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Photographer: Alfredo Estrella/ AFP via Getty Images Photographer: Alfredo Estrella/ AFP via Getty Images

San Miguel de Allende oozes old Mexico charm.

There are the cobblestone streets, the colonial-era buildings and wrought-iron balconies, the neo-Gothic steeples soaring high above the pink-sandstone church anchoring a corner of the main plaza. Travel and Leisure magazine has twice named it the best city in the world, a ratification of how beloved it is with tourists and retirees from the U.S., Canada and beyond.

But lately, San Miguel has been attracting a very different sort of crowd: the drug cartels. And the moment they arrived and began pushing cocaine and imposing their brutal brand of property tax, the murders began.



A restaurateur died in a hail of gunfire in front of horrified customers after he refused to pay extortion demands. The son of the owner of a construction-materials business was killed on his way to work. A tortilla shop owner in the nearby town of Celaya was gunned down along with two of her employees. And a fruit vendor, a convenience store operator, another restaurateur and three cantina owners closed their doors after shakedown-visits and, it would appear, are lying low.

This kind of crime was unthinkable here just a few months ago. “It’s still hard to believe,” said Manuel, a restaurant manager who, like many others, would give only his first name for fear of reprisal.

San Miguel has joined the chilling list of tourist destinations—Cancun, Los Cabos, even Mexico City itself—that are losing their perceived immunity from the drug wars that have ravaged much of Mexico for years, captured in headlines about beheadings, mass graves and broad-daylight shootouts.

All of which presents a major challenge to President Andres Manuel Lopez Obrador and his markedly hands-off approach to crime. A leftist who took office a year ago, his strategy is “abrazos, no balazos,” or “hugs, not shots,’’ as he has described it.



Not only are more Mexicans being killed than ever—28,741 so far this year—but the bloodshed is complicating the president’s push to fight poverty, because it is discouraging investment and deepening the slump in an economy that slid into recession in the first half of the year.

Pedestrians in San Miguel de Allende. Photographer: Alfredo Estrella/ AFP via Getty Images

“Security is a nation-wide problem now and unfortunately no one can escape it,” said Javier Quiroga, head of the bar and cantina association in Guanajuato, the state where San Miguel is located. “It’s getting harder for people to go about their regular activities.”



Carved out of the arid plateau that runs through central Mexico, San Miguel is just a few hours drive from Mexico City. A UNESCO World Heritage Site, it is an Instagrammer’s dream and a favorite for foodies. The weather is near-perfect all year round. By some estimates, the population of 160,000 includes as many as 10,000 expatriates, mostly Americans and Canadians, who live here at least part-time.

The cartels have so far spared the boutiques, cafes and art galleries popular with tourists and expats. The automakers in the region, including Volkswagen AG and General Motors Co., haven’t been subjected to what small business owners have had to endure; their operations are well defended in gated industrial parks. Although the hotel occupancy fell 15% in August from the year before, according to data from the Tourism Ministry, the culprit may be the slumping economy, not safety concerns.



And strolling the main streets and alleys during the day, it doesn’t seem that anything, really, has changed. The balloon vendors still ply their trade and the stalls selling esquites—a corn-salad snack beloved in this part of Mexico—continue to do brisk business. Members of Lopez Obrador’s newly-created national guard showed up for a few days over the summer, though usually the only visible security forces are the municipal police officers in their dark navy uniforms, walking their regular beats.



Carol Quinn, a Canadian who rents an apartment in San Miguel for extended periods of time, said she’s not unconcerned by what she hears and reads about the lawlessness. “I’m a little more nervous, a bit more conscious,” she said as she sat on a bench near a church hosting a wedding. “But I’ll still come.”



Talk to people like Manuel, the restaurant manager, and the conversation is quite different. They will tell you about the increase in criminal activity, in drug use by locals, in derecho de piso payments to thugs who ask, not politely, for money or services in exchange for letting mom-and-pop stores to continue operating. The cartels are aggressive, forcing small businesses to employ their members or to become de facto members themselves.



In August, according to local shop keepers and media reports, one gang dropped off bags of cocaine at a cantina, telling the owner they were worth 300,000 pesos ($15,300) and that the money would be collected in the next couple of weeks. The owner shut the bar and fled the city. A variation of the same happened at two other cantinas.



The office of Mayor Luis Alberto Villarreal didn’t respond to requests for comment about the crime wave, which has swept across the state. Homicides in Guanajuato have gone up by 260% since 2015; this year, 47 police officers have been killed, more than in any other state, according to Causa en Comun, a nonprofit that tracks police murders in Mexico.



Street performers pose with tourists. Source: AFP via Getty Images



One reason for the surge is that the government crackdown on fuel thefts in the region spurred cartels to look for alternative income sources to finance their operations and turf wars. Beyond that, some of the big gangs have splintered and the competition for new territory has heated up.



Drug lords “are looking to make a name for themselves and to get some money quick,” said Gladys McCormick, an associate history professor who specializes in Mexico-U.S. relations at Syracuse University in New York. “Extortion is the easiest way to do that.”



Cartel attacks have become more brazen nationwide. In October, more than a dozen police officers were killed in Michoacan state by men in armored trucks; days later, cartel members terrorized the city of Culiacan with heavy weaponry in broad daylight. Last month, gunmen killed nine dual U.S.-Mexican citizens riding in a convoy 60 miles from the Arizona border in an area that has been contested ground for cartels. Over the weekend, armed men in several trucks descended on Villa Union, a town near the border with Texas, and began shooting up city hall. During a battle with security forces, 16 of the gunmen were killed, along with four state police officers and two civilians.



That the drug violence has reached San Miguel de Allende “is a dark cloud on the horizon because it heralds that nowhere is safe anymore,” McCormick said. “The fact there is such an international presence in San Miguel de Allende guarantees that the fear felt inside the city will echo beyond Mexico.”



