News | Economy | Culture | Opinion | Lifestyle | Nature
Noticias | Opiniones | Alternativa con Miguel Antonio Bernal
Archive | Unclassified Ads | Home

Volume 16, Number 13
December 15, 2010


economy

Also in this section:
Improbable Panatropolis project has government fingerprints
US-RP tax information deal enrages lawyers, bores bankers
Text of US-Panama Tax Information Exchange Agreement (PDF)
Latin America and the Caribbean will grow by 6 percent in 2010
Panama will grow by 6.3 percent in 2010
Peasant and indigenous organizations reject market schemes for global warming
Television in Venezuela: who dominates the media? (PDF)
Centennial Bridge woes
Coronado grows as a commercial center
Father Gallego's continuing legacy, by the cup


Many things that used to be in a Business & Economy Briefs feature of the website have now migrated to our constantly updated Facebook page


Look! Up in the sky! It's --- Panatropolis.... From the promoters' website

Buy now! Buy Now! BUY NOW!!!
Panatropolis, the improbable
by Eric Jackson

The Ice Tower is currently under construction in Panama City and will be the tallest building in Latin America when it is completed. The tower will be 104 floors (1,250 feet) when it is completed in 2010. It is located on Balboa Avenue on the oceanfront near the banking district.
Real estate hype, 2007

Faster than a speeding bullet. More powerful than a locomotive. Able to leap tall buildings in a single bound.
The Adventures of Superman, 1952

THE PLANNING OVERVIEW
THE THOUGHTS BEHIND THE VISION
Coming soon


Would it be libelous to say "They're baaaack"? It's an expression that was popularized in ads for a series of horrible Hollywood movies, then took on specific associations on this isthmus. Los Chukis, named after the infamous fictional Chucky, are a real-life infamous Panamanian street gang, formerly of Barraza, now of this country's prison system.

But then, the unreal sales hype of the upscale Panama City real estate bubble of a few years ago still echoes in real life --- we have one of its loudest and dullest voices as our mayor, after all. And though there are all of these luxury condos unsold and all of the condo flippers who came to Panama to get rich quick have long departed, we still sometimes see or hear Panama touted as "the next Dubai." There are also people who remember Panamarina Pacific, the new gated city over the ocean with underground parking. Some of us may even pass by the site of the pharaonic but now abandoned Faros de Panama project.

So now come a couple of insurance guys, who got into real estate during the bubble years, selling us Panatropolis:


Well, hey, if they have an expert, then it must be true.

But it seems that, although he coined the term, Professor Kasarda has never actually built an "aerotropolis." He just touts them.

Kasarda is a member of the Urban Land Institute, the international real estate industry think tank headquartered in Washinton DC, which is renowned for its promotion of gentrification schemes across the planet and these days busies itself lobbying to weaken California's environmental laws, which it says require "excessive documentation."

So what does this "aerotropolis" word mean, anyway? A quick reference to Wikipedia alleges that this reporter used to live near a couple of these for many years: Detroit Metro Airport, a major passenger hub, and nearby Willow Run Airport, which started out as part of a World War II bomber plant and was once a major place for bringing in and shipping out key parts for Michigan's now moribund auto industry.

So an "aerotropolis?" With upscale luxury housing where the glamorous jet set lives conveniently near the airport?

Things have not changed since this reporter returned to Panama nearly 17 years ago. Residential prices are lowered, not enhanced, by proximity to Detroit's airports. It's that way almost everywhere in the world, because of the noise.

Yes, there are measures that can be taken to manage the noise problem around airports. In San Diego, they don't allow planes to take off  or land at night. In some communities where residents have sued airports over the noise, settlements have included the retrofitting of homes with soundproofing to ameliorate the noise. But forget about quiet relaxation in the garden.

There are health issues about the noise. The Umweltbundesamt, Germany's environmental agency, conducted a study around Cologne's airport, and did all the statistical adjustments to take social class, pre-existing health conditions and other noise sources into account. They found that aviation noise sharply increases the rate of heart attacks, with the effect about twice as severe among women as among men. Although there is a weird cult of Panamanian yeyes that celebrates the noise of car alarms, boom trucks and firecrackers all day and night, any reputable physician will tell you that noise is a stress factor and that stress contributes to heart attacks, strokes and other unpleasant conditions.

But the Panatropolis promoters sure do make a cool video:


So why would anyone want to take this thing seriously?

The money

The promoters, headed by CEO Juan Luis Chevalier and board president Joseph Homsany, say that they intend to develop the project on 850 hectares of land between Tocumen Airport and the Pacific Ocean. 325 of these hectares, they say, will be bought by the public authority that runs Tocumen Airport from the University of Panama for "approximately $109 million," presumably for resale or some other sort of transfer to the private developers. In an unsourced press release widely disseminated over the Internet, it is claimed that:

These first steps to acquire the land were made after a meeting which was attended by the president, Ricardo Martinelli, the vice president and foreign minister, Juan Carlos Varela, the CEO of Tocumen SA, Juan Carlos Pino, Comptroller Gioconda Bianchini and the director of the Ministry of Economy and Finance's Catastro Office, Publio Cortés.

Let's see: 325 hectares is 3,250,000 square meters, at $109 million. That's slightly more than $33.50 per square meter. Granted, we are dealing with low-lying land that's adjacent to the airport where in the recent floods one of the taxiways was damaged by water seeping under the pavement. But that's still relatively cheap if it's the turf on which an upscale residential community is to be built.

The politics

Now think about the politics of that.

Juan Carlos Pino is part of Vice President Varela's Panameñista Party entourage, and the airport authority (Tocumen SA) is that ruling coalition partner's political fiefdom in this administration.

The conventional wisdom has been that the University of Panama's scandal-afflicted rector, Gustavo García de Paredes, is a shoo-in for re-election to a fifth term next year. However, the students voted heavily against his re-election referendum in June, and more recently his candidate for dean of the business administration and accounting faculty ran a distant third.

Whether $109 million coming into university coffers represents a price that's arguably too low from the university perspective, or whether it represents a shrewd deal by the university administration, in either case it's a massive slush fund for the rector to bring into play during a re-election campaign. "This is university land," notes one of the rector's sternest critics, law professor Miguel Antonio Bernal. "Varela's people are involved and Martinelli and Varela are behind it." He doesn't expect much to come of Panatropolis, but he is expecting a deal for the land that will be detrimental to the university.

(The university angle gets weirder, if one wants to believe the mysterious but widespread press release. García de Paredes is cited as saying that the university will reserve three to five hectares of its land near the airport to build a new medical school, of all things.)

Land use

The Panatropolis promoters claim to have raised 40 percent of the money they need and are looking for investors. So what if they actually find these and the Panatropolis project is built?

For many years one of Panama's development goals has been to turn our main international airport into Latin America's principal commercial air passenger service hubs. Tocumen received a huge boost by the US reaction to the al-Qaeda attacks of September 11, 2001, because for many Latin Americans it became difficult or impossible to get a visa to travel to or through the United States, and many others who have no visa problems found the reception they got from Americans unfriendly. As both an air hub and a shopping destination, Panama City took business away from Miami. Tocumen Airport has expanded and over the longer term airlines and airport planners were looking to the land just south of the airport for further expansion, to build new runways to accomodate more traffic. But that's precisely where the Panatropolis development is being touted.


Also in this section:
Improbable Panatropolis project has government fingerprints
US-RP tax information deal enrages lawyers, bores bankers
Text of US-Panama Tax Information Exchange Agreement (PDF)
Latin America and the Caribbean will grow by 6 percent in 2010
Panama will grow by 6.3 percent in 2010
Peasant and indigenous organizations reject market schemes for global warming
Television in Venezuela: who dominates the media? (PDF)
Centennial Bridge woes
Coronado grows as a commercial center
Father Gallego's continuing legacy, by the cup




Panama Vacations
Tankless Water Heaters --- http://www.eztankless.com/
Panama Hotel: Luxury apartment rentals in Casco Viejo, Panama City
Panama Real Estate: Original travel and investment articles on The Panama Report
Make the Executive Hotel your headquarters in Panama City
Find the boat of your dreams through Evermarine




© 2010 by Eric Jackson
All Rights Reserved - Todos Derechos Reservados
Individual contributors retain the rights to their articles or photos

email: editor@thepanamanews.com or

e_l_jackson_malo@yahoo.com

Cell phone: (507) 6-632-6343

Mailing address:
Eric Jackson
att'n The Panama News
Apartado 0831-00927 Estafeta Paitilla
Panamá, República de Panamá