news

The sexiest place west of Panama City's red light districts for gringos who can pay too much

Yes, Panama has a lot to recommend it, both for people who want to live here and for visitors. The rapacious business practices that go on here, however, go under the heading of "drawbacks."

The stench of burning garbage turned out not to be the only problem for Nikki Beach Panama, the condo resort whose publicity implicitly represented a Panama without black people and a resort where rich foreigners can have their every desire  tended to by foxy young blondes.

The structure of the thing is something that can't be sold to wealthy Panamanians or to foreigners who have lived here for a few years and know the ropes. Think time share, but with a twist: you get three weeks a year in your unit, but you own it all year long. The rest of the time the resort manages it for you and rents it out to tourists, and after all the expenses and overhead are deducted, you get your share of the proceeds. The possible manipulations, and potential conflicts among owners and between owners and management, are almost endless.

Right. In a country with corporate secrecy. In a country where conflict of interest is mandatory for Supreme Court magistrates. In a country that has a stock and bond market, wherein a resort baron told his bondholders that he couldn't pay them what he agreed, forced them to take less, and the price of stock in that venture went unchanged. Who, other than a naive foreigner, is going to trust a Panamanian developer in such a hard-to-verify investment deal?

Nikki Beach, the chain, has its issues too. As in the joys and risks of operating upscale resorts in hungry Third World countries with thuggish governments. They had every angle worked out with the Mubarak government when they announced that "Egypt's exclusive north coast welcomes a Nikki Beach Hotel & Spa, luxury villas, and of course a Nikki Beach Club. Located in the exclusive complex of Hacienda Bay, Nikki Beach will be the first and only resort in Egypt." And who knows? Maybe they've bought protection from the drug cartels for the three resorts they have in the works for Mexico. Their expansion was underway in the United Arab Emirates and Spain just in time for those countries' real estate bubbles to burst. Their "five star luxury hotels and resorts with Ultra VIP Service" were in the works in Honduras just in time for the coup.

Judging from Nikki Beach's lawsuit in a Miami US district court, the argument between the US-based international chain and the Panamanian developer Casa de Campo Farallon SA --- which is owned by the politically connected Galvez family --- is about "an extensive list of construction defects." Nikki Beach pulled the contract last November, but the Galvezes kept on using the franchise name and logo in its promotions, hence the lawsuit.

Meanwhile, some of the people who bought into the project share the physical quality concerns, scoff at any and all claims of "five star" restaurant or hotel service qualities, and want their money back because they bought with an expectation of a certain brand name and the standards that go with it but have not received that. There are also issues about fees that have been raised for this and that. There are people trying to sell their units, and people talking about lawsuits.

The developer's version is that Nikki Beach was ousted for its poor performance as a chain, that the resort is still a going concern, and that another chain is being sought.

But will another chain do? If it's not going to be a Nikki Beach establishment, what does that do to your chances of meeting Paris Hilton or Britney Spears there?