Cuba for sale - ‘Havana is now the big cake – and everyone is trying to get a slice’

Cuba for sale: 'Havana is now the big cake – and everyone is trying to
get a slice'
Property developers are queuing up to pounce as Cuba opens its doors to
the world. Proposals for Havana's old harbour are described as 'Las
Vegas meets Miami in the Caribbean'. So can the city cope with the
commercial storm ahead?
@ollywainwright
Monday 1 February 2016 07.00 GMT

In central Havana's Parque Fe del Valle, at the end of a street bustling
with the usual scenes of queues for the bakery and clapped-out 1950s
cars weaving between piles of rubble, is a glimpse of a very different
Cuba. Every bench, wall, dustbin and plant pot in this tree-lined square
is occupied by bodies hunched over laptops and gathered around
smartphones, as people swipe at tablets and gesticulate at their screens.

Three generations of one family are huddled around a phone, the children
fighting over who gets to wear the headphones while the granny holds a
baby up to the camera – so that relatives in Miami, who they haven't
seen for years, can inspect the family's new arrival. Nearby, two
brothers scroll through Facebook to check the latest enquiries for their
bed-and-breakfast business, their laptop balanced on a makeshift desk of
crates, while a gaggle of teenage girls stream music and practise dance
moves under a tree.

This lively scene, which looks like an impromptu secondhand technology
fair, is the result of a new phenomenon in Cuba: Wi-Fi hotspots. In a
country where the internet is still forbidden in private homes and an
hour checking emails at an internet cafe can cost nearly a week's wages,
the arrival of five designated Wi-Fi zones in Havana has been nothing
short of revolutionary.

Walk along La Rampa by night, the long people-watching road that slopes
up from the seafront into the neighbourhood of Vedado, and you'll see
huddles of ghostly faces, illuminated only by the glow of screens. These
sprawling open-air internet lounges have also spawned a new informal
economy. Wi-Fi touts wander the streets like drug-pushers, re-selling
the state telecom company's prepaid $2 scratch-off cards for $3 apiece,
muttering "cards, cards?" instead of the usual "hashish? girls?". Snack
stalls and drinks stands – private enterprises that would have been
forbidden five years ago – have sprung up to fuel the spontaneous
street-corner parties, where people gather around to watch the latest
Hollywood trailers on YouTube.

"We are seeing a whole new quality of public space," says Miguel Antonio
Padrón Lotti, a Cuban professor of urban planning, who worked at the
country's National Physical Planning Institute for 45 years. "Cubans
have always socialised on the streets, but now we can interact with the
wider the world at the same time."

The wider world is arriving here in ever bigger droves, and not just
through the internet. On the cobbled streets of Habana Vieja, the
beautifully restored old town, it can now be hard to move for the
throngs of package tour groups. They follow their flag-toting guides
between cafe-lined squares, shuffling from the Museo del Chocolate, past
living statues and outposts of Victorinox and Diesel, to boutique shops
housed in majestic old mansions where handmade watches are on sale for
$12,000.

Not long ago, all this was crumbling. The improbable transformation is
the work of the Office of the City Historian, a vast state department of
architects and planners headed up by Eusebio Leal Spengler since 1981.
Wielding unheard-of power for an architectural historian, equivalent to
that of a mayor, he has won plaudits from Unesco and heritage bodies
around the world for what he's achieved here over the last 30 years,
against all the odds.

In the early 1990s, Leal persuaded Fidel Castro to set up a state-owned
tourism enterprise, Habaguanex: a company charged with developing
hotels, restaurants and shops. Crucially, it would plough the profits
back into restoring Havana's derelict buildings and streets, as well as
seeding social projects and community facilities. It was a canny model
of capitalist tactics deployed for socialist ends, which has seen Leal's
office channel more than half a billion dollars into the old town. The
company now presides over a growing empire of 20 hotels, 40 restaurants
and 50 bars and cafés, as well as dozens of high-end boutiques.

But outside the tourist circuit of the four main plazas and the
carefully repaved pedestrian routes that wind between them, two-thirds
of the old town remains in a perilous state. Castro's revolution was
fundamentally anti-urban, focusing on restructuring the rural economy at
the expense of the colonial capital, and the consequences are all too
visible. Look beyond the newly polished stage-set facades, and you'll
still find families living several generations to a room in buildings
that threaten to collapse around them at any minute.

Although half of the profits of Habaguanex are ploughed into social
initiatives – including health clinics, schools, libraries and old
people's centres – the renovations have come at a price, exaggerating
the divisions between the scrubbed-up and the squalid. Many former
residents of these grand historic buildings have been rehoused far away
from the centre, in the hated suburbs of Alamar and Habana del Este
across the bay to the east. More look set to be displaced as the
pressure to accommodate foreign visitors only continues to rise.

One local cafe owner, who used to live in an historic building in the
old town with 20 other families, now has to travel two hours a day to
get into work, since his former home was renovated. But he has mixed
feelings about the consequences. "The tourists might be pushing us
further away," he says, "but they're also bringing in money that the
city desperately needs. And our building was about to fall down anyway."

As part of the growing restaurant industry, he benefits from being paid
in the currency that foreigners have to use on the island – the
convertible peso, or CUC – which, pegged to the US dollar, is 25 times
more valuable than the local currency, the Cuban peso (CUP). It is a
gulf that has effectively created two classes of citizen in this
supposed land of equals: those with access to hard currency, and those
without. "Life is better if you work for the tourists" is how one
rickshaw driver puts it – as two middle-aged Americans struggle to get
out of his fibreglass cabin, adding a generous tip on to the already
over-priced fare.

More than 3 million tourists came to Cuba last year, boosted by a sharp
increase in the number of US visitors, which has surged by almost 40%
since Obama ushered in a thaw in diplomatic relations at the end of
2014. American citizens are officially still forbidden to travel here
for the sole purpose of tourism, but the sanctioned categories of
travelling to "support the Cuban people" and for "people-to-people
activities" are vague enough to allow tour operators to thrive. American
cruise-ship giant Carnival is already planning to bring "culturally
themed" cruises here from May, making it the first such cruise company
to visit Cuba since the 1960 trade embargo. According to the IMF, an end
to the embargo could see as many as 10 million US tourists a year – a
deluge for which the creaking, crumbling bones of Havana are far from
prepared.

"The infrastructure just isn't there to cope with such numbers," says
Belmont Freeman, a Cuban-American architect based in New York, who has
made frequent trips to Havana over the last 15 years. "The city is
woefully underserved for hotels and even if more were built, the
services couldn't supply them. The mains water system hasn't been
improved since the 1920s – it still loses around 50% through leakage."

Not that this seems to be standing much in the way of the luxury hotel
developers, who have their sights set on opportunities across the city.
On the eastern side of Parque Central, just visible through a cloud of
construction dust from nearby roadworks, stands the stately frontage of
the Manzana de Gomez building, a classical pile that occupies an entire
city-block, built as Cuba's first shopping mall in 1910. Now entirely
stripped out, it stands as an eery windowless shell, awaiting the
opulent filling of a five-star Kempinski hotel planned to open later
this year.

Around the corner, the Hotel Packard is being similarly spruced up and
expanded by Spanish starchitect Rafael Moneo for Iberostar. Further
north, near the package beach resort of Varadero, British property
developer London & Regional has unveiled plans for The Carbonera Club,a
$500m luxury development of 1,000 Conran-designed residences arranged
around an 18-hole golf course. Taking advantage of a recent relaxation
of regulations, it will allow foreigners to own beachfront property on
the island for the first time. US chains such as Marriott and Hilton can
do nothing but stand drooling from just 100 miles across the Straits of
Florida, waiting for the embargo drop.

"I give it two years, max," says Freeman. "It will be US business
interests that finally push congress into lifting the embargo – they're
all going crazy being shut out of this market." American architects and
developers are already queuing up to be first in line, ready to pounce
on investment opportunities when the embargo drops. Frank Gehry sailed
into Havana in December, aboard a streamlined yacht he designed for
himself, here to "offer his expertise to Cuba" according to a government
statement.

"You know that Cuba is at the centre of attention of many people," Gehry
told the gathered crowd. "And in the immediate future it will attract
many investors – particularly the tourism sector. But I am sure that you
know to be careful with those projects."

Jorge Pérez, a Cuban-American condo tycoon based in Miami, paid a visit
to Havana for its art biennale last year. "I wish they would let me be
the developer for all of this," he told Miami newspaper el Nuevo Herald
on his return. "I think I could change Havana in 10 or 20 years. If they
opened things up and I could build a luxury condominium in Vedado, I
would sell them in two hours here in Miami."

It is the kind of prospect that worries Miguel Padrón, who is not sure
that Havana is ready to cope with what developers are preparing to throw
at it. "We will have many divas and divos arriving with their very nice
drawings," he says. "But as a society, we desperately need to improve
our capacity to debate and discuss these plans. The challenge is how to
capture the potential of the market in the right way, to learn how to
negotiate with foreign investors. Havana is now the big cake – and
everyone is trying to get a slice."

All eyes are focused on bay of Havana itself, once the source of the
city's immense wealth and now the place from which investors are hoping
to extract an even bigger bounty. With the opening of a new $900m port
30 miles west of Havana at Mariel – built with Brazilian help – the old
harbour now represents the next major development opportunity: a
derelict jumble of warehouses and struggling fragments of industry.

"The harbour is the embryo of the city," says José Antonio Choy Lopez, a
Cuban architect who sits on the board of UNIAC, the Union of Cuban
Writers and Artists: a body charged with assessing plans for the bay. As
one of the best natural harbours in the Americas, enhanced by impressive
fortifications in the 16th century, it was where the Spanish galleons
assembled, laden with riches plundered from the New World, before
sailing in protected convoys back to Europe. Huge quantities of gold and
silver, along with Alpaca from the Andes, emeralds from Colombia and
mahogany from Guatemala, were all traded here, bringing profits that are
wrought in Havana's palatial buildings. "It was a cultural crossroads,
the very reason for the cosmopolitan character of the city," says Choy.
"And its redevelopment is now the most important project facing Cuba
this century."

For such an important project, precious little is actually known about
the plans. Not that the sense of mystery is unusual. In Cuba, things are
rarely announced until they actually happen. "They never publish targets
here," says one foreign diplomat, "because they usually don't meet them."

Choy talks of proposals to turn the harbour into a centre of "culture
and recreation": the redundant Tallapiedra power station might become an
art gallery, along the lines of London's Tate Modern, while the site of
the Nico Lopez oil refinery across the bay, where a chimney still
belches thick black smoke 24 hours a day, might be developed into a new
city of science and technology. There is talk of transforming an
elevated railway line into a linear park, like New York's High Line, as
well as plans for a big new transport hub next to the old train station.

Sensitively done, it could have a similar quality to harbour
revitalisation projects such as San Francisco's Fisherman's Wharf or
Cape Town's V&A Waterfront; the elegant steel-framed warehouses
repurposed with minimal intervention. One such shed has already been
reborn as a crafts market, while another recently reopened as a
restaurant and microbrewery.

However, the future of such enterprises, post-embargo, could be
precarious given the complex history of land ownership here. One US
shipping company has an $850,000 claim on a kilometre stretch of the
waterfront, including the brewery building, which they say was seized
from them after the revolution. The same goes for many such buildings
across the city and beyond, with the value of claims for confiscated US
property totalling almost $8bn, including long-standing claims from the
likes of Exxon, Texaco and Coca-Cola. Despite diplomatic talks,
compensation issues have yet to be resolved.

There is also no guarantee that the next stages of the harbour
redevelopment will be as low-key as the warehouse renovations completed
so far. Havana may well find itself catapulted from having too little
money to having too much, too fast, with all the usual consequences. One
insider describes some foreign developers' proposals for the harbour as
looking like "Las Vegas meets Miami in the Caribbean".

Freeman is more optimistic. Havana will be saved from the worst effects
of commercial speculation, he thinks, by a combination of glacial Cuban
bureaucracy and happy accident. "Nothing is going to happen very
quickly, for the simple reason that it takes so long to get anything
done," he says. "Other countries have been trying to develop in Cuba for
decades, and they've been stymied all along by the country's sclerotic
controls over every aspect of economic activity." The harbour will also
be protected from the "Venice syndrome" of vast cruise-ships dwarfing
the city with their stacked cliff-faces of cabins, he says, because the
boats simply won't be able to get in. A road tunnel, laid across the
bottom of the bay in a big concrete tube in the 1950s, makes it too
shallow for them to enter.

At the other end of the scale from the grand waterfront plans, there are
signs across the city of a new kind of real-estate development.
Scaffolding has long shrouded much of Havana, but it no longer just
signals the work of the City Historian. Recent changes to property laws,
which have allowed Cubans to buy and sell their own homes for the first
time in years, paired with a relaxation of US rules on how much money
Cuban-Americans can send to their family back home, have spawned a
micro-real estate industry of independent renovation. Families with
access to cash from overseas are doing up crumbling buildings themselves
and either letting them out as holiday rentals (possible through Airbnb
since last year) or selling them on – minting a wealthy new class in the
process.

It is a change in legislation that foreign companies have been quick to
pounce on. Choy is currently putting the finishing touches to the
renovation of a building on the waterfront that his family owns,
converting it into holiday flats using funds from Cuba Real Tours – one
of a growing number of companies developing boutique holiday lets. "We
have invested a huge amount in this project," says company director
Patrick Fries, "but it's incredibly risky as we don't actually own the
building."

They have also encountered the chief difficulty of anyone trying to do
construction work in Cuba: the dearth of materials. Glass still isn't
produced on the island, so each window has to be imported – and the
customs limit of four windows per person, or two doors, mean these
small-scale refurbishments often entail getting friends and family to
help out.

But such obstacles certainly haven't limited the aspirations of would-be
developers, or the level of quality that they can achieve with a bit of
Cuban resourcefulness. Freeman describes an "eye-popping" day he spent
with one of Havana's fledgling estate agents, touring spectacular 1950s
houses that had been fixed up extraordinarily lavishly and are now being
offered for up to $800,000.

Elsewhere there are penthouses listed for more than $2m, although no one
knows how much anything is really worth: there are no benchmarks and no
mortgage industry. Instead, people gather at the end of Paseo del Prado,
standing with handwritten signs around their necks, displaying faded
photos of apartments for sale, and browsing listings written in
dog-eared exercise books. It is one of the many strange scenes in Havana
of micro-capitalism at work – which clearly won't be micro for much longer.

Source: Cuba for sale: 'Havana is now the big cake – and everyone is
trying to get a slice' | Cities | The Guardian -
http://www.theguardian.com/cities/2016/feb/01/cuba-for-sale-havana-is-now-the-big-cake-and-everyone-is-trying-to-get-a-slice