Guys In The Zone: Costa Rica Real Estate

Regional to International, the Osa Airport Dilemma

A week ago, I was reading the Tico Times and the headline “Liberia Airport Renovation Nearly Finished” jumped out at me. It’s only been nine years since that airport opened, and now it’s getting $41 million dollars worth of renovations?? I had to figure out why, if only because it might offer a flash forward to what we can expect when (emphasis on “when”) the International Airport opens up in the The Zone, also known as, the southern Pacific zone of Costa Rica.

Long Lines

Whether it’s checking into a restaurant, hotel, or airport… people do not like to wait, especially when the line stretches out the door. Long lines and airports are synonymous, but the leaders at Liberia International (and the Guanacaste business owners) have figured out that a bad traveling experience doesn’t inspire repeat customers. The Liberia airport is scheduled to re-open any day now, and just in time for the tourist season.

The Profitable Impact

Did you know that 225,224 passengers arrived at Liberia’s airport last year*? That’s an average of 18,768 people per month and just over 625 per day. In January, foreign visitors in Guanacaste, increased by more than 28% over January of 2010. With the upgraded facilities (think mini-Juan Santamaria), services, and new carriers (JetBlue, Air Berlin), they are clearly anticipating an increase in arrivals in the near future.

The Liberia airport has done wonders for the development (read- boom) of Guanacaste. Not only does the airport employ hundreds of people from the community, it also stimulated new business opportunities in the immediate area, including— hotels, car rental companies, and commercial centers.

Conversely, there can be, and usually is, a relative downside to rapid development. Have you been to Tamarindo lately? I went two years ago, and the sleepy beach town I visited in 2002 was almost unrecognizable. The main strip looked like it had a SoCal facelift, the renown beach break was packed with surfers, and I found myself longing to be back in quiet and verdant Zone.

How It Relates To The Zone

The second most popular question we get is “When is the International Airport in Palmar going to open?” My answer: “I have no idea.” It’s not that I don’t read up on the subject, it’s just difficult to believe the words of Alberto Cole or the Minister of Tourism.

As I mentioned in an article a year ago, the construction of this airport goes hand in hand with the construction of new hotels. (At this point the area doesn’t have enough beds to accommodate an extra 400+ people/day in The Zone… especially in the high season.) Adding small to mid-sized boutique hotels isn’t an effective and complimentary plan. For the airport to be viable, large 100+ room resorts will need to be built and one need look no further than Guanacaste and its growing pains to be concerned.

To date, Ben and I have not heard anything concrete regarding new resorts in the area. Taking that one step further, there are only a handful of residents who want this airport to be built. Simply put, the majority of people who most desire this new International Airport… are people who don’t live here.

Tiger Heron in the Osa Peninsula

The Ecological Impact

Some of our reader saw the recent article in the Environment section of the The New York Times. The article outlines the potential ecological impact on the Osa Peninsula, an area that boasts 3% of the World’s known biodiversity. The author writes, “Construction is planned in two phases from 2012 to 2016… (initially) designed for 50 passenger planes.” IF (notice the big IF) that timeline is accurate, there will be a global blast of articles and special features, then… an influx of investors. Real estate and development markets will surely be stimulated, and these investors and relocators will have a large raw land inventory to choose from when they do arrive.

As real estate experts, Ben and I are standing in the path of progress and we are experienced “tour guides” in Costa Rica real estate. However, like the majority of people who move to The Zone, we also love our small town community and the postcard paradise that surrounds us.

* Costa Rican Tourism Institute

Hydroelectric power is BIG in Costa Rica.

The Costanera Highway, The Caldera-San Jose Highway, The Cortez Hospital, The International Airport and The Diquis Hydroelectric Dam… it is easy to see that Costa Rica is serious about improving its infrastructure and securing a bright future.

Over the past decade, the dramatic increase in tourism and investment has sparked a bit of a power-struggle between proponents of economic growth and socio-environmental protection groups.  In this case, the “power” is the proposed billion dollar hydroelectric project called “El Diquis” near Palmar in the Osa Peninsula.  This isn’t recent news, but I believe it is worth mentioning as it will affect life in various ways in the southern Pacific zone of Costa Rica.

The Zone Is HOT

This large-scale project, facilitated by I.C.E. (Instituto Costarricense de Electricidad), is calling for the construction of a dam on the Térraba River in the greater Boruca Canyon. The dam will create a lake equaling approximately 25,000 surface hectares (over 6 million acres), the largest of its kind in Central America.  By comparison, Lake Arenal is roughly 8,500 hectares.

This station will generate up to 630 megawatt units capable of providing over one million families with electricity!  This project is about Power, both electric and economic.  According to a Continuum report commissioned by the Costa Rican government, Read the full story

Are you an entrepreneur who wants to relocate in Costa Rica? Many of you have ideas of what you would like to do but you don’t know if it is feasible. Do you buy a well-priced piece of real estate then develop it to your liking? Or, do you buy a turnkey business in one of the small towns of the Southern Pacific Zone (SPZ)? Those are two questions The Guys In The Zone are asked often, and I thought I would shed a little light on the possibilities.

Buy land, build structure, announce grand opening.

Relocators who lean toward the Buy & Build model are the most common brand of investor. Rarely, does the building process go perfectly smooth especially if you are a “first timer” in Costa Rica. Even with a good contractor, we encourage most owners to be on-site often. In fact, the more you can be there to answer questions and provide direction, the better. There’s nothing worse than flying down to check on the status of your building only to discover the size of your custom kitchen and bathroom have been interchanged?! If you follow this advice and move down to oversee the building process, then there are the obvious costs associated with living here (rent, bills, food, gas, etc.). However, this increases your chances to end up with the small (or large) business you always dreamed of. I have attended a few “Grand Openings” in the past few years, and most owners smile with pride, albeit with a touch of fatigue.

Most of our commercial land sellers are open to negotiating price and/or carrying paper (seller financing) as long as there is a significant down payment. Currently, we have excellent “raw land” properties that can accommodate businesses ranging from a small hotel-restaurant (listing #224) and one of the best “large commercial” pieces on the Costanera (listing #312).

Or, buy a landmark!

Until just recently there were very few businesses to buy in the SPZ. Over the past five years, the ticos and early bird gringos have successfully Read the full story

Yesterday started off as a typical, glorious Costa Rica morning. Rod and I got an early start with San Buenas Golf Resort Project Manager Larry Breau, walking the golf course project. This involved a drive from our Uvita Costa Rica office towards the south about 20 minutes. There was a slight delay in travelling south due to to ICE (pronounced ee-say), which is the monopolistic agency here in Costa Rica in charge of telecommunications. They are running a new grid of lines to accommodate the rapid growth in the zone. No problem, just a 5 minute wait.

We had a full morning of rubber boots, machetes, broad rimmed hats and a liter of water reviewing the project.

In driving back to the office we encountered a line of cars backed up. Thinking it was ICE we sat patiently waiting. A number of people had turned off their cars and were milling about in the road, talking, some with exaggerated arm gestures. One gal walked by and upon seeing the lighter shade of our skin (assuming that meant English is spoken) she approached us and asked what the hold up was. We very authoritatively informed her what was going on with ICE. Turns out we were dead wrong. This was a road block caused by angry protesters out in front of Crystal Ballena, a local hotel and restaurant where a high level meeting was in its second day.

Costa Rica government officials met with developers and the local Osa government departments to discuss some of the project closures that were the result of an inspection sweep Read the full story