Rob, can you point me toward the revisions to Cuba’s investment laws that would permit this venture?  I’ve seen nothing in recent years, and I don’t believe the small changes made in the 1990s for the limited leasing of villas (subsequently reversed) would be sufficient.

This would be a rather significant policy change for the Cuban government to permit complete foreign ownership of property on the island, leading me to have rather strong doubts about the veracity of this announcement.

Also, “The $1000 application fee is to be wired to the Royal Bank of Scotland International then you have to return the application with a copy of your passport by fax.” is far too reminiscent of the various Nigerian email schemes as to make one particularly cautious.

Marek,

Thank you for asking. I should make it very clear that the Havana Journal does not endorse any investment in this venture and does not have any financial stake nor incentive to promote the Carbonera Club or any of it’s affiliates, partners, individuals or parent companies.

I will admit that I was approached by FloriditaTravel.com (owned by Havana Holdings) for advertising space across our Havana Network of sites but we turned them down (added 12/23/08: because the deal was not right for us).

So, please buyer beware. Seek legal advice and make investment decisions based on the extremely speculative nature of any investment in Cuba.

Okay, with that said, I have not heard of any changes to Cuba property laws with regards to foreign ownership. I think the villa “ownership” is in the form of a transferable 99 or 50 year lease, something like that.

They have not broken ground on this project. Leisure Canada has similar arrangements with the Cuban government for maybe ten years and they have not broken ground either as far as I know.

The reason I posted it here and the reason that I think the project has credibility is because Terence Conran of Havana Holdings is behind the Carbonera Club project.

Cuba consulting services

Thanks for the clarification, Rob. One of my “pet research interests” lies with how Cuba has managed its tourism sector investment and growth, so any developments like this catch my eye.

Cheers,
M

Looks like the mafia wasn’t purged in 1959.

There are much better and safer deals to be had in the DR.  They at least have some rule of law.

It’s right to be cautious, but not disbelieving. It may pay off to actually do some research on this.
I think anyone could see the players in this are big names.
I’ve taken a look at the Esencia website and the partners they have are serious. PGADC is the the arm of the world famous PGA. If you’re a golfer, you would have to be dumb not to know them. Sixth Senses again is world famous, like Oberoi or Orient Express Group. The architects are real, and Terence Conran, who you say is part of Havana Holdings - is head of the UK’s leading design and architecture company, The Conran & Partners, with stores all over the UK. He’s like Virgin’s Richard Branson and if he is involved its worth watchng. And Savills, the leading property agent in the Uk if not in Europe, has the project listed on its website. So it is real.

If that doesn’t make you stop and think, then you could maybe just look at the Telegraph piece on Conran getting involved:

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/2790952/Conran-joins-Havana-to-roll-out-high-life-in-Cuba.html

They say the company has already put up 20 million towards the project.

I had a look at the documents, and the bank after all is RBS, serious, not some dodgy Nigerian unknown. I also read about the Cuban tourist minister, who was in the Uk in November, did a press talk about this. I called the Caribbean Council, and they verify it. Sounds to me like there may have been a policy change. Go figure.

Just seen this quote about Esencia and The Carbonera Club:

“The Chairman of the UK side of The Cuba Initiative, Ian Taylor, MP (former UK Trade Minister) commented after a recent visit to Cuba: ‘To have a British company that is able to bring so many well known names together in relation to an investment in Cuba heralds a new era for British business in Cuba and augurs well for closer UK relations’.”

this is kind of sad….don’t cubans already have limited access to beautiful beaches and these proposed private villas limit them even more? we should help cubans keep their cuba…......

Another sad example of how the Castros are selling Cuba without allowing the right owners the Cubans to be part or to buy anything.

99 year lease, do you think Castro will be around in 99 years? In any case apartment projects were sold in Cuba in the early 90’s. Cuba’s government is the cuban people and cubans have access to most beaches. This is part of their tourist development which is one of their main sources of foreign currency that goes into public projects and food purchases. True like in Mexico some resorts are off limits to non turists like the Cayos and only cubans employed there have the right to go there. This is not uncommon in this world of tourism.

Cuba’s government is the Cuban people? That’s a good one.
That’s exactly what Castro say a government of the people, with the people and for the people.
Now, go and ask the actual Cuban people what they think about it. Nothing further from the hard reality.
A dictator with a bunch of non-democratically elected group of cronies dictates the destines of the majority of the Cuban people.

Good luck with purchasing or leasing for 99 years anything in Cuba, firstly most likely you are buying in somebody’s property secondly the government can come later and take it from you as they had done it with so many people before.

This Sports Illustrated article quotes Esencia CEO Andrew Macdonald that the project is “spade ready” yet he admits that the project is now on hold indefinitely and that “more than 20 other government ministries have to approve the plan before it can go ahead”.

So, how exactly is the project “spade ready”?

Save your money people. I’m sure Esencia has good intentions but the Cuban government does not. They claim to want foreign investment but they just want foreign money and development ideas.

Just another project on the scrap heap waiting for that “big day” in Cuba. The big day that never comes.

Cuba consulting services

This looks like a great opportunity on the surface.  Digging a little will reveal some pitfalls and perhaps some unacceptable risks, depending on your appetite for such things.

The approval process is nothing more than government veto power as any true capitalist will accept just about anyone’s cash, especially in the pre-build stage.  Then there is the fact that the local residents haven’t a clue (as of January this year) of the looming development.  And there is no guarantee that those lands are not subject to future claims.  If they have done their homework on it, they are not saying.

Then there is the the payment process;  It is obvious that they are financing this project with purchaser’s cash at least the lion’s share of it, so the actual risk to the developer is minimized and the burden put on the investor.  With that said, they have been claiming the project is “shovel ready” for two years now.  Look at LCI (http://www.leisurecanada.com) who have done their homework (no future claims on property they plan to develop), boast a serious and capable management team and have for years been saying the same thing; they will break ground any month now.

Esencia does have good intentions but to those like me that like my money close, they would not allow the moneys to be put into escrow in Canada until they hand over the keys to what they are advertising.  This to me makes it a non-starter.

Then there is the pricing.  You can buy comparable accommodation just about anywhere in the world for the prices they are asking or less!  Think about that.  Where is the value story here?  What would make one want to step up to this opportunity if there is no real value in the package or guarantee they will ever put a shovel into the ground, never mind complete the project?