- The Washington Times - Wednesday, November 15, 2006

GRANADA, Nicaragua

Laurance Ginsberg moved from a Dallas suburb to this colonial city with its pastel-colored dwellings because the deal was too good to pass up.

The former Starbucks employee found a sprawling colonial-style mansion near the main square of Granada, Nicaragua’s top tourist destination. The country is so cheap and the landscape so stunning that some travel magazines have tagged Nicaragua the “new Costa Rica.”

Mr. Ginsberg opened a coffee shop and gelato bar in the front and moved his wife and two school-aged children into the huge home behind it, with rent equaling his mortgage in Richardson, Texas: about $1,300 a month.

“We basically moved here for that word — potential,” said Mr. Ginsberg. “We feel like this place is at the tip of the iceberg.”

Over the past five years, a growing number of American expatriates, retirees and investors have turned to Nicaragua, where some of the lowest property prices in the hemisphere have translated into quick fortunes and idyllic, seaside retirements.

But with last week’s election of Sandinista leader Daniel Ortega as president, some are worried the good times may come to an end. Mr. Ortega soundly defeated his nearest rival Eduardo Montealgre, a business-friendly banker and choice of Bush administration officials, who sought to demonize Mr. Ortega throughout the campaign.

For some outside of Nicaragua, Mr. Ortega conjures up images of property redistribution and revolution, and his election has many wondering what will happen next.

“We’re in a wait-and-see approach,” said Juan Carlos Pereira, executive director of ProNicaragua, a public-private organization that seeks to promote foreign investment in the country. “It really depends on Daniel Ortega.”

Mr. Ortega campaigned as a changed man. Gone was the anti-imperialist rhetoric of the 1980s. The former guerrilla, whose campaign theme was reconciliation, literally changed his colors, from the traditional red and black of the Sandinistas to a pastel pink. And while he railed against “savage capitalism,” he sought to assure investors that land confiscations were a thing of the past.

Since his election, Mr. Ortega has sought to ease frazzled nerves, but some fear his reputation will outweigh his words.

“The worry for us is the image of Ortega around the world,” Mr. Pereira said. “It will take a little while for him to win the confidence of investors.”

For coffee shop owner Mr. Ginsberg, Mr. Ortega’s election does not spell the end of his Nicaraguan adventure. “We don’t plan on fleeing, I can tell you that,” he said. “As long as no drastic changes occur with the new administration we plan on keeping our chins up and giving it a long, hard try.”

Oliver Mora, a real estate agent in Managua, is hopeful that retirees and investors won’t be scared off, noting Mr. Ortega’s new willingness to make alliances with conservative forces.

“The profits are greater than the level of risk,” he insisted. “We just hope there’s no kind of panic.”

Tourism officials are also betting Mr. Ortega won’t want to tip the cash cow foreign visitors have become.

Tourism represents Nicaragua’s most lucrative industry, ahead of meat and coffee exports. The tourist sector was worth $183 million in 2005, nearly double the $109 million in revenue it produced in 2001. The number of tourists has likewise exploded, from 584,221 in 2001 to 803,933 last year.

Maximo Erick Bonilla, manager of a tour company in Granada, said he worried the industry would enter a short recession. “The tourists from the U.S. won’t have the same confidence,” he said. “The image of the country will be on hold.”

Mr. Mora and others say that many of the factors that made Nicaragua such an attractive option before Mr. Ortega’s election will continue: Cheap land, stunning natural features and security. Despite the nation’s image, Nicaragua is the safest country in Central America, crime statistics and several studies show.

It is not as clear whether the retiree-friendly tax laws of the previous regime will survive.

Most of Nicaragua’s foreign retirees, who number in the thousands, have clustered along the Pacific Coast, where giant waves have also lured legions of surfers.

The focal point is San Juan del Sur, a picturesque half-moon bay fronted by lush hillsides. Once a getaway during the civil war of the 1980s, San Juan del Sur is now plastered with real estate signs and a growing number of luxury hotels and U.S.-style master-planned communities.

While the days of $20,000 ocean-view homes are over, some oceanfront lots still sell for less than $50,000.

So far, Mr. Ortega’s election hasn’t sparked a mass exodus.

“Obviously we’ve had some calls from some companies wondering what to do,” said Mr. Pereira, the investment promoter. “Our advice is to wait and see. If you believe the campaign rhetoric, then he will be a moderate.”

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