Rebirth of Casco Viejo

Dear International Living Reader,

We couldn't find a place to park. Our friend, driving, had to circle the block twice then ask a young gentleman standing on the corner for advice.

The young Panamanian directed us a couple of blocks down the street, away from the square. Nothing closer, he assured us. It was Friday night...and this was Casco Viejo. The place was hopping.

It had been more than a year since my last visit to this neighborhood, and I was struck immediately by the changes...by the level of activity. Walking around earlier in the day, looking at apartments and buildings for sale, we saw construction crews down every brick-paved lane, scaffolding on every third or fourth building. Now, in the evening, we were joined by hundreds of merry-makers, well-dressed and laughing, coming and going from the restaurants and bars, the cafes and galleries.

Don't get me wrong. One out of maybe every fourth building has been or is being renovated. Many of the others, though, are near-ruins, sometimes shells, sometimes inhabited by three or four (I heard in one case 30) families. This is a barrio (our Panamanian friend walking around with us advised we avoid a certain few streets) in transition. Don't come expecting South Beach...but be ready to make the comparison in, say, another 5 or 10 years.

Don't come for peace and quiet, either. Everywhere is the sound of children laughing, radios blasting (everything from Italian opera to American pop), traffic passing, and, in daytime hours, drills whirring. This is the place to come to soak up the atmosphere and sink into the scene. Living here (as increasing numbers of foreigners are choosing to do), you could walk out your front door at 11:30 at night and go in any direction to a nightclub or a good restaurant still serving dinner.

I'm a sucker for old buildings, and this old town has no shortage of them, some Spanish in style (elaborate iron railings and grillwork give these away), some French (with more subdued facades), some dating to the early 1700s. Unfortunately, many of the original buildings of this neighborhood were lost over the centuries to fires, but a good few stand, and there's a good inventory of 19th-century structures worthy of attention. These mostly three- and four-story buildings line the narrow lanes and, in every direction, lead to water, for this little city is nearly surrounded by it.

It's the kind of place Paul Gauguin or Graham Greene would have appreciated. Indeed, they did. Both spent time here.

For centuries, though, the Panamanians didn't seem to appreciate their second-oldest city, choosing to build the "modern" Panama City several miles east. Casco Viejo languished for nearly a hundred years.

Then, in 1997, UNESCO named it a World Heritage Site and, that same year, a government restoration project was begun. The Panamanians began offering incentives to anyone who would help them rebuild and revitalize this neighborhood, the oldest European settlement on the Pacific coast of the Americas. Decree Law #9 allows that any income from the sale or rental of a building in Casco Viejo is exempt from Panamanian tax for 10 years. Plus, you can deduct 100% of the costs of the renovation from your income tax, and you don't pay any duty on materials imported for renovation. Further, you're exempted from property tax for 30 years and all transfer taxes (as long as you're paying at least $50,000 for the property).

Here's a tip: Build a parking lot. The place needs one...and if you put one on an empty lot, your income from it is tax-free for 10 years.

Some investors taking advantage of the tax breaks have renovated their buildings to impressive standards, restoring them exactly to the original (Though, to be honest, they didn't have much choice. The city is careful. Your renovation plans must be approved, and they must respect the history of the building.)...while adding all the conveniences of 21st-century living.

We toured the completed renovation projects of one small development firm that's been at work here for several years, turning these old buildings into small, upscale apartment complexes (if you're interested in owning or living in this neighborhood, these are the apartments I'd recommend first, though not much inventory remains... our Local Office staff in Panama can give you follow-up details: Panama@internationalliving.com ).

Then we saw a current project, where they're just starting the renovation work, and we thought, ah...here's an opportunity. Classic building, prime location. We're delighted with the idea of relocating the International Living Panama office to this address. We're making an offer. I'll keep you posted.

Kathleen Peddicord
Publisher, International Living

P.S. From Panama, Sunday, I returned home to Ireland. My husband, Lief Simon, traveled on to Argentina, where he has met up with the Discovery Tour in that country this week. Yesterday, he told me this morning, the group toured a dozen apartments in B.A., including one in San Telmo that got Lief's attention. San Telmo is in the southern part of the city, dating to 1735, when it was home to the city's aristocrats and elite. Today, the houses they lived in remain, though many have been cut up over the centuries into down-market apartments. Sam Telmo is maybe best-known for its Sunday antiques market.

The apartment that caught Lief's eye was a renovated two-bedroom of 227 square meters plus a patio, on offer for $125,000. That's $550 a square meter. Good price. Lief says good apartment. For details, contact Paul Reynolds .

P.P.S. Lief also says he's just learned that an individual property owner in Argentina pays no capital gains tax upon resale.