By
Ralph Nicholson and Zoraida Diaz
Friday, April 18, 2008
Santa Cruz Gives Nod To $91M Bid And 442 Slips
An international consortium of Costa Ricans and Americans has won the right to build and operate the long-awaited international marina in Playa Flamingo.
An extraordinary session of the Municipal Council of Santa Cruz on Saturday voted five to two to award a concession to Desarrollo de Marinas Matapalo DEMM S.A., almost five years after the current facility was ordered closed.
The winning consortium, made up of a handful of US and Costa Rican businessmen, beat out three other contenders for the concession.
At $91 million, Matapalo DEMM was the biggest and most ambitious project among the four.
The company’s plans call for a new breakwater plus 442 boat slips, some capable of handling mega-yachts of up to 45 meters (150 feet). There will be coastguard, immigration, police and refueling facilities, a 20,000-square-meter hotel, a commercial center and an unspecified number of condominiums. The facility will also include an extended pier for cruise liners.
“I am going to resurrect Flamingo as the sports fishing center of Costa Rica, fish permitting,” said a clearly delighted, Donald Brooks, who is part of the winning consortium.
The Council’s Flamingo Marina Commission considered four final bids, but rejected two — Inversiones Rigilcom S.A., and Tamarindo Lifestyles S.A. That left Matapalo DEMM and Willily Ocean View S.A., the same company developing the Bahía Escondida Marina, presently under construction in Golfito.
In fact, Victor Ledezma Varela, a legal counsel hired by Santa Cruz, urged the municipality to award the concession to Willily Ocean View, arguing in a prepared report that Matapalo DEMM’s project was inconsistent with the master plan, and would generate “great fills and movement of soil” and have “an adverse impact on the other part of the bay.”
Instead, in a 32-page report read to the council, Municipal President Adrian Rojas ignored the legal advice, saying Matapalo DEMM had shown coherent time frames, a financial capacity to develop the marina, plus a project which was bigger in scope and price than Willily Ocean View.
With their decision the Municipality stands to make $459,000 a year in concession leases, about $175,000 a year more than if they had awarded the concession to Willily Ocean View. It was a fact not lost on the marina commission.
“…the group Matapalo DEMM S.A., will pay the municipality an annual canon that is much greater than the one offered by Willily Ocean View, with which the municipal finances would be better served with the possibility of developing more social and communal projects that benefit the population,” Mr Rojas told the meeting.
In reality the concession fees may be smaller than projected.
Developers must now present an environmental impact study before SETENA, the National Technical Secretariat of the Ministry of Environment. Further, their plans must pass scrutiny by the Comisión Interinstitutional de Marinas y Atracaderos Turísticos, (or CIMAT), the government department charged with overseeing all technical aspects of this and other marinas.
Both departments are likely to seek changes to the original plans.
“The drafted project is now subject to technical analysis, and eventually the public area that they are interested in developing could be cut,” said Oscar Villalobos, CIMAT’s Technical Secretary. “It will be transformed and it will mature and end up being different: this is a fact.
“What must be understood is that the scope of the project, once it is presented before SETENA, could completely change, for it must adjust to all the requirements of the Law of Marinas and environmental viability.”
Only when both SETENA and CIMAT are satisfied can the developers formally apply to the municipality for the concession.
Matapalo DEMM is made up of a handful of investors, including the $500 million Rodblu Investment Fund and its two principles, Carlos Rodriguez and Stephen Blumenthal. Mr Rodriguez, a Costa Rican, owns the Flamingo Beach Hotel, via Cardel Hotels LLC. He is also Executive Vice President of Driftwood Hospitality Management LLC, which includes more than 40 properties. Mr Blumenthal is a Miami real estate developer and broker.
Mr Rodriguez said he hoped to have all the paperwork completed within six to 12 months.
“We are currently negotiating with different high-end hotel brands to see whose name will go on the facility,” he said from Miami, Florida. He confirmed it was likely to come from among their own stable of brands, which include Radisson, Wyndham, Crowne Plaza, Sheraton, Hilton, Hampton Inns and Holiday Inn.
Regardless of timing — the construction phase is likely to take three years — the awarding of the concession has been widely welcomed.
“I don t know what the considerations were, nor the technical aspects considered,” said the Minister of Tourism, Carlos Ricardo Benavides. “But I think that a well-made marina in that region is extremely important as it would consolidate the area’s tourism development.”
Gerardo Brenes, President of the Association of Fishermen of the Northern Pacific, which has 32 members, said he had spoken with representatives of Matapalo DEMM, who had committed a number of slips for exclusive use of artisan fishermen.
“It’s not that we were married to any of the groups, but now that this one has been chosen, we welcome them, and they can count with the support of the association.”
The decision is likely to give a boost to local real estate, which has seen prices ease on the back of worsening economic conditions in the United States.
“This is a very good thing for the area,” said Jack Osborne, owner of Coastal Properties in Flamingo, which has about 100 hectares (250 acres) of undeveloped land in the area.
“We are very excited, everybody has been waiting for this for a long time,” Mr Osborne said. “I think it will dramatically increase land prices in the area, especially property directly in Flamingo.”
“The marina announcement is very positive for Flamingo area real estate values,” said Sharon Myers, President of the Costa Rica Global Association of Realtors.
“For the most part, current price levels already reflect some of the anticipated value of the marina project,” she said. “Longer term, once the project is completed, a new economic engine will be created and we expect to see significant demand for Flamingo area real estate.”
James Lynskey, legal representative of Willily Ocean View, was less than enthusiastic.
“We are convinced that the best offer is ours; therefore, we will use all the resources the Costa Rican State of Law guarantees to defend our offer, but we can only decide specifically which legal instruments to use when we have been notified officially,” he said in a written statement.
The adjudication document gives losing bidders ten days in which to appeal.