Hotel La Compañía, a one-of-a-kind project aimed to support the revitalization and economic growth of Panama city’s historic district
Arias, Fábrega & Fábrega has advised Hotel La Compañía with the financing granted by the Inter-American Investment Corporation (IDB Invest) and BAC International Bank Inc. to finance the development, construction, and operation of Hotel La Compañía, a one-of-a-kind project aimed to support the revitalization and economic growth of Panama city’s historic district.
The 88 deluxe rooms hotel, part of the Hyatt’s Unbound Collection, is being developed preserving the original brick, stone, and vintage wood from the façade as well as in the various niches of the four 17th century buildings belonging in the past to Jesuit mission “La Compañia de Jesus” in Casco Viejo, Panama City, Panama, declared a World Heritage site by the United Nations Educational, Scientific and Cultural Organization (UNESCO) in 1997. The hotel is expected to open in Q1 2022.
It is unusual for IDB to finance a non-conglomerate borrower but in this case the multilateral recognized the importance of the transaction as a remarkable Hotel in the making, recreating a historical property into a new landmark in Panama while preserving the historical elements of Casco Viejo’s Spanish colonial, French colonial and American plantation periods influence.
ARIFA assisted with all the Panamanian aspects of the transaction, including the negotiation of a common term’s agreement, the structuring and negotiation of a security package guaranteeing the senior loans and the satisfaction of the condition’s precedent for each disbursement.
The firm also successfully assisted on the negotiations with the Panamanian historical heritage authorities and the Panama Tourism Authority to obtain a 20-year concession (renewable for an additional 20-years) for the use of the central courtyard of the hotel (the largest internal courtyard in Casco Viejo); an area that until now had been kept behind closed doors because of its historical value.
Through its supply chain, the hotel will have a positive impact on Panamanian small and medium enterprises that produce mostly food and handcrafts, creating new market linkages. Christopher Lenz, CEO of the project, has already identified potential sources to activate local suppliers and estimate that approximately 60% of food and beverage purchases will be from local producers.