Progress Report

Feb.  7-12, 2005 // CONSTRUCTION LOG #18

As in past weeks, several new names have been added to the mailing list. If someone no longer wants to receive this progress report, let me know and I’ll remove you from the list.

NOTE: THIS LOG WILL BE A BIT DIFFERENT THAT THE PREVIOUS LOGS WHICH HAVE FOCUSED ON THE CONSTRUCTION. THE THREE AREAS WHICH DIFFER ARE: A “MARRIAGE MAKER”, “THE PERMITTING PROCESS TO DATE”, AND “MARKETING—THE NORTH AMERICAN RETURNS”.

THE “MARRIAGE MAKER”

It occurred to me that there might be someone in the readership who had the same problem I did: how to develop and maintain a website. I have already introduced the person I use to two people —they have been as happy as I’ve been with her services.

Background: Maria and Gaston —a young Argentinean couple who lived on the property for about 18 mo. I never got to know them very well —we each had our agendas and Gaston worked long hours and Maria took care of now 2 year old Adriana. Gaston had helped us on several occasions and I subsequently hired him to design and install the wireless LAN system. On the cusp our returning to Canada and of their subsequent return to Argentina to be closer to family and friends and to participate in Argentina’s economic rebirth, I came to know Maria for more than a wonderful person and mother but professionally as a website designer.

In June I started working with her and WOW!!! was I surprised that this talent had been living next door to me all this time and I didn’t know it. While I provided the overall design of the website and the content (text) including many of the pictures, she put it all together and made a number of editing contributions which better displayed the content. She made it so the website works, it loads fast, it is easy to negotiate, etc. She chose the colors and layout of each page. She translated all the English into Spanish and she continues to upload my construction log, pictures and translates the log into Spanish. She has done other translations for me as well. She is fast, efficient, accurate, reliable, and gives excellent turnaround service. She is very, very reasonably priced and wonderful to work with.

What I continue to find amazing is that distance is NOT a problem. She is in Argentina some 3,000-4,000 miles apart. We never see each other. It makes no difference. It is as if she is in my office.

Maria’s e-mail address is: luz@hostarg.com.ar

THE PERMITTING PROCESS TO DATE

This is a progress report; the story is not yet finished nor is the outcome known. I do, however, have some observations and experiences which might be of interest and or useful to others:

Situation: The application was rejected at the Regional office of the Ministry of Health because it was considered by them to be a “condominium” even though the Governmental body of Architects and Engineers which is the first step in any application process has classified it as a non-condominium. Who’s got the ruling authority??????

Background: I purposefully tried to avoid the condominium classification for a number of reasons:

(1) When I started the planning of this project several years ago, I heard a number of reports that bribery was a common and necessary element to expedite the process. My neighbor developer related a story to me that he had to buy a certain pipe from the brother of one of the government officials as it was the only one “approved” for the application. It cost him an additional 3,000,000 colones which, at that time, was about $7,500 USD. If one didn’t play these games, then the application process was even longer than long. Having just come from a project in Toronto where I had to wait a year to get a building permit and incurred thousands and thousands of dollars in costs and mean while watched the economics of the project melt away, I was looking for an alternative.

(2) Condominiums are fairly new to CR. The laws are frequently changing, contradictory, and they never really get it right. When I started several years agon, there was a big scandal. Builders had submitted plans and the projects built often differ significantly---there were no site inspections. The result was that the government was receiving much criticism from purchasers that what they thought they were buying was significantly different than what was developed. I really didn’t want to be part of this in any way, shape, or form.

(3) There were some requirements which I really didn’t want to comply with because the economic result would have been to destroy the concept that was really at the heart of this development—to live in a garden and to be surrounded by nature. I didn’t want to see or hear a car. The economics of building a big roadway and the shape of the lot and the location of major plantings and trees conflicted – I would have to put a huge roadway down the center of the property, through the heart of the garden and then I would be like every other bloody condo development in CR. Thank you , NO.

(4) In addition, there were some other requirements which added no value to my product. I calculated that the total additional cost per house constructed was about $8-10,000.

(5) I therefore, devised a strategy whereby I could avoid some of the government review agencies, the whims and experimentation of the development of condo law, and the roadway requirement which would largely destroy the heart of the development. That strategy was to use a legal structure in CR law—a co-operative—where purchasers would buy shares in the corporation which owned the land and improvements and the shares purchased would give exclusive right of use in perpetuity to the owner of the shares. The day to day operation would look and feel like a N. Am. condominium. The main difference was that the purchaser would not have title to the property and therefore could not get a mortgage. Subsequent analysis said that while mortgages are technically available to non-residents, the requirements and terms are more rigorous, time consuming and expensive than for residents. My target market was/is the N. Am. retiree, the 2nd. Home owner, and investors. Many of my clients were likely to pay cash and for those who couldn’t, I would provide the financing more easily than they could otherwise get. I speculated that Ticos would not buy into this cco-operative structure but I also didn’t expect Ticos to buy my product for a number of other reasons.

Speculation on my part: The rules of the game have changed in mid process. With so many presidents and high profile people in jail or with pending charges of bribery and corruption, the small bureaucrats, who in the past may have been guilty of the same charges, are now running for cover. No one wants to make a decision which requires any thinking, If a situation even gets close to the line, it is rejected and moved up the line to someone else.

The bureaucrats are not making the distinctions that exist in law. They seem to say that if it walks like a duck, quacks like a duck... It is a duck regardless of significant differences—they don’t really want to look at the nuances—they either don’t have the training or they are afraid to make a decision.

What has happened? and What is in progress? I’m following two parallel paths. (In what follows, I’m going to be a bit vague with names and places.)

Path A: is to return to the decision maker in Min. of Health and try to explain to him why this project should not be so classified. It is my belief that the decision maker never reviewed the plans but was advised by an subordinate. To follow this path, I was referred to a lawyer who will be drafting a letter and making my case. Thru contacts, I have spoken indirectly to his former boss. If I do not get satisfaction, I have been invited to return for a second conversation.

The referral to the lawyer working on this strategy was an interesting experience. I went to a very secure government building to see an important person in the legal department. It was explained to me that “one does not got to the wolf’s den unless you know the wolf.” My contact’s wife did. Upon entering the building the two men were instructed to empty their pockets and we were “waned” for security. The woman accompany us was not nor was her hand bag searched. She asked the security people why not and the response was that they do not wan nor search handbags of women. Evidently women don’t pose a threat. I can think of any number of places where others think differently and with good reason—but not here.

Path B: A favor was called in and I was lead to another influential person who reviews all condominium plans. The question was asked: how can this NOT be classified as a condo project? And: If it must be classified as “condo” what alternations need to be made and what can we get variances for? This person visited the property on Wednesday. He was very impressed with the entire project. He liked the way we had handled the black water, the quality of the construction, the green area we had provided for, and recognized and accepted the target market of purchaser, etc. On Thursday I was told that if I were to give him the disc with the drawings, he would rework them and I could expect to have my permit in 30 days. I bit and that is now one of two possible directions. I emphasized the “30 days” so I’m expecting to return to full construction by mid March.

This story is to be continued...

MARKETING—THE NORTH AMERICANS RETURN

The following are simply my observations and I don’t claim they are accurate or universal in CR.

The fact is that we have seen a significant increase in interest in this project. People who are serious —people who have decided to move to and/or purchase in CR. These people are not just tire kickers but they are good quality purchasers with money in their pockets and conviction in their decision. They are just looking for the right place for them. In the last three weeks, all of our renovated units are spoken for and I have a waiting list of about 8 who either hope one of the existing deals falls apart or that I can, in two undefined remaining areas, design a unit for them. Some of these people want to throw money at me so they can be first on the list. I don’t work this way so I have politely declined; I prefer to see what I can design and have committed to keep their preferences in mind and to keep them advised. When I am able to focus my attention on the two remaining areas (currently the area around and including Unit 106 and Unit 102) . I’ll be in touch with those on the list.

We currently have three people seriously interested in new units. Whether anything will happen with these people, I don’t yet know.

As soon as we have a rental vacancy, we lease it at our asking price. (Today, we had two parties interested in renting our most expensive unit—No. 111.) We were only able to consider leasing this unit because the tenant in 107 left as he was bothered by the construction noise (he worked evenings and needed to sleep in during the morning. Grinders working their way thru steel makes for a lousy sleep.) My friend Keith will move there —he’s awake with the birds so not a problem.) Certainly one can find less expensive places to live than Residencias Los Jardines but I don’t think one can find better value considering the amenities, finishes and furnishings.

In a conversation with my lawyer, he said that he had noticed a significant increased interest from Americans over the past month. He also said that it seemed to him that some of these were dissatisfied Democrats who just wanted to get out of the States.

I have received numerous inquires from my website and from my mailing list. People are now beginning to ask serious questions to determine if this is the right place for them.

What is driving this? I don’t know. Perhaps because it is February in North American or ???? I know I’ve introduced 5 people to CR, two is now living here part time, two are moving here for thewinters, and the other one is seriously considering it.

I expect that if we have to go the “condo” route, that after I sell 5 of the new units, I will increase the price to help recover the costs.

Construction

Synopsis: A normal pace.

Renovations

Unit 104: This unit will be done and mostly furnished by Wednesday of next week. Curtains and sofa will take a few more days. The doors are being hung as I write; kitchen cabinetry is installed; built-ins in the closets are yet to be finished. Tiling is nearing completion. All windows and screens are installed, Plumbing fixtures will follow next week. This is a gorgeous lots of character—large terrace behind the house, two bedrooms, two bathrooms, lots of windows, etc.

Unit 108: We spent the first part of the week re-welding all the previous welds and installing cross bracing to stiffen the structure such that it is rigid. The roof was removed and structural steel added; the cupolas were built and the metal substrate reinstalled. The exterior was cladded with densglass and the first coat of stucco was applied. Rough in plumbing and electrical is substantially advanced. I expect this unit to be fully framed with virtually all exterior cladding and all rough-in plumbing and electrical done this time next week. We will be getting a detailed kitchen plan and master bathroom designing approved by the purchaser early this week.

Unit 106: I’ve asked one of the two architects I’m working with to submit to me a proposal for the area which includes Unit 106. I’ve requested two story houses, detached or semi detached, one bedroom w/ den, 1 1/2 baths, lr/dr/kitchen, terrace. I’ve said a minimum of three but if 4 fit, then o.k. I also would like additional parking. Let’s see what he comes up with.

New Construction

We leveled the window sills, graded the road, and began making ready the forms for the arched windows and reinforcing columns which will be poured the day after we get the building permit. We designed and began installing the remaining walkways in the garden which will connect residents in the new homes to the parking lots, each other, and to the garden and grounds facilities.

We are buying a substantial quantity of roofing material; it has to be imported, it is soon to be here and the next shipment is expected to be more expensive. The last time we needed this product, the bloody ship it was loaded on ran aground in some Venezuelan port. We waited.

We’ve also ordered 15 front doors. They are a special design which are not always available.

When we have the permit (target of March 15) I estimate it will take about 2 2 1/2 months to finish the 7 houses currently under construction and probably 3 1/2 to 4 mo. To finish the three yet to be started. When the houses are completed, the project will be completed as all ancillary work is now being done.

OUR LIVES

Lita. She takes it to bed with her and sleeps have the night with it curled up in a fetal position. I’ve got my back to her guarding my “loins”. This is ridiculous!!!!!!! Lita has also determined that the parrot the latin salsa beat better than Johnny Cash. The two of them have a wonderful time dancing —the bird hanging on to her shoulder having a grand old time and Lita, not hindered by my clumsiness, does just fine on her own. She’s also decided she needed to go to a fitness studio. She has a driver who picks her up most of the time and takes her to the fitness center. At the fitness center, they know she’s blind so they help her on the machines. How long this will last I don’t know and I’m not taking any bets. Its surprising she doesn’t take the bird with her. (I’d like to see it get squashed between some weights!)

Me. I’ve been preoccupied with braking this impasse, getting the design and construction moving for 108 and in seeing that the finishing details and materials are available for 104 not to mention the furnishings and decorations for that unit as well. In addition, we had to relocate Keith, and complete the decorations of No. 111 for the new tenants. All this as well as figure out the walkway design and what I wanted and did not want to occur. And lastly, communicating with those people who have shown an interest in the project. I’ve certainly been ready for a drink at quitting time.

Pool: after nearly a 2 mo. absence we returned to the pool hall last night. It’s amazing how the bad can get so much worse. It was awful, pitiful, painful... We were virtually all as bad as Lita... but we still had great laughs and that is what it’s all about.

Weather: it’s been REALLY, REALLY windy these past couple weeks. Even the old timers are commenting. (I was slurping my favorite chocolate milk shake the other day when this almost ancient guy started commenting on the wind. I comment on the coolness of the evenings.

After my ex —workmate and his wife left on Monday, we’ve actually had the week to ourselves.—to rest, relax, and catch up with friends here. It was an experience —my blind wife and his wife who has Alzheimer’s disease and the two of us realizing that neither of our situations are what the four of us expected —certainly life is full of surprises. Fortunately Lita and I made some lifestyle decisions which seem to be working for us.

Brian, Lita, Vicka and Hugo

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