real estate

CSS suspends land sale

Carlos Lemos/LA PRENSA

Buyer Beware:The Caja Seguro Social (CSS) attempted to sell 17 hectares of prime real estate for $57 per square meter when land prices in the adjacent Costa del Este development range between $1500 and $3000 per square meter.1058937

The Caja de Seguro Social (CSS), a public corporation administered by the State and charged with managing various social services and entitlement programs such as health care, medical insurance and pensions, has suspended its sale of a 17-hectare parcel of land bordering the Costa del Este development.

The CSS had offered the land at a price well below market value, even though it purports to be committed to managing its financial resources effectively in the public interest. The land was listed in the Residencial Especial category and offered at $57 per square meter. But that categorization is incorrect, and selling the land at that price would have only further jeopardized the CSS's Invalidez, Vejez y Muerte (IVM) program, which funds pension and reitrement benefits, and which could run a deficit of as much as $82 million this year.

In fact, the property was zoned not only for residential development but also for the construction of offices and commercial areas, increasing its value considerably. In neighboring Costa del Este, prices for similarly zoned land range between $1500 and $3,000 per square meter .

The office of the Ingeniería Municipal, or city engineer, said that the CSS had outdated information when it opened the bidding process for its property.

Iván Carlucci from the real estate company Inversiones Natasha, said the land is worth at least twice as much as what the CSS is asking for it. Also, the mixed zoning classification permits greater density building than the Residencial Especial category, which usually means bigger profits for developers.

The Comité de Residentes de Nuevo Reparto Panamá is planning to file a complaint against the sale with the Ministerio Público and the Defensoría del Pueblo, arguing that it harms the IVM program.

The Comité will also denounce the sale of a different piece of property, which sold for $53 per square meter in 2003. A 20-story office complex is planned for the site.

“We're not opposed to orderly development,” said Mirna Martinez, president of the Reparto Nuevo Comité. “But who is going to benefit from this sale?” Certainly not those who depend on the CSS for pension benefits and medical care, she implied.

Only four companies continue to express interest in purchasing the CSS property. They are Mega Proyecto del Istmo, Square Feet Panamá, Colinas del Sol and Premier Panamá. Because of the complaint filed by the Comité de Residentes and the questionable asking price, some 20 other companies have decided to withdraw from the bidding process.