Figali Group Requests More Land for Controversial Entertainment Center

April 24, 2007
Panama City, Panama

Grupo Figali Internacional, a large development group, is building one of Panama City’s most ambitious mega-projects. Dubbed “Panama Canal Village,” the project is located in the Amador sector of what was formerly known as the Panama Canal Zone.

Grupo Figali’s plans for Panama Canal Village Diagram courtesy of La Prensa newspaper.

For a portion of the land and sea project, Figali has two contracts with the AMP (Autoridad Marítima de Panamá, or Panama Maritime Authority) that concede a total of 19 acres of tideland for development. Figali has begun a landfill here that will encompass a yacht marina, cruise ship terminal, helipad, and beach club. The landfill will also connect a group of islets to create an upscale nightclub strip. Figali pays just over $1,500 a month in concession fees for this tideland.

Grupo Figali has a four-lot concession for which it purportedly owes over $8 million in back rent to the Ministry of Economy and Finance (MINEF). Here, the group plans to build a “high-fashion boulevard” consisting of everything from boutiques to a “California gold rush” theme park. Figali has already built a large convention center on one of the lots, but work on the boulevard project has yet to commence.

In October 2006, the AMP ordered Figali to suspend excavation and remove landfill that had been already been placed, saying that the group was working outside of the approved area. The AMP further alleged that Figali had failed to comply with submitting a series of documents and permits, including final plans for the project (the group submitted a draft proposal, but no final design).

Apparently, the fiber optics company, Global Crossing, realized that Figali was excavating near fiber optic cables. The cables were installed by the company in 2000 and form part of a larger Latin American network.

Figali did not heed the AMP’s cease and desist order, appealing instead to the Supreme Court. The group claims to have all paperwork in order and further requests that the courts review its current concession contracts. Figali says that Panamanian authorities provided the wrong coordinates when issuing the concession, leading the developer to unknowingly work too close to the fiber optic lines. The developer further contends that it signed the concession contract in good faith, only to find that other companies with concessions in the area were paying less than half Figali’s rate.

Much of the confusion in the Figali case stems from a change in government institutions handling the matter. Figali’s original tideland concession contract was signed via the ARI (Autoridad de la Region Interoceánica, or Interoceanic Region Authority). The ARI was responsible for land within what was formerly U.S. military land known as the Panama Canal Zone. Once the U.S. military ceded control of the Panama Canal in 1999 and closed all U.S. military bases in Panama, the ARI was phased out.

Just days ago, Grupo Figali asked that the AMP concede about 284 additional acres of tideland, saying that this would resolve the entire matter. Figali says the additional acreage is also needed to allow vessels with larger drafts to dock at Amador.

The AMP has not responded to the petition for 284 additional acres. In a statement released prior to the petition, the AMP said it was seeking a global resolution by means of a specially designated inter-institutional task force.

Best regards,

Jessica Ramesch
Editor, Panama Insider