Revolutionary Cuba Now Lays Sand Traps for the Bourgeoisie


MEXICO CITY — One of Fidel Castro’s first acts upon taking power was to get rid of Cuba’s golf courses, seeking to stamp out a sport he and other socialist revolutionaries saw as the epitome of bourgeois excess.

Now, 50 years later, foreign developers say the Cuban government has swung in nearly the opposite direction, giving preliminary approval in recent weeks for four large luxury golf resorts on the island, the first in an expected wave of more than a dozen that the government anticipates will lure free-spending tourists to a nation hungry for cash.

The four initial projects total more than $1.5 billion, with the government’s cut of the profits about half. Plans for the developments include residences that foreigners will be permitted to buy — a rare opportunity from a government that all but banned private property in its push for social equality.

Mr. Castro and his comrade in arms Che Guevara, who worked as a caddie in his youth in Argentina, were photographed in fatigues hitting the links decades ago, in what some have interpreted as an effort to mock either the sport or the golf-loving president at the time of the revolution, Dwight D. Eisenhower — or both.

President Hugo Chávez of Venezuela, who maintains close ties with Cuba, has taken aim at the pastime in recent years as well, questioning why, in the face of slums and housing shortages, courses should spread over valuable land “just so some little group of the bourgeois and the petit bourgeois can go and play golf.”

But Cuba’s deteriorating economy and the rise in the sport’s popularity, particularly among big-spending travelers who expect to bring their clubs wherever they go, have softened the government’s view, investors said. Cuban officials did not respond to requests for comment, but Manuel Marrero, the tourism minister, told a conference in Europe this month that the government anticipates going forward with joint ventures to build 16 golf resorts in the near future.

For the past three years, Cuba’s only 18-hole course, a government-owned spread at the Varadero Beach resort area, has even hosted a tournament. It has long ceased to be, its promoters argued, a rich man’s game.

“We were told this foray is the top priority in foreign investment,” said Graham Cooke, a Canadian golf course architect designing a $410 million project at Guardalavaca Beach, along the island’s north coast about 500 miles from Havana, for a consortium of Indians from Canada. The company, Standing Feather International, says it signed a memorandum of agreement with the Cuban government in late April and will be the first to break ground, in September.

Andrew Macdonald, the chief executive of London-based Esencia Group, which helps sponsor the golf tournament in Cuba and is planning a $300 million country club in Varadero, said, “This is a fundamental development in having a more eclectic tourist sector.”

The other developments are expected to include at least one of the three proposed by Leisure Canada, a Vancouver-based firm that recently announced a licensing agreement with the Professional Golfers Association for its planned resorts in Cuba, and a resort being designed by Foster & Partners of London.

The projects are primarily aimed at Canadian, European and Asian tourists; Americans are not permitted to spend money on the island, under the cold-war-era trade embargo, unless they have a license from the Treasury Department.

Developers working on the new projects said they believed Cuba had a dozen or so courses before the revolution, some of which were turned into military bases. Cuba and foreign investors for years have talked about building new golf resorts, but the proposals often butted against revolutionary ideals and red tape. Several policy changes adopted at a Communist Party congress in April, however, appear to have helped clear the way, including one resolution specifically naming golf and marinas as important assets in developing tourism and rescuing the sagging economy.

“Cuba saw the normal sun and salsa beach offerings and knew it was not going to be sustainable,” said Chris Nicholas, managing director of Standing Feather, which negotiated for eight years with Cuba’s state-run tourism company. “They needed more facets of tourism to offer and decided golf was an excellent way to go.”

The developers said putting housing in the complexes was important to make them more attractive to tourists and investors, and to increase profits.

Still, John Kavulich, a senior adviser for the U.S.-Cuba Trade and Economic Council, said Cuba had a history of pulling back on perceived big steps toward freer enterprise and might wrestle to explain how such high-dollar compounds could coexist with often dilapidated housing for everyone else.

“Will Cuba allow Cuban citizens to be members, to play?” he said. “How will that work out? Allowing someone to work there and allowing someone to prosper there is an immense deep ravine for the government.”

But Mr. Macdonald said political issues were moot, given that Cuba already had come to terms with several beach resorts near Havana that generally attracted middle-class foreign travelers.

“It’s not an issue for them,” he said. “It’s tourism. It’s people coming to visit the country.”

If the projects are built as envisioned, the tourists will enjoy not just new, state-of-the-art courses and the opportunity for a second home in Cuba, but shopping malls, spas and other luxury perks. Standing Feather, which calls its complex Estancias de Golf Loma Linda (Loma Linda Golf Estates), promises 1,200 villas, bungalows, duplexes and apartments set on 520 acres framed by mountains and beach.

The residences are expected to average $600,000, and rooms at the 170-room hotel the complex will include may go for about $200 a night, a stark contrast in a nation where salaries average $20 a month.

Standing Feather said that to build a sense of community and provide the creature comforts of home among its clientele, the complex will include its own shopping center, selling North American products under relaxed customs regulations.

“It is in the area that Castro is from, in Holguin Province,” added Mr. Cooke, the golf course architect.

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Cuba attracts foreign interest in building golf courses


Xinhua: Cuba was making progress in attracting foreign investment in 16 planned golf courses, Cuban Tourism Minister Manuel Marrero said here Tuesday at opening of the International Tourism Fair Cuba 2011.www.cubaluxury.travel

Marrero said negotiations were progressing with foreign companies interested in forming joint ventures to build the courses.

Cuba last year adopted a strategy to attract foreign investment and develop the tourism of marinas and golf courses with international capital.

The island now has only one golf course in Havana and another in Varadero.

Mexican Secretary of Tourism Gloria Guevara said her country was very interested in the program and several companies were “exploring the possibility of investing”.

Tourism is the second biggest source of Cuban revenue, contributing more than 2.2 billion U.S. dollars to the country in 2010, according to National Statistics Office data.

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Cuba ready for golfing revolution


(CNN) — Under Fidel Castro’s rule, golf was all but eliminated in Cuba, but the bourgeois sport of the West is poised for a comeback on the communist-run island.

Castro and Che Guevara famously staged a golf match to antagonize then-U.S. president Dwight D. Eisenhower, and soon after he came to power in 1959 the revolutionary leader began his march on Cuba’s dozen or more courses.

The tanks rolled in, and some were turned into military facilities. One became an art school, and Castro reportedly built a house on the fairways of another. By the time he was finished, only two courses remained.

But over half a century later, a more relaxed political regime and a hunger for the tourism dollar is set to transform Cuba into an unlikely golfing hotspot for Western travelers.

“Golf is becoming a reality in Cuba this year,” Andrew MacDonald, chief executive of London-based Esencia Hotels and Resorts, told CNN.

“The key moment was a change in Cuban property law last August to make foreign ownership far more attractive.

“The Cuban government have a vision of establishing 15-16 new golf courses in the next five to seven years.”

Esencia is part of that vision. Its luxury Carbonera Country Club development in the beach resort of Varadero has been seven years in the making, and MacDonald hopes to start construction on the $300 million project in the next few months.

Leisure Canada, a Cuban investment company based in Vancouver, is also at advanced stages with three planned golf developments in the Pinar del Rio province on Cuba’s west coast.

And London-based firm Foster and Partners confirmed to CNN it has been commissioned by a Spanish developer to build a 2,000-unit golfing community with three courses in the same area.

Cuba currently has just 27 holes for golfers. The ramshackle nine-hole Havana Golf Club survived the Castro regime as a venue for foreign diplomats and visiting businessmen, while the Varadero Golf Club on the east coast was extended to 18 holes in 1998 thanks to a $20 million investment from the government.

Canadian Les Furber was the man who designed it, and he said the political climate made for a protracted process.

Why did Communist heroes play the bourgeois game?

“Because of the U.S. embargo on products and services it was challenging to get many of the things we needed, and the economic time meant it took eight years to build the golf course due to the lack of diesel fuel, tires and batteries etc,” he said.

Despite the frustrations, Furber is keen to return to the island to work on future developments, and believes Cuba is ideally situated to attract Western golfers.

“Cuba is 90 miles from Miami and has a great climate, coastal frontage for development and needs golf to support the tourism demands,” he said.

“Cuba recognizes now that it does not have any financial support from foreign countries and needs tourism in a big way to help pay for its imports and lines of credit for most things it does not produce or manufacture.”

Cuba’s minister for tourism Manuel Marrero said in 2010 that 16 golf developments had already been approved by the Council of Ministers. He stressed that golf was fundamental to its plans to bolster the tourism industry.

But Havana Golf Club’s resident professional Johan Vega has heard it all before. He remains skeptical over the mooted developments, and harbors doubts whether Cuba is truly ready to embrace the sport that, thanks to Castro, is no more than a minority activity.

“When the new ones open show them to me. Then I will know it is true,” he told the Golf.com website.

“In Cuba golf culture simply doesn’t exist. If you talk to people here about birdies and bogeys they have no idea what you mean.”

Cuba’s golf revolution will certainly be on the agenda in April when Varadero hosts the third annual Montecristo Cup, a tournament open to amateurs and professionals.

Spanish professional Alvaro Quiros will be the big-name attraction this year, and the four-time winner on the European Tour is fully behind the initiative to bring golf back to the Cuban people.

“It is important that support is given to many people in Cuba to play, practice and participate in golf,” he said after his appearance at Varadero in 2010.

“Golf will be an Olympic event in 2016. Cuba should seriously look at and prepare for golf as they have done with other sports — baseball, boxing, track and field.”

MacDonald is confident change is coming. He’s been impressed by the enthusiasm and golfing knowledge of the Cuban contractors and government officials, and is utterly convinced their vision will become a reality.

“Golf just wasn’t a priority in Cuba before and now it is,” he said. “We hope that in years to come emerging young players will have the chance the develop and compete on an international level.

“Cuba is known for its baseball players, and when you think about it the golf swing is not a million miles away from that used in baseball.”

While initially looking to the “Anglo-Saxon” tourist market, MacDonald believes the U.S. government will ultimately relax its restrictions on Americans visiting Cuba.

“I see that coming in softly over the next few years. But it’s also worth noting that 10 million U.S. citizens can already come here because of their Cuban relatives,” he said.

As for Castro and Guevara’s famous game, it was won by the younger man with a score of 127. Castro shot over 150 and some have suggested his resentment of golf was simply down to the fact he was never any good at it.

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Cuba, with eye on golf, liberalizes land law


Reuters: HAVANA, CUBA – The cash-strapped Cuban government will allow foreign investors to use state-owned land for up to 99 years in a change that is likely to bring developments of luxury golf courses to the communist island.

The new law, published in the Official Gazette on Thursday, was said to be aimed at “facilitating the process of participation of foreign investment in international tourism”by giving “greater security and guarantee to the foreign investor in the real estate business.”

Cuban authorities have said that a dozen or so golf developments are under consideration as they seek ways to boost tourist revenues for the fragile economy.

Before the legal change, which was decreed in July but not announced until Thursday, Cuban law permitted use of state lands for 50 years. Most land in Cuba belongs to the government.

Foreign investors who have proposed the golf developments say the 99-year limit is necessary to attract buyers and make their projects, which will feature course-side homes, financially viable.

Cuba, which discouraged the sport after the 1959 revolution, has only two golf courses.

Cuba attracted about 2.4 million tourists last year, and is hoping golf will bring wealthier visitors to the island.

Officials are also planning for the day when the United States, 90 miles (145 km) away, ends its longstanding ban on travel to Cuba.

Legislation is pending in the U.S. Congress that would lift the ban that is part of the 48-year-old U.S. trade embargo against Cuba.

President Raul Castro has undertaken various reforms to improve the Cuban economy, with the goal of ensuring the survival of the communist system installed after the revolution that put his older brother Fidel Castro in power.

Earlier this month, he told the national parliament that the government would grant more licenses for people to operate small businesses.

In another decree published in the Official Gazette on Thursday, the government said it would allow small-time private vendors to sell agricultural products from roadside stands.

The concept has been in use in some parts of the country since last year, but now is official national policy.

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Talks on 16 golf course projects to start in 2011


Negotiations with foreign investors about construction of up to 16 golf courses and condominium communities will begin in January, Tourism Minister Manuel Marrero told reporters at the National Assembly on Sunday.

Marrerro’s announcement, based on a decision by the Council of Ministers at a meeting July 16-17, reverts the freeze on foreign real estate buying and selling imposed by the government in 2000, after a short-lived experiment with condominium construction in Havana.

Specific regulations for the purchase and sale of real estate by foreigners will be published before the end of the year, Marrero said. The immigration status of foreign buyers, as well as the types of contracts and statutes regulating the joint ventures between foreign investors and state companies are “being analyzed,” he added.

The 16 projects “have already been approved by the Council of Ministers, are in the process of implementation, and it’s being concluded,” Marrero told reporters, according to AFP.

Cuban development projects go through three stages — identifying a Cuban partner, obtaining approval of the foreign investment and tourism ministries, and finally getting the go-ahead from the Council of State.

Marrero said of the 16 golf course projects approved by the Council of Ministers, negotiations on four are “very advanced.” They include one project in the province of Holguín, one in Pinar del Río, and two located between Havana and the beach resort of Varadero.

The new regulations could spawn an unprecedented construction boom of as many as 7,000 golf course condominium units in 13 developments, predicts Tony Zamora, a Miami real estate lawyer who has researched foreign investment in Cuba for more than 10 years.

The new regulations will also open up opportunities for construction of marina-only condominium projects, Zamora suggests, adding that the government is pondering as many as six residential developments connected to marinas. This could add another 4,000 units, he believes.

The government designated about 80 sites as suitable for golf course development, according to Zamora. Over the past five years, at least a dozen foreign investor groups have lined up projects.

Under the new regulations, the government will probably offer foreigners an “usufructo” model, under which they can own property under lifetime leases, 50 years and up. The usufructo model would allow foreigners to buy, mortgage and sell properties, or pass them on as an inheritance during the life of the lease.

Another set of regulations that could be included in the law package concern issues such as length of stay for foreign part-time residents, and import and export rules for residents’ personal goods, such as furniture or automobiles. Currently, foreigners are allowed to stay up to six months at a time.

This would be the government’s second run at residential real estate construction for foreigners, after it aborted a first run in the late 1990s.

The foreign investment law of 1995 specifically allows the sale of real estate to foreigners for tourism purposes and offices. However, the government has been struggling for years to establish the ground rules for foreign real estate buying, a delicate topic in Cuba’s egalitarian political system.

In 2000, the Cuban government poured cold water over a condo construction mini-boom in Havana, when it stopped all sales and bought out its foreign partners. According to Zamora, the problem in 1998-99 was that the government failed to put any provision against flipping in the contracts. Also, many Cuban friends and family of the owners ended up living in the new condos, which caused resentment among fellow Cubans.

Even so, some 400 new units in Havana were sold in a five-year span; most of them continue to be in the hands of foreigners.

The new generation of projects is different, because they are in remote locations, outside the big cities. This, in turn, might spawn another side business, Zamora suggests: The construction of workforce housing nearby.

The most public of the four most advanced investor groups has been Esencia Hotels & Resorts. The British company announced in late 2008 it wants to build a golf course community, the $400 million Carbonera Country Club Resort in Varadero. Carbonera is planned for 730 units, around an 18-hole golf course and marina.

Meanwhile, a British-Spanish group hired Foster + Partners, the company around renowned architect Sir Norman Foster, to design a 2,000-unit community near Bahia Honda in western Pinar del Río province, around three golf courses and a 200-slip marina.

Vancouver-based Leisure Canada is redesigning its master plan for a three-course golf resort with marina village at Jibacoa, 50 miles east of Havana, according to President and CEO Robin Conners. A later stage of the project will include cottages, Conners says.

Also, a privately owned Vietnamese company, Housing & Urban Development Corp. (HUD), reportedly is planning to build two golf course communities, including one inland, just west of Havana.

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Cuba’s golf future, promising but still far off


Reuters:

If Cuba plays it right, thousands of tourists could eventually be swinging their clubs at an 18-hole golf course overlooking the turquoise waters and golden beaches just east of Havana.

They will moor their yachts at a swank marina and drive electric carts to luxury villas built around the course’s scenic artificial lake.

The project, one of at least a dozen awaiting a thumbs-up from the island’s communist authorities, appears closer than ever to becoming reality after Tourism Minister Manuel Marrero said last month that Cuba will go ahead with the construction of golf courses and marinas.

www.cubaluxuryrent.comLetters of intent have already been signed between Cuba’s state-owned tourism company Palmares and several investors from countries such as Spain, Canada, Britain and even communist ally Vietnam, said a source close to one of the deals.

Cuba currently only has two courses. But sitting just 90 miles off the coast of the United States — the world’s biggest golf market with 27 million fans — its potential as a golf tourism destination is huge and so are the potential revenues.

“Cuba can be one of the strongest golf destinations in the Caribbean,” said Peter Walton, chief executive of the London-based International Association of Golf Tour Operators.

In the half century since Fidel Castro’s revolution turned Cuba into a communist state and its golf courses into art schools or military camps, the only well-publicized golf match has been between two guerrillas who hardly knew how to play.www.cubaluxuryrent.com

Castro and Che Guevara, who was a caddy in his boyhood days in Argentina, played golf in their military fatigues and boots in 1961 to thumb their noses at the U.S. government.

But even if today’s Cuban leadership has overcome its long-time ideological prejudices against the most capitalist of sports, the fine print regulating future joint ventures and real estate ownership remains a mystery.

Golf courses are generally financed by surrounding real estate developments, so the first thing investors will be looking at is Cuba’s willingness to sell or lease land to foreigners. To justify the investment, leases will have to extend for at least 50 years.

“They seem ready to accept the real estate developments. But at this point nobody knows the terms of the leases or the conditions Cuba may attach to the contracts,” said a foreign businessman involved in one of the projects.

PERCEPTION OF RISK

Over the years, several projects have been pitched to the Cuban government, including proposals by British architectural firm Foster + Partners, French construction company Bouygues Batiment International and, more recently, the Vietnamese Housing and Urban Development Corporation.

Most of the developments are planned along Cuba’s northern coast, including Havana and up-market resorts such as Varadero and Cayo Coco.

Besides villas and apartments, some of these projects worth hundreds of millions of dollars include full-scale, Western-style restaurants, supermarkets and shopping malls so far non-existent on the communist-run island.

But to see the rough hillsides of a suburb in Havana turned into smooth greens filled with foreign putters will probably take more than just reasonably long lease terms, says KPMG analyst Andrea Sartori.

“You need to have certain stability and guarantees to property ownership that I think the country currently doesn’t have,” said Sartori, the head of Golf Advisory Practice, a Budapest-based division of KPMG specialized in the industry.

“It is very much an issue of the perception and risk that an international investor will have in leasing a property in Cuba today.”

Although Cuba’s 1995 foreign investment law foresees the sale of real estate to foreigners, the experiment in the late 1990s was soon halted after limited sales of apartments.

Business sources say Cuba would seek to create joint ventures in which it would provide land in exchange for 51 percent equity, Foreign partners would then be responsible for a huge cash injection, a model similar to the one used two decades ago to develop the island’s hotel industry.

“That tends to bring down the returns (on assets) to foreign investors below the 15 to 20 percent they will be looking for,” said a businessman with experience in Cuba.

To break into the regional golf circuit Cuba would need to develop a cluster of at least 10 courses, foreign experts say.

YANKEE INVASION

Even if nobody says it, the investors behind these projects are betting on a future opening of American tourism currently prohibited by a Cold War-era U.S. ban.

President Barack Obama has lifted restrictions on the visits of Cuban exiles to the island but a Congressional bid to end the travel ban affecting other Americans seems stalled amid renewed political tensions.

“These golf projects will take time to develop and the relationship with the U.S can improve a lot in the next two or three years,” said Tony Zamora, a Miami-based Cuban American lawyer familiar with some of the deals.

But the challenges facing Cuba’s future golf tourism industry may also derive from the island’s own domestic problems.

Before building thousands of luxury villas for foreigners, a businessman says, Cuba will have to address its overwhelming housing deficit to deflate potential social tensions.

“The key ingredients of a successful golf destination are there — The climate, the proximity to a major market, the flavor,” said KPMG’s Sartori. “However there are key issues that need to be resolved.”

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Vietnam invests in real estate project in Cuba


The Housing and Urban Development Corporation (HUD) has signed a memorandum of understanding with Cuba’s Palmares Group on HUD’s investment to build a 36-hole golf course and tourism-service-apartment complex in Colodera Bauta.

The project is expected to cover an area of 300-400 ha, including a 180 ha lake.

A joint venture will be established to run the project, in which the Vietnamese and Cuban sides each hold 50% of chartered capital for 50 years. Cuba’s Palmares will hire consultants to assess the value of the land plot, which will be considered its capital contribution.

Palmares is a big group comprising 18 companies running restaurants, entertainment venues and golf courses with 1,000 business points.

The Vietnamese side has also negotiated with Palmares about a second golf course in Cabodela (Varadero, Matanzas).

Besides the cooperation with Palmares, HUD has also talked with Cubanacan, the leading tourism group in Cuba, about investment in a five-star hotel with 800 rooms which is expected to be located on a 9.22 ha land plot in Santa Lucia (Camaguey). The land plot is located next to a hotel run by Barcelo group Ignacio Agramonte.

According to Melia las Americas’ General Director René, Santa Lucia is an attractive place with beautiful beaches, while there are still few hotels here. The place is relatively far from Havana, but this is not a problem as tourists like tours to new places. In addition, Santa Lucia is located near Ignacio Agrimante international airport.

HUD has also worked with Gran Caribe about the upgrading of the Capri Hotel in Havana. In this case, with the two countries’ special relationship, Cuban ministries will seek permission to allow the Vietnamese side to make investment in the project with the Vietnamese side’s expected capital ratio of 20%.

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