What does Manzanillo have to offer?

For starters, Manzanillo has a virtually guaranteed 80-degree average temperatures and sunshine 340 days of the year. It has abundant natural beauty, outdoor activities, cultural attractions and friendly people. And it's less crowded and cheaper than many other vacation and retirement destinations in Mexico and the United States.

"People will be able to spend less money on having a home built or whatever they want built," said Lane Milligan, St. Paul chair of the sister-city partnership. Milligan and her husband, Jim, a marketing executive at Oakdale-based Imation Corp., are longtime friends of the Koens and plan to build a second home at the development.

"Bob looked for and found the right partners," Milligan said. "They feel real passionate about it. There's no doubt in my mind that it's going to work."

Lots at Bahia de Oro likely will sell for $75,000 to $100,000, with construction running at about $100 per square foot. That compares to $300 to $400 per square foot in high-demand areas of Mexico or the United States such as Puerto Vallarta or Naples, Fla., the developers said.

"Upscale here in the United States is so affordable down in Mexico," Koens said. "You can achieve your dreams if you look at Mexico in your investment strategy."

Is it a safe investment?

U.S. investors traditionally have been leery of Mexican real estate due to suspicions about personal and financial security. Both fears are based on misinformation, said Patrick Kelly, Colima Development's attorney and a member of the international law group at Fredrikson & Byron, Minneapolis.

"It's no different than going to New York," said Kelly, a Mexican real estate expert whose wife hails from Mexico. "You take some precautions. From an investment perspective, if you know what you're getting into, you can get a good deal. And the opportunity down there is greater than what you have up here. It is like being in Florida 30 years ago."

Mexican laws are well-developed, said Luis Reséndiz, a Fredrikson attorney who is licensed in the United States and his native Mexico. "You have to do your research on title, basically the same way you do your research on title to property in the 'States. ... You have to make sure that whatever you are getting is what has been represented by the seller."

Security is an issue for many snowbirds, but housing prices and amenities are the top criteria they consider when purchasing vacation or retirement homes, said William Craig, associate director of the Center for Urban and Regional Affairs at the University of Minnesota. Colima Development has "something good in the long run," if it meets those criteria, he said.