Retire To Casco Viejo, Panama City

Panama City's Most Romantic Quartier

May 8, 2011, Casco Viejo, Panama: Historic Casco Viejo, a UNESCO World Heritage Site, is the most romantic, most charming, most architecturally rich region of Panama.

Also This Week: Discovering Eastern Europe--Bargains In Bucharest...Retire To Ukraine?...The World's Top Nine Retirement Havens...

Dear Overseas Opportunity Letter Reader,

On one of my first visits to Panama, nearly a dozen years ago, a longtime friend who was living in Panama City at the time invited me to take a drive with him.

"I'm going to show you the best this city has to offer," he promised.

We drove down avenida Balboa, beyond the central zone of the modern city, turned left, and passed a brightly painted Chinese-style arch that seemed very much out of place in this Latino barrio.

But what lay beyond the Asian arch was perhaps more surprising: A treasure trove of historic structures left behind by the Spanish, the French, and the Americans who'd hung their hats in this part of the world over the preceding few centuries.

Like the arch, everything in this zone was crumbling, peeling, cracking, and fading. The gutters were thick with litter, and small barefooted children ran back and forth across the narrow brick-paved roadways in all directions.

From the open windows, Latin music blared. In the open doorways, women lounged and rocked, chatting and tending to their near-naked babies.

Some buildings couldn't quite be described using that word. They were more piles of rubble than actual structures...

But if you looked beyond the litter and the rubber, beyond the crumbling plaster and the peeling paint...you saw something very special, something that exists in only a limited number of places around the world: Block after block of classic colonial-style buildings with shuttered windows, balconies on every level overlooking the street, ornate iron work and turned wood, and facades of the kind you see more often in the pages of coffee-table books than you do in real life.

This was Casco Viejo, that my friend introduced me to all those years ago. As soon as we'd turned the corner past the Chinese arch and into the barrio, I urged him to find a place to park so we could get out and have a closer look. I wandered up and down the streets that day with delight. I like old buildings the way some women like new shoes. For me, this was better than a shopping spree at Saks Fifth Avenue.

The better I got to know Casco Viejo, or The Casco, as locals refer to it, over the years, the more infatuated I became. This region of Panama City is quite separate from the rest of the capital, out on a small peninsula in the Bay of Panama. Almost any street in The Casco eventually leads to the sea.

Along the way, these centuries-old roadways paved with brick take you past those glorious colonial structures, and, as well, a well-laid-out series of plazas, each with its own church. Casco Viejo boasts eight historic churches in all, including Iglesia Felipe Neri, the oldest in the city, dating to 1688.

This is one part of Panama City built for walking, which is something else I appreciate about it. This ancient quarter is laid out like a classic European city, on a grid around those welcoming plazas with their shady trees.

Back then, on my first visit, it took considerable imagination to see the potential beneath the grime and the garbage. Most of the one-, two-, and three-hundred-year-old buildings were, at the time, crowded with a dozen or more inhabitants each, some legal, most not, some paying a pittance in rent thanks to a scheme something like rent control in central Manhattan. Many of the Casco's occupants at the time, though, were squatters, meaning that, before the buildings of this historic zone could be rejuvenated, its population had to be moved out.

Fast forward to today, about a dozen years later, and the squatters are mostly gone, some moved to affordable housing provided by the Panama government. A good number of the old houses have been rehabbed, in most cases with tender loving care and attention to original detail, some converted to private homes, others to apartments, office buildings, art galleries, shops...

Today there are restaurants with sidewalk tables, open-air cafes on the corners, and trendy bars with live music. Today, the Casco is increasingly the place to go on a Friday or a Saturday night if you're young and looking for fun.

That said, if you didn't see Casco Viejo years ago, and you see it today for the first time, you might wonder what I'm on about. Trendy? Romantic? Charming? "This place is little better than a ghetto!" you might exclaim...

The gutters are still strewn with litter (though nothing like a decade ago). Children still run barefooted in all directions. Women still lounge in the open doorways gossiping with their neighbors and nursing their newborns. The stray dogs are here and the blaring boomboxes, all the elements of a real barrio.

This is a neighborhood in transition, and many in the Casco are keen not only to renovate the old colonial structures to their original glory, but to do so while preserving the cozy Panamanian community that has existed for decades among them.

The Casco is, for me, both the most colorful, historic, and romantic section of Panama City and, as well, the most authentically Panamanian.

People typically love it or hate it. You should come have a look and make up your own mind.

Meantime, we feature a complete report on life in modern-day Casco Viejo in this month's issue of my Panama Letter, subscribers' e-mailboxes this week.

Kathleen Peddicord

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P.S. What else this week?

• "I'm spending a month wandering through southeastern Europe with my Scandinavian friend Ivan and my Texan friend Vinnie," writes Intrepid Correspondent Paul Terhorst.

"When I was small, this part of the world was closed to us, behind the Iron Curtain. All that changed in 1989 when the Berlin Wall fell. The region started on a new path. I'm here now, interested to see how things are coming along.

"From my view through the window of the day train from Bulgaria to Romania, the answer seemed to be: not very well. The Bulgarian countryside offered abandoned factories, houses, office buildings, and food processing plants. We saw few cars on the road, few cars parked in the villages. Everywhere was desolation and ghost towns.

"Then, all of a sudden, the countryside changed..."

• "Put it on your list," says Intrepid Correspondent Paul Terhorst. "You owe it to yourself to travel to Odessa, Ukraine, a first-rate historic city on the Black Sea.

"For the past few weeks I've been traveling around southeastern Europe with friends Ivan from Scandinavia and Vinnie from Texas. We started in the Balkans: Bulgaria, Romania, and Moldova. Now we're farther east, in the Ukraine, and Odessa is our first stop.

"Think of Odessa and the Ukraine as Russia Light. Odessa has been part of Russia for over 200 years, since Catherine the Great annexed it. A huge painting of Catherine hangs in the local museum's main room.

"In the 19th century, Odessa was the Empire's fourth-largest city, after Moscow, St. Petersburg, and Warsaw. Stalin hosted the famous Yalta conference nearby in 1945. Most people here speak Russian rather than Ukrainian.

"So, for practical purposes, we're in Russia. From a traveler's point of view, Ukraine makes more sense than Russia itself...

• "I could live in Odessa," writes Intrepid Correspondent Paul Terhorst, picking up where he left off yesterday, "and maybe someday we will. First, I'd arrange an exploratory trip for Vicki and me. Remember, Americans and many others can enter Ukraine without a visa, for up to three months.

"If we manage to set up shop here, short or long term, I'd have to learn the alphabet. Learning the alphabet should be much easier than learning the language, and at least I could read menus, road signs, bottle labels, and the like.

"Come to Odessa sooner rather than later, before costs go up..."

• The world's top retirement havens? Nine countries stand out right now as offering particular opportunity to the would-be expat, retiree, or investor overseas. Read more here and here.

Also This Week...from Resident Global Real Estate Investing Expert Lief Simon:

Invest in real estate and get a second passport. That's the straightforward premise behind the economic citizenship program that the two-island nation of St. Kitts and Nevis has put together.

Of course, for most people who might consider this, the investment return is secondary to the citizenship and the passport. With a St. Kitts passport, you can travel visa-free to more than 100 countries and territories (according to http://www.visahq.com/). For reference, a U.S. passport is good for travel to more than 130 countries; a British passport gets you access to almost 140.

It doesn't allow visa-free travel to the United States, for example, but it does mean visa-free entry to the U.K. and Canada.

In other words, in the scheme of things, a St. Kitts passport is a pretty good passport to have.

It's also a relatively very straightforward passport to obtain, as I explained. All you have to do is to buy a piece of real estate in a designated development on either St. Kitts or Nevis for a minimum investment of US$350,000.

Surprise, surprise, many of these designated developments have real estate offerings priced right at US$350,000. Qualifying properties are listed on a website here.

On top of this, you'll have about 20% in closing costs, including taxes and fees, meaning you're looking at a total cost of about US$400,000 for the real estate purchase.

Plus you'll have the registration fees...US$35,000 for the primary applicant and US$15,000 for your spouse and another US$15,000 for any child you want to bundle with the application. And don't forget the legal fees, US$25,000 for a family, US$20,000 for a single.

The piece of real estate you purchase can be rented out. However, realistically, at best, you're going to see a net yield of maybe 3% a year. Under the stipulations of the program, you can't resell the property until at least five years after the date of your new citizenship. And, if and when you do resell, you can't do so to another person seeking economic citizenship, meaning you're selling on the local market.

I'd expect that, after holding for five years, you might break even on the purchase price.

I explain all this to make the point that this isn't a real estate investment. This isn't about the yield or the capital appreciation...but the passport.

In today's world, the truth is, if you don't qualify for a second passport through ancestry (in Ireland, say), then your options for obtaining one are limited and come down to acquisition through residency or acquisition through investment. Those passports you acquire as a result of legal residency take many years to progress. Those you acquire through investment are typically, like this option from St. Kitts and Nevis, expensive.

But perhaps not ridiculously so. If you don't want to invest years (typically five) in the pursuit of a passport through residency, then an investment of, say, all told, US$450,000 in a piece of real estate on St. Kitts or Nevis seems a reasonable option to me. The economic citizenship program offered currently by Montenegro, for example, requires an investment in an operating business. That's a bigger risk, I'd say, than the purchase of a piece of island property. And the required investment amount is greater (500,000 euro).

Why would you want a second passport in the first place?

Diversification.

With a second passport, you have more options. You have a second "home" to return to should things take a turn for the worse wherever elsewhere you're residing. You have an escape hatch of sorts.

Again, though, the economic citizenship program in St. Kitts isn't your only second-citizenship option. And holding a second passport is but one part of an overall diversification strategy.

As these opportunities become ever more important in the current global climate, I've worked with my publisher (also my wife) Kathleen Peddicord to plan for the launch of a new e-letter service. This new service will come directly from me, weekly to start. It'll be a gloves-off, straight-shooting exploration, through firsthand stories, experiences, and discoveries, of your best current opportunities for diversifying your investments, your assets, your business holdings, and your life.

I'll be covering global investment options from real estate to currencies, commodities, and precious metals...residency and citizenship...taxation and tax havens...privacy and structures...and every other opportunity for global diversification my contacts, resources, and I can uncover.

First issue out later this month. Kathleen will have more information for you next week.

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