real estate

Paradise goes to court

A court has issued a ruling bringing the lease agreement for Playa Bonita into question.

la prensa

sea suit:Competing developers are at odds over the bidding process that awarded concessions in Kobbe to Paradise Beach, which built the Playa Bonita resort. 994460

Behind the tranquil waters and sun-drenched beaches at Playa Bonita resort, a legal battle is brewing that could mean major headaches for its owner, Paradise Beach Corp.

A ruling of the Third Chamber of the Supreme Court indicated that Paradise Beach has to pay Desarrollo Urbanístico del Atlántico, S.A. (DUASA) for the time and money it spent in 2003 on bidding for the lots in Kobbe where the resort is located.

The same ruling declared void the resolution in which the Junta Directiva de la Autoridad de la Región Interoceánica (ARI) assigned the lots to Paradise Beach.

This is the first time that the court has reversed a concession given by the state for the former Canal zone properties returned by the Americans in 1999. Moreover, it is the first time that such a decision has been reached after a project has been developed.

The battle has pitted two heavyweights in the business community, Ahmad Mohamed Waked of DUASA and Paradise Beach's Hermán Bern.

Waked is head of a company that sell appliances in the Colón Free Zone in addition to holding a post within DUASA. His son was close to former president Mireya Moscoso, holding a post within her government, as well as being a DUASA official.

Bern is the largest operator of hotels and resorts in the country, whose empire includes the Intercontinental Miramar, the Crown Plaza, the Ambassador Suites and the Gamboa Rainforest Resort.

The two crossed paths in 2003, when the ARI decided to tender four plots in Kobbe to be used for an ecotourism project. ARI officials said the winning bidder would be the one who submitted the highest rental fee, without taking into account the amount of the project's investment.

When the bid was awarded to Paradise Beach, DUASA initiated legal action stating that the process had not been handled in a transparent manner.

When reached for comment, Bern said he is waiting for the government to tell him "where we stand."

"This is a legal matter which has to be defined by the Ministerio de Economía y Finanzas (MEF)," he said.

The MEF took over the responsibilities of the ARI when it was disbanded.

Bern has also filed a complaint with the Consejo Nacional de la Empresa Privada (CONEP.)

The court's decision has also stopped the sale of two lots in Kobbe to Paradise Beach that was part of the initial concession. Although the Consejo de Gabinete approved the sale in July of last year, the court has granted a request by DUASA to suspend it.

For now, the resort will continue to operate under Bern's stewardship. It’s future, however, will be decided in a courtroom, far from the beach.