Sunset Properties of Playas Del Coco

Around the coast in Costa Rica

BUSINESS & ECONOMY

Casinos face new regulations in Costa Rica

(Infocom) — A series of new guidelines, including an executive decree, are seeking to limit the operation of existing and new casinos in Costa Rica.

Restrictions recently announced by the government include the fact that casinos will only be allowed to open eight hours every day — a significant cutback from the 24-hour option currently permitted. The establishments also won’t be able to offer free drinks to players, and the casinos will be restricted from having direct access to the street.

Additionally, casinos will only be allowed to operate inside hotels that have at least a three-star classification and a minimum of 60 rooms.

The goal of these regulations is to keep Costa Rica from becoming a gambling hotspot, especially after Michael Boettcher, president of the well-known Russian casino chain Storm International, announced his interest in establishing operations here — shortly after Russia itself enacted legislation limiting the activities of casinos.

The new guidelines indicate that in hotels where casinos are established, the casino won’t be allowed to occupy more than 15 percent of the hotel’s total area. Plus there will have to be a proportional relation between the hotel’s total number of rooms and the number of tables and games in the casino. For example, a hotel with 60 rooms can install 10 tables and 60 slot machines. For every 10 additional rooms, the hotel will be allowed to add another table.

Moreover, casinos will be required to belong to the same individual or company that owns the hotel; the goal of this rule is to avoid the traffic of licenses, as established by an executive decree signed by the ministers of tourism, health and justice.

The new regulations recognize, for the first time, gambling addiction as a public health issue, banning the presence of minors in casinos.

In the case of non-compliance, hotels where casinos are located could face losing their tourism business certificates and the benefits that come with that. Also, the new laws require that the company owning the hotel be properly registered as an employer with the Costa Rican Social Security System (CCSS), be current with payment of taxes, and have its Ministry of Health’s permit current.

The new regulations will become effective once they are published in the official government newspaper, La Gaceta.

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Rates for prepaid cell phone service approved

(Infocom) — The Public Services Regulatory Authority (ARESEP) has approved rates that will allow the Costa Rican Electricity Institute (ICE) to begin offering prepaid cellular telephone service through the GSM network.

The prepaid cell phone is a new option in the Costa Rican market, through which users pay a set amount of money in advance and can access the same services and capabilities of standard cell phone services. These include having a permanent cell phone number to make and receive calls, caller ID, private number, call redirecting, voice mail, call waiting, text messaging and cellular Internet, among others.

Customers can recharge their service by paying three different amounts: 2,500 colones ($5), 5,000 colones ($10) and 10,000 colones ($20). These amounts allow them to access phone services for 20, 45 and 60 days, respectively. Users are given a five-day grace period to recharge and use any leftover amount from previous recharges.

The rate authorization was published last April 11 in the official government newspaper, La Gaceta.

Regulator General Fernando Herrero explained that prepaid cell phones will allow lower-income people and tourists to have access to telecommunications services, becoming a good option to expand telephone accessibility in the country — this because users won’t have to pay a deposit (12,500 colones or $25) to acquire a prepaid line, like users of standard cell phone lines do.

Additionally, prepaid cell phones can become another substitute for landlines, providing the opportunity to improve mutual solidarity networks and access health services in emergency situations. “Everyone in the country should have access to a cell phone, and that’s why we are promoting this prepaid system,” Herrero said.

Since the prepaid service must offer the same conditions as the standard cell phones, the rates applied to both services are similar. Changes in the final cost of the prepaid cellular service will obey to charges related to service availability, access to the 911 emergency service, caller ID capabilities and sales tax.

To offer this service, ICE will need to assign any GSM lines available (whether by reclaiming delinquent accounts or by expanding the network) to the prepaid service mode, all along without subscribing more users than what current capabilities and licenses allow.

ICE must also allow any clients currently holding standard GSM cell phone lines to switch to the prepaid system should they wish to do so without any restriction, as long as the number of licensed lines is not exceeded. These individuals will get to keep the same phone number and will receive a reimbursement of their deposit.

COSTA RICA NEWS

Friday, May 11, 2007

FIFCO Unloads Stake In Paradisus Playa Conchal

By Staff Beach Times

Florida Ice and Farm Company, Costa Rica’s brewing and real estate giant, has unloaded its stake in the Hotel Paradisus Playa Conchal, one of Guancaste’s most prestigious all-inclusive resorts.

Reserva Conchal, the parent company of the 930-hectare (2,297 acres) real-estate development project of the same name, in Cabo Velas, has sold a 90 per cent stake in the 302-room hotel to Caribbean Property Group, a US investment fund.

The deal is worth $135 million.

Under the arrangement, Florida Ice and Farm Company (FIFCO) retains a ten per cent interest in the hotel, which carries the Meliá brand.

“The reason we did this is because we are not hotel operators or owners,” said Carlos Francisco Echeverriá, head of public affairs for FIFCO, late this week.

“We wanted to keep a minimum ownership only in as much as it is closely related to our real estate business,” Mr Echeverriá said.

FIFCO also retains the Garra de Leon Golf Course, as well as the remaining 700 hectares outside the hotel.

The deal has been several years in the making.

It began to move when FIFCO acquired three key Costa Rican assets of SAB Miller, one of the world’s biggest brewers with brewing interests or distribution agreements in more than 60 countries across six continents.

Specifically, FIFCO wanted the Central American bottler, Embotelladora Centroamericana S.A. (ECSA), the drinks distributor, Distribuidora Centroamericana de Bebidas S.A., and critically, SAB Miller’s 42.5 per cent interest in Reserva Conchal.

That gave FIFCO an 85 per cent interest in the Cabo Velas property.

“As the controller of Reserva Conchal, we decided to sell our majority shareholding in the hotel business,” said Mr Echeverriá. “We formed a new company and now own just ten per cent, while CPG owns 90 per cent.”

The Caribbean Property Group manages the Caribbean Real Estate Opportunity Fund 2005, an investment fund of private capital of $500 million. It is sponsored by Goldman Sachs and includes Perry Capital and about 15 other, smaller investors.

According to Jorge Volio, the Chief Executive Officer of Volio Capital, since January 2006 CPG has embarked upon an aggressive acquisition campaign.

“They raised a fund from sophisticated, US investors, of about $500 million which gives them the opportunity to leverage the capital across about $2 billion in assets,” said Mr Volio.

“The purpose of the fund is to acquire ongoing concerns with cash flows already happening.”

Volio Capital represents CPG in Central America, and Mr Volio negotiated the latest deal.

CPG has concentrated on four types of acquisitions --- hotels and other assets in the hospitality industry, office buildings, commercial and retail properties, plus industrial facilities.

In Costa Rica they have acquired the Fiesta Premier Hotels in Papagayo and Puntarenas. In a deal with the Hilton Hotels Corporation, those properties have been re-branded a Hilton Hotel and a Doubletree by Hilton.

In Costa Rica, the investments of CPG include the industrial free zone of Global Park, plus the Court Marriott Hotel in San José. The group also owns hotels in the Dominican Republic, Trinidad and Tobago and Aruba.

Mr Volio said there were no plans to alter the operations of the Hotel Paradisus Playa Conchal.
“There are no plans to re-brand the property,” Mr Volio said. “The Melia is a successful hotel, it is profitable, and we would not have done this if it were not.”

Both sides in the negotiation say they expect the deal to be finalized when due diligence is complete, probably within about 60 days.

Reserva Conchal is one of the foremost tourist developments on the Pacific Coast.

It started with Paradisus Playa Conchal, the Melia-operated, five-star, 400-plus-room, hotel, finished July of 1996, and was followed a year later with the opening of the 18-hold Garra de León golf course.

Under the 15-year Master Plan, the property will eventually be divided up into three main areas.
A second resort is to be built, as well as another golf course, and an equestrian center. Plans call for more than 700 lots to be released containing a mixture of condominiums, duplexes, single dwelling houses, villas and in some cases, building lots.

The group also plans to develop Los Altos, a small outcrop of land overlooking Playa Conchal from the south. Here will be a six-star, 70-room, boutique hotel, high-priced condominiums, duplexes and villas all overlooking an isolated beach whose only access will be by boat.

Reserva Conchal is known to be in active negotiations to begin building the second resort, to take advantage of the lack of all-inclusive accommodation along the coast. Management will not be drawn on how that hotel project might be developed.

One possibility, given the recent deal over the Paradisus Playa Conchal, would be to simply sell property, allow other developers to build the hotel and use the facility to draw buyers for their real estate.