People often ask me, “Is it safe to invest in Costa Rica?” I don’t claim to be an expert in the field of international investments but lately have seen a growing number of big name U.S. companies and individuals investing in Costa Rica. They would never think of putting their capital here if the investment climate was not favorable.

Intel was the first major play to invest in Costa Rica in 1998. A significant amount of Intel’s major manufacturing and technology development has taken place at its award-winning site in Costa Rica. This site includes two manufacturing plants and one distribution center dedicated to the assembly, testing and distribution of the world’s fastest processors.

Let’s look at who else has invested recently in Costa Rica.

• General Electric purchased 50% of the Bank of San Jose, a private local bank. As a result the bank plans to expand to other areas of the country.
• Walmart just purchased stock in Supermercados Unidos, the largest supermarket chain in Central America.
• Steve Case, the founder of AOL and of Time Warner fame, just purchased 23 million dollars worth of beach property. He plans to build an upscale resort at Punta Cacique.
• Wendy’s Hamburger chain will open over 15 stores in Costa Rica starting in May of 2006. All 15 of the stores should be completed by 2010.

The percentage of Canadian “boomers” is higher than the U.S., not that the actual numbers are. Canadian baby boomers are a huge group: proportionately 50 percent larger than the U.S. boomers. (Canada has an approximate population of 33.3 million and the U.S. has about 301 million of which there were 76 million boomers). For every five U.S. expatriates in Costa Rica, there is probably one Canadian. My prediction is that Canada will be a large investor in Costa Rica in the near future.

Furthermore, the Canadian dollar is now on a par with the U.S. dollar. Because of this, you can expect more and more of the equity in the booming Canadian real estate market will shift to popular retirement places like Costa Rica. The U.S. has been hostile to some Canadian investors.

Why wouldn’t a lot of equity from housing in say, Vancouver where the least expensive house costs $600,000, shift to Costa Rica ?

For the past 25 years I have been helping people relocate to Costa Rica. During that time I have had the opportunity to observe where people settle and how they fare in different areas of the country.

About 80 percent of my clients stay in the Central Valley in areas like Escazú, Santa Ana and Cariari, Heredia and Alajuela. Most of them have selected these places because of the amenities they offer such as good housing in the paths of progress, proximity of private hospitals , emergency health care and private ambulance services, high-speed Internet, good shopping, entertainment and other intangibles. The majority of people are happy and found what they wanted in Costa Rica.

The remaining 20 percent of the people moved to the beach, remote areas of the Central Valley or other parts of the country. About ten percent of this group adjusted well to living in more isolated situations. They are a special breed who don’t need the stimulation and comforts found in the Central Valley near the major cities. I have several friends who live in the beautiful Dominical four hours form San José and just love the laid back lifestyle.

However, one thing I have observed over the years is that a good number of the people who more to the outlying areas really get bored. At first they think that will be happy being “away from it all.” But after a while the lack of stimulation and variety of things to do starts to wear on them. They quickly realize that they made a mistake and chose to move closer to major towns and cities. Often they find exit strategy difficult because they have purchased property in areas out of the path of development.

I even have a Costa Rican friend who is a realtor and move to a beach in Guanacaste and almost went off the deep end. She stated, “Everything is a pain in the neck here. I have to drive 20 minutes just to go shopping and there is absolutely no local entertainment.”

Conversely, there are a few cases where people who tire of living near cities and choose to move to the countryside. However, this scenario is the exception and not the rule.

When Wayne Bishop visited Costa Rica 12 years ago, he was wowed by the country’s natural beauty, but he was even more taken aback by its investment potential.

“If you had any entrepreneurial nose, you could see the raw opportunity there,” he said. “Most developments have been mom-and-pop operations. … There’s an opportunity for them to be properly planned, Western style.”

So Bishop, co-founder of Minneapolis architecture firm Walsh Bishop Inc., spent the next several years looking for land on which he could build a Western-style resort. In 2000, he and some co-investors, including the Marvin M. Schwan Charitable Foundation in St. Louis, broke ground on the first phase of Peninsula Papagayo, a project anchored by a golf course and a 210-room, five-star luxury hotel.

That’s just a fraction of the investment he and several other Minnesotans have made, or will make, in the Central American country.

While he declined to share names of the Twin Cities developers and investors he’s working with, Bishop said there are several.

“I’ve been inundated with calls from Minnesotans that have land and are looking for my advice,” said Bishop, who sold his interest in Papagayo to the Schwan Foundation and is working on several additional Costa Rican developments of his own. (The Schwan Foundation was established by The Schwan Food Co. founder Marvin Schwan, but is not part of the Marshall, Minn.-based company.)

“We’re at the beginning of a huge land boom,” Bishop said.

Several other Minnesotans are taking part:

• Blaine Kirchert and Rich Pakonen, two St. Paul developers, have formed a joint venture and intend to enter the Costa Rican real estate market. Their first project is a 26-unit luxury condominium project in Playa del Coco on the country’s West Coast. The pair is working on a much larger 250-acre mixed-use project in the center of the country.
• A group of Twin Cities investors, including former 3M Co. and Control Data Corp. executives, have opened a macadamia nut farm in the country.
• Graves Hotels Resorts of Minneapolis announced plans to develop a Graves-branded luxury hotel in Tamarindo, Costa Rica, also on the country’s West Coast. It has two other properties there already. Graves operates Graves 601 Hotel Minneapolis, the former Le Meridien Hotel Block E development.

The relatively small country has become a popular vacation spot, and visitors are coming back to Minnesota enchanted, just as Bishop did. Word of what he and other entrepreneurs are doing in Costa Rica has spread, prompting more investment.

The reasons are many.

One draw is the sheer number of U.S. citizens expected to move to Costa Rica. Bishop said he’s heard the U.S. government say it anticipates 1 million Americans will retire in Costa Rica during the next 10 years.

Others, like Bishop, say they simply become enchanted when they visit for pleasure.

“There’s a long heritage of Minnesotans going to Costa Rica during college because of their environmental-studies programs down there,” Bishop said. “Today those young folks are adults, so there’s a huge connection.”

Pakonen, owner of Pak Properties, was an exchange student in Costa Rica for a few weeks in college. He was drawn to the country for its stability and beauty.

There are many cultural differences between Minnesota and Costa Rica, he said, but for the most part, business is done the same way. People are educated and they do business “above board.”

Pakonen decided to take a look more than a year ago after someone approached him with an opportunity to invest in some land.

Potential developers need to consider that the Costa Rican government is active in protecting the environment. It limits the height of hotels along the coast so it doesn’t become another Miami or Cancun, for example, Kirchert said.

Ecological tourism is the biggest contributor to the country’s gross national product, and officials want to protect that.

But it’s not just developers pushing into the country. A Minnesota-based mortgage company is setting up shop down there, Bishop said. Other service companies will likely do the same as the Minnesota contingent there grows.

Several Minnesotans, including John Doleman, a former Control Data Corp. executive; Tim Stepanek, a Minneapolis venture capitalist; Jerry Robertson, a former top executive at 3M Co.; and Elli Ansari, owner of food-marketing firm Flavorroad, are partners in a macadamia-nut business in Costa Rica.

While the business started in 1989, investors say it’s coming out of its shell.

The group of investors — there are about 80 today — bought the macadamia plantation, called Finca La Anita, to save it from loggers and to employ a village of about 350 people nearby. “It’s an investment, but there’s an altruistic component to it, too,” Doleman said.

Finca la Anita isn’t yet profitable.

It takes awhile to get such an operation up and running. Macadamia seeds must spend two years in a nursery before they are planted, and it takes another five years before trees yield nuts.

The company is starting to sell its nuts retail in co-ops across the United States instead of just on the bulk market. The plantation owners started a marketing program that offers customers a free stay at the plantation when they buy 40 boxes of nuts. The nut entrepreneurs also are promoting the fact that for every box of nuts they sell, they contribute enough money to a trust fund to save a full square-meter of rain forest.
“We’re slowly doing better and better each year,” Doleman said.

Getting there

Costa Rica is by far the most popular destination for Minnesotans visiting Central America and South America, though easy access has declined, said George Wozniak, president of Minneapolis-based Hobbit Travel.

A few years ago, Sun Country ran two flights per week between the Twin Cities and Costa Rica. Today, Northwest Airlines runs one flight per week between January and May to an airport on the country’s West Coast. Continental Airlines offers five flights every day into the capital city, San Jose, but Twin Cities passengers are required to transfer in Houston or Newark.

Flights usually run between $450 and $650 per person, but Northwest recently quoted a round-trip ticket to Liberia International Airport on Costa Rica’s West Coast for $305 per person for mid-April departures.

Even though it’s a fraction of the size of Brazil, Costa Rica claims to have more rain forests and species of birds and animals.

A couple of years ago, Wozniak and his family went on a river-raft tour through the center of the country.

“It’s a pretty amazing place from the standpoint of going back and thinking you’re in Jurassic Park.” He said the monkeys, butterflies and birds reminded him of a Johnny Weissmuller Tarzan movie. “It’s a heck of a way to see areas you’d never be able to see by land.”

Bill recently came to live in Costa Rica. Like me, he lives in the city and does not own a car. He called me last Saturday to ask directions to the Pavas feria. I told him where to catch the bus on Pavas Avenue and to get off one stop past the U.S. Embassy.

He was a little embarrassed as he confessed that he had not as yet ridden a bus in San Jose. He should not be embarrassed; not many expats do ride city buses. I am now used to that mode of transportation but remember how confused I was at first, so, for those who would like to try the bus, I am going to answer some of the questions Bill asked

Often there is a sign in the window of buses telling you the various stops and how much the current fare is (it changes with inflation).
You do not need the exact change. I have seen bus drivers change five thousand note bills, although you might find yourself with a pocketful of menudo (small change). Within the city most trips are under 200 colones (40 cents).

Don’t dally in the front of the bus once you have entered because often there is an electronic gate that records the entries. Sometimes buses are crowded with standees. If you are older and female, someone will usually give you their seat. If you don’t know where your bus stop is, the driver is usually very helpful in letting you know when to disembark. Ask him when you enter. If you do know, pull the string or push the proper button at least a block beforehand. As soon as you sit down, look for the signal apparatus. Sometimes they are hard to find. Remember, Ticos riding buses are as kind and helpful as they are in other situations. I once was struggling with a torn fingernail and the lady in the seat opposite me brought out an emery board, gave it to me and insisted that I keep it.

Some buses seem to be old school buses with seats and spaces between them just right for third graders. If you are very tall, it might be easier to stand or the middle seat at the back of the bus. Sometimes you may get a driver is a “cowboy” as I call them or “muy bravo” as some ticos say. There are signs in most buses telling you to exit via the back door but many riders near the front still use the front door.

Buses are not always quiet, sometimes the driver treats you to his music, sometimes a vendor or supplicant gets on to give a pitch for money. A city bus is sometimes noisy and sometimes crowded, but it is never smelly. I am convinced that Costa Ricans are the most bathed people in the world.

There are many bus stops throughout the city (they are about the only places that tell you what street you are on). There are benches and some have narrow roofs which don’t actually protect you from the rain because rain seldom falls straight down in the city.

Buses leave and return to San Jose from just about every town in the country. The best place to pick up schedules and locations of the intercity bus stops is the Tourist Bureau located under the Plaza de la Cultura.

After writing all of this I began to wonder if it has any relevancy because once people have cars it is very difficult to give them up. They love what they consider the convenience even though they may find themselves inconveniently stuck in traffic unable to read or nap, or do some serious work (other than talk on their cell phones), all of which you can do on a bus.

And then this past week I attended Al Gore’s film “An Inconvenient Truth,” about global warming. The viewing was sponsored by the Eco travel agency Horizontes Nature Tours and was free for the many people invited to view it. The lovely Cine Megaly was almost full. The film is well worth seeing and has significance for Costa Rica because this country could, with continued and more serious concern for the environment, for conservation, be a proud example to the rest of the world. Global warming is reaching a critical mass and seems to be affecting even Costa Rica (and we are lucky because the rise in temperatures is less the closer you are to the equator). Some friends who live in Atenas tell me it is getting warmer there so that they are now noticing that there are more mosquitoes – a warm weather menace.

At the end of the film was a list of things that we can do to help stop, or at least slow down, global warming. There are the three well-known “R’s”: Reduce consumption, Reuse what you can and Recycle. Then came a whole list of specific things. First on the list was Ride the Bus.

Suddenly I felt my information to be very relevant.

Jo Stuart is the author of the popular book about life in Costa Rica entitled, “Butterfly in the City.” To order a copy of her wonderful book please contact her at: jostuart@amcostarica.com