Miami Beach

Successful private business owner in Cuba opens a new restaurant in Miami Beach

Bartender Isaías Rodríguez prepares drinks for Viviana Otero and Suzett Viego at La Fontana Miami.
Bartender Isaías Rodríguez prepares drinks for Viviana Otero and Suzett Viego at La Fontana Miami. EL Nuevo Herald

The recently opened La Fontana Miami restaurant is trying to emulate the success obtained by another restaurant with the same name which opened in 1995 in Havana, Cuba.

In the middle of an acute economic crisis, Horacio Yaikime Reyes-Lovio and Ernesto Blanco decided to fix up the patio in their grandmother’s house and embark in the lucrative but dangerous enterprise of launching a private business in Cuba.

After nearly two decades of working to make La Fontana one of the most successful restaurants on the island, Reyes-Lovio decided to liquidate his part in the business and move to Miami to continue to work on his project “without obstacles and without limits.”

Reyes-Lovio talked about the different setbacks continuing to pose obstacles for cuentapropismo, or private business ownership, in Cuba.

La Fontana Miami, at 928 71st St. in Miami Beach, an area known as “Little Buenos Aires,” opened a few weeks ago. Area locals didn’t notice the new Cuban restaurant in the area until Friday, Nov. 21, when a Jazz band inaugurated the place. The following Saturday, Picadillo, a Cuban-American music group performed a concert at the new restaurant. Reyes-Lovio said La Fontana in Havana pioneered the “dinner-concert” formula and popular musicians in the island habitually performed at the restaurant.

The restaurant doesn’t have a specific advertisement or sign that distinguishes it from nearby restaurants and is very modest in comparison to the opulent location of its counterpart in the Cuban capital, in the Miramar neighborhood.

“I thought I would find a luxurious spot, something similar to the restaurant that was so successful in Cuba, but it’s a normal place, a small space in a street that’s not close to the hustle and bustle,” said Ted Henken, a professor at Baruch College, who went to the restaurant’s inauguration in Miami Beach.

“It’s obvious that he’s trying to start from zero like any other business,” said Henken, who along with professor Archibald Ritter has recently published the book “Entrepreneurial Cuba: The Changing Policy Landscape,” a study about private business initiatives in Cuba which compares the policies developed during the governments of Fidel and Raul Castro.

The original La Fontana opened with a capital of $1,500 and the experience acquired by Reyes-Lovio as an accountant of a famous state-run restaurant for tourists, El Tocororo.

Even now, El Tocororo appears in international tourism guides, holds a certificate of excellence from TripAdvisor and has been frequented by politicians and celebrities, among them singers Beyoncé and Jay-Z, who dined there while on a controversial trip to Cuba to celebrate their wedding anniversary.

The restaurant has a bar named El Edén and offers plates unusual in Cuba such as “shrimp ravioli in white sauce” and “cobo in ginger, garlic and pepperoni.”

El Tocororo is powered by tourism and it’s easy to deduce that its economic success allowed Reyes-Lovio to open La Fontana Miami.

But Reyes-Lovio emphasizes that he’s not the owner of the restaurant and that he’s only providing the concept and the name of La Fontana. He’s secured the name of the restaurant by creating several companies with similar names, a practice known as “fictitious names.” In state of Florida registries, most of these companies appear as being associated to his own company, Yaikime Enterprises, or are listed under his name.

The policy of President Barack Obama’s administration of granting more tourism visas and multiple reentries of up to five years in duration has increased the flux of Cubans on both ends but there are still limitations for private business owners in Cuba who want to set up shop in the U.S.

Coded sanctions in the Regulations for the Control of Active Cubans, dating back to 1963, prohibit the majority of transactions involving Cuban citizens. Under current laws, La Fontana Miami can’t be a branch of the original in Havana and Reyes-Lovio says it isn’t. However, he doesn’t discard the possibility that in the future he’d like to work with his former partner Blanco in the creation of a project of that nature.

The sanctions of the Department of Treasury against Cuba, administered by the Office of Foreign Assets Control establish exceptions for people born in Cuba but who have obtained permanent residency in the United States, have been naturalized or are in the country legally, or are in a state different to that of a “visitor,” such as having a pending application to settle their migratory status. Cubans with tourism visas, according to the regulations established by OFAX, can’t set up their own companies in the United States.

Cuentapropismo in Cuba

In an investigation about restaurants in Cuba, Henken and Ritter documented the limitations imposed on businesses in the island and detailed how restaurant owners are forced to adopt “survival strategies” which are more often than not, illegal.

Since 1993, the restrictions which have weighed most heavily on restaurants have included controls over which foods they can offer — beef and lobster were prohibited, as well as the number of tables and chairs allowed and the number of employees permitted, only to name a few.

Reyes-Lovio said that during the time in which the restaurants were most watched, he and his partner decided to close the restaurant and wait for the “wave to pass.”

“We used that time to restructure. We had rooms closed for four, five and even six months in the process of reparations.” he said.

In 1994, just a year after their legalization, the police intervened in more than 100 restaurants and jailed their owners for what they calledillicit enrichment.”

“No one is untouchable in Cuba,” said Henken, who interviewed more than 15 owners of small restaurants for his book, which highlights the cases of private restaurants that despite their great success or perhaps because of it ended up being shut down by the government, their owners incarcerated.

“The most successful eateries are the ones that have to develop the most strategies to survive, because those are the ones which are most watched or their products run out quicker and they have to search for other providers,” Henken said. “If they are published in a big publication or internationally and they obtain too much publicity in the eyes of the government then that’s bad news for them.”

Seen with distrust

Although they’re supposedly legal, private businesses were stigmatized for a long time and were seen with distrust if they developed an economy that went beyond mere survival, Henken and Ritter state in their analysis.

“There’s been a significant spike in the number of licenses expedited for cuentapropismo, but the majority of legal occupations are meant for survival, not growth,” Henken said. “They’re not productive; they don’t employ a lot of people. Opportunities for professionals are scarce and there’s no access to credit or inputs.”

Jorge Azel, an investigator associated with the Institute of Cuban and Cuban American Studies at the University of Miami has evaluated the situation of privately owned businesses in Cuban in a similar fashion.

With Raul Castro’s reform, 178 occupations were originally permitted — among the most picturesque ones, “button sewer,” “palm cutter,” and “matchbox filler” — “all of them within the domestic sector and none that contributed to economic development,” because of his limited relation with exports, says Azel.

“In this way, small profits can be created and some people helped without really involving them in economic development,” he said.

According to official statistics published in July, the number of people labeled as employed in “activities on their own” was above 471,000, but a similar number have turned in their licenses once they realized they couldn’t make enough money to cover their business expenses and the varying taxes they had to pay.

On the other hand, the majority of the new cuentapropistas or private business owners came from the informal market and not the state sector how the government had planned, to try to minimize the work force employed by the state.

“True and meaningful change won’t take place in Cuba until private property is protected,” Henken. “Profits need to be allowed to grace the hands of private business owners and for that to happen a step that is both technical and political must be taken.”

Until that time comes, Reyes-Lovio wants to establish his business in Miami, “with more tranquility” and “freedom”.

Henken warns, however, that “having success within the legal realm in Cuba is one thing, obtaining it in Miami is a whole other ball game.”

Follow Nora Gámez Torres on Twitter @ngameztorres.