The day is soon approaching when you can travel from San José to points like Playa Jacó, Caldera or Puntarenas in under one hour by way of the new San José – Caldera highway that is nearing construction.

The new highway, that is missing completion between Santa Ana and Orotina, will shave off at least 45 minutes travel to all points on the Pacific coast.

A trip to Liberia that now takes 3.5 hours on best days will be just a little over 2.5 hours, meaning you reach the beaches of Coco, Hermosa for instance in less than three hours. Tamarindo and Flamingo will also be less than three hours away.

Quepos and Manuel Antonio will be less than 2 hours.

The reason for the current extended drive time is the winding of the mountains from the Central Valley, either over the Monte de Aguacate, a steep climb and drop of the more gentler pass on the Interameircana.

Either way, the drive is slow, slowed even more by large trucks and loaded buses and few passing lanes.

The new highway cuts through all that. The slopes and hills are gentle, the winding is to a minimum.

Inside Costa Rica took a rare look at the new highway on Christmas day when several of the guards manning the points of entry only for workers on the highway, let us pass.

It took only 13 minutes to drive from Piedades de Santa Ana to 8 kilometres east of Orotina (the guard at that check point did not allow passage), driving at an average 60 kilometres per hour.

The road is completely asphalted, what is missing is the final touches of completing the road markings, some of the barriers and of course, the toll stations.

For the most part the highway is a two lane road, one lane for each direction. However, near the intersections of Piedades (though the signage reads Cuidad Colón), La Guacima, La Garita, Turrucares and Atenas, the road opens up to four lanes and illuminated.

The road delivers what will surely be a very pleasant experience driving to and from the Pacific beaches and other destinations.

And since it is a toll road, like the San José – Santa Ana section, it will be lightly travelled, as the cost from Escazú (the first toll) to west of Orotina (the last toll) is ¢1.120 each way.

On Friday, December 25, 2009, 10:30am, Inside Costa Rica, with camera in hand filmed the new road from Piedades to West of Atenas (the only portion of the unopened highway we were allowed to travel).

Click here to go on a virtual ride of the new highway. Part 1.
Note, video is 30Mb (large) and may take some time to download on slow connections

Click here to enlarge map.

SOURCE

Click on photo to see listing for $850K

The recent world economic downturn – acutely felt in the U.S. – has made valuing real estate in Costa Rica more complex for American buyers.  Recently, there has been increased skepticism from both buyers and sellers at the negotiating table due to vastly different market perceptions. Foreign buyers are seeking rock-bottom prices that they’re accustomed to in their deflated local markets, while most Costa Rica sellers perceive their market to be relatively solid and remain fairly firm in their asking prices.  Consequently, reaching win-win agreements has been increasingly difficult.

Plainly stated, Costa Rica is not without challenges, but remains a far healthier market than the U.S.  According to Wall Street legend Henry Kaufman, “Costa Rica made no mistakes in the recent economic downturn.”  Mr. Kaufman, who recently bought a project in Santa Ana, strongly encouraged others to invest here “immediately.”   Costa Rica’s lifestyle benefits attract droves of newcomers from all over the world, which continues to fuel the market.

Click on photo to see listing for $195K

Certainly there are some bubble areas with highly motivated sellers in Costa Rica who need to sell for one reason or another, but there are also many mortgage-free sellers who are content to wait for a reasonable price. The more common position is somewhere in the middle: a seller has their home listed for a reason – to sell it – and they are willing to be negotiable within reason, even offering seller financing if need be.  However, sellers as a whole are not accepting dramatic discounts, for the very reason that they own property in a healthier market.

Below are some recent observations of buyer’s and seller’s perceptions in the current market. Perhaps it can be helpful to close the gap ever so slightly.

For Buyers:

• Yes, there has been some price softening in Costa Rica and more motivated sellers.  So, you can negotiate with most sellers.
• However, Costa Rica and the United States is not an “apples to apples” comparison.  A $100K home in Florida might seem like a great deal, but it has a much higher cost of living associated with it:  higher healthcare costs, taxes, need for A/C in a difficult climate, etc.
• Supply and Demand: Abandoned homes in Florida are a dime a dozen, while Costa Rica’s inventory of quality homes is almost a just-in-time pace (albeit a slower pace) in most areas.
• Costa Rica has never had an economy based on credit; so people have generally bought their homes with cash — both Ticos and foreigners.  As such, there was no mortgage “bubble.” Most sellers are in a cash position and can and will wait for a reasonable price.
• Costa Rica’s expat community is fundamentally populated by retirees, not speculation homebuyers (as some believe).  Although, there still is some measured speculation, which should be seen as a good sign for potential buyers.
• Many foreign buyers are not from the U.S.  In fact, the ratio of expats in Atenas is at least 50% Canadians and Europeans. Their currencies are strong, and they have not experienced the same dramatic collapse as the U.S. real estate market either.

For Sellers:

• This is not the time to expect to get your top asking price. Most buyers expect a discount given the global economic climate: your price should be fair if you really want to sell.
• If possible, it is helpful to be open to financing part of the sale. Lending has become nearly impossible on U.S. homes and more difficult in Costa Rica.  You can negotiate terms that work for you. However, customers from the “developed” world are witnessing record low interest rates will baulk at double-digit rates commonly seen in Costa Rica in the past.
• Your first offer may be your best offer. If you really want to sell your home, you are most likely going to wait longer than you previously thought, all reasonable offers should be considered.
• It is a buyer’s market.  Since Costa Rica is currently a land of cash (for those that have it) and not fictional inflated credit, the buyer feels powerful right now.

Click on link to see this listing for $295K

Property in cheap saturated markets in the U.S. has little “real” value besides the lifestyle one can lead having that property.  In a market critically dependent on gun-shy lenders and unlikely job growth, reselling cookie-cutter U.S. homes at any price in the foreseeable future is suspect at best – unless the lifestyle is attractive.  Costa Rica, a primarily cash-driven market, attracts people because they reason it’s a “better” place to live and own property.

There is no hard and fast rule for negotiating in Costa Rica as every seller and situation is different, but our general observation is that it’s safe to make an offer that is 15-20% below asking price with a goal of achieving 10% cash discount.  This seems to be a fair and realistic scenario given the current market conditions and perceptions of participants.

Best wishes to both buyers and sellers.

Investment Payments in Physical Gold

With demand for gold at an all-time high, Costa Rica has an opportunity to prosper. The gold mines near Las Juntas consistently see 15-20 grams per ton and have been successfully producing for over 100 years for a total exceeding 1.5 million ounces. However, the mercury-based refining method of the arrastas (local refiners) is crude, inefficient, and severely damaging to the environment. The environmentally-conscious government of Costa Rica has tried to halt mercury refining, but it was overturned by intense protests from the small miners. A new company has brought its expertise to Costa Rica to build a more efficient and environmentally-safe gold mill to help the local miners and to eliminate the mercury pollution.

Gold prices continue to rise due to global concerns about inflationary fiat currencies, coupled with the limited amount of physical gold in the market. In fact Barrick Gold, the largest gold mining company in the world, recently admitted that gold resources peaked in the year 2000: “Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore,” said Aaron Regent, president of the Canadian gold giant. “Ore grades have fallen from around 12 grams per ton in 1950, to nearer 3 grams in the US, Canada, and Australia. South Africa’s output has halved since peaking in 1970.”

Many large mining companies have come to Costa Rica at great expense in order to exploit these high-yield mines, but quickly retreat when they realize that the mines are only conducive to small-scale mining. The industry in Las Juntas is successfully driven by individual miners, and provides sustenance for over 10,000 locals. However, it is crucial for them to have an environmentally-friendly refining capacity, or levels of mercury poison will only increase as production ramps up.

The primitive refining method conducted by the local arrastas is nothing more than a vat of mercury with a hand-operated spindle that separates the gold from the soil and stone ore brought to them by the local miners. The mercury-soaked tailings (waste soil) are then tossed aside to be leeched into waterways. The process is also arduous and time consuming for the miners who must monitor the process, taking away from their time spent in the actual mines. Additionally, this method proves inefficient as only about 65% of the gold is able to be harvested.

The manager of the proposed eco-friendly mill, Mike Moreland, was born into the gold business and is a lifelong miller. He has designed a better way to service the local miners with a “zero non-toxic discharge plant.” Through a multi-process gravity mill, he states that up to 90% of the gold can be recovered. This method first tests the miner’s ore in a lab to determine the gold content in the load. This helps the miner by cutting down his wait time, so that he can spend more time mining and less time babysitting his ore. Next, the ore will be pulverized; and due to the high specific gravity of gold, the ore will undergo gravity concentration with final recovery using a small amount of cyanide. This cyanide will be neutralized in the process before tailings are disposed onsite.

The site for the mill is a seven-hectare (17.3 acres) permitted industrial site with all necessary buildings. Their group, which has over 30 years experience on four continents, is seeking investors for up to $600,000 to start the 35-ton-a-day mill. The investment funds will be secured with a first mortgage on the land at 10% interest, and some capital ownership in the enterprise may be offered. Ultra-conservative estimates of 20 tons a day at 80% recovery, with gold prices of $1100/ounce, puts gross annual profits north of $400,000. Operating at full capacity with high quality ore from the miners and higher gold prices will only increase these returns. Furthermore, the site has the capacity to double the milling capacity to 70 tons a day.

“This is a safe way to invest in wholesale gold. See, we are essentially gold buyers that don’t rely on a single mine or a single miner. We buy gold in all forms. When it comes to us in raw ore form, we only pay for lab-tested samples that meet our grade, and then we refine it for resale,” Moreland added. The mill buys raw ore for 50% of market value and unrefined gold at 80% of market value. They then sell to one buyer in Florida – Republic Metals – who purchases over 100 ounces at a time for 98.5% of market value.

As gold prices continue to accelerate, Moreland LTDA provides an opportunity to invest in wholesale gold with a company that provides a valuable service to the local community and environment. Costa Rica, as a famously stable and peaceful democracy, has fee simple property title (like America) which secures investors’ funds.

For more information contact us here

Outsourcing has been a trend for quite some time; much of the U.S. tech sector has gone to places like India, where Indians are doing the work.  A trend is developing among American companies:  they are beginning to move their businesses and their workers to Costa Rica.

Costa Rica is significantly less expensive than the United States, but it is not the cheapest place for a business and its workers to reside.  However, Costa Rica has benefits that may not directly affect the bottom line of a company’s operating costs, but indirectly prove that it is the best country in the world for business relocation — and more and more businesses are coming to this conclusion.

Costa Rica, unlike many low-cost Third World countries, does not pose a physical threat to company employees: there is no history of kidnappings (think Mexico); no political instability (Nicaragua, Guatemala, Indonesia); and workers are likely to be happy relocating to one of the best climates in the world (unlike Panama).  Furthermore, Costa Rica is no more than a 6-hour flight for most Americans.

A recent job fair in San Jose drew thousands of graduates of INA, the country’s best business institute.  The Expo showcased dozens of new American companies which have just arrived, or will be arriving in early 2010.  These companies range from financial, to the tech sector, science, travel, and more.  English-speaking positions are being sought from the pool of INA graduates to augment the transferred workforce from the United States.  The article below, just published by The Tico Times, is limited in its scope as it does not address the fact that many U.S. workers are arriving in Costa Rica.  Western Union and IBM are prime examples of a balanced workforce.  However, the article is important as it highlights the trend, though it focuses on the rationale of low operating costs and the benefits for Costa Rican workers only.  True, no one typically likes to be told they need to relocate, but Costa Rica offers many more positives than negatives — companies and their employees are beginning to accept this.

Costa Rica Celebrates Jobs Transplanted From U.S.

By Adam Williams Tico Times Staff | awilliams@ticotimes.net

In mid-November, Amway Global, told 93 employees at its operation in Ada, Michigan, in the United States, that their jobs soon would be cut and relocated to Costa Rica. A week later, a Boston Scientific Corporation (BSC) plant just outside of Miami, Florida, also in the U.S., announced plans to shut down the installation and move 1,400 jobs to a new facility in Costa Rica. Welcome Work: A Boston Scientific Corp. employee at the company’s second production plant in Costa Rica works on the assembly of medical devices. Ronald Reyes | Tico Times While the creation of new jobs may be good news for the struggling Costa Rican economy, nearly 1,500 U.S. employees have been told their once-solid jobs at these companies will soon disappear. In a message to The Tico Times this week, former Boston Scientific employee David Rodríguez said he was laid off from the Doral plant west of Miami two years ago, after working there for 10 years. “I have friends who still work there; some attend my church,” he said. “From what I have heard, many – especially those who are older and have worked there for over 15 years and were hoping to retire at BSC – are shocked and worried about their futures. The reality is that there will be more than 1,200 people without a job in two years time and BSC will continue on.” A reasonable assumption might be that the decision of Amway Global, a multi-level marketing and direct sales company, an d BSC, which manufactures medical devices, to export jobs was due to tighter funding or diminishing earnings. In fact, both companies are prospering financially. According to Amway spokesman Stephen Duthie, the company reported sales of more than $8.2 billion last year, a 15 percent leap from the previous year. Sales at BSC exceeded $8 billion in 2008. “We are looking to grow our market in Latin America, and creating a hub in Costa Rica will allow us to run it more efficiently,” Duthie said in an interview with The Tico Times. “This was not a decision made under duress.” The Job Relocation Trend BSC is not the first “life sciences” company to leave the Miami area and redistribute jobs to Latin America this year. According to The Miami Herald, Johnson & Johnson health care products and pharmaceuticals announced in January that it would eliminate 159 jobs in Florida’s Miami Lakes operation and transfer them to Ciudad Juárez, Mexico. In April, BSN Medical, which makes orthopedic products, announced that it would close its plant in Miramar, Florida, and export most of its jobs to Reynosa, Mexico. The plant laid off 163 workers. The latest layoffs come at a time when the unemployment rate in the U.S. is at 10.2 percent, the highest level in over 26 years. According to the Beacon Council, a public-private organization that focuses on job creation and economic growth in Miami-Dade County, the unemployment rate there in October was 11.8 percent, a 5.2 percent increase compared with the rate in October 2008. Miami is not the only U.S. area suffering from high unemployment. According to the U.S. Bureau of Labor Statistics, the unemployment rate in the state of Michigan, the home of Amway Global, has climbed to a whopping 15.1 percent, the highest rate of any U.S. state. Though the 93 jobs snipped at Amway are relatively few in number, laid-off employees must try to find work in the worst job market in many decades. Yet the trend of slashing the number of employees and relocating jobs has shown no sign of slowing as companies continue to employ cost-cutting measures. A statement issued by the Beacon Council after BSC announced its decision to close the Doral plant reads: “We are told that in a restructuring effort to reduce operating costs, Boston Scientific will relocate to an existing and vacant company facility in Costa Rica which will result in lower operating and labor costs for the company. The Beacon Council is disappointed with their decision and, although we have been in communication with the company, there was little we could do to retain the company in Miami-Dade. While Boston Scientific deems this to be a necessary business move needed to adjust to the current economic crisis, without a doubt, their decision will be severely felt in our Miami-Dade community.” Likewise, when the tire company Firestone announced plans to cut jobs in Indianapolis, Indiana, in the U.S., and move them to Turrialba, a small town on Costa Rica’s Caribbean slope, Costa Rican President Oscar Arias, who spoke at the inauguration, cited the same rationale. “This plant was in Indianapolis in the U.S., and they brought it here because certainly the costs of production are lower in Costa Rica,” Arias said. “But overall it is important for a canton like this, depressed in employment numbers.” One Man’s Loss Is Another’s Gain Arias’s comments highlight the benefit for Costa Rica of the slashed U.S. jobs. The Boston Scientific jobs lost in Miami will be filled by Costa Rican workers at the two plants in the Propark free-trade zone in Coyol, near Alajuela. When the jobs are distributed over the next two years, Boston Scientific will provide work to approximately 4,000 Costa Ricans. “The moving of jobs here to Costa Rica is always great news for our economy,” said Julio Acosta, a senior advisor at Infinitum, an international business consulting firm based in Costa Rica. “It boosts the Costa Rican economy because it provides jobs for local workers and also generates more business for other companies here.” According to Acosta, the cost-cutting schemes are rooted in lower wages paid to Ticos, and this translates directly into profits for the company. “This has been happening here and in countries all over the world,” Acosta said. “Where wages are lower, companies will employ people there to do the labor at less cost. … The trend will continue. And one day, if wages in Costa Rica increase, companies will outsource to a less expensive country. Companies will always look for the cheapest way to maximize profits.”

The 2,074-page healthcare bill certainly contains a lot to digest. One of the new tax provisions calls for a tax on elective plastic surgery. Costa Rica’s medical tourism has been rising as the costs in North America rise. Chrissie Long from The Tico Times presents a very clear and concise view of the benefits Costa Rica can expect in the wake of U.S. taxation.

By Chrissie Long
Tico Times Staff | clong@ticotimes.net

There’s at least one sector celebrating a proposed tax on plastic surgery in the United States, and that’s the people who cater to medical tourism.

Each year, hundreds of thousands of North Americans look offshore for tummy tucks, facelifts and breast enhancements, knowing they can pay a fraction of the costs they would have to fork over in the United States.

Costa Rica, a three-hour flight from the U.S., has absorbed a large percentage of patients and, with the addition of the proposed tax, medical experts expect a greater influx.

The 5 percent tax on elective cosmetic procedures was proposed as part of the 2,074-page health reform bill presented by the U.S. Democratic Party this month. The tax is expected to generate $5.8 billion to help fund the $849 billion health system overhaul.

But plastic surgeons in the United States have launched a campaign to prevent the tax, arguing that its effects would result in discrimination against women, who represent 86 percent of cosmetic surgery patients there.

“This tax is effectively a ‘soccer mom’ tax that will adversely impact mainstream American wives and mothers, who are the majority of plastic surgery patients,” said Dr. Renato Saltz, president of the American Society of Plastic Surgeons (ASPS). “As doctors, we understand and appreciate the need for health care reform, but taxing physicians and cosmetic surgery procedures to pay for the reform is not realistic or beneficial.”

ASPS noted that only 10 percent of the respondents on a recent survey reported a household income of over $90,000, “which clearly refutes the suggestion that elective surgery taxes are ‘luxury or ‘sin’ taxes affecting a privileged few,” according to a statement released earlier this month.

The bill was given a nod by the Senate on Saturday, Nov. 21 and will is currently awaiting further debate.