Teonoste row sparks fears of confiscations

The Sandinista government’s armed occupation of property at Punta Teonoste eco-resort has investors worried that rule of law and property rights have gone out the window in Nicaragua

The government’s armed takeover of a property allegedly belonging to Hotel Punta Teonoste, a luxury eco-resort on Nicaragua’s southern Pacific coast, is sending shockwaves throughout the investment community and renewing fears of Sandinista confiscations.

Walter Bühler, the Swiss-born majority owner of the $2 million beach resort in Tola, says armed police officers and functionaries from the prosecutors’ office arrived at his hotel Feb. 13 and informed the staff the property now belongs to the state. The government agents have not presented any judicial order or paperwork to support their claim, but are currently occupying a 20-manzana plot (nearly 34.5 acres) on the southern part of Teonoste’s property, Bühler says.

“This is a land invasion, plain and simple. The government entered by force and snatched the land like delinquents,” Bühler told The Nicaragua Dispatch. “And now the fear is that they are going to take it all, because all the land—all 65 manzanas (113 acres)—is on one single property title. So if they try to take 20 manzanas, the rest of the title is bad.”

“This is a clear-cut confiscation,” he stressed. “Without any reason, motive or judicial order, they entered by force and took the land.”

Bühler says several of his staff workers were detained by police during the invasion, but were released today.

The private sector—COSEP and the private tourism chamber—have come out in strong support of Teonoste and are demanding respect for rule of law and private property in Nicaragua. COSEP, the country’s most important business chamber, demanded a meeting with Attorney General Hernán Estrada, who in January was accused by another investor of appropriating a separate lot of prime real estate in downtown Managua.

COSEP will hold an extraordinary meeting at Punta Teonoste next Wednesday as a show of solidarity.

Estrada today confirmed that the 20 manzanas of disputed land at Teonoste have been given by the state to Edén Pastora, the flamboyant former guerrilla leader who has recently returned to President Daniel Ortega’s good graces. Estrada said Teonoste only owns 5.1 manzanas—or 8.8 acres, less than 1/10 of the property that Bühler claims to own with “clean and transparent title.”

Pastora, who is leading the Sandinista government’s river-dredging efforts on the Río San Juan, has not commented on the controversy. Bühler says the government already gave Pastora the property adjacent to Teonoste two years ago.

Trouble in Tola

The whole coast of Tola once belonged to Cornelio Hueck, a confederate of former dictator Anastasio Somoza. After the triumph of the revolution in 1979, the land became the property of the Sandinista Popular Army. Today, several of the top military brass have their vacation homes on nearby Playa Guasacate.

Bühler says he bought the title to the 65-manzana property for Punta Teonoste 13 years ago. He says the title wasn’t contested for the first decade he owned it. But in 2010—three years after Hotel Teonoste opened—the state prosecutors’ office tried to quietly annul it without telling him.

“From one day to the next, they wanted to annul the whole title,” Bühler says. “But their legal arguments were very weak, and their efforts got rejected by the court in Rivas.”

The government appealed its claim to the Appeals Court in Granada, where the case has been sitting unresolved for two years. But apparently, the state prosecutors’ office got itchy waiting for a court to act, so they did instead.

Gov’t denies confiscation

Estrada insists his office’s actions are not confiscatory against Punta Teonoste.

“In no way will this affect their valuable investment,” Estrada told government propaganda outlets. “The government is actively promoting (investment) and the prosecutors’ office has been collaborating with all investors through ProNicaragua.”

Estrada said the government is just “measuring” the properties to determine with exactness what land belongs to the state. He didn’t explain why the disputed land is being gifted to Pastora.

“We will continue to respect private property and we will continue to exercise rule of law,” Estrada said.

Opponents, however, claim rule of law already skipped town.

“Rule of law is not just weak in Nicaragua, it’s totally atrophied,” former Attorney General Alberto Novoa, Estrada’s predecessor as head of the prosecutors’ office, told The Nicaragua Dispatch. “It’s not that this was done with a lack of due process, it was done with no process. It was a unilateral decision; the prosecutors’ office said this land is mine and I am taking it.”

Novoa said that under no circumstances can the state invade land by force without a judicial order.

“We are in the presence of a state that is first of all authoritarian and secondly concentrating power for some end goal that is not yet clear,” said Novoa, who is a member of the opposition Sandinista Renovation Movement.

Teonoste is not the only case

The government’s alleged land grab at Punta Teonoste is not the only recent case of mysterious property invasions under the second coming of the Sandinista government.

The restaurant at Punta Teonoste (photo/ Tim Rogers)

Though President Daniel Ortega returned to power in 2007 with promises to sort out Nicaragua’s residual property mess—and indeed has given titles to tens of thousands of campesinos, securing their claim to property—land invasions have spiked in recent years, according to the U.S. Embassy.

“Americans who own property, many of who are dual (Nicaraguan) citizens, have suffered (recent) land invasions. And when they have gone to the authorities, authorities have not reacted. So they come to us and we inform the authorities. And I must say the reaction from the Nicaraguan government has been mixed at best,” former U.S. Ambassador Robert Callahan told The Nicaragua Dispatch in his exit interview last July.  

Sandinista authorities, Callahan added, “Often turn a blind eye to these land invasions.”

The ripple effects are being felt, he said. 

“That not only affects the confidence that people have in the judicial system, but it also affects foreign investment because who is going to come here if the judicial system will not respect and enforce the sanctity of contract, property titles and that kind of thing? It’s of great concern and it’s very well known as a problem. Land invasions are getting worse, absolutely,” Callahan said.

For former Attorney General Novoa, the problem is that each government—the Sandinistas and their predecessors—tries to resolve property issues to favor their own coterie.

“The problem of property rights is not resolved in Nicaragua,” Novoa said. “Former Presidents Violeta (Chamorro) and (Arnoldo) Alemán tried to resolve it, and now this government, too. But the they are trying to resolve the problem in their own way, according to the interests of a certain group that’s in power at the moment.”

If Teonoste gets gobbled up by the government, Bühler says, Nicaragua’s investment climate will go down the toilet with the strength of an industrial flush, no matter how much counter-spin the Sandinistas try to put on the situation.

“There is no confidence and tremendous judicial insecurity in Nicaragua right now,” the Swiss investor said. “If this is allowed, no one is safe and all Nicaraguans will be affected.”

 

  • Dennis McCormick

    This is a serious issue, and I tried thinking of it this way, but in the back of my mind I heard the history teacher saying, “Bühler, Bühler…”

    • Ben Spence

      Too Kool, Dennis! I hear the same voice.

  • http://elportonverde.com Mike Quinn

    Hey great article with lots of details that were not in the La Prensa today…

    Specifically the news that the government is taking just the 20 manzanas on the southern end of the property…that part adjoins an army base—i.e. Teonoste is on the northern border of the army land.

    I wonder whether the properties surrounding the army base on the east and south ends are now at risk too?

    Not good, not good at all.

  • Martin

    Hey this happens all the time in the USA. Government can “eminent domain” a private property for public use … the only difference is that the government has to pay the owner a reasonable price. In California, at least,that property can then be turned over to a private investor.

    • GringoLoco

      Martin, you’re comparing apples to oranges. In the USA, there is a process to confiscate private property under eminent domain.

      In Nicaragua, Whoretega just sends in the thugs. Don’t like it — well, you could try the “judicial” system where the Rule of Law = 0.

      What I would like to know is what Comandante Cero (Pastora) has over Whoretega? Basically all of the SE parts of the Rio San Juan are owned/controlled by Pastora — and yet he gets another plum?

  • Michaelt

    I am honestly speechless. How dumb can the government be. Just when you think they’ve turned a corner on learning of foreign investors they go out and do something like this that questions if they have learned anything over the past 30 years.

  • http://www.fincapopoyo.com Philip Christopher

    I am the president of a significant coastal project in northern Tola and have been deeply invoolved in combatting the local land traffickers as well as working with now three Presidential admninistrations in Managua for now 8 years on the issues of promoting clean titles, protecting foreign capital investment and more.

    Neither this article or the END or La Prensa coverage is probably addressing the complicated realities of legitimate title chain.

    Let me address some inaccuracies in the above article and then offer an opinion.

    The Hueck family did not, nor does not now own the “coast of Tola”. They did control/own a large swath of northern Tola from the village of El Astillero south towards San Martin (north of Guasacate) dating back to the 1930′s. I believe they accepted for some if not all of this land Nicaraguan government bonds in the 1990′s as compensation (based on a meeting I had with the Hueck family in 2005), thus returning the land to the state. Whether the state granted this land to Pastora, I have no knowledge.

    The land that Teonoste occupies I believe was “acquired” by former President Aleman during his tenure and then resold to other parties, eventually into the hands of the current Swiss owners. In Tola, it has been throughout the last ten years or so well discussed among locals that Teonoste may be “dirty land”.

    So while perhaps the PGR has not followed rule of law to the letter in this process and how exactly the property belongs to Pastora I am not sure ( I am contacting them today to discuss this, perhaps a journalist could do the same), one way to look at this from a positive standpoint is that land acquired through less than transparent, ie clean, means will be at risk to government resolution and restitution to the proper owners.

    Land trafficking is a malaise that undermines the long term growth and prosperity of Nicaragua. Many foreigners have come to Nicaragua and purchased land either without doing good due diligence or with clear knowledge that the land they were acquiring had issues, but they were willing to do the deal because the price was so low for the raw land. These types of land purchases serve to foster and prolong the problems of land trafficking.

    Those investors whether they be Nica or foeriegn who participate in dirty land deals gravely harm all those who seek to and /or have purchased clean land. Land trafficking is the primary reason why land valuations in Nicaragua are a fraction of Costa Rica or other Central American locations.

    The question an investigative journalist should be asking is whether or not the title/lease (whatever document of ownership the Swiss have)for Teonoste is dirty or clean land.

    Another question or aspect of this is to consider how other large tourism investors such as Grupo Pellas and their huge capital investment project near Gigante and Brito feel about this. I have read even in the Nica Times quotes from Carlos Pellas that asserted that he was committed to clean land based projects and that those in the Tola area with questionable paper were hurting/depressing real estate valuations for all…especially those on clean land.

    So in closing, I have not seen the “papers” for the Swiss or the Pastora’s, but I am fairly certain the Swiss investors knew that there was a questionable history to the land and that was reflected in the very low price they paid initially.

    For someone who has a very clean title, but has suffered years of land trafficking extortion, I find those who maybe have dirty land wrapping themselves in the sheeps wool of “rule of law” as disingenuous at best and harmful to all legitimate tourism development.

    Thus while maybe Dr Estrada and the PGR did not handle this as properly as they should have in terms of rule of law procedure, perhaps the longer term outcome is a positive for capital investment in coastal tourism real estate development if it serves as notice to all Nicas and foreigners that buying dirty land will not pay off.

    Lets not all be in a rush to color this as a disaster for foreign capital investment. There may be a silver lining….for those who bought their land legitimately.

    • http://notaplicable William Hape

      Philip. I read your post and agree, I am a retired x bank executive who worked 40 years in Latin America, some times, people do not listen and think there just a bunch of retarded fucks running these countries, but, in the end the truth is found, and suck it up, if its not working at the being of a deal, how can it work at the end, plus the Swiss fucks know it all any way so go fish, and don;t complain. Willy

      • http://notaplicable William Hape

        My comment posted here today, said it is under some kind of moderation,let me assure you its not necessary, when they went to market with the movie Scare Face they re wrote the rules on acceptance of language as GP General Public and if there are any children on this site I am sure they will learn something. So if my comments are not posted in there actual spirit of the cause, I will find another form. 2012 Wm.

  • Jaime Silva

    If Edén Pastora considered himself a revolutionary why the hell is he demanding retribution for whatever that he thinks Nicaragua owes him? Many other people fought even harder and longer than Pastora and the never demanded a thing. Besides, Pastora already got paid by many groups including the CIA: https://www.cia.gov/library/reports/general-reports-1/cocaine/contra-story/south.html
    He is nothing but a a lowlife mercenary that is jeopardizing the foreign investment in Nicaragua!!

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  • Mary Hope

    Btw, Eden Pastora has already spoken to the press (around min 1:30):

    http://www.youtube.com/watch?v=Nd_sYfLRIjM

    He basically says that the Procuraduria General de la Republica made the decision to give him in the concept of a “donation” 19 manzanas.

    When they asked why would they do such a thing? Pastora answers casually, well..perhaps because they thought that Eden Pastora is the one amongst all of us [Orteguistas] who has the least [$$] & has never been given anything.

    LOL! How sad…what a law-less country we live in, thanks to nut-jobs like Hernán Estrada!

  • economist

    A hotel and restaurant means more to a government than a home. It provides a vehicle for tourists and locals to spend money which brings tax dollars to the government and creates jobs. How many people worked for Mr. Buhler and how many of these people used this money to buy food which supported someones farm?

    Time to stop the bickering and games and understand the big picture and grow Nicaragua’s stagnant economy.

  • http://none Optimist

    The government did not confiscate anything. The PGR is measuring lands in order to solve the land disputes. I wonder why the ND does not publish the official position of the government and PGR on this subject. Tola and other provinces are in need of revision. So if you have nothing to hide you just let these people do the measuring. When you do not let them in because you claim it is private property and then you shout land confiscation….something sounds strange. Are the owners hiding something?

    In order to move the country forward property disputes need to be resolved. Cooperatives and private properties need these revisions in order to become legal and stop limitation to growth and stability due to property issues. The FSLN is trying as best as they can to resolve all these property conflicts. They are very clear on protection of private property and foreign investment.

    • Tim Rogers

      The government’s position is included in the article. But you have to read the article to know that.

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  • jose jose

    well marry a nica and only buy a few manzanas for farming then. the fsln is turning chavista so just enjoy the low prices of a commie economy. capiche?

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