Real Estate, Dominican Republic MAY 23, 2009 - Senator Francisco Domínguez today called the 99-year lease of several square miles of Government lands in Barahona, to the developer Terma de Salamandra to build a hotel “confusing and strange.”
The Santiago senator said it’s difficult to understand how a company with 500,000 pesos(USD 12,000) in capital can announce investments of more than 560 million dollars in just 10 years.
He argued that since in the rental contract the company pledges to invest 24 million dollars in the first year, “I want to know how they are going to appear.”
The lawmaker said he’s not against the South region’s tourist development, but the rental contract doesn’t meet formal and legal requirements. “Hopefully the people can get the money for the investment stated in the contract without difficulty, however, this is simply a good will statement, it’ll be necessary to wait and see if it’s adhered to.”
The company pledged to build a 1,000 room hotel complex, villas, golf courses, health centers, among others facilities within 10 years in Canoa, Barahona, and paid the Government 500,000 dollars.
The Senate yesterday approved the contract which now goes to the Chamber of Deputies, whose endorsement is also expected. source: DomincianToday
Special Note from Dominican Watchdog:
This is nothing special, but just one of many Dominican real estate deals made with the Government. As usual it completely lacks transparency to the public and possible future private investors. Who got the USD 500,000? and Who will benefit from this very unique Dominican real estate development opportunity? Dominican Watchdog is sure that we will soon hear more about this fantastic "Deal".
We might even be lucky to see President Leonel Fernandez at the Inauguration in Barahona, promoting this fantastic new "investment opportunity" together with a Famous Royal just like the re-launch of Punta Perla.
Dominican Watchdog wonders it this new real estate project in Barahona will be promoted by a serious developer, or if it is just another "HIT & RUN" type like Mr Ricardo Miranda looking to rip of European and American investors?
Dominican Watchdog will follow the project closely, and it will be interesting to see If this USD 560 Million Barahona real estate project will use escrow accounts and title guarantee company, or if it is the usual system just to collect deposits and not worry about securing the foreign investors and their funds.
Investors beware - websites and brochures don't get things build. Let the developer bring the first USD 100 Million before you bring any money. Maybe when its build and if you like what you see, then you can bring your money! There are too many unfinished real estate developments in the Dominican Republic, and nothing has happened to the scammers!
It would be nice to see a strong presence of serious development companies with strong financial backing - please follow discussion about how to secure property investors in the DR at "Stop Dominican Property Sharks"
Here is a few blogger comments from DominicanToday where you can also join the discussion:
From: Dominican Republic
What's confusing? It's a scam. That's it. Got it now?
From Hoy: Economist Isidoro Santana told Hoy that international credit is closed for the DR until the country signs an agreement that indicates that the IMF is monitoring the actions of the government. Santana, interviewed on the Uno+Uno TV show on TeleAntillas called on the government to improve the quality of its spending.
From: United States, far S. Florida (formerly Santo Domingo)
It stinks like rotten FISH. Greed above all, in the DR. Gotta love it. Everything and anything is for sale in the DR. One big problem, after you think you paid for whatever it is you purchased, you are not certain or guaranteed of ownership. Agreed juanb, it is a scam...