Quiet Uruguay beach town booms with celebrities

On Uruguay's Atlantic coast, a beach town is booming with celebrities and high-rolling foreigners willing to pay millions of dollars for a piece of this bohemian but ultra-chic getaway.

In the past decade, Jose Ignacio - 180 kilometers (110 miles) east of Montevideo - has become a refuge for members of the jet set in the region who want to escape noisy Punta del Este, the old line resort 40 kilometers (25 miles) away.

Colombian singer Shakira, Argentine television producer Marcelo Tinelli, Argentine magnate Amalia Fortabat and French actress Dominique Sanda own properties in the area.

This summer's visitors have included, among others, the son of Princess Caroline of Monaco and Rolling Stones guitarist Ron Wood.

The global economic crisis hasn't reached this corner of South America. Real estate sales in Punta del Este shot up more than 53 percent last year, with most of the increase seen in rural areas where celebrities have their spreads.

In tiny Jose Ignacio, with its lighthouse and scalloped beaches, the boom has been even more pronounced with a 157 percent jump in sales, totaling 263.6 million dollars.

"The trend in values has been up. Even during the financial crisis in 2008, prices rose," said David Gasparri, a partner with the real estate firm of Antonio Mieres.

A vacant 810 square meter (0.2 acre) lot in the historic center of Jose Ignacio costs at least $500,000, although a seafront property could go for twice or three times as much.

And five hectares (12 acres) of farm land more than two kilometers (over a mile) from the sea can fetch a million dollars.

Seventy percent of the buyers are Argentines - Uruguay's biggest annual contingent of tourists - and the rest are Europeans or North Americans attracted to the area by the combination of nature, beach and high quality gastronomy, said Gasparri.

"This is a paradise. The night is more peaceful. You live closer to nature. The kids can ride bicycles, go to the beach alone. You relax more," said a 43-year-old businessman, who bought a charming white house facing the sea last year.

He is one of many who didn't hesitate to fork out a million dollar sum to summer in a town with unpaved streets and handmade signs but with no lack of creature comforts, and where no house is the same.

And for tourists with the means to pay there are places like Playa Vik, a luxury residential complex built by a Norwegian millionaire and inaugurated in December.

Designed by architect Carlos Ott, it combines rooms painted entirely by artists with self-sustaining, environmentally sensitive systems, which the owner had used before at a country inn nearby.

The centerpiece of Playa Vik's design - an imposing titanium and glass cube that breaks out of the landscape - has aroused controversy among residents protective of the town's low key style.

But Augustin Leone, the general manager of the Vik country inn, said: "It's a venture that helps enormously to position Jose Ignacio as an international destination. It's the only high end luxury property here."

The town's authorities, meanwhile, are fighting to control growth.

A 1993 ordnance allows only construction of single family homes no taller than seven meters (23 feet). It also limits businesses to a small commercial area. Hotels and discotheques are explicitly prohibited, and permission has to be obtained for parties.

"We wanted a family oriented place, a place where people come because they like the beach, the sound of the wind, the breaking of the waves," said Javier Ruibal, a director of the Development League of Jose Ignacio.

"It should be a gastronomic hub, where people come to spend the day and at night goes back to being a quiet little town," he said, adding that following those rules has strengthened property values.

The town's original inhabitants, however, are not too impressed by the changes. Eduardo Techera was born in Jose Ignacio 51 years ago, and six years ago moved from the town proper to the countryside beyond it.

"From an economic point of view, the change is good, but I don't like it at all. I don't like the Jose Ignacio of traffic jams, of stress and craziness. I like the peace and tranquility of the old Jose Ignacio," he said.

About 800 people come every year to spend summers in the town, but barely 30 people stay on the rest of the year when, as a sign in the main plaza puts it, "Only the wind blows here."