Tax
breaks, lower prices and a laid-back lifestyle draw a growing community
of Americans to one of the nation's small towns.
BOQUETE,
Panama — Golf course manager John Sutton had had enough of lawyers,
telemarketers, several of his neighbors and the federal government.
So the San Diegan and his wife took early retirement, sold everything
they owned and moved to Panama.
The Suttons,
who bought a house here last summer, exemplify a wave of American
retirees who want to get away — far, far away — from it
all. Each month, about 20 of them are turning up in this remote coffee-growing
town nestled in the mountains of western Panama, buying houses and
starting new lives. It's the latest hot spot in Central America, a
region that over the last decade has attracted increasing numbers
of U.S. retirees.
"Boquete
gave us the opportunity to have a great, comfortable lifestyle,"
said Sutton, 50, who with wife Dinah put $5,000 down on their brand-new
house without even seeing it. The subdivision is named, appropriately
enough, Hidden Valley.
Loading
groceries into his car in front of Romero's, the local supermarket,
he said, "This isn't Albertson's, but it's close enough."
Other
U.S. retirees are making similarly radical moves, attracted by Panama's
favorable tax treatment of foreigners, a carrot dangled by most Central
American governments; the relatively low cost of living; the lush
surroundings; and the eternally mild climate.
"We
got tired of the snow," said retiree Barbara Votava, who moved
here from Spokane, Wash., with her husband, Bill, after he sold his
photo-processing business. "This is as close to paradise as you
can get."
In recent
years, retired foreigners have been drawn to Costa Rica, Nicaragua
and parts of Mexico. But Panama's moment seems to have arrived. Boquete
has turned up on several "Best Places to Retire" lists published
in recent months in U.S. newspapers and on Internet sites.
"I
paid my dues, got my two boys through college and decided things have
got to be better someplace else," said John Villegas, an Arizona
retiree who publishes the Internet newspaper the Boquete Times. "They
are."
Asked
to define what Boquete retirees have in common, Villegas said: "They
have strong ties to their past and recollections of better times,
nuclear families, respect for the law and civility. And they have
no qualms about looking outside U.S. borders to re-create those good
old days."
Like most
other Latin American countries, Panama does not keep statistics on
the number of foreign retirees living within its borders. But immigration
officials here and throughout the region agree that the numbers are
rising.
Panama,
for example, last year granted 449 special retiree visas, nearly double
the 229 granted in 2003, according to the nation's immigration office.
A total of 2,500 pensioner visas have been issued. Costa Rica, which
has been retirees' favored Central American destination, has issued
11,000.
Under the
terms of the visas, the Panamanian government exempts foreign retirees
from paying property or income tax, as long as they prove they have
$500 minimum monthly income. Newcomers can bring in a car and up to
$10,000 in belongings tax-free. Interest from their deposits in Panama's
banks is also exempt. Retiree visa holders also get numerous discounts,
including 50% off most plane and bus tickets.
Panama
says the special tax status is good for the country because retirees
create jobs and inject more cash into the local economy.
A case
in point is newcomer Mike LaFoley, a Boston-area native. Since he
and his wife, Annie, arrived here four years ago, he has started a
coffee farm and spent thousands of dollars in construction improvements
on his property.
"My
last pay period, I handed out 11 envelopes to my workers," LaFoley
said. His stuccoed home, like most of those in the subdivisions popping
up in and around Boquete, looks like it could have been built in an
upscale Orange County suburb, replete with verdant yard, faux-tiled
roof, driveway and carport.
Although
only about 500 foreigners live in Boquete and its environs, builders
last year took out permits to build 2,000 additional housing units
in anticipation of a real estate boom.
Many here
say Boquete benefits in comparison with Costa Rica, which experienced
an influx of U.S. retirees in the 1990s but has lost some of its allure.
Rising crime, higher real estate prices and controversial government
proposals to scrap or reduce retirees' tax breaks have persuaded many
to come to Panama instead.
"We
were going to live in Costa Rica, but my wife and I didn't like the
way it felt," said Sylvan Cohen, a retired building materials
merchant from Philadelphia. "It felt like people were leaving
— too many 'For Sale' signs."
Cohen and
his wife also visited dozens of U.S. states in their RV looking for
a place to retire before settling on Panama.
Life in
this farm town of 18,000 is tranquil and unhurried — for now.
Many fear that the population of rat-race refugees is rising so fast
that paradise may soon lose its charm. In addition to Hidden Valley,
half a dozen subdivisions geared to Americans are either under construction
or on the drawing boards on former coffee farms and cattle ranches.
Rising
demand for property has caused a tenfold increase in land values in
just two years, said Judith Urriola, manager of the local branch of
Banistmo Bank.
"Costa
Rica got expensive, and it's going to happen here. We just hope it
takes a while," said Jorge Conte, who is developing a 350-home
subdivision called Hacienda los Molinos. Prices for a 2,300-square-foot
house in his development average about $160,000. That's the low end
of the home price scale, locals say. Most new homes sell for $200,000
and up.
The influx
of moneyed foreigners has had a strong impact on this once sleepy
town, Banistmo's Urriola said. It's been great for owners of coffee
farms who have struck it rich, selling their 500-acre properties for
$1 million and more, a king's ransom in rural Panama. Less positive
has been the impact on small store owners who are being replaced by
discount chains like Romero's, she said, that cater to first-world
consumer tastes.
Maria
Ruiz, scion of a local coffee-growing family who got her graduate
degree at Case Western Reserve University in Cleveland, says that
as coffee plantations are redeveloped into homes, the transformation
of the town could hurt local indigenous people who come from a neighboring
reservation for three months of the year to harvest coffee.
Mike Scott,
a NASA facilities manager from Houston who is looking to retire in
a couple of years, came here last week to see what the excitement
was all about. He likes the town but found that some units in the
new subdivisions aren't the bargains he expected.
"There
is an element of feeding frenzy here, of the attitude that 'we have
to get something now or we'll be priced out of the market,' "
said Scott, who is in his mid-50s.
He added
that he is going to wait to buy in hopes the bubble bursts and prices
drop.
Scott
and others say they appreciate the welcoming embrace of the Panamanian
government. Many newcomers say they felt driven out of the United
States by the government's intrusive policies.
"People
are giving up their freedom in exchange for protection" back
in America, said Chuck Fross, a retired electrician from Kalamazoo,
Mich., who bought a house here last year.
"The
government has stuck its nose into everything."
Villegas,
the Arizona retiree, said it felt good to be free of the "layers
of bureaucracy" in the United States, while another recent transplant
from Vermont, who asked not to be identified, decried the U.S. obsession
with "everything happening by the book."
Does Boquete
have any downside? Residents pointed out that there is no urgent-care
hospital, the closest being a 45-minute drive away in the provincial
capital, David.
But Ted
and Louise Harrison, emergency-room doctors from British Columbia
who bought property here last year, are working on a project to build
one. They say that meanwhile, the level of regular medical care is
good in Boquete and elsewhere in Panama, because many of the doctors
got their training in the United States.
Hershel
Stolebarger, a retired New Mexico real estate broker, said a friend
felt comfortable getting a hip replacement in Panama rather than the
United States — especially after finding out it would cost $5,000
compared with $30,000 in "El Norte."
The benefits
far outweigh the disadvantages, Sutton said. His monthly living expenses
average $1,500 a month, half what he and his wife spent in San Diego,
he says.
The biggest
savings are in health insurance. He and his wife pay $50 per month
for government health coverage that would cost $1,200 in San Diego.
Although
he shares the concerns that the U.S. government is overly intrusive,
Sutton said his moving to Panama had nothing to do with politics,
echoing most of the newcomers here.
"I
bleed red, white and blue. This was a lifestyle decision. We could
have worked 10 more years and gained nothing," Sutton said. "You
give up the hustle and bustle, sure, and the convenience of shopping
malls. But you come down here and the stress level drops immediately.
My wife's blood pressure dropped 25 points the first week we were
here."
César
A. Tribaldos, a veteran member of Panama’s tourism industry,
has been elected president of the Panamanian Hotel Association (APATEL)
for the third consecutive term. He will serve until 2007 along with
a board of directors which includes Jorge Loaiza (Vice-president),
Anette Cárdenas (Secretary), Edgar Pérez (Treasurer),
Thedy Véliz (Deputy Treasurer), Jaime Campuzano, (fiscal) and
José Montesinos (member). 
