New real estate policy?

Manuel Marrero, Cuba’s Minister of Tourism, says that the government has approved and will soon release a new “real estate development policy associated with tourism, fundamentally golf courses, marinas and other complementary tourist investments linked to tourism.” Here’s coverage from BBC, AP, and AFP Spanish.

For years there has been talk of golf course developments with real estate mixed in, and I have noted the rumors here many times, mainly as they appear in the British press. This is the first time I have seen a Cuban official address the subject.

If it pans out, it will be a concrete move to attract more foreign investment and to allow Cuba to compete in a new market segment. Reportedly, when it comes to golf/condominium development, the sticking point has been Cuba’s prohibition on allowing foreigners to own real property. And reportedly, discussions have focused on a solution that would instead allow long-term leasing – 50 years, with 25-year renewals – that allows developers to recoup investment almost in the same way as a straight sale.

We’ll watch the Gaceta Oficial to see what the minister has in mind.

Odds and ends

• Cuban Vice President Carlos Lage announced that investment projects will be delayed, and he exhorted everyone to work harder and more conscientiously in a speech to municipal council leaders. From the Reuters story:

“The country spent $1.47 billion last year to import 3.423 million tonnes of food and to import the same amount this year at current prices will cost $2.554 billion, a billion dollars more,” Lage said.

“The 158,000 barrels of oil per day that we consumed last year cost $8.7 million per day and this year costs 32 percent more, or $11.6 million per day,” he said.

• Last week there were stories in British newspapers, which I cited here, saying that a golf course/real estate development deal was about to be announced in Havana. A week passed, no announcement. My mistake, and I should have known; for a long time, the golf hype has been way ahead of the reality.

• Have you ever wondered about the guys in Havana with the red Havana Club vests with the words “parqueador estatal” across the back, the guys who charge you to park, and can never explain why you need to pay them to park on a public street? J.C. Orta Alonso wonders too, and wrote a letter about the issue that was published in Granma; I hope someone answers it.

Odds and ends

• From David Adams in the St. Petersburg Times, more speculation that Cuba may be preparing to reach agreements with foreign partners to develop golf course/real estate projects. Cuban law is an obstacle: by barring foreigners from owning real estate, it is hard to include housing and condominiums as part of a golf course development. A solution, Adams reports, may come by a Cuban decision to allow 75-year leases, the next best thing.

• The Orlando Sentinel: it makes sense to worry about the environmental impact of Cuban offshore oil exploration, but it’s “self-defeating” for Senator Nelson and others to deal with it from afar, without talking with Cuba.

• From the Center for Democracy in the Americas, more man-on-the-street interviews.

• I missed this one from last week: El Nuevo Herald’s report on 14 foreign companies about to be booted from Cuba. English version here.

Odds and ends

• The U.S. government put out a press release about the company charged with violating the embargo by providing software to Cuba that was “used to create a model for potentially exploring and developing oil and gas within Cuba's territorial waters.” But was the company paid?

• Dream golf – Here’s yet another news report about a golf resort/real estate project in Cuba, to be developed with foreign investors. Yet again, there’s a reference to an announcement by the Cuban tourism ministry that seems never to have taken place.

• A campaign is under way for a Presidential pardon for Eduardo Arocena, who was convicted in federal court in 1984 of “twenty-five counts, including first degree murder of a diplomat; two conspiracies to murder diplomats; malicious damage by explosives to property used in commerce, with personal injury resulting; six counts of possession of unregistered bombs; two counts of conspiracy; and perjury before the Grand Jury.” That quote is from the decision of the appeals court judge, who denied Arocena’s appeal, saying he had engaged in “a terrorist campaign shocking in its ferocity and persistence.” The campaign’s site, hosted by the Net for Cuba news site, is here. (H/t Cuban Colada.)

• Good eye, Dalia – We know little about Dalia Soto del Valle, wife of Fidel Castro, but she seems to have a good sixth sense. She had a bad feeling about her son’s girlfriend, Dashiell Torralba, El Nuevo Herald reports. Torralba is facing credit card fraud and identity theft charges in Miami. She gained fame when she left Cuba and sold a video of the Castro home to a Miami television station in 2002 (Penultimos Dias dug up the link). If you search Torralba’s name on YouTube, you get her television appearances where she described life amid the Castro family.

Home sales on the horizon?

Raul Castro promised in 2007 the removal of “excessive prohibitions” that weigh on Cuban citizens.

His most notable moves to date have been the end of bans on Cubans staying in tourist hotels, having cell phone accounts, and importing certain electronic items. These could be dwarfed by the impact of a policy discussed at the Party Congress: to allow purchase and sale of residential property.

Many Cubans have title to their houses or apartments, but by law they cannot sell them in an open market. They can bequeath them to heirs or trade them with another homeowner (the famous permuta), after which lawyers complete the paperwork to transfer ownership.

The reality is a little different.

They do buy and sell homes, as this St. Petersburg Times article explains. On paper, the transaction is a swap. In reality, the swap is accompanied by a payment to compensate the owner who gives up the higher-value property. In cases where a seller finds a buyer but doesn’t want the buyer’s house, a chain of swaps is constructed with all the compensating payments so everyone gets what they want, and lawyers come in at the end to ensure that all have clear title.

Signs on houses all around Cuba advertise willingness to trade, and in Havana many trades are arranged Saturday mornings on the Paseo del Prado.

In this context, the idea that the Cuban government might permit normal home sales is revolutionary. The Lineamientos published last year called for “flexible formulas for the exchange, purchase, sale, and rental of housing, so as to facilitate solutions to the housing needs of the population.”

When the Party Congress met, one of the committees discussed the “acquisition of housing,” Granma reported. It said that the committee agreed “that the purchase and sale of same be established, and to make more flexible other forms of transmission of real property (trade, donation) between individuals, and also to speed up the procedures for remodeling, rehabilitating, construction, and renting, with the goal of facilitating solutions for public demand for housing.”

In his opening speech to the Congress, Raul Castro said that the “legal norms associated with the purchase and sale of housing” are “in an advanced phase.”

“Advanced phase” doesn’t tell us if the new policy will take effect next week or next year. And of course the details won’t be known until those “legal norms” are published.

But even if there are restrictions, an open market for housing would mark a dramatic change, an official realization that a too-heavy government hand exacerbates housing shortages, while more private activity will ease them.

So here are some questions and speculation.

First, creation of a normal market would overnight turn the houses of many thousands of Cubans into capital assets that they could use as collateral, convert to cash, improve and hold as an investment.

It’s safe to assume that there would be anti-speculation measures such as a ban on resale within a certain number of years.

One also assumes that outright foreign ownership will not be permitted, although perhaps long-term leases such as those discussed in the context of golf course residences for foreigners will be permitted.

Speaking of those golf courses, if foreign capital is brought in to build homes for foreigners in resorts, will foreign capital also be brought in to build homes that Cubans can purchase?

What do they mean by speeding up procedures for construction to help satisfy housing demand? Does that mean that Cuban citizens with land can subdivide a lot, then build and sell a house?

Cuba will be an unusual market. The price of housing will not be determined by local demand and purchasing power alone. Demand and prices will also be driven by people outside Cuba who give Cubans money to buy homes. A Miami gas station owner nearing retirement will send money to his brother in Havana to buy a house with extra rooms where he can stay during visits and live during retirement.

This is bad for those without that brother in Miami, and it means a large inflow of foreign capital for the Cuban economy – one more capital flow that comes from the Cuban-American community.

Finally, it could mitigate one of indignities of the salida definitiva, the status accorded to most Cuban emigrants, who have to give up their property before they depart. For some, allowing sale of property would make a difference.

This is all speculation until the policy is spelled out. We’ll watch. If someone has ideas about the market for cars, I’m all ears.

A golf course deal?

From London, in The Times and The Telegraph, comes word that Cuba will announce a deal with British investors to develop golf course/real estate resorts that are intended to make Cuba more competitive in high-end tourism.

For months, there have been rumors that a deal of this type was in the offing, but a major sticking point has been Cuba’s resistance to allowing foreigners to own property in Cuba. (In the early 1990’s there was a condominium development in Havana, but its owners were bought out by the Cuban government.) Apparently this problem was resolved, according to the Times report, by a 75-year lease on the land for the first resort, which will allow the sale of homes for $300,000 to $2 million.

The first resort will be called the “Carbonera Country Club,” but neither newspaper report says where the 150-hectare project is to be located.

Slow going

What do sugar and ethanol, golf course development, and deep-water oil exploration have in common?

They are all on the list of possible foreign investment projects in Cuba, and they are all slow to develop.

I have commented before that when it comes to golf course/real estate projects, the announcement-to-action ratio is off the charts; see here, here, and here.

Sugar projects are slow too. The reason may be that even though Cuban government policy is to encourage foreign investment generally, and not to exclude ethanol development, Fidel Castro has voiced reservations about using food crops to produce fuel. So I speculate that that is the reason for the slow going. At any rate, last week there was yet another statement, this one from the sugar minister, about Cuba’s openness to foreign investment in the sugar sector.

When it comes to offshore oil, it’s slow going too. Cuba made news last week by announcing estimates of its offshore reserves that are double those of the U.S. Geological Survey. But a manager of Cuba’s state oil company also announced that the much anticipated drilling by Repsol will take place in mid-2009 – fully five years after its exploratory well was drilled – and that Canada’s Sherritt has relinquished rights to two offshore blocs rather than proceed to the drilling phase. In Repsol’s case – where the formation of a consortium with Norsk Hydro is a positive sign – the reason for the delay may be simply that higher oil prices have made deep-water rigs scarce.

Varadero golf

Cuba’s tourism ministry may be preparing to build new golf courses, but they won’t match this one, about a third of the way out the Varadero peninsula, where the land mass is barely two fairways wide. This picture was shot near the old Dupont family beach home (to most of us, it’s a mansion), part of an estate that constituted a large part of the peninsula itself.

New tourism investment planned (updated)

Cuba’s tourism minister Manuel Marrero Cruz says $320 million is available to invest in rehabilitation of hotels, construction of new hotels and resorts, and construction of golf courses, marinas, and theme parks. Part of the investment plan includes creation of new joint ventures with foreign investors, a new twist.

This article doesn’t say where he made this announcement, but came in the context of the week-long promotion that Cuba just concluded with foreign tour operators.

We’ll see where this goes; in Cuba there’s a big difference between announcement and execution of investment projects.

The minister is putting money behind priorities that his ministry has held for years. They are based on a recognition that long-term growth – especially into higher-end market segments – depends on diversifying Cuba’s tourism product through golf course construction and other projects. One element that strikes me as new is the emphasis on “revitalization” and “reconstruction” of hotels – an area where visitors note uneven investment.

If this plan is carried out, it’s one more sign that unlike five years ago, Cuba has working capital at its disposal.

[Update: More efforts to boost tourism reported on the Caribepreferente website: reduced airport services fees, landing fees, and aviation fuel prices, a promise of less red tape in Customs, highway repairs and installation of lots of highway signs.]

Odds and ends

• According to this press report, Senator Menendez of New Jersey urged the President of Cyprus not to open an embassy in Havana. The United States has more accredited diplomats in Havana than any other country; the article doesn’t say whether the President asked the Senator about that.

• Not so fast: EFE reports that Cuba’s ambassador in Madrid says Cuba accepted the EU proposal for a political dialogue, but “first it’s necessary to discuss and agree upon the bases on which this political dialogue can occur,” and he pointed out the need for the talks to be between “equals, respecting the independence of the states, the principle of non-interference…” etc.

• The Center for Democracy in the Americas has a report (pdf) on a September 18-21 trip to evaluate hurricane damage and recovery efforts, and also a video of an interview with Orlando Marquez, spokesman of the Archdiocese of Havana and Palabra Nueva editor, commenting on Caritas’ disaster relief role.

• After denying visas to two Prensa Latina reporters to return from Cuba to the UN bureau, where they have worked since 2005, the State Department reversed course and granted the visas.

• Another story from the British media about potential golf course development: there’s “a frisson of excitement about Cuba,” “a country which is still, in theory, Marxist,” talk of investment by Sir Terence Conran, and a project involving “villas and apartments” and a “a boutique hotel, spa and an 18 hole championship golf course.”

Odds and ends

• From November 2006, a Wikileaked cable that gives a glimpse of the annual campaign to beat the UN General Assembly resolution that condemns the U.S. embargo. This cable is brief, reporting that Uruguay would be voting “in favor of Cuba.”

• The talk of additional golf course/real estate development continues, with a Canadian company “hoping to finalize a deal this August,” according to the Globe and Mail. Another story in the New York Times.

• A photo of the mountains of Pinar del Rio from a cruise ship moving northeast along Cuba’s north coast, from Flickr user roger4336.

• The Minister of Internal Commerce is out, replaced by his deputy Mary Blanca Ortega, according to a note published in Granma.

• Connecticut Senator Joe Lieberman supports the Obama Administration’s Cuba travel measures in a talk to the Cuban American National Foundation.

• EFE: The late Orlando Zapata Tamayo’s mother and 12 relatives have visas to go to the United States with refugee status.

• The New York Times on how Cuban ballet dancers fare abroad.

• Wyoming biologists fitted osprey with satellite tracking devices to learn about their migration patterns and found that one lone male left the Rocky Mountain flyway, headed east to Florida, and went on to Cuba.

Odds and ends

• The Wall Street Journal reports on golf course development. Cuban officials have talked about this for years, to make for a more diverse tourism destination and to attract higher-spending travelers. Maybe there’s some action afoot.

• Cold water on ethanol: Reuters’ sources say that in the near term, Cuba is interested in ethanol production not from sugar, but from bagasse, the waste product from sugar milling.

• Alpha 66, in convention in California, seeking allies adentro.

• London’s Independent gives an account of the mass offered in the square in front of Havana’s cathedral by the Vatican Secretary of State – invitation only, some top officials in attendance, Damas de Blanco standing in the back. The reporter also talked to Oscar Espinosa Chepe and Miriam Leiva in their apartment in Marianao.

Odds and ends

• Here are statements from the United States and Cuba on the migration talks held in Washington last week. Portia Siegelbaum of CBS adds background, including that the number of non-immigrant visas granted by the U.S. consulate in Havana more than doubled in 2009 to 20,000.

• Granma: Cuba has been elected vice president of the UN Human Rights Council.

• Oswaldo Paya writes that Cubans should unite in demanding an end to the travel restrictions the Cuban government imposes on them.

• CBS on the economic policy discussion at last week’s Catholic Church conference.

• Reuters: Waiting for golf – or more precisely, waiting for decisions – in Cuba. Also from Reuters: tobacco production and exports are down, as is land devoted to tobacco cultivation.

Odds and ends

• AP on the very slow development of golf courses in Cuba.

• Posada Carriles’ trial has been delayed again but as Tracey Eaton points out, there’s plenty of time before the guy turns 90.

• Also from Tracey Eaton: notes on the state security agents that posed as dissidents until they unmasked themselves in 2003, following the arrest of the 75. Eaton has photos of two whom he interviewed.

• The Herald’s Alfonso Chardy on the Reagan-era agreement that allows some of those who came to the United States from Cuba in the Mariel boatlift to be sent back, including the story of one Cuban American who met that fate.

• The Guardian on the impact and high cost of mobile telephony in Cuba.

• Granma on efforts to produce the farm tools needed by all the new farmers who received land grants in the past year.

• No one knows the timing but serious economic change could come soon in Cuba, the political counselor in the U.S. Interests Section says. Cuban Colada translates parts of an article published in Puerto Rico’s El Nuevo Dia.

Odds and ends

• The Damas de Blanco attended mass yesterday and walked along Quinta Avenida as they have done for years, but it was peaceful and there were no pro-government crowds present. Cardinal Ortega, who gave the mass at the church in western Havana, says the lowered tensions follow his appeal to the government. AFP reports in English here; a story from Spain’s El Pais is here. AFP also reports (Spanish, here) that the church has continued to try to persuade Guillermo Farinas to abandon his hunger strike, but he isn’t interested.

• The Herald’s Juan Tamayo on the case of Dania Virgen Garcia, a dissident who was jailed for using force in a family dispute and whose family, according to human rights monitor Elizardo Sanchez, doesn’t seem to be defending her.

• Professor Jaime Suchlicki’s arguments for maintaining U.S. travel restrictions are rebutted by Anya Landau French at the Havana Note.

• Guardian: Cuba’s policy on travel insurance for visitors – I thought it was health insurance – is not very clear, and a UK tour operator chalks it up to the island’s “old-fashioned air, its exotic chaos.”

• Alejandro Armengol’s column in El Nuevo Herald focuses on prisoner of conscience Ariel Sigler Amaya, and argues that keeping him and others in jail signals weakness on the part of the government.

• NPR on the “free-market makeover” in beauty shops and barber shops, where not everyone is happy.

• An idea from Kirk Nielsen at Poder360 for securing federal mass transit money for Miami: name the project Metrorail Marti.

• I just ran across the website Hemos Oido, which is a “Worldwide Translation Experiment” that translates Cuban blogs. A list of blogs translated into English, with links to recently translated posts, is here.

• Hugo Chavez, now on Twitter, invites Fidel Castro to limit himself to 140-character messages too.

• I plugged it once, I’m doing it again: Check out this magnificent blog for all you need to know about Hialeah.

• The Washington Post on Livan Hernandez and his hot start with the Washington Nationals – and his future golf career.