Chinese expo center in Mexican tourist resort expects go-ahead

MEXICO CITY Thu Aug 29, 2013 6:10pm EDT

MEXICO CITY Aug 29 (Reuters) - A planned expo center in the Mexican beach resort of Cancun, touted as the largest showcase of Chinese goods in the Americas, should begin construction soon, the company behind the project said on Thursday after a court ruled in its favor.

Plans for Dragon Mart Cancun, a $180 million, Chinese-backed retail space, have run into various obstacles including complaints from business groups fearful it would undercut local businesses, and from environmentalists concerned about coral reefs nearby.

The project was approved by the state government, which is run by President Enrique Pena Nieto's centrist Institutional Revolutionary Party, or PRI, but the city government, led by the leftist Party of the Democratic Revolution (PRD), opposed it.

In April, Dragon Mart Cancun sued the city of Cancun to overcome a political impasse that threatened to derail the project.

But last month, the PRI recaptured the municipality and this week a state court ruled the city should approve the project.

"For Dragon Mart Cancun the next step is to wait for the municipality to give us the building permit, because now there's no likelihood or recourse available to stop it," said Carlos Lopez, the company's chief executive, in a statement.

The PRI will take control of the city at the end of September.

Lopez has said the project will create 8,550 jobs and enable Latin America's No. 2 economy to become a key center for growing East-West commerce.

Julian Ricalde, the outgoing PRD mayor of Cancun, said he is analyzing the court's decision and would make a statement in the upcoming days.

Various business groups opposed to the project have said they will continue to fight Dragon Mart Cancun.

The project is 90 percent Mexican-owned and will get 10 percent of its funds from privately held Chinese firm Chinamex, according to the company.