Downtown facelift: can a new, high-powered joint venture restore decaying downtown Mexico City to its former glory? (Spotlight).

Hopes are high that a new public- and private-sector venture can give Mexico City's long-neglected historic downtown a needed shot in the arm. The partnership-between the federal and Mexico City governments and some of the nation's most powerful private corporations--expects to bring major capital into the area and resolve the litany of problems currently beseting the Centro Historico.

The splendor of he area began to fade in the 1950s, as major companies and expanding government offices relocated to more modern installations in newer areas of the city. One of its economic lifelines at the time was the Centralde Abastos, which later moved to the city outskirts. Unsurprisingly, middle-class families have been moving away from the area's steady deterioration ever since.

Today, what is potentially one of the capital's most beautiful areas is over-run by crime, litter and black market street vendors. Roughly 24% of the downtown area's current 72,000 residents earn less than US$129 a month. As it stands, an estimated 23% of downtown property is dedicated to commercial warehousing, as the area has become a source of low-end retail opportunities for working-class Mexicans. Some 400 cargo trucks move in and out of the center on an average day, causing severe traffic and pollution problems.

Topping it all off, the gradual drying of the lakebed of former Lake Texcoco on which the center was built is causing the oldest city in the Americas to sink at a rate of slightly over two inches per year. So what will it take to make the Centro an attractive place to live and work again?

BACK TO BASICS

"Safety and cleanliness, that's all people want," said telecom mogul Carlos Slim at a recent Board of Directors meeting of the AMERICAN CHAMBER OF COMMERCE OF MEXICO. On behalf of Fundacion Telmex, Slim is leading private-sector efforts to refurbish the downtown area.

The restoration projects are being administrated by an independent trusteeship and supervised by a 10-member supervisory body, which is made up of three representatives from the federal government, three from the Mexico City government and four private citizens.

The initial goal is to resolve the problems of infrastructure and public services that plague the city center in order to encourage private and public investments. Key to the area's renovation is the creation of attractive middle- and upper-class residential areas.

And the funding has already begun. Several private companies and public institutions have committed to moving their office headquarters to the center, while others have made large investments in downtown real estate.

BANKROLLED BY SLIM

Slim also told board members he has committed to providing US$250,000 of the total US$4.3 million it will cost to hire Giuliani Partners, directed by former New York City Mayor Rudolph Giuliani, to implement a zero-tolerance public security policy in certain areas of Mexico City.

Help is also coming from other sources--both the United Nations Educational Scientific and Cultural Organization (UNESCO) and the French government are currently advising local authorities on the best way to restore the area's 1,681 historic buildings.

The efforts, however, have not come without heavy criticism from the press and some leading academics. Although efforts began early this year, a May seminar on the project blasted what some call the government's lack of commitment to major improvements in the area's basic infrastructure.

So project organizers are launching a pilot program to tackle the problems of infrastructure, law, order and cleanliness within the most well-known portion of the city center. This 40-block area is delineated by Donceles street to the north, Carranza to the south, Lazaro Cardenas to the east and the Zocalo to the west (see map).

"If we can't do it in a 40-block area, then we can't do it anywhere," Slim told AMCHAM/MEXICO leaders.

Matthew Gower is a former editor of BUSINESS MEXICO. He currently resides in London.