Guess which one I can actually AFFORD?
Hillwood still owns 13 prime, half-acre, beachfront lots in the uber-exclusive enclave of Peninsula Papagayo, located in a dry tropical forest on the Pacific coast of Costa Rica not too far from The Four Seasons, in the northwestern part of Costa Rica called Guanacaste, which has the best climate and the least rainfall in the country. It is also one of the least-developed areas, since there was no airport here before the one in Liberia opened in 2002. In May of 2008, Hillwood fueled up its private jet and whisked several Dallas real estate agents and me, as their scribe, for a 24 hour look/see that made me vow to return (and fly private!). I was a little sad, however, because I knew I’d never be able to afford one of those Hillwood lots, much less build a home on it. The price tags back in the boom were a cool $1.1 million to $4.5 million, or about $2 million per acre. (Note: asking price has gone up since 2008, now $2 to $5 million.) Cashing out in the U.S. and camping on my beach-front lot was not an option: Costa Rica’s famous “howler” monkeys might keep me awake at night.
Spring ahead to last November, 2011. I arrived at The Palms, a gated private residence club on Playa Flamingo in Guanacaste, south of Papagayo. Sole ownership of one of the 34 villas will set you back $1.2 million – ha, but at least that includes a 2300 square foot luxury structure. But get this: with fractional ownership, I could own a one-tenth share on a 2300 square foot condo for just $129,000.
Now we’re talking!
Fractional ownership can succinctly be described as like living in a New York CoOp, or a condo. But instead of everyone owning a part of a space in a whole building, fractional ownership gives you undivided deeded ownership in a certain residence or villa. There are various arrangements: in some, you always stay in the same residence, in others you have access to multiple residences with similar finish-outs and and floor plans, but it is not necessarily the same structure you were in last visit. Some fractionals are Residence Clubs, which is like joining a country club: you own the property but rather than being assigned fixed or rotating weeks, you make reservations when you choose, similar to booking tee times.
Do not confuse these with timeshares, as many do. First of all, time -shares are now highly regulated and have come light years from their early, not-so-great days. Second, timeshares usually assign fixed weeks, are often not deeded and follow the same depreciation patterns as a car does.
Are there plusses and minuses? You bet, just like everything. You buy a certain “fraction of time”; in The Palms case, the $129,000 buys a one tenth interest in a two-bedroom plus loft villa at The Palms. You have to share the property with others, and there are rules — like maybe no dogs allowed, no smoking. But here’s my argument, and why I am a fan of some fractionals: we working lasses cannot vacation more than a few weeks per year anyhow. It’s like pulling teeth to get my husband away even for a weekend! Each owner reserves two weeks at the beginning of each year, and has the opportunity to use the Villas any other time based on availability. Owners can even reserve short notice trips.
And that’s the dirty little secret about vacation homes: even the wealthiest are starting to figure out that you just don’t have enough time to spend it on an eternal vacation. Children, school, sports, family: there are times when you just have to be home or even travel to another destination. Then there is the upkeep, repairs, sometimes hiring someone to live in the house for you. Which is why what The Palms is doing is, I think, quite brilliant.
We landed at the same Liberia (Costa Rica) International airport as we did in Hillwood’s G450, only this time we were on Delta. American also has many direct flights, depending on the season, a quick 2 hour flight from Houston. The airport was still cooled by enormous ceiling fans and is known for its extra-long runway built by Oliver North during the Iran-Contra affair. (Somewhere in Liberia I’m told there is a restaurant in one of Ollie’s old planes!) One big change: there was a gorgeous, gleaming new building next door, the new Liberia airport that is now open.
Wow, I thought: three years later and they already have a gleaming new airport rivalling Panama’ City’s state of the art jetport!
We were picked up in a beautiful, clean and cool white Escalade owned by The Palms: cold drinks and icy towels in an ice bucket. Off we went to Playa Flamingo, a little over a one hour drive, as any home owner would. I was happy to see the streets have not much improved since 2008, because to me, that is the charm of Costa Rica. I love the way roads kind of just stop, turn to dirt, then pick up again somewhere. I love seeing someone on horseback right next to the car because those four legs are his wheels. In Coasta Rica, life is the way it used to be. Pura Vida
One reason why Costa Rica is such a popular Latin American country is the kind, respectful, highly educated population. Franklin (named after Benjamin) was our driver and guide. His brother Roy Saenz is the Palm’s main chef and concierge, making fresh Mojitos and cooking like a five-star chef — in fact, Roy owned a restaurant in Flamingo and IS a five-star chef. He is also the go-to man, organizing trips and where to find anything. He and Walter were an unbeatable team and living proof of the high education standards Costa Rica holds for every citizen. Franklin told us there were seven boys in their family and each one had been named after an American — this is a country that still likes us! Our car trip was a complete history class about Coasta Rica and Flamingo. There was not one question Franklin could not answer, and when he couldn’t, he googled it for me.
There are seven states in Coasta Rica, Guanacaste being one and named for the wide, shade-producing canopy trees also called Elephant Ear Tree, which grows prolifically in parts of Costa Rica and is the national tree of Coasta Rica. Though cattle and birds eat the fruits, I tried them and they are delicious! The word lierally means tree of ears or ear tree in Aztec, and legend has it that the tree offered protection. Coasta Ricans are very protective of their Guanacaste trees. The beach at Flamingo is one of the best in the world for surfing; the movie Endless Summer II, a sequel to the 1966 The Endless Summer, was filmed in nearby Tamarindo in 1994 and sealed the great surfer rep. Famous people who have lived here: Liz Taylor and Richard Burton, Lynda Carter and Mel Gibson. Brad and Angelina Pit hop private planes over to the Four Seasons all the time, as does Bill Gates, but now I understand the Brangelina clan is thinking of buying a ranch in Coasta Rica. Other celebs are soon to follow.
Really, the Flamingo beach is far superior!
September and October is the monsoon or green season, high season starts November 15 and runs until, August. May and September are slow months, I found early November perfect. June is the rainy season.
Retiring baby boomers are running to Costa Rica like flies to honey, 41,000 strong: with no incomes taxes on foreign-earned income, no capital gains tax, you can live long and large for less. “A $2000 a month income,” said Walter, ” let’s you live like a king.”
If you have a tourist visa, you have to leave the country every 90 days. Otherwise, become a resident and you can stay and still maintain be a U.S. citizenship as a resident.
There are four million people in CR, two million of those live in the capital, San Jose. Flamingo has only 1,000 people or so. The crime rate in this part of Costa Rica is generally low, but people who live there do report burglaries and for this reason, most condos and hotels have guards 24/7, as does The Palms.
Being actually a small community, it is not surprising that the Palms is the only upscale property of its kind in Flamingo that is right on the beach. The sand is seconds from your door: get any closer, you’d have to have a home on piers. There are quaint Euro-style eco-lodges and boutique hotels, but nothing high-end or obnoxiously tall. Each two-bedroom, three-bath villa looks out on the horseshoe-shaped Flamingo Bay with that pure turquoise water flanked by soft white sand. And you can hear the waves 24/7.
For me, my ah-ha moment was when we first walked into our villa. Coming in from the road, I had no idea how close we were to the actual water! I walked to the sliding mahogany and glass French doors and walked outside to our private patio. Literally five steps and I was on the sand. The interiors are uber high end, with granite counters, Viking stoves and top line stainless appliances you’d find in any high-end U.S. home. The floors are wood and marble, steps decked out with rich red-brown wood from the Guanacaste PRIOR to the ban on using it. Downstairs, the kitchen, living room with sofa bed and dining room; upstairs, the two bedrooms with huge closets. Each bedroom has it’s own spa bath and there is a full bath on the first floor.
After four days of paradise, body surfing, Mojitos, snorkeling, kayaking, Mojitos, touring the tiny towns of Brasilito, Reserva Conchal, Mojitos, Hacienda Pinilla, we crowned it all with an airboat trip on the Tempique River at Palo Verde National Park. (Passed on the marlin fishing, catamaran sailing, jet skis and scuba diving, but it’s there.) We saw everything including white-faced monkeys, howlers, green iguanas and coatis, and 12 different habitats from Ecotrans Tours. This fabulous company also has tours into Nicaragua, four hours north: our tour guide was an architect! The Four Seasons offers a day pass for its Arnold Palmer-designed golf course with breathtaking ocean views, and a full spa if you need one but we actually found a local masseuse who came to our villa for aromatherapy wraps using locally created scents.
I was ready to sign on the dotted!
A one-tenth Palms ownership costs $129,000, one-eighth costs $149,000. Twelve of the 25 villas have already been sold either as fractionals or total ownership. There is not much financing in Costa Rica, most of the sales are cash. Unlike Mexico, foreigners can own real estate in Costa Rica, just not on the beach, for the most part. In Costa Rica, 95% of beachfront property is considered concession property and is governed by the Maritime Zone Law plus other regulations including some set by municipalities and the ICT (Costa Rican Institute of Tourism). Annual maintenance fees run $5,646/$7,040. Get this: that includes a daily housekeeper. The housekeeper folded our bathtowels into beautiful swans and scattered flower petals everywhere.
So why not just visit and rent? Why buy? The Palms is a rare property, one of the most unique resorts in CR because there is no road or path between the development and the ocean. And these pads are not for lease. Beachfront property, particularly luxury beachfront, is especially rare in Costa Rica because of 1977 legislation that banned beach development. Since the original resort was built before then, ownership is grandfathered in, which is why the owner/developer had such incredible vision.
That owner is an American businessman, commercial developer Bob Spence of Sacramento, Calif. In 2002 he came to CR with a friend who had flipped Costa Rican property for a hefty profit. Bob bought five lots in Ventana right on the beach. Months later he sold them for his own hefty profit. He told his wife, Marsha, “I’m going back.”
That’s when he purchased the Palms property — it was unfinished cinderblock units owned by a Middle Easterner — and Spence has since invested more than 20 million in renovations.
“The first time we drove here from the airport, there was nothing but potholes in the road,” says Marsha. “I took Advil for a week.”
The beach was there, of course, but the concrete walls were depressing and the structure resembled a Beirut prison more than a resort. But Bob, says Marsha, has incredible vision and he saw the potential in the rare location. He brought in an architect, re-drew everything, extended the floorplans, raised ceilings, made them light and bright to take advantage of the million dollar views. He traveled to Brazil to buy all the granite, selecting it personally. He selected high-end fixtures and appliances – happens to be a Viking dealer in San Jose. He wanted to appeal to the refined tastes of the U.S. and Canadians who he hoped to sell to. Every villa has state of the art electronics and internet access, two balconies, two bedrooms and a sleeping loft, three full bathrooms, Jacuzzi tub in the master with separate shower, those Viking appliances in the kitchen and beautiful craftsmanship. There’s even a laundry closet with stack Miele washer and dryers.
Spence, a self-made millionaire who got his start founding “Pick-n-Pull” an online dismantling auto scrap company he sold to Schnitzer Steel ten tears ago for $85 million, has his heart in commercial development. He oversees everything at The Palms, from grouting tiles to the food to working on the three bedroom full ownership units for sale next month for full ownership starting at $2.5 million. Pick-n-Pull recycles more than 350,000 autos a year. Ironic that Spence found his next project in a place also committed to preserving the planet and maintaining natural beauty, because Costa Rica is truly one of the most beautiful countries in the world, naturally.