At bars on the Malecon, Puerto Vallarta's beloved oceanfront promenade, lost souls drink margaritas in the morning. Boys carry iguanas on their arms, telling tourists they taste...

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PUERTO VALLARTA, Mexico — At bars on the Malecon, Puerto Vallarta’s beloved oceanfront promenade, lost souls drink margaritas in the morning. Boys carry iguanas on their arms, telling tourists they taste like chicken. And if you listen — and imagine — you may hear Elizabeth Taylor shrieking at Richard Burton in their house on the hill above town.

All things considered, you’d think Puerto Vallarta would be washed up by now, 40 years after Burton came here with his famous paramour to shoot John Huston’s film “The Night of the Iguana.” It’s hardly the quiet, sunstruck Mexican village on wide Banderas Bay that Liz and Dick fell in love with. You’ll find a Wal-Mart, Hooters and several McDonald’s restaurants; too much traffic on the narrow cobblestone streets; perpetual noise, bare skin and cornrows on people they don’t flatter; and authentic Mexican trinkets made in Malaysia.

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Besides, other ritzy new resort areas — Cabo, Ixtapa, Huatulco — have arrived on the Pacific coast of Mexico, and hotel development in Puerto Vallarta has moved out of town, all the way to the reclusive Four Seasons Resort Punta Mita, about 60 miles north. On the south side of Banderas Bay, past the point where Mexican Highway 200 leaves the ocean, several small, luxurious eco-resorts such as Verana have opened. These don’t have much to do with Puerto Vallarta because they can be reached only by boat.

As if the indignities of age weren’t enough, the city was hit by Hurricane Kenna last October. It swept away sand on already eroded downtown beaches, tore up the Malecon and destroyed Los Arcos, the triple-arched sculpture that was the city’s symbol.

City rebuilds

In the months since the hurricane, though, the town launched a project to lengthen the Malecon, which includes a new pedestrian bridge over the Cuale, the river that separates the northern and southern sections of town. Los Arcos has been rebuilt, as has another Malecon sculpture, “In Search of Reason,” by Guadalajara artist Sergio Bustamante. This striking bronze creation consists of a tall ladder with two ghostly figures on it and another watching from below. The hurricane spirited away the biggest figure. But it was salvaged when some boys who found it on the beach came to town trying to sell it as scrap metal.

That’s pure Puerto Vallarta, a good-tempered, prosperous city of about 250,000 midway between Mazatlan and Manzanilla. The out-of-town resorts and secluded inns are not for me, however. When I say I love Puerto Vallarta, I mean the city proper. With its ripe smells and collarless dogs, martinis and art galleries, it’s the happiest blending of Mexican and gringo culture I know.

Having been here before and knowing I wanted to spend my time in the city, not the high-rise hotel zones, I found it easy to choose a place to stay: the Hotel Molino de Agua. It was a mango orchard on the south bank of the Rio Cuale in the early 19th century when the city got its start. Now it’s a slightly faded, family-owned enclave surrounded by high wrought-iron fences, with a monkey cage, monster banyan trees, two swimming pools, a restaurant, cottages and two- and three-story motel buildings close to the ocean.

My room on the top floor of one of those had two double beds, an air conditioner, a bathroom with ants and a big terrace overlooking Los Muertos beach. I especially liked the hotel’s location, which made it easy to explore downtown on foot.

The Molino de Agua is one of the least exclusive resorts on Banderas Bay. For about $5, outsiders can spend the day at the hotel. I did laps in the morning before the guests arrived and liked hearing kids frolicking in the pool when I returned for siesta in the late afternoon.

Some things had changed and some had stayed the same since my visit five years ago, as I discovered the next morning, walking the beach. Los Muertos, which must have been a glory in the days of Dick and Liz, was littered and rockier than I remembered, good for people-watching and sunset cocktails in waterfront restaurants such as Daiquiri Dick’s but an uninviting place to swim.

Rocky, but inviting

Past the pier and a handful of high-rise hotels favored by gay travelers, a rocky headland separates Los Muertos beach from harder-to-reach coves and a chain of resorts to the south. There, a steep, crumbling staircase leads up to Amapas Street, which winds past dreamy houses with gated entrances. From the cracked, uneven sidewalks, I saw evidence of the loveliness inside: Mexican tiles, splashing fountains, chaises shaded by jacarandas.

Heading north, Amapas slithers back down the hill and emerges in the heart of the southern section of town, where shops, restaurants and off-the-beach budget hotels cluster. That’s where I usually found breakfast: eggs, tortillas and fresh-squeezed orange juice at Mexican places, or coffee and a muffin in cafes with lattes and, often, Internet connections. Every day I saw the same expatriate Americans, including a retired doctor from Oklahoma City who told me he was “taking loafing to a new level.”

Loafing is the most appealing way of passing time in Puerto Vallarta, though many of the tourist activities available at resorts can be booked in town.

Next, I drove into the hills above town for a 2-1/2-hour treatment at Terra Noble Art and Healing Center. It’s a New Age health spa built in a jury-rigged style of adobe, thatch, wood and rock, with a sweeping view of Banderas Bay.

Having been to more luxurious spas, I wasn’t expecting much. But the $135 package (which would have cost three times more in the United States), was truly memorable, starting with a salt and oil scrub, followed by a massage and facial. I kept making little purring sounds and must have lost consciousness, because when my senses returned I thought I was in my hotel room.

Mostly, though, I ate and shopped. It looked as if all the tchotchkes of Mexico — the straw hats and bags, huaraches, woven belts, beaded bracelets, carved saints — had landed in stalls near the Malecon, on the little island at the mouth of Rio Cuale and in the municipal market. But since my last visit, more stylish places had opened, including a string of home decor, apparel and jewelry stores on Basilio Badillo Street.

A block up from them, I found Mundo de Azulejos, a concrete-floored factory and store packed with reasonably priced Mexican tile and pottery. When my senses returned this time, I was the proud possessor of a hand-painted ceramic sink I have no use for but did manage to get home in one piece.