San José, Costa Rica, since 1956

AOL Founder Plans $800 Million Beach Resort

In front of video cameras and reporters at Casa Presidencial, former SiliconeValley tycoon Steve Case formally announced plans for an $800 million luxury resort complex on Cacique Point, between Cocos and Hermosa beaches, in the northwestern province of Guanacaste.

Case, one of the co-founders of America Online (AOL), made the announcement last Friday with Costa Rican President Oscar Arias at his side, saying that the project would “define a new generation of resort development” with its environmental and social responsibility.

“It’s very important that business leaders realize that it has to be about more than just your profit,” the U.S. businessman said.

The elephant in the room, however, was that the environmental-impact study for Case’s project had already been rejected by the National Technical Secretariat of the Environment Ministry (SETENA), precisely because the project lacked details for how it plans to mitigate its impact on the local environment and the community.

A new environmental-impact study –which SETENA is now evaluating – was submitted July 9. The study must be approved by SETENA before the project can move forward.

Case’s proposed resort would be among the largest of several large tourism complexes in that part of the country. To be known as Cacique Costa Rica, the 263-hectare complex would feature three five-star hotel brands, private villas, an 18-hole Tom Doak golf course and a tennis and fitness center branded with the names of former tennis stars Andre Agassi and Stefi Graf.

The project would create 2,000 direct jobs and 500 indirect jobs, according to the company.

The resort would be the first to be developed by Revolution Places LLC, a luxury tourism developer founded by Case and held by the company Revolution LLC, which Case founded in 2005.

The Cacique Point development would have several hundred rooms and villas available for travelers, as well as 300 properties for sale. Hotel brands will include small houses operated by One & Only Resorts and a spa and hotel with the Miraval brand. The One & Only in Palmilla, Mexico, offers rooms for $450-2,600 per night.

The first phase of the Cacique project is slated for completion by 2010.

Case cited his upbringing in Hawaii as an inspiration for the project, which he said will integrate the luxury vacation complex with the local community, even going so far as to build a village that will be “a gathering place for the whole region” and include residences and local shops.

Both the publicity materials for the project and the press conference sounded triumphant notes on the project’s sense of environmental and social responsibility.

The development promises to plant a million trees in river areas, as well as donate $1 million to local nonprofit organizations. Details of those programs will be announced next year, Case said.

Also, he noted that the development would be low impact and low density, developing only 20% of the land and leaving the rest intact.

Less clear, however, are the details of how the development plans to go about mitigating its impact on the environment and community.

On June 11, SETENA rejected Cacique’s environmental-impact study, saying it failed to meet muster on 14 technical points. Most of the problems had to do with lack of information in the study.

For example, SETENA notes that while the project (then known as Punta Cacique) proposes a desalinization plant to solve the region’s water shortages, it does not explain how the plant would work or the environmental impact its operation would have.

In one complaint, SETENA called the study’s soil analysis “very shallow,” while in another it noted that, “Considering the (area’s) poor natural drainage, mitigating activities and works to protect the Penca Gully are not defined.”

The SETENA report said that the impact study also fails to catalogue the wildlife that inhabits the area, and problems of habitat fragmentation and the isolation of wildlife populations “are not considered in the design of the site.”

“The preceeding considerations put in doubt the environmental sustainability of the project,” SETENA’s analysis continues.

Similarly, the analysis criticized the impact study for not presenting its methodology for its survey of the local community’s perception of the project.

Neither did the impact study consult the local community regarding how it would be affected by the water use of the project, which the SETENA report called “highly relevant (and) directly concerning the health and quality of life of the population.”

Asked about Guanacaste’s ongoing problems with water scarcity at the press conference, Case said Cacique had “acquired” access to water with the property, and that the project would “allocate some of that water to the community.”

Cacique spokesman Jorge Cornick said the project had presented a totally new impact study on July 9 using a new environmental study company – “People with more experience of a certain scale in Guanacaste,” he explained.

Cornick said the main problem with the first impact study was that it lacked information, something that has been remedied with the new study SETENA is evaluating.

Cacique Costa Rica isn’t the first time Case has turned an investment-minded eye toward Costa Rica.

Case bought an 80% stake in a company called Exclusive Resorts in 2004, according to Business Week magazine. Exclusive Resorts, now held by Revolution LLC, is an international club that owns over $1 billion worth of luxury properties around the world.

For a deposit and an annual fee, club members can spend several weeks out of the year at any one of the Exclusive Resorts properties, in lieu of owning their own vacation homes.

At the beginning of this year, Exclusive Resorts opened up one of those properties in Costa Rica – a resort called Poro Poro, on the PapagayoPeninsula, just north of Cacique Point. The $75 million, 20-acre “destination community” has 21 luxury residences for Exclusive Resorts members.

Exclusive Resorts is also one of the three luxury hospitality brands that will be operating residences on the Cacique Costa Rica project.


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