real estate

U.S., Panama wrangle over former U.S. embassy

U.S. officials continue to seek a deal involving the old U.S. embassy building on Avenida Balboa.

Maydée Romero/LA PRENSA

limbo: The former embassy building, which Panama acquired in 1938, is now worth a reported $16 million. 1029387

President Martín Torrijos's administration has insisted that it will not allow the United States government to sell the grounds of the former U.S. embassy on Avenida Balboa, for which Panama signed a 999-year lease back in 1938.

The diplomatic squabble began last May 26, 2007, when the U.S. Department of State announced the sale of the property on its website. The original listing did not indicate to whom the grounds belonged, but a month later it was updated with the following clarification: that the land was not theirs and that it would not technically be available for the next 999 years.

According to Volume 329 of the Registro Público, the property belongs to the Gobierno Nacional, which means the United States would need the Torrijos's government permission to sell or transfer the rights to a third party.

Of course the U.S. government´s intentions of cashing in on its historic embassy site and moving to Clayton made perfect financial sense. Real estate experts estimate the lot´s current value at about $16 million. Last June, sources from the U.S. embassy proposed three potential solutions to the conflict: charging the Panamanian government for improvements made to the grounds during U.S.'s tenure; changing the wording of the original agreement to allow for a third party transfer; or using the building as an annex to the present Clayton headquarters.

In the meantime, the State Department persists in its negotiations with Panama. "Our policy has not changed," said U.S. embassy spokesman Gavin Sundwall. "We are negotiating the situation with the Government of Panama."

Panamanian officials were not available for comment on the issue.