Now Might Be the Time to Invest in Veracruz

This is little more than a fishing village…but it could be the next big thing…

November 30, 2007
Panama City, Panama

We've been talking about the Veracruz area in Panama Insider for some time now. In our February 2007 issue, we said, "There seems to be a good foundation to develop there." And now it seems Veracruz is about to take off as predicted. Part of this is due to the nearby Howard neighborhood, designated the Panama-Pacific Special Economic Area (AEEPP) in 2004. The government gives special incentives to certain types of businesses—including technology, airline repair and maintenance, maritime cargo, and transportation logistics companies—that invest here. A master development plan is in the works that will turn Howard into a major logistics hub boasting one of Panama's most coveted residential areas. Veracruz is little more than a rustic fishing town and beach locale just minutes away from Howard and about 25 minutes from the center of Panama City. Though the beach can be quite deserted during the week, on weekends you’ll find it full of middle-class families, surfers, and young adults. Vendors in makeshift kiosks sell fried fish, ceviche, and friend green plantains. It's pleasant and homey…and the Panamanian jet-set wouldn't be caught dead here with "the riffraff." All this may be about to change…thanks to a "crazy" proposal.

The proposal is for a $2.4-billion, 43-million-square-foot project dubbed "Panamarina." It's the brainchild of Spanish businessman Carlos Llamas, who says he is negotiating with the Panama government to obtain permission for the project.

Panamarina calls for some 231 new buildings, hotels, and residences, golf courts, a cruise ship marina, casinos, and more…right by the tiny pueblo of Veracruz. Llamas envisions all this on an artificial island—that he would build and that would be linked to the Veracruz community by a two-mile bridge. Though he has yet to reveal who exactly will be joining him in this venture, Llamas says he has already founded a Panamanian corporation with capital from France and Spain. He also says he has lined up collaborators who have the technical experience required to carry out such an endeavor.

Urban planner Alvaro Uribe calls Llamas "delirious," saying that the project is "science fiction…technically possible but the costs would be extremely high."

Llamas, however, is optimistic. He says the project is feasible and promising, and would follow European models. "We propose that the government give us control over the marina, and in exchange, we'll give $300 million in infrastructure to the community of Veracruz." The community would benefit with a water treatment and sewage system that would "revitalize" the coastal waters here. Llamas also says he will give the community a public access beach with covered areas, machines to keep the beach clean, 2,500 homes for the community, a hospital, a school, training facilities, and new roads.

Llamas says Panama President Martin Torrijos approves of the initiative, but that it still hinges on an environmental impact study that will be presented to the National Environment Authority (ANAM) in a few days. Asked whether the project will have an impact, Llamas says, "Of course it will have an impact, everything has an impact," adding that the positive would outweigh the negative and that the impact would be minimal because the Bay of Panama (currently undergoing a massive cleanup) is already polluted.

We looked for property in Veracruz and found a four-bedroom home, asking price $75,000, and a three-bedroom ocean-view home for $90,000. A 35.8-acre lot is also on offer; the lot is divided by the town's main road, but 20% of the property is beachfront--asking price $1.4 million. A non-ocean-view lot near the coast is also available for $137,260. Will these prices go up in the near future? If Llamas' project is approved, there's a good possibility property in this area will appreciate significantly.

Best regards,

Jessica Ramesch
Editor, Panama Insider