COSTA RICA BLOG — Before moving to Costa Rica in 1998, I was involved in a number of commercial developments for both myself and some clients in my home town of Victoria, British Columbia. In B.C., as in other Provincial jurisdictions in Canada, as I expect is also the case in many, if not all U.S. jurisdictions, a Developer is expected to contribute to the improvement of off-site infrastructure in-keeping with the impact of their proposed commercial development on existing infrastructure, such as roads, sidewalks, boulevards, gutters, storm sewers, and the like.

In my personal development circumstances of a small strip-mall in a suburban Victoria neighbourhood, development approval by the Municipality was conditioned on my contributing to what is known as Development Cost Charges (DCC), which included the donation to the Municipality of a portion of the land for road widening, and payment to the Municipality for the cost of their providing for the road widening, and gutters, storm sewers, a sidewalk, and a boulevard on the property donated.
I mention all of this, as I don’t see anything similar with respect to the cost of off-site infrastructure improvements being imposed on Developers in Costa Rica in any material way, respecting the impact of their developments on existing infrastructure. As an example with which I am familiar on a daily basis, the traffic congestion generated on the “Belen Radial” through Lindora in Santa Ana, is an extreme example of how commercial and office center development, without the complementary improvement in off-site infrastructure, can be very detrimental to day-to-day economic activity.

I would estimate that the cost of increased gasoline consumption, coupled with the time loss in productivity resulting from traffic congestion on this route, contributes to a significant loss to the Costa Rica Economy from this circumstance alone, not to mention many other parallel circumstances in other parts of the San Jose Metropolitan area and the Country as a whole. Obviously, the solution to the Lindora example, is adding an additional travel lane in each direction, with a shared left-turning lane in the center.

This would also include the addition of travel lanes to the bridge over the Virilla River leading to San Antonio de Belen, which would obviously be a very costly proposition. My question is, “Where is the cost contribution to these obviously required off-site infrastructure improvements by the Developers of the multitude of commercial and office centers which dominate this route, required to accommodate the increased traffic generated by the users?”. I realize that improvements are being proposed for this route by MOPT, but why should this be a tax payer expense, rather than a Developer expense?

It’s clear, that Developers are driven by the profit margin which accrues after the bottom- line after development costs are determined in any given circumstance. Obviously, not contributing to these off-site infrastructure development costs increases the profit margin on any given development. However, the over-all loss to the Costa Rica Economy by not addressing these infrastructure requirements and the negative consequences generated, particularly in the case of traffic congestion, must, in the final analysis, be the over-riding consideration. This has been a recognized position by countries such as the U.S. and Canada for many years and should be the recognized position in Costa Rica as well.

I realize, that in many of the cases, the Developers that I am speaking about are members of what I have referred to in a previous blog, as the Costa Rica “Ruling Class”, possessing the necessary political connections to receive a “free pass” for most development permitting processes and to avoid the cost contribution to off-site infrastructure development and improvements, as I have allude to, should be the norm. Perhaps, the dubious benefits enjoyed by this “ Ruling Class” is the even greater issue to be addressed.

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Richard Philps
Attorney Richard (Rick) Philps is a Canadian citizen, naturalized as a citizen of Costa Rica. Rick practiced law in Victoria, B.C., Canada as a member of the Law Society of British Columbia, for fourteen years, prior to moving to Costa Rica in 1998. Rick then earned his Bachelor of Laws and Licensing Degrees (Civil Law), with Honours, and a Post-Graduate Degree in Notary and Registry Law, from the Metropolitana Castro Carazo and Escuela Libre de Derecho Universities, in San Jose. Rick is a member of the Costa Rica College of Lawyers, and practices law in Costa Rica in the areas of real estate and development, corporate, commercial, contract, immigration, and banking with the Law Firm of Petersen & Philps, located in Escazu, a western suburb of San Jose. To contact Attorney Rick Philps about hiring him as your Costa Rican Attorney, please use the following information: Lic. Rick Philps - Attorney at Law, Petersen & Philps, San Jose, Costa Rica Tel: 506-2288-4381, Ext. 102; Email: rick@costaricacanadalaw.com Website: www.costaricacanadalaw.com