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"Latin America's tallest building" project collapses
Government withholds text of Free Trade Agreement
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The tallest building in Latin America? Never mind...

by Eric Jackson

Back in July the nation's business and political elites were mainly preoccupied with selling a Panama Canal expansion plan, and part of the sales pitch was that the injection of a lot of money into a huge national public works project would stimulate the entire economy. The more optimistic of the smaller-scale real estate people and the outright hustlers who are forever looking for an excuse to say "now's the time to buy" were echoing what the big players were saying.

And so it was with great fanfare that Archbishop José Dimas Cedeño, Second Vice President Rubén Arosemena and Panama City Mayor Juan Carlos Navarro led the cast of dignitaries at a ceremony to inaugurate the Palacio de la Bahia, to be Latin America's tallest building on Avenida Balboa.

Meanwhile, however, certain architects, developers and urban policy wonks quietly wondered how such a building's residents could be squeezed into Avenida Balboa's already congested traffic. Others noted that no Panamanian bank was involved in the financing.

But the doubters who are also business competitors didn't want to be so rude as to openly trash a high profile project, and people were preoccupied with the canal referendum back then. So the project was announced, buildings were torn down, and a blast of worldwide publicity, much of it in sophisticated international media whose reporters are expected to be more skeptical, much of it on the websites of the sleaziest speculators and their cheering sections, went out about Panama City soon having Latin America's tallest building.

The problem is, the plans called for seven stories of undeground parking and the site is on a landfill. The water intrusion problem was not taken into account and officials of the municipal and national governments who should have known better didn't bother to notice that they had been called in to promote a project that for practical reasons could not be built.

But the hype went on over the Internet and in real estate offices and a number of buyers with lots more money than brains plopped down their money to buy apartments in advance of construction.

On the ground, reality soon set in. Changes were made to the plans, allegedly by non-Panamanian architects at the developer's behest, and without getting prior approval from city hall. Foundations were laid with quantities and qualities of concrete that were insufficient to support a skyscraper's weight. The city hit the developer of the $160 million, 350-meter high project with a $42,000 fine for those infractions. The changed plans would have meant fewer apartments to sell as parking moved above ground and higher building costs.

As word got out, the appearance was of a boondoggle at best, a fraud at worst, and most probably an intention to make a grand announcement to bring in the paying customers and then cut corners everywhere possible. In the face of that, Spanish developer Adolfo Olloqui called a halt to the project, blaming the architectural firm Jesús Díaz Arquitectos for selling him a non-viable plan. The latter, for their part, blame the developer for making technically impossible cost cuts. A pay dispute wherein the architects are demanding $500,000 in unpaid fees ensued, with suggestions aired in the local press that Olloqui is insolvent.

Olloqui, for his part, says that the project will be resumed with a new plan by a different architect and that people who had bought apartments will not be cheated.

So what does it all mean? Boquete developer Sam Taliaferro had these observations:

"I had met with the developer on several occasions and he left me as someone who did not have a clue of what he was doing. He was into the hype and wanting to build the biggest building in Latin America. I know the architect Diaz and he is a good fellow, but does not have experience in buildings of this magnitude. I think this will be the first of many cancellations and although it is not good for Panama's reputation, it may be good for Panama in the long run.

"We have just completed another study that shows over 20,000 apartments being constructed in the city in buildings over 40 stories. That does not include the many, many projects that are single family homes in the Interior.

"Everything in the city is being driven by speculators and not buyers. For every buyer there are 100 speculators.

"The Interior is a different story. Most properties being bought on beaches and mountains are for people who want to live there. Very little speculation, but also it is slow in sales for most of them."

Taliaferro concluded that it may not be popular in some circles, but that the speculation needs to be cooled off so that "Panama grow in a responsible and careful way."

This is the second time that plans for a tallest building in Latin America located in Panama City got into the cconstruction phase, but all for naught. A few years ago the would-be Generali Tower on Calle 50 ended up as a huge mosquito breeding hole and the stuff of long-running acrimonious legal disputes.