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Panama uses the U.S. dollar Panama City, like many cities, has torn down many of its stately homes in past decades to make way for concrete high-rises. But Casco Viejo, or San Felipe, as the locals call it, was saved. Founded in 1673, Casco Viejo retains the architectural influence of the Neoclassical, the French, the Spanish Colonial, and even the Art Deco periods. Deemed a UNESCO World Heritage Site in 1997 and a government restoration project that same year, Casco Viejo is positioned to become a major world destination.  Good news for Panama City…and maybe good news for you, too. You could play a part in the restoration of this neighborhood, the heart of the first European settlement on the Pacific Coast of the Americas…and benefit from government incentives to boot.

With its Decree Law #9 of Aug. 27, 1997, the Panamanian government created interesting incentives for would-be property developers interested in Panama City’s Casco Viejo. 

Tax exemptions

Specifically, investors in this neighborhood can take advantage of preferred mortgage rates (3% below current market rates); property tax exemptions for 30 years; exemption from all transfer taxes upon the sale of the property; and exemption from import taxes involved in construction and restoration.

But let me back up a little and tell you some more about this favored barrio of my adopted city.

This is where you’ll find the president’s palace and the mayor’s home. Ruben Blades, Panama’s most celebrated entertainer, also keeps a residence here, as do many of the country’s most prominent artists. The French Embassy sits conspicuously at the southern tip of this three-century-old community.

I’ve experienced the renaissance of many neighborhoods before, including SOMA (South of Market) in San Francisco and South Beach in Miami. Casco Viejo is no different, except that its history and architecture are infinitely more significant. Centuries-old homes in washed-out hues with decorative iron balconies draped in bougainvillea and unobstructed views of modern Panama City…a well-kept central plaza…restaurants and galleries…and on every corner…scaffolding. Weekend days, the cobblestone streets are alive with children playing stickball and dodging the ice cream vendor on his bicycle. 
 

Salsa and merengue echo

Weekend nights, it’s a different story. The place throbs…dimly lit streets are crowded with traffic and pedestrians. Salsa and merengue echo from open-air living rooms while neighbors chat at their doorways, enjoying the breeze off the adjacent Bay of Panama. 

Mercedes, BMWs, and Range Rovers crowd the narrow, brick-lined streets seeking passage to one of the many now-fashionable restaurants or nightclubs. Scantily clad children hang from the stoops while teenagers gather on the side streets. Teatro National (the restored National Theater) finishes its evening performance and hundreds more flood this small six-square-block area.

One square in Casco Viejo, Parque Bolivar, offers the best example of what could be. 
Nearly every building here has been renovated completely. There are four restaurants, a
condominium building, and the Ministry of Foreign Relations municipal building (currently under renovation), plus individual residences, a school, and one of Panama’s most celebrated cathedrals, La Iglesia de San Francisco de Asis. A statue of Simon Bolivar and remarkably manicured domed ficus trees fill the center courtyard.
 

Al-fresco dining and tipico musicians This square is the epicenter of Casco Viejo nightlife and surrounded by al fresco dining opportunities. Strolling musicians play lively Panamanian tipico music. Sample the sangria at Café de Asis—as well as the best people-watching in Panama City. Casablanca, serving international cuisine and boasting an excellent wine list and formidable service, is popular with those with a little more padding in their pocketbooks. Signs of private investment prompted by the government incentives are everywhere. You don’t walk far without passing a restored building or one in process of renovation. There’s an almost “land rush” feel to condominium development in the area, and new rental units and commercial space are under construction.

Residential construction is booming. The area immediately surrounding the Plaza de la Independencia, continuing to the Presidential Palace, and then along the bay (near the
French Embassy), is seeing the most growth. Casa Remon, a small development of three condos across from the Panama Canal Museum, has units from just under 1,300 square feet for $125,000 to 2,450 square feet for $245,000.

Renovated properties in Casco Viejo are selling for $90 to $140 per square foot, depending on location. Some, with rooftop terraces and city views, command more.
The Panamanian government followed up its investment-incentive legislation with some investment of its own. Their renovations of the Ministerio de Gobierno y Justicia (Ministry of Government and Justice) and the Teatro Nacional are significant, but probably the most reassuring sign of the government’s commitment is the complete renovation of the old La Salle Parochial School, located on the Parque Bolivar. This multi-million-dollar project will bring hundreds of government jobs to the area.

How Panama got the Canal

Another feature significant to the revitalization of Casco Viejo is the abundance of tourism-related attractions in the area. Three museums, including the beautifully restored Panama Canal Museum, are in the district, as well as several cathedrals. One of the most frequented attractions is the Arco Chato, or “flat arch,” within the ruins of the Convento de Santo Domingo. Many believe this architectural wonder is responsible for Panama having a canal and Nicaragua not. It proved to many that the area was safe from severe earthquakes. 

The Panama Canal Museum (officially, the Interoceanic Canal Museum of Panama) chronicles the evolution of the Canal, including the early French attempt, the American construction and operation in the 20th century, and the handover on Dec. 31, 1999. 

The restoration of this museum building was an achievement. It is now one of Casco Viejo’s most beautiful buildings and a testament to the pride that Panamanians have in their Canal. Admission is $2 for adults, 75 cents for children, students, and those with a pensionado visa. The museum also offers a self-paced audio tour of the main exhibit hall for an additional $3. It is offered in Spanish, English, and French. The museum is open Tuesday through Sunday, 9:30 a.m. to 5:30 p.m.

Two blocks east on Calle “A” and beside the Santo Domingo Convent, the one-room  Museo De Arte Religioso Colonial provides a charming look at Panama’s 17th- and 18th-century religious heritage. Its layout and presentation are more like a flea market than a museum, but that’s part of the fun. The museum is open 8 a.m. to 4 p.m., Tuesday to Saturday, and Sundays 1 p.m. to 5 p.m. It’s closed on Mondays. Admission is 75 cents for adults, just 25 cents for children and pensionados. By the way, we befriended the one-person staff and, after an additional $1 donation, were allowed to see the grounds of the adjacent Santo Domingo convent. 

While not a bona fide museum, the 18th-century Casa Góngora is a recent attempt by the Panamanian government to create a forum for the encouragement of the local arts. Available to all Panamanians, a high school folkloric dance company was rehearsing the day we visited. Authentic furniture and much of the original architectural detail (three of the roof’s original beams have survived two devastating fires) make the house worth a visit.

Next to Casa Góngora, Callejón del Chicheme is yet another restoration venture under way. The top-floor condominium offers a stunning, unobstructed view of the Panama City skyline from a 400-square-foot terrace. Offering two bedrooms and 1.5 bathrooms, it’s still under construction so you can choose some of your own finishes. It’s currently listed for sale at $141,000. Other units in the building, ranging in size from 721 square feet to 1,363 square feet cost from $75,000 to $136,000.
The price of parking

As I mentioned, Casco Viejo can seem like a sleepy village on weekend days, but during the week and on weekend nights, parking is a challenge. So much so that developers are dedicating the first floor of most renovations to it. One recent project listed additional parking spaces for sale at $12,000 each…and all were sold within the first week.
 

Weekdays see much more activity in the area as the government offices and construction projects increase the pedestrian traffic. Many of the area’s restaurants are open for lunch during the week but close during weekend days. Los Tres Caracoles on Calle Premera (First Street) is always a favorite. It’s open weekdays from noon until 3 p.m. and evenings from 7 p.m. until midnight. The restaurant has a set menu, The chef just checks to see if you are allergic to anything…then just brings dishes to the table. Almost like tapas. The cost is $16 per person. Reservations are required, tel. (507)211-0535 or (507)211-1918.

Another popular restaurant in Casco Viejo is “Casco Viejo.” This French restaurant has long enjoyed an exceptional reputation on Calle Cincuenta (50th Street) in modern Panama City and recently opened a second by the same name here in the San Felipe district.
 

A heaping pint of shrimp ceviche

If you’re coming or going from Casco Viejo via Avenida Balboa, take time to visit the Mercado del Marisco (fish market) and grab a bite to eat upstairs in the fresh seafood restaurant. We enjoyed an appetizer of fried calamari, entrées of filet of corvina (a local white fish) with fried plantains and rice, along with two beers each, for only $20, including tip. Our best discovery, though, was the fresh ceveche being hawked by local fishermen. A heaping pint of fresh shrimp ceveche cost only $5.

A word of warning

One word of warning: This area is not for the faint-hearted. Most of the current residents are poor; many are living here illegally, in abandoned buildings, and scavenging for food. Stray dogs and cats, the homeless, and drug dealings are constant nuisances. During this transition period from local barrio to trendy destination, which easily could continue for the next 10 years, conflicts between the current residents and the gentrification movement are inevitable. But incentives put in place by the government with its Decree Law #9 of August 27, 1997, allow for the equitable and fair relocation for the current residents.

As one local developer told me as we gazed over the neighborhood from atop a roof terrace, “you either see the beauty of Casco Viejo immediately upon arriving or you don’t. It’s not something that develops. You either get it, or you don’t.” For the keen investor or urban pioneer, Casco Viejo is paradise.

Editor’s Note: Greg will be taking attendees of our October Panama Discovery Tour to visit this area so they can see firsthand the renaissance that is taking place. The Discovery Tour will be preceded by our annual Offshore Advantage Conference in Panama City, scheduled this year for Oct. 23 to Oct. 26. The Country Tour runs from Oct. 26 to Nov. 1. For more details, or to reserve your place, contact Barbara Perriello in our Discovery Tours’ office, tel. (800)926-6575 or (561)243-6276; e-mail: tours@InternationalLiving.com; website: www.ildiscoverytours.com.