DC4MS

Friday, August 29, 2008

$800M Punta Cacique Project Put On Hold


By Ralph Nicholsun

Punta Cacique, an $800 million resort project south of Playa Hermosa in Guanacaste, has been shelved for up to 18 months because of the downturn in Caciquethe US economy, it was confirmed this week.

Revolution Places LLC, the US company owned by Steve Case, the founder of the internet giant America Online, was to have built two boutique hotels, a tennis center designed by husband-and-wife tennis stars Andre Agassi and Steffi Graf and an 18-hole golf course by Tom Doak.

It is the third mega-project to be put on hold in the past three months, all of them blaming the poor US economy and the spiraling cost of building materials.

In June, Genesis Desarrolladores, one of the leading real estate development firms in Costa Rica, confirmed it was putting on hold its St Regis Resort project in Playa Coyol, on the Central Pacific coast.

The Genesis decision came in the same month developers behind the $120 million, 150-room Regent Hotel project on Guanacaste’s Papagayo Peninsula, announced their project was also on hold through lack of financing.

The long-rumored decision by Punta Cacique to postpone development will come as a further blow to the Pacific coast real estate market, already feeling the effects of the housing crisis in the US.

Jorge Cornick, a spokesperson for the Punta Cacique project, said the decision was made in response to the US economy, the hike in the cost of raw materials and rising gasoline prices.

“We have made considerable progress in Cacique Costa Rica this year in terms of design, entitlements and finance and we are convinced this project will be a success,” Mr Cornick said.

“While we have made progress, we have also closely monitored both the US and international economic and financial climate and based on the general uncertainty of the global economy, we believe it more prudent to proceed with construction of Cacique Phase One at a later stage,” he said.

Mr Cornick said he expected the project to be on hold for 12 to 18 months.

“Revolution Places is fully committed to Cacique and to Costa Rica,” Mr Cornick said.

“We believe that our commitments to environmental sustainability, social responsibility and respect for the local culture make Cacique a perfect match for the values and expectations of Costa Rica and we look forward to the date in which we start building this great project.”

The development, which was originally scheduled to open in 2010, was announced with great fanfare in August last year, with Mr Case standing alongside President Oscar Arias.

A press conference heard the resort would be built on 263 hectares (650 acres) known as Punta Cacique. The project will leave 80 per cent of that land undeveloped as a private natural reserve.

© Zoraida Diaz




BETTER DAYS: (from left) Punta Cacique’s Steve Case with President Oscar Arias, the Minister of Tourism, Carlos Ricardo Benavides and the Minister of the Presidency, Rodrigo Arias in August, last year. Now the project has been put on hold.


The announcement also marked the launch of Revolution Places, the new destination resort unit of Revolution, a holding-and-operating company founded by Mr Case in 2005 with $500 million of his own money.

The resort is planned to have 270 guest rooms and 300 private homes. One and Only Resorts, a hotel firm with locations worldwide, will operate the beachfront hotel. Exclusive Resorts, a luxury time-share business owned by Revolution, will build 30 of the resort’s homes. Miraval, a destination spa owned by Revolution, will operate a facility with 120 rooms and 60 villas.

The group had also applied for permission to build a marina and dock for up to 75 boats.

Building was supposed to have begun in April and created about 2000 jobs.

Like Punta Cacique, the $120 million, 150-room Regent Hotel project on Guanacaste’s Papagayo Peninsula, was announced alongside President Arias.

Minnesota developers Richard Pakonen and Blaine Kirchert had teamed up with Regent International Hotels and the respected Costa Rican architect, Ronald Zurcher, to build and manage the project which will include the hotel, 86 condominiums, 20 luxury estates and a giant spa.

The 22-hectare site (about 60 acres) overlooks Peninsula Papagayo and Bahí*a Culebra and includes three beaches. The developers had originally wanted the hotel operational by early next year.

Mr Kirchert said in June the project was still looking for construction financing. The developers had been talking to Lloyds of London who had been interested, but ultimately decided against it.

“We are pausing for the moment, giving us a chance to investigate further how the situation with the capital markets might play out,” Mr Kirchert said at the time.

In May 2006 Genesis Desarrolladores announced it would build the luxury St Regis Resort project, which includes a residential component, together with Lionstone Development, a Miami-based company with a 30-year track record of owning, developing, leasing and managing hospitality, gaming and residential properties.

However, Vianney Delgado, a spokesperson for Genesis, confirmed in June the company was searching for a new partner for the project.

Mr Delgado also pointed to the worldwide economic climate, which had influenced the decision.

“Two additional factors we are taking into consideration to put the project on hold are the international uncertainty in the real estate business and the construction costs which are increasing every day,” Mr Delgado added.

Mr Delgado said the St Regis brand was still associated with the project, which is to be built on 100 hectares (250 acres) about 100 kilometers (65 miles) southwest of San José and near the Los Sueños resort, marina and golf course.

“The rest of the project will remain on hold until the group negotiates with this new partner we are looking for,” Mr Delgado said.


The Beach Times - $800M Punta Cacique Project Put On Hold

Kagehitokiri

regent on hold? not good for lusso.

3DH

I was thinking the same thing, Kage! (The Panama project seems to be in the same sinking boat...)

__________________
"Boutique" is better! Another extremely satisfied LUSSO member!

pwrshift

Maybe AOL isn't doing well these days?

caribbeansun

I've been advised by a resort developer with connections to Regent that in fact the Costa Rica project was pulled by the developer because he got a better offer from St. Regis.

Time will tell if this is accurate or not.

3DH

Is this the one that Steve Case was partnering with, or La Punta Papagayo, which was to have a Regent hotel at it... ? The website is now very vague on who will be running the hotel end.

__________________
"Boutique" is better! Another extremely satisfied LUSSO member!

ER Traveler

I believe it was a separate project that included a One and Only and a Miraval along with residences including some ER homes. I think it's smart to put this on hold. The locals are very disturbed the governmant has allowed development on nearby Peninsula Papagayo since it was park land and the locals now have very restricted access. The location is really not ideal for seeing the best of what Cosat Rica has to offer and as I would prefer that ER look to expanding in a completely new destination than build anymore in Costa Rica.

3DH

How is the availability at the Costa Rica residences? (I am curious as to whether members find this a high-demand location... especially since LUSSO is constructing 4 residences nearby.) We enjoyed our visit to Costa Rica (ER homes) in 2006, but the only major outing we took -- other than the canopy tour -- was to Tamarindo for surfing lessons and lunch.

__________________
"Boutique" is better! Another extremely satisfied LUSSO member!

LTTravel

Availablity at Costa Rica is very good now that they have 21 homes there. Only Christmas, New Years, President's Week and one or two weeks of Spring Break need to be booked early, otherwise there is almost always availability.

ER Traveler

Availability is good outside of major holidays - I would say equivalent to Cabo and RDM. They are well utilized and other members like them alot. Recently members have begun adding additional days to their trips to go to the volcanoes and and rain forests and stay in some of the better located lodges. Peninsula Papagayo will eventually have more options for dining and lodging so will be more "happening", that is if these projects don't end up being canceled completely.