzer. 

"I'm saying, `You have lost your mind. It's rock and mountain and cliffs.' I said, `What are we doing?' " 

Doug Schnitzer tried to convince his father to rent a home or stay in a hotel every time he had the urge to visit Baja California Sur. 

At first, Doug thought this could be a small project his 65-year-old father could do in his spare time. 

But the elder Schnitzer, who made his name by developing Greenway Plaza and other Houston landmarks, had a vision of selling beachfront property in the area. At the time, residential development in the Los Cabos area was still in its infancy. 

"He took a bet back before Cabo was what it is today," Doub said. 

Back then, Cabo San Lucas was still a quiet, fishing village, but the Mexican government had big plans to turn it into a major tourist destination. 

In the past 20 years, the government has built an international airport and highway, allowing more options for getting to the area besides by boat. 

That opened up what has become a dream destination for many people. Visitors can snorkel, fish or just read on the beach. They can watch whales migrating along the Pacific Ocean or see sea lions sunning near El Arco, the rock arch near Land's End, where the Pacific meets the Sea of Cortez. 

The explosive growth of Los Cabos has proven to be a bonanza for developers who saw it coming, like Schnitzer. Now five-star hotels, golf courses and expensive restaurants dot the beach. 

Schnitzer's dream was to develop Villas Del Mar at Palmilla, a residential community that offered all of the comforts of exclusive U.S. living near a golf course, only in Mexico and alongside a beach. 

The task of developing a posh community in Mexico was a challenge. Building mountainside homes presented a costly geological challenge. 

The task was complicated by the fact that only a year after he began the project, Schnitzer and three other businessmen were indicted and convicted on charges of bank fraud for a land deal. 

However, that ruling was reversed in 1996 by a federal judge who acquitted Schnitzer and his two associates because of the government failed to prove they intended to cause their bank to lose money on a 1986 real estate transaction. 

Despite these stumbling blocks, soon after Schnitzer and Hatfield of Hatfield Investments built the first villas and sold them all for about $600,000 each, the duo decided to increase their investment. 

"They were so damn successful with the first five that they had an option to build six more," said Doug Schnitzer, 46. 

Their success spurred them to pick up the pace of building. It went from something a man could do in his spare time to a large business opportunity. 

The business involved such Houston companies as Martha Turner Properties, which sold several homes in the community, and Locke, Liddell & Sapp, which provided legal help. 

So far there are 83 homes, and more under construction. With red clay roofs and white stucco exteriors, the homes start at more than $2 million and go up to $7 million, depending on the style and whether they are furnished. 

Total sales in the development are up to $350 million. 

At the moment, the weak U.S. economy after the Sept. 11 terrorist attacks and a possible war with Iraq are slowing home sales. 

Instead of "Sold" signs going up before homes are even completed, as the trend has been ever since the project got off the ground, Villas Del Mar at Palmilla has nine homes for sale. 

Despite this slowdown, Doug said he and his older brother plan to remain involved in the Villas Del Mar project for the long term, because it's part of their father's legacy. Their father died in November 1999 at the age of 70. 

What they're selling begins with the breathtaking views, but it goes beyond that. 

About five years ago, Schnitzer insisted fellow Houstonians Gail and Jim Norman vacation in the Mexican state of Baja California Sur and perhaps buy a home from him. 

The Normans told Schnitzer, their longtime friend, that they didn't want to buy a home in Mexico. 

Jim Norman, a retired advertising executive who is now 73, recalled telling him: "I don't go to Mexico anymore." 

But Schnitzer promised them there was no commitment, and he helped get them good deals on their trip. 

Finally, on the third day in the Los Cabos area, the couple decided to keep their promise and visit Schnitzer's development. 

"We needed a home like we needed a hole in the head," said Gail Norman, 64, as she watched the sunset from the second home the couple has purchased in the Villas Del Mar at Palmilla development. 

They never fell in love with Cabo San Lucas, which Jim Norman calls "a tourist trap." 

But all it took was for Gail Norman to see the waves crashing against the jetties and the white sand beach. The home the Normans would later buy was nothing more than concrete blocks at the time. 

"I just walked up there and stood and looked at all that water and sand and said, `Oh my God!,' " Gail Norman remembered. 

But more than the beautiful views and the promise of a luxurious home on the beach, it was the golf course that sold the Normans. Avid golfers, they decided to buy a home here because of the seven courses in the area, most of which offer a view of the sparkling blue Sea of Cortez. 

The closest course is the Palmilla Golf Course, designed by golfing legend Jack Nicklaus. 

The Normans fell in love with the development so much that they ended up buying two homes in Villas Del Mar. They rent out one home that's closer to the beach and live in the other three to four months a year, renting it out when they can. 

While they live there, they make an effort to contribute to the local economy by buying Mexican-made furniture and picking their own organically grown vegetables in a nearby community. 

But before they purchased a home, the Normans hired international real estate attorneys to make sure their investment was safe. 

Tales of evictions of American retirees from their beachside homes in coastal communities across Mexico stir fear in the hearts of many foreign buyers. Many of these unlucky homeowners purchased ejido property, communal farmland that is being privatized, which often leads to title fights. 

Mexican law doesn't allow foreigners to buy property within 62 miles of an international border or 31 miles of a coast. However, they can buy property in those areas through real estate trusts called fideicomisos. A Mexican bank holds the deeds, but the buyers have ownership rights for a set number of years. 

Kenneth Schnitzer also decided that to sell luxury vacation properties in Mexico, he's have to have someone there to smooth the way for buyers wary of the hassles of living here. 

"My father's thought was if we are going to get people to spend this kind of money in Mexico, we need to make it as simple as possible," Doug said. 

"From day one we had to make it easy on the buyer because no one was going to spend their money on a house in Mexico and not know how to pay their bills. After all, mail service in Mexico is not reliable and a simple task of paying an electric bill can mean hours of waiting in line." 

The Del Mar Management concierge staff can take care of everything from paying the telephone bill to stocking the refrigerator, said Al Kairis, director of sales at Del Mar. Residents can call the management staff and let them know what flight they are on, arrive in San Jose Del Cabo and immediately begin their vacation. 

When the Normans arrive at their casita, as the style of home they own is called, their car is washed, their pool furniture is outside and their hedges are trimmed. 

The services allow residents to spend their entire time in Los Cabos vacationing, but they do pay Del Mar hefty fees for maids, gardeners and security officers, considering that most workers in this region earn around the daily minimum wage of $4.22. 

Residents pay more than $20 an hour for maid service here and the Normans are sure that money doesn't all go to the hired help. 

"We're at the mercy of the system here," said Gail Norman. 

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(c) 2002, Houston Chronicle. Distributed by Knight Ridder/Tribune Business News.