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.
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.”