CARTEL WARS GUT JUAREZ, A ONETIME BOOM TOWN

CIUDAD JUAREZ, Mexico--This violent border city is turning into a ghost town.

Bloodshed from Mexico's warring drug cartels has sent those with
means fleeing this former boomtown. Restaurants have moved north to
Texas. The dentists who served Americans with their cheap procedures
have taken their equipment south. Even the music is dying here.

Some 400,000 residents have fled Juarez after two years of
drug-related killings, bringing desolation to downtown, seen in
December, and beyond. JUAREZ JUAREZ

"The musicians haven't left yet, but they do their shows in El Paso
now," says Alfonso Quinones, a Juarez concert promoter who is trying
to organize a jazz festival in the city.

No solid number exists for the exodus, a matter of debate among
Juarez's leaders. But the city's planning department estimates
116,000 homes are now abandoned. Measured against the average
household size of the last census, the population who inhabited the
empty homes alone could be as high as 400,000 people, representing
one-third of the city before the violence began.

That would mark one of Mexico's largest single exoduses in decades.

"The problem is that we don't have the rule of law here," says
Lucinda Vargas, an economist who runs a civic group called Plan
Estrategico de Juarez.

Juarez finds itself in the crossfire between two rival drug gangs,
the local Juarez cartel and the powerful Sinaloa cartel, both of whom
want to control the city to smuggle drugs into the U.S., the world's
biggest drug-consuming market, and capture a lucrative and growing
local drug market.

In 2008, roughly 1,600 people were killed here, up from a few hundred
annually in previous years. President Felipe Calderon decided to send
federal police and some 7,000 troops to quell the dispute. The move
hasn't worked: Last year, the death toll reached 2,600 people, making
it Mexico's most violent city. There have been an estimated 500
homicides this year.

The latest high-profile blow to the city came on March 13, when three
people associated with the U.S. Consulate in Juarez were gunned down
in an incident that drew outrage from presidents on both side of the border.

Juarez isn't alone in its troubles with drug gangs, which operate
with near complete impunity in much of northern and western Mexico.
On Friday, residents of Mexico's northern business capital,
Monterrey, awoke to nightmarish traffic after heavily armed men
believed to be linked to drug gangs commandeered several trucks and
buses and used them to block eight strategic traffic points around the city.

Juarez's gradual emptying has been hastened and deepened by a
recession in a border economy that is hogtied to that of the U.S.

Just 21/2 years ago, Juarez was one of Mexico's engines of growth, a
magnet of manufacturing with an easy entry point into the U.S. The
North American Free Trade Agreement had helped to expand Juarez into
the base for assembly plants that accepted parts for everything from
consumer electronics to plush toys, and shipped the finished products
back to America tariff-free.

Since 2005, 10,600 businesses--roughly 40% of Juarez's
businesses--have closed their doors, according to the country's group
representing local chambers of commerce.

Ciudad Juarez's new reality is told on its empty streets. Along
residential block in a subdivision called Villas de Salvarcar, hardly
a home appears left occupied.

"I don't know when they left," said a woman selling clothes in a
garage sale for her few remaining neighbors. She declined to give her
name, simply pointing to the block behind her where 15 teenagers were
killed on Jan. 31 while they watched a football game. The massacre
was a case of mistaken identity: Drug gangs had been targeting
another party, authorities later said.

Down the street, the bloodstained walls of the home had been washed
clean a few days ago, residents said. But bullet holes remained in
the walls and neighbors nervously kicked at the dirt as a police car,
permanently stationed along the block, rolled by.

The rising towers of El Paso, visible from downtown Juarez, offer a
stark contrast along with a promise of security just across the
border bridge. Among those with a home in El Paso is Juarez's mayor,
Jose Reyes Ferriz. Mr. Reyes uses the home only for his work as an
attorney on the other side of the border, his spokesman said. But he
added: "It's very common to have a [second] house in El Paso."

Guillermo Marcedo, 70 years old, keeps to one side of the border.
Born in Juarez, he now drives a taxi in El Paso. Like many of his
colleagues, he will rarely take clients to Mexico, fearing an attack.

Having arrived in the 1990s when the border had been quiet, Mr.
Marcedo has moved as many relatives as he can into the U.S. "I had to
think of my family," he says from behind the wheel on a recent day.
Two weeks ago, the last member of his immediate circle, a son who
works as a psychologist for the Juarez government, received
permission from the U.S. to make the move.

Not all who want to leave, especially the poor, have been so lucky.
With bank loans more difficult to get and mortgage interest rates
high, the Texas town has fallen out of reach for even some
well-heeled Mexicans.

"A lot of them do not have established credit [because] they had no
intention of ever living here," says Sandie Leal, an El Paso
real-estate agent who recently struggled to cobble together bank
statements and other documents for a Mexican client. The client was
offered an interest rate of 9%, Ms. Leal says, which he turned down,
but has opted to rent in the city.

Whether they rent or buy across the border, much of the town's middle
class has left it, says Oscar Cantu, publisher of the local newspaper
El Norte. Two weeks ago he sent reporters knocking door-to-door in
the town's wealthy neighborhoods, and says they turned up roughly
3,000 empty homes. "There was a lot of speculation about how many
people had gone--we counted," he said.

In one such subdivision, residents had scrawled graffiti, pleading
with the government for help. "Defend us, I want to live," says one.
"We had been the hope, the light," reads another. "Don't lie to us, Calderon."

It remains to be seen when--if ever--Juarez's departed residents
return. Ms. Vargas, the economist, expects many will cross back from
El Paso when the drug situation calms and the economy picks up.
"They're waiting it out," she says.

But for his part, Mr. Marcedo, the driver, says he intends to die in
the United States.