It might be called Puerto Vallarta’s “Stairway to Heaven.” Climbing up a double row of steps and fronting white homes with red-tiled roofs, the cobble-stone heights of Iturbide Street offer a magnificent view of blue Banderas Bay and its population of wintering humpback whales and playful dolphins. From the high ground, the eyes can see the far-off flutter of sail boats, the medium-shot profile of the upright Sea Horse statue on the boardwalk below and the close-up touch of the downtown’s historic Roman Catholic Church.

Usually exuding calm, Iturbide Street is actually one of the flashpoints in an ongoing struggle to shape, re-define and direct the Mexican resort city’s future. On a recent January day, as workmen pounded away with a jack hammer to make way for a new garden at the bottom of the street, a small group of residents held a protest against a city project they contended would choke off circulation in the neighborhood.

A placard posted on the construction enclosure read: “No to street closures.” The new garden, they charged, would make parking impossible and hurt small, struggling local businesses in tough economic times. “We need ambulances to have access,” added Berta Elena Martinez, a 57-year resident of the neighborhood.

Busily collecting a growing list of signatures on a stack of petitions, Alicia Munguia asserted that Puerto Vallarta’s municipal administration, which leaves office after local elections scheduled for later this year, had not taken residents’ opinions into account. The official dissing, she continued, was reflective of a larger governing style that included last year’s demolishment of the old boardwalk, or Malecon as it is known locally, and its replacement with a newer, more manicured one.

The ongoing Malecon renovation, Munguia added, even dared to move the Sea Horse statue to a new spot on the boardwalk, thus tinkering with a community symbol where Vallartenses had long gathered to celebrate events such as the latest victory of the popular Chivas soccer team.

“First it was the Malecon,” Munguia said. “It was torn down without a consensus.” Adding insult to injury, the long-time resident said, was the pending plan to finish moving Puerto Vallarta’s downtown city hall to a new facility located in an outlying part of the Pacific Coast city this year. If Mexican downtowns have two elemental institutions, Munguia and her husband joined in, they are the church and the city hall. “The authorities have to be downtown,” Munguia argued.

In response to the Iturbide Street controversy, Puerto Vallarta’s municipal government published a display ad in a local newspaper. “We are working for the improvement of the historic downtown with the construction of the Iturbide walk-way,” the ad proclaimed. The city-sponsored message included the photos and words of three local merchants and residents. Salvador Pena Davalos, who was listed as living in the immediate neighborhood since 1945, was quoted praising the project.

“I find it acceptable,” Pena was quoted on the new garden, saying that Iturbide Street had become a “pig-sty” where passerby openly urinated and drivers double-parked. “This part is going to be prettier and more visible from above here.”

At first glance, the Iturbide Street skirmish might seem like a strictly local spat of a passing nature. In the bigger picture, though, the conflict is part of a larger one that has also flared up around rapid growth and traffic congestion, illegal condominium developments, invasions of street vendors, the razing of Puerto Vallarta’s downtown parks for parking garages and, of course, the Malecon renovation began in 2011. Underpinning the controversies are the contradictions between commercial development and community planning, mass tourism and sustainable visitation and the uncertain, turbulent transitions from old-school authoritarian rule to democratic governance, an unresolved matter across Mexico.

Perhaps ironically, one of the last exhibits to likely grace the interior of the old municipal palace was a recently-concluded show of Jalisco photographers that focused on themes of democratic participation and access to information. Images of protesting citizens stood out in black and white.

Undoubtedly, Puerto Vallarta’s long, spectacular Malecon is a defining if not the defining tourist attraction in the growing resort city of more than a quarter-million people.

By day, jogging and dog-walking locals scurry alongside crawling groups of now-mainly older foreign tourists that meander by a wishing well, elaborate sand sculptures, statues, hustlers and restaurant/bars promoting cheap margaritas and beer. Street vendors dart in and out of the throngs, selling dolls, gum, jewelry, popsicles, and even massages. Flying v-formations of pelicans glide over the bayside boardwalk, while a trio of Aztec dancers performs for the tips of gabachos. On another end of the Malecon, the indigenous flying men from Papantla, Veracruz, scramble up a tall pole and then hurl themselves over a platform suspended upside down by ropes, slowly twirling down to the sand while accompanied by the breaking, dramatic notes of a flute. A bilingual Spanish-English sign staked in front of the spectacle appeals to the onlooker:

“Papantla Flyers: On each flight risking life to give continuity to ancient culture. Your donation is important because it is our only wage.”

By night, the Malecon undergoes a metamorphosis. Flashy night-clubs with names like Mandala or the Zoo pound thumping, pill-friendly sounds for hopping, gyrating bodies from Mexico and abroad-much to the disdain of old-timers who complain of the loud disruptions to their lives. The party never really ends. Early one morning, a pair of shirtless young men wandering down a side street spotted another shirtless young buck standing on a balcony. One of the men on the street barked in English: “Hey, angel baby, got any bud?” “Yeah, come on up!”

For months last year, the Malecon was virtually shut-down after work crews moved in and commenced ripping up the pride and joy of Puerto Vallarta. New palm trees were planted and a new, more pedestrian-friendly boardwalk closed off to vehicular traffic and rolled out for the walking shoes. Sporting a leprechaun on its sign, a new casino, the Foliatti, opened its doors in December. The Foliatti is part of a new gambling culture that’s taking hold in the port city. In residential neighborhoods, so-called “tragamone-das,” cheap slot-like machines that reputedly pay small cash prizes to a winner, are cropping up inside and just outside small stores, notably where many children gather.

As part of the Malecon’s new look, the local government has installed new public bathrooms, albeit with a 40 cent entrance fee. There is no charge to use the bathroom in the soon-to-vacated old city hall next to the Malecon.

While relieving oneself on the Malecon bears a cost, bicycling and kayaking can be enjoyed for free. The municipal government now lends 15 bicycles, 20 baby carts and 15 kayaks for intervals ranging from 30 to 60 minutes. A user has to leave a piece of identification as collateral. “Many, many people have used this service,” said city staffer Susana Quesada. “It’s a permanent thing.”

As the Christmas season loomed late last year, the Malecon renovation was behind schedule and workers stepped up the pace to complete Vallarta’s new crown jewel just in time for the high season. Then tragedy struck.

On December 28, Aide Maribel Pacheco Arizmendi and her younger sister Rocio were in town for the holidays. A 31-year-old teacher from the state of Mexico, Aide Pacheco was posing for a photo at one of the new metal sculptures on the Malecon. Making the unforeseen mistake of touching the work of “art,” the educator was reportedly zapped with a charge of electricity. While attempting to rescue her collapsing sister, Rocio was also shocked.

Interviewed on a You Tube video, Rocio claimed that it took paramedics 10 minutes and an ambulance about 15 minutes to show up at Puerto Vallarta’s most-visited tourist draw. When the emergency responders showed up, it was too late anyway. Aide Pacheco was pronounced dead, killed in a freakish accident while on a much-deserved vacation with her little sister. It’s unclear precisely how Pacheco was electrocuted, and weeks later the press is mum about the young woman’s death.

“It’s not right that this should happen,” a tearful Rocio said on You Tube.

Generally outraged by the Pacheco death, locals have mixed opinions about the outcome of the Malecon project. Berta Elena Martinez and her son Juan Agustin Murillo have sold children’s toys and flashing plastic lights on the Malecon for 11 years. The renovation put them out of business for six months, and left a pile of debt they are still trying to pay off. Murrillo said the verdict is still out on the positive or negative impact of the new boardwalk. “This is something new,” he said. “We’re accustomed to having a flow, and we have to adapt ourselves to this model.” But Murillo added that some businesses were probably unable to survive the long closure, as he noticed more and more closing near the construction zone.

With more than a decade in Puerto Vallarta, Liliana Cueva now manages the two Huichol Collection outlets on the Male-con. Featuring on-site craftsmen, the stores sell the stunning art of the indigenous Huichol people of Jalisco, Nayarit and Durango. Made of paper maiche, wood, clay or ceramic, many products also come in the form of the animals central to Huichol cosmology. Striking beads from the former Czechoslovakia- the “best” in the world- are the “principal part” of the Huichol’s artwork, Cueva said.

The young retail manager said the new Malecon is a toss-up in commercial terms so far, with extra business in one store and about 50 percent less in the other because of the detour of pedestrian traffic away from the latter’s particular location. Yet the Huichol Collection’s overall business is still down before pre-economic crash levels, according to Cueva. “People only pay their stay and their food,” she said. “People don’t have money to spend on souvenirs, like they do in other ways.”

Cueva said her business was given a 30-day notice before the Malecon construction got underway, but still had to pay rent and utilities for the one store that remained open during the project’s peak activity.

Some people approached for their opinions declined to give their names for this story. A woman behind a counter in a jewelry store quickly cut off the conversation, cryptically warning of being “watched” by neighboring businesses. A U.S. citizen with nearly two decades under her belt as a regular visitor to Puerto Vallarta said she went by the Malecon one day last year and came back the next for a big surprise.

“One day all of a sudden, these gates are up and there are armed guards all over the place,” she recalled. The new Malecon, she continued, is “nice but I don’t think they should have spent the money.”

The woman was very critical of the way construction began, nearly ensuring that citizens who had earlier protested the renovation would be caught off-guard. The frequent visitor said she preferred to remain anonymous because her family has property in Puerto Vallarta and did not want “trouble.” Speaking out in Mexico is not the same thing as in the U.S., she insisted.

For Puerto Vallarta’s powers-that-be, the ultimate acceptance of the new Malecon is a high-stakes affair. Considered Mexico’s second most-popular tourist destination, Puerto Vallarta is showing renewed spunk at a time when competition is fierce for scarce tourist dollars. The federal Tourism Secretariat reported a 11.4 percent in local hotel occupation during the first two weeks of January, compared with same period in 2011. The increase in hotel occupancy even beat out Cancun and the Riveria Maya for the first two weeks of the year.

Recently, Puerto Vallarta scored a major coup when it landed the decades-old Tourism Tianguis, which had previously been held every year in Aca-pulco. Set for next month, the event draws thousands of industry heavies who wheel and deal for short-term and long-term tourism packages and profits. And Puerto Vallarta delivered another blow to violence-ridden Acapulco when the relatively tranquil, smaller city on Banderas Bay got some of the legendary Spring Break business that has fled the tarnished old pearl of Mexican (and world) tourism.

The big, U.S.-based Spring Break promoter Student City is advertising 2012 Spring Break “party packages” at Puerto Vallarta clubs known for all-you-can drink sprees.

“From tequila manufacturing and bullfights, to raging day parties-you’ll be sure to have a blast chilling with the thousands of other students who flock to PV,” read a Student City Internet promotion that was a little sloppy on Mexican economic geography but more accurate on the endless party scene, or “reventon,” as it is known in Mexico.

In the current scheme of things, the fate of Puerto Vallarta’s downtown and its beloved Malecon are tied to national and international currents of fame, fortune and failure.

Interviewed at his street display, one artist contemplated Puerto Vallarta within a global context.

“I love the Malecon. I love Vallarta. That’s why I live here,” he said. Nonetheless, he added, local developments are bound to the rise of China, the decline of the US, the turbulence in Europe and the historic emergence of the frugal tourist. “We understand the world is in crisis, and the reduction in tourism is not exclusive to Mexico,” he said. “If part of the U.S. hurts, it affects our whole body..there are no sales. The thing to do is to put up with it for a spell. We have to continue creating our art for better times,” he concluded. “It’s not the end of the world.”