Preheat the oven to 350.
Add the sugar and water to a medium heavy bottomed saucepan. Cook the sugar mixture over medium heat until golden, brushing the sides of the pan with water to dissolve sugar crystals if needed. Watch carefully so the sugar does not burn.
Immediately pour the sugar mixture into a deep dish pie pan or 2 quart round baking dish, tilting to coat the bottom of the dish with the sugar. Let stand for 10 minutes.
In a medium bowl, beat the cream cheese until fluffy. Add the eggs one at a time, mixing after each addition. Add the sweetened condensed milk, evaporated milk, and vanilla, and mix until smooth. Pour the cream cheese mixture over the sugar mixture in the baking dish.
Place the baking dish in a larger baking pan, and pour boiling water into the pan until the water comes up one inch on the sides of the baking dish. Bake 50-60 minutes, until the center of the flan is set and only jiggles slightly when shaken gently.
Cool on a wire rack for one hour, then cover and refrigerate overnight. To serve, run a knife gently around the sides of the baking dish, then invert the flan onto a rimmed serving dish.