Ola Uruguay Real Estate and Investments

Featured in the Wall Street Journal, Realestatejournal.com, and the New York Times, real estate agent Ignacio Ruibal is both a resident of Jose Ignacio, as well as its unofficial ambassador. Representing over 200 properties he knows more than most people about this exclusive town’s real estate market. He sat down with Ola to talk about the history of the town, and how it balances authenticity and exclusivity.

How do you think Jose Ignacio differs from other Uruguayan towns?

The grand difference between Jose Ignacio and, let’s say, Rocha, is that Jose Ignacio is located in the state of Maldonado. Jose Ignacio is the last southeastern peninsula, where residents and guests can experience both the sunrise and the sunset. Jose Ignacio isn’t a fishing town like Punta del Diablo, nor is it as wild as Punta del Este. It’s a rural coastal aldea, or village, nestled between two lagoons, the countryside and the sea.

Being inside the radius of Punta del Este (40 km, or a half-hour drive away) allows us access to the city’s action, without sacrificing our ability to offer an experience totally apart from it. We are incredibly lucky to have within our reach all the services and infrastructure of Punta del Este, as well as the stability of the state of Maldonado.

Is it true Jose Ignacio has its own ordinances?

Yes, in 1993 we successfully fought to be defined within the boundaries of Maldonado, as well as to have our own set of ordinances and building codes. Jose Ignacio was defined as the village, the area bounded between the lagoon of Jose Ignacio and the lagoon of Garzon, and the area between just north of Route 9 (including the town of Garzon) and the Atlantic Ocean.

Jose Ignacio is what it is, thanks to our work as a community, as neighbors, and the government’s response of this time. We went to them with a judicious approach. We explained that Jose Ignacio was a gem within the limits of Maldonado. We could either polish this gem, or destroy it. After a year of fighting, we achieved our objective: our own ordinance codes. Jose Ignacio is the only place in Maldonado that has it’s own building ordinances, as well as very tight zoning restrictions that explicitly prohibit certain activities like nightclubs. At one point we had an issue with them and we figured the only way to cut them out was to prohibit them.

Jose Ignacio is not a new place, or a “recent discovery.” It has always existed, it is a beautiful place. The majority of the people who came were coming from La Barra or Punta del Este, seeking a different experience; they came and fell in love with the place. As a community we were left to ask, what do we do to guarantee these people, who are often paying a lot of money to be here, that we will not grow to the point that we lose our identity?

To you, what is the identity of Jose Ignacio?

To me the two fundamental aspects of the personality of Jose Ignacio are familiar character and low density, which might be the most important. We asked ourselves: What can we do, the community, to grow Jose Ignacio in a sustainable way? And our response—low density. This allows Jose Ignacio to continue to be a place characterized by family. If we allow for excessive building, like what was happening before 1993 with condos and such, Jose Ignacio would have been destroyed. Today, there are no condos being built. Now there is a rule: one owner, one house. Before there could be six families in one house. Now there can be just one family.

What was the reaction to you desire for low density?

All the other Uruguayan real estate agents said we were crazy to fight to limit investments to Jose Ignacio. They said to me personally as a real estate agent, shouldn’t you be fighting for more investment? No, what I am fighting for—what I see as my life’s purpose—is to preserve the spirit of this place—a spirit that can’t be seen in empirical data. It is the possibility to wake up, leave my house to buy a loaf of bread, and greet Juan to my left and Pedro to my right. I know my neighbors—those who live in front, behind, and alongside my family. And this is a privilege worth preserving.

What was the town’s reaction to the change in ordinances?

Throughout the years this law guaranteed low density and a small town character. After changing the town’s building ordinances, it is explicitly prohibited to build pubs, dance clubs, music venues, shopping malls, camping, etc. The reaction was mixed. Some said we were elitists, or at least trying to be elite. This wasn’t the case; we were attempting to preserve the rural character of our town. Growth isn’t always good—it can push out local merchants, fill the streets with signs and unnecessarily bright lights.

[Nacho’s discussion of Jose Ignacio is interrupted by the entrance of his two daughters, who are asking for money to buy an ice cream.]

The law was very polemic. It wasn’t that we wanted to cut business. Rather we wanted to maintain Jose Ignacio as a place to raise children and know your neighbors. How do you explain to an established merchant that you are going to prohibit certain types of growth? We did not want to cut growth, we wanted to change the face of growth. We wanted merchants and restaurants to sell poco, caro, y bueno or small, expensive, and good. We wanted to offer a differentiated product to a high-minded clientele, versus selling cheap products to the masses. Certainly it was hard to negotiate, but in the end, everyone understood it was best.

The law in 1993 paused growth, and I mean that in the best way. Jose Ignacio could have exploded; we could have transformed into another La Barra. I knew La Barra in the 70’s, and by the 80’s it had completely changed. Back then La Barra was the edge of the action; when you went past it you had reached the end of the world. Maybe there was a house or two, in Manetalias, for people from San Carlos who came to summer there, but nothing like it is today. You’d get to Jose Ignacio and there was nothing. There was like 40 houses in the pueblito. [He proceeds to name almost all the families of each].

100 Years

This past year in 2009, we hosted a celebration for the 100th anniversary of the fraccionamiento of Jose Ignacio, or the breaking up of the town into divisions. In attendance were some characters who have lived in the town their whole life, including Rosendo Nuñez, who administered the only form of communication between the village and the outside world. He had two yellow old buses, the kind you might imagine seeing in Costa Rica, with open doors and chickens and pigs on top. He had a company called El Faro, which ran buses from San Carlos to Jose Ignacio and San Carlos to Garzon. Not only did he take people from town to town, but he also brought with him things like prescriptions. At this point there wasn’t a pharmacy. If you had a headache, you’d have to suffer through the whole day until he came with aspirin in the afternoon.

Though the town has undergone physical changes and seen radical growth since the 80’s, it’s character remains in tact. The policy of one family, one house is very important to this preservation. The market can be very demanding. People with millions and millions of dollars all want to buy and develop here. It’s very difficult to control growth when there are willing investors. There’s always someone asking for a favor, an exception. The community must be very alert and consistent; exceptions cannot be made, or else everyone will expect one. This year a change in the building ordinance was proposed for the small hotel sector within the peninsula Jose Ignacio, which created quite the controversy. We got worried about how it would affect the rural character of the town. An inn’s guests are always changing. For a neighbor, waking up to greet a visitor of a hotel is not the same as waking up and greeting another resident who you know and see, day after day. In response, we hired a consultant in Montevideo to conduct a simulation of the impact that potential changes to the ordinances would have on the community. It cost a fortune, but we shared the cost between neighbors. Why did we do it? It wasn’t to be crazy, or elitist, or to say that we can’t change a thing, ever. No, it was to provide proof that changes to the building ordinances would ruin the spirit of this place. It was a great accomplishment.

And who supported this study?

When I speak of Jose Ignacio, I’m really referring to the residents of Jose Ignacio, Santa María de los Médanos, La Juanita, Arenas de José Ignacio, as well as the surrounding rural areas. In total the residents are in the 700’s, dispersed between thousands of hectares. In the actual town of Jose Ignacio, there are around 370, 70 of which split the cost of the 2009 study.

Moving into real estate, how much do lots go for in the village of Jose Ignacio?

In the village, or caso viejo, the land is around US$500 per square meter to US$600 per square meter. The cheapest lot you probably can find is US$400,000.

Editor’s note: Other real estate listings currently on offer in Jose Ignacio include—a 230-square-meter three-bedroom, two bath house three blocks from beach for US$550,000; a 730-square-meter villa, with five en suite bedrooms, and spectacular views for US$1,000,000; a 8.5 hectare chacra with charming farmhouse and lake overlooking Jose Ignacio Laguna and ocean for US$800,000; and a brand new, 500-square-meter, four-bedroom property on 5.5 hectares for US$1,200,000.

Is there much commercialization of the lots?

Within the village there really isn’t a disposition to sell, and there aren’t many sales, as odd as that sounds. Sometimes someone will approach a homeowner and try to convince them to sell their home. The owner will usually resist, but sometimes deals are struck between the two of them without the house ever being technically “for sale.” To set a price they will say, how much did you pay for the land? The house? And they will set a price.

What type of person buys in Jose Ignacio?

There really aren’t developers, because there aren’t “deals.” The town isn’t a market for investors, but rather final consumers. The type who buys here is a type who wants to be here. They don’t buy to sell. They are often investing a large portion of their inheritance or savings to purchase in the town, and they do so with the desire to personally enjoy their property. More and more Europeans are buying here, especially the French and Belgians. 

So Americans coming to Jose Ignacio is a new phenomena, no?

Very new. The Europeans were here long before North Americans. I assume it’s because North Americans have the Caribbean so close, that they never really had to travel too far to go to a beautiful beach. However after 2001 it was as if North America rediscovered South America. Why? I believe that the Argentines helped sell a new vision of our region. No one sells us better than the Argentines. They say our country is safe, with good infrastructure. We in turn sell a way of life as well: passing the day tranquilo, on the beach, drinking a cold beer with beautiful people all around.

Editor’s note: Actors Bruce Willis, Uma Thurman, Kevin Bacon and his wife, Kyra Sedgwick, along with singers Shakira and Julio Iglesias, and the model Naomi Campbell, are just a few of the celebrities who added their star-power to the tiny town of Jose Ignacio. Posada del Faro, a boutique hotel, has been host to many of these celebritities, along with fashion photographer Mario Testino and model Giselle Bundchen. Yards from the Posada is the home of British novelist Martin Amis.

You were able to halt crazy development, but obviously in the many years of fighting, you would have experienced victories and defeats. What was your gravest loss?

Gratefully we have experienced mostly victories. However, the greatest deception was the development project Setai. The original owner bought 40 hectares on the beach. He could have made a fortune just making lots of the lands, but the spirit of the developer—the desire to milk the land of all its worth—got the best of him. So instead of creating 20 to 35 lots on the land, which would have still tripled his investment, he wanted more. So what did he do? Using a very prominent architect, Carlos Ott, he created an initial project saying they were going to create a hotel. Then they explained that the clients they were going to attract were the type of people who were accustomed to the best resorts in the world, where they have access to the beach directly from the hotel. Thus, if they were going to spend $40 million building a hotel, it would need to be directly on the beach and not 150 meters from the beach, as Uruguayan law dictates. His proposal was a complete departure from national protocol. Moreover, the original document proposing and justifying this exception is nothing short of shameful. It is more shameful still that the national government and the state government eventual granted permission for the exception.

And how did they allow it?

I don’t know. I don’t know. The state government and the junta (local government) approved the project even though the entirety, or at least the majority, of the community was opposed to the project. Instead of 150 meters, the Setai would be allowed to be built 90 meters from the beach. The community reacted immediately to the news. We contacted the Minister of Environment and every other relevant office. Along with questioning the environmental impact of the project, we also asked how it was that the local government was going to allow for a development that limited public access to public beaches. After all, there are stringent national laws that regulate and limit construction in front of beaches, so as to keep them accessible to the public. As a resident I presented saying, how could the state deny me the right to walk along the beach? But unfortunately, what’s done is done.

Is Casa Vik comparable?

Editor’s note: The Norwegian billionaire investor Alexander Vik’s summer home (made of titanium) will cost $10 million to complete. It measures 4,201 square meters and is designed by Carlos Ott, the famous Uruguayan architect. Ott’s other projects include the Antel tower in Montevideo and the Opéra de la Bastille in París. Vik’s 1,500-hectare property outside of Jose Ignacio is also home to a boutique hotel. You can stay there for a pricey $750 a night.

Vik is another story. He came to buy an estate north of the lagoon and made a hotel that is discreet and contextualized. Each bedroom houses a mural by a young Uruguayan artist, a project that he wanted to do to support young artists. He is also building a home sobre el mar (at the beach). It’s his house for his personal use from the end of December to January. If he wishes to rent it once he leaves, he’s allowed to, just like any resident. He insists that it’s his own home. The difference is clearly the size. It’s like the difference between renting a sailboat and a yacht. If you rent Vik’s beach house, you are in essence renting a yacht of a home, including amenities like a chef, wait staff, etc. The scale was difficult to accept at first, because it’s a break from the context of the town. People don’t normally build so large and we wouldn’t exactly like to make a trend of it. .

Do you live full-time in Jose Ignacio?

We have a home here, as well as in La Barra and in Punta del Este. We live here in-season. However, it didn’t make sense to permanently be here because my daughters attend school in Punta del Este. The 40k commute was just too much for them during the school year. They would return home very tired from school, their activities, and then the long drive. But even though we live part of the year in Punta, when you ask my girls where they are from they say, “Jose Ignacio.”