The hypothesis that the economic crises awoke the business spirit and the capacity for innovation are confirmed by the stories of many businesses in Colombia and around the world. Precisely in 1932, in the middle of the Great Depression, the Sociedad Tulio Ospina y Cía. of Medellín was created, which continued the family businesses that were led by Tulio Ospina Vásquez since 1918 (1857-1921). In the beginning, the business had diverse activities (construction, bricklaying, real estate, civil works, mining, agriculture, and livestock) which were run by Tulio Ospina Vásquez’s sons, Tulio, Mariano, and Francisco Ospina Pérez.
After the death of the founder, the corporation expanded. Tulio Ospina Pérez (Medellín, 1900-1983) joined the firm in 1923 after finishing his studies in engineering at the University of California. The next year, along with his brother Mariano, also an engineer, he opened the construction department of the company. The operations went well until 1932, the year in which the family-run corporation had to be restructured as a result of the crisis.
The founder, son of the ex-president Mariano Ospina Rodríguez, was perhaps the most important engineer in Antioquia. He stood out as a businessman, educator, and politician. His brother, Pedro Nel Ospina, also an engineer, was a businessman and president of the republic during the years 1922-1926. Three generations of this family made up one of the most influential dynasties in the political and business history of the country. Not only were they present in the creation and orientation of the conservative party for more than 100 years, but also in three presidential terms, which arose democratically.
As for economics, the Ospinas made up one of the biggest family fortunes in the country, accumulating wealth through mining, industrial, and farming activities. The Ospina Pérez brothers registered in the First Notary of Medellín, by Public Deed No. 105 on January 19, 1934, a type of subsidiary for Tulio Ospina y Cía to operate in Bogotá with the management of partners Mariano Ospina Pérez (1891-1976) and Lucio Zuleta Ferrer. From 1930, Mariano Ospina, who had become a spokesman for the rural coffee-growing country, took charge along with Juan Zuleta, founder of the newspaper El Colombiano, and his brother Lucio, an Antioquian conservative.
The Ospina family made their way into construction because, just like Bogotá, Medellín showed an extraordinary boom in its economy in the 1920s, which was reflected in its sustainable urban growth. The accumulated capital during the economic boom in the 1920s drove Colombian business sectors, which were not as affected by the economic crisis of 1930, to invest in new businesses or to develop already existing businesses.
The distant location of a seaport, lethargic urban development during the 19th century – as indicated by the widespread poverty in the city – and the lack of a key export in the high plateau that would connect Bogotá to the world market were all obstacles that Bogotá had to face in order to grow. But some advantages, such as being the biggest regional market in the country, headquarters for all diplomatic bodies, and therefore, an international city by excellence, main center of the government bodies and closeness to the hot and temperate zones of the country which provided Bogotá with low-cost food and minerals, were all favorable conditions to promote Bogotá’s advancement. Therefore, from the beginning of the 20th century, Bogotá was presented as a place of opportunities for all types of businesses.
The urban areas grew tremendously in Colombia in the 1920s (24% between 1925 and 1930), as did the demand for better wages; the network of railroads grew from 1,166 kilometers in 1914 to 2,434km in 1929. Bogotá grew towards the north, where San Diego and Chapinero developed, to the west creating Santa Isabel, and to the south, where La Cruces and San Cristóbal developed. The population rose from 144,000 in 1918 to 237,000 in 1930, during moments in which automobiles, radio, and airplanes were coming into force.
The rapid growth of the city and the celebration of the quarter century of the founding of Bogotá motivated president Olaya Herrera to elaborate a regulatory plan in the future development of Bogotá, a proposal taken by his successor, Alfonso López Pumarejo. As an effect, the Austrian urbanist Karl Brunner (1889-1960) was contracted, who apart from introducing innovations in urban and architectural concepts also formed a professional body in the Universidad Nacional that gave him a radical change in direction with regards to urbanism, architecture, and construction, not only in Bogotá but also throughout the whole country.
Brunner made a design that looked for an ordered amplification of the urban sprawl, an improvement in circulation through a network of wide roads and control of the use of land according to residential, commercial, industrial, and governmental destinations. The company Tulio Ospina y Cía. of Bogotá fully welcomed the proposals of Brunner’s plan, administered by the Bogotá Department of Urban Development, the official coordinator for the commemorative works of the quarter century. One of the most emblematic was the famous Avenida Bolívar.
With the founding of the Banco Central Hipotecario (1932), specialized in housing finances, there was a response to the unusual demographic growth and to the huge housing deficit in the country. As a result, the government encouraged mortgage lending and all industries related to construction (bricks, cement, steel, glass, wood, and ceramic) as a way to economic recovery. At the same time, architecture and construction firms were created or expanded.
Among the most active architecture firms in Bogotá were Herrera Carrizosa Hermanos, Alberto Manrique Martín, Guerra Galindo y Compañía, Michelsen y Villalobos, Ferreira Álvarez y Cía., Cuéllar Serrano Gómez, Rocha Santander y Cía., Casanovas y Manheim, and others. The organization of a mortgage lending credit system was a prerequisite for founding an urbanizing company. The BCH and the Caja de Crédito Agrario, created as a legislative initiative by Ospina Pérez, were institutional devices that complemented the development of the proposals from Misión Kemmerer (1923) that contributed to the creation of the Banco de la República. Both official banks not only offered resources to buy a house, but also supported the efforts of the religious entities and industrial entrepreneurships that focused on housing construction. Thus, with a regulatory plan that formulated rules of the game to organize the urban development, an evident housing deficit, availability in the rise of public service infrastructure (electricity, aqueducts, and transport), an advance in the construction materials industry, financial entities promoted by the government to attend to the real estate sector, and a overcoming of the great economic crisis, among other factors, conditions were created so that Tulio Ospina y Cía. would start in Bogotá from 1934, major projects surrounding the newly inaugurated Avenida Caracas, welcoming Brunner’s proposals.
New residential neighborhoods, such as Teusaquillo, El Nogal, El Retiro, La Magdalena, Quinta Camacho, Los Rosales, La Merced, Palermo, Santa Fe, Alfonso López, Marly, El Recuerdo, Bosque Calderón Tejada, among others, were born thanks to companies such as Urbanización Palermo S.A., Urbanización Bosque Calderón Tejada S.A. (1934), Urbanización El Recuerdo (1935) and Urbanización Santa Fe S.A. (1937), in which Tulio Ospina y Cía. were majority shareholders and in charge of the projects. All of the projects were carried out in a context of restoration and recovery of the country, thanks to the decisions of Olaya Herrera and López Pumarejo in the handling of the economic crisis and its effects.
From then on, Tulio Ospina & Cía. of Bogotá entered in an era of very active business negotiations, urbanizing on their own or through the participation in stocks and shares in other societies. The most notable was in the sector of La Soledad, where the Ospina family would establish their residence as well.
When Ospina Pérez assumed the presidency of the republic (1946-1950), Lucio Zuleta Ferrer positioned himself in the development management and the Board approved the guidelines according to which Ospinas & Cía. S.A. would limit themselves to fulfilling existing commitments, abstaining from taking new commitments during the presidential term.
After the happenings on April 9, 1948, President Ospina would name Fernando Mazuera, a tradesman and developer, as the mayor of Bogotá in order to carry out the reconstruction of the city. Along with the agreement to freeze the activities of Ospinas & Cía. S.A., it is possible that the uncertainty that unleashed the Bogotazo (1948), the chaotic government of Laureano Gómez and the dictatorship of Rojas Pinilla would demotivate the investments, given the high risks generated by the confusing political situation.
In spite of the great opportunities that the reconstruction of Bogotá created, Ospinas & Cía. S. A. did not participate in the development of projects in order to avoid, on one hand, the suspicion of the opposition and the public opinion, and on the other hand, to comply Ospina Pérez’s iron conscience that introduced the company policy of avoiding business with the state. Their activity is very evident in the history of Ospinas, clearly oriented towards private urbanization. Such orientation would reinforce its response to the great magnitude of economic and social changes that the country would experience starting in the 1950s, with the unstoppable modernization of its infrastructure.
The proposals of Le Corbusier, brought to Bogotá by the Ospina government while Mazuera was mayor, were complemented by the mission of the World Bank, led by the Canadian economist Lauchlin Currie (1949). The proposals of Le Corbusier were more urbanistic, an example being the extension of the main avenues (Avenida de las Américas, and the Autopista Norte), while those of Currie aimed more at advising the government on the country’s general economic planning. They contributed to the arguments for the construction of Bogotá in Distrito Especial (1954), anticipating its future macrocephaly and accelerated growth. Currie considered it useless to fight against the giants of huge Latin American cities due to greater demographic concentration, less costly and more efficient provision for infrastructure, something like the concept of economies of scale.
This rationality explains why the district and national governments carried out the provision for public services (energy, water pipelines, sewage, telephone, health, education, and urban movement) with such speed. Large dams around the cities were also in favor, an expression of what was suggested by the World Bank’s mission. From the Ospina Pérez government until today, the Colombian economic policy has focused on developing the country with a base in the industrial sector and urbanization, the latter being very integrated with the financial and social sectors because of its connections with employment and living solutions, issues in which Currie would continue to insist upon as manager of the Upac (1972) and of the four strategy plan of the Pastrana government (1970-1974).
Similar advancement of the company towards the north of the city was carried out between 1955 and 1972. In its time, it was the biggest private project carried out in the city.
The transformation of Bogotá from the middle of the 1950s is related to its bureaucratic structure and budget. Its government is the largest and best equipped with technical personnel and resources, at the time when planning is very controlled, with mixed and private support such as the CAR, the Bogotá Chamber of Commerce, the majority of the professional guilds that base their national headquarters in it (such as Fedelonjas), and the most important municipal enterprises of public services in the country. In this context, Ospinas & Cía. S.A. had its period of great brilliance, as would indicate the number and size of its projects. While from 1940 to 1955 only 14 projects were carried out, between 1956 and 1970 50 projects were undertaken
The large growth led the Ospinas board of directors in 1956 to conclude that their status as an anonymous corporation did not fit with its eminently family oriented character. Unanimously, the partners’ special meeting approved its transformation into a limited company and, in consequence, adjust the statutes. The new conception and organization of the business was as radical as that of 1940. However, the associates maintained the urban concepts that governed almost all of the projects generally inspired by Brunner and Le Corbusier, the strategy of looking for associates in every urbanization project in order to mitigate the risks and the necessity to strengthen the vertical integration with machine operators, asphalt and concrete factories, marketing firms, etc.
In effect, the handling of the land, through the association with businessmen and property owners that was integrated become like associates in each project contributing property to urbanize or divide into lots, this permits them to not only monitor their projects in the whole city, but also access to new land with associates interested in Ospinas assuming control and applying their experience. This formula, however, contributed to an inflation of projects, exceeding the capacity of the family corporation. The owners had to refinance the company in order to confront their expansion. In 1958 various associates joined, like Tequendama de Inversiones y Promociones Ltd., Corporación Financiera Colombiana de Desarrollo Industrial, Industrial Eléctrica Ergo Ltd., and other private investors.
The considerable participation of these new associates led to the Ospina family losing control of the company. From an almost family capital of $400,000 in 1945, the firm grew to more than $4 million in 1960 with the entrance of the new associates; a corporative aim that favored urbanization, construction was added, and from a general management (administrative and technical) was changed to a presidency, only with Lucio Zuleta’s control. From 1959 he would have the support of an architect as a technical manager, a new accounting system according to the new magnitude of the company and a unit in charge of the publicity campaign to promote its new activity as a construction company.
The growth and rapid transformations in corporate aims produced a tremendous identity crisis that was resolved with a redefinition of its functions. The president Lucio Zuleta asked in 1960 what was and what should Ospinas be: “Developer? Construction company? Simple sales of urbanized lots…?” In order to resolve the dilemma, he ordered a consultancy study with Mariano Ospina Hernández to determine the firm’s situation, of the living situation in Bogotá, and of the operations in 1960. Finally, he proposed to define the company as a “human team specialized in the benefit of complex services that is summarized in the word Urbanism,” it is to say that “since the direct and indirect preparation of engineering plans and of urban design until the elaboration of rules for land use, study of the real estate demand, creation of promotion systems, the planning and supervision of civil, sanitary, and electrical engineering projects, accounting and financial operation, etc.” In conclusion, urbanize and construct. The winds of internal adjustment were expressed in the proposal of Ospina Pérez to concrete another recapitalization and convert again the firm in an anonymous corporation.
From 1960, the competition grew because the other companies also expanded and because new urbanizing and construction companies emerged. The entrance of investors elevated the number of associates and projects to 24. The complexity reached led to innovations for efficient management. In 1967, for example, was the first private Colombian company that utilized a computer in administrative management, in hiring the services of the IBM team from the Universidad de los Andes, where the accounting was completed. The success achieved drove Ospinas in 1968 to organize his own Departamento Computarizado de Estadísiticas. The transfer of its offices this same year to the international building, its capacity as a construction company, the quality and quantity of its urbanizations, put the company on the forefront in the sector.
The 1970s also mark the dispute for urban land, which became more costly and scarce every day due to the confusion regarding the regulations presented, the limits in the coverage of public services, and the incessant growth of the demand for housing, offices, and shopping centers.
Densifying the city in height (growing up instead of out) gradually become standard, in massive or individual projects. Some examples were the tower of offices at the intersection of 26th street with Carrera 13 (1962) and the second period of Ciudad Montes (1968), which was a multifamily construction. Ospinas also proposed this idea for a project in a higher stratum, in the north of the city, in the land pertaining to Castillo Camacho, located in 72nd street along the east side of Carrera Séptima.
The scarcity and the high cost of urban land urged on the internal debate of the company about the characteristics of the various projects. In 1967, when they began to think about the construction of Bosque de El Retiro, the discussion was livened up by those who preferred fewer buildings and more green zones – as cement asphyxiated the city – and those who saw these zones as a waste of money and a bad business deal. The point of view of the environmentalists triumphed and in the future Ospinas would be concerned with adding more green spaces in urban development and housing plans. This debate arose in parallel with the debate to convert the firm or not convert the firm in an open anonymous corporation, as had been proposed Mariano Ospina in 1960. Nine years later, the actions of Ospinas were finally inscribed in the Bogotá Stock Exchange. It was the strategy to capitalize that came to be in the opportune moment to face the expansion that was coming to the sector with motivation of urban reform and the proposals of the presidential campaign between 1969 and 1970, that alluded strongly to the construction sector in order to invigorate the economy.
The other events in this period are connected with the economic crisis of 1982-1983, the traumatic step from a protectionist model to a free market (1989-1991), the participation of the large illegal capitals in construction, the failed politics of housing without initial quota during the Betancur government and its replacement by the subsidized Vivienda de Interés Social (VIS). It is highlighted that Colombia was one of the few Latin American countries where the construction sector reactivated its economy, even with the world recession in the 1980s, known as the lost decade.
All these issues are analyzed below.
Since 1972, Ospinas & Cía. S.A. left in the past its 200 hectare projects, like El Chicó. It had to reduce its projects to a maximum of 2 hectares and go on from the successful mortgage bonds of Upac, under which gigantic multifamily projects like El Castillo Camacho, among others, were developed. In order to attenuate the damage to the social life of Bogotá they produced regulatory gaps with the Ley de Reforma Urbana. The company responded with its politics of producing housing “with a human face,” emphasizing that it is “not only real estate, but a home.”
In 1989, they associated with Olímpica to carry out an important real estate project: a great shopping center in the old Hipódromo de Techo, named Plaza de las Amérias, inaugurated in 1991. Another megaproject was Salitre Plaza shopping center, executed in alliance with Cadenalco and Conconcreto and located in the new zone of development of the city called Ciudad Salitre. Likewise, in response to the proliferation of pirated neighborhoods and despite the degrading tendencies, evident in the social housing projects between the 1970s and 1990s, based on the illegality and the fierce pursuit of profitability, in the projects of Ospinas prevailed green areas and the quality construction of housing for all strata. An example of this was El Ferrol, in the south, or Bosque de Medina, in the north of Bogotá.
After its participation in urban renovation projects such as San Façón (1983) or Parque Central Bavaria (1988), various plots of land in Ciudad Salitre are acquired in 1992, with the aim of constructing the CEM that would complement the great Centro Internacional of Bogotá, conceived in 1962. The CEM is the headquarters of a convention center and office buildings that host some of the biggest companies in the country. The consortium Ospinas-Suramericana envisaged the construction of a commercial gallery and of basic services (bank offices, restaurants, cafeterias, copy centers, mail, and notaries) to attend to the necessities of the same companies, employees, and other people in the sector, with the goal of avoiding the omissions that in its moment had the conception of the Centro Administrativo Nacional (CAN) in 1955. The CEM became the first office complex with all of the complimentary services.
Similarly, Ospinas, Cadenalco, and Conconcreto joined to develop the Salitre Plaza shopping center in the geography center of the Ciudad Salitre, close to the Avenida El Dorado, as a backbone to the sector. Salitre Plaza permitted the firm to express all of its innovative capacity in the material architectural products in shopping centers of the country, like the covered parks with different environments to reduce the feeling of confinement; and the horizontal circulation and vertical (ascents and descents) between the different levels to make the circulation of the visitors more fluid and pleasant, among other things. The conception considered the model of the shopping center which encompasses social and cultural meeting areas as a new expression of urbanism and commercial and business architecture. It was inaugurated in 1996.
To the above achievements, was added in 1994, the opening of a new phase in its history, consisting in the internationalization of its activities in creating the master plan of the commercial city El Recreo in Quito (Ecuador). In addition to the partnerships with the aforementioned Antioquian companies in the development of Ciudad Salitre, in 1993. Shortly after, in 1996, Ospinas & Cía. S.A. acquired Inversiones Bogotá S.A., just before the construction sector and the Colombian economy entered into a phase of crisis.
The downward cycle of construction activity between 1995 and 1999 shows the licensed area in the country, with a reduction of 55%: it went from 16.5 million m2 to 7.4 million. Only in housing, which covers the largest segment in the sector, went from 12.3 to 5.5 million m2. The participation of the construction in the total urban employment dropped from 7.6 in 1994 to 5.8 in 1997. In Colombian Pesos in 2003, mortgage banking had losses of more than $1 billion in 1998, and almost $2.5 billion in 1999 and of $550 billion in 2000 (Superintendencia Bancaria). This crisis also affected Ospinas, who would take refuge in 2000 under the Ley 550 of corporate restructuring.
In order to ease the crisis, Congress approved the Ley de VIvienda which terminated the Upac and replaced it with the UVR. However, in the courts proliferated executive proceedings caused by the hundreds of construction companies that failed and more than 750,000 cases resulting from bank charges to debtors (El Tiempo, 4-03-2007). The surges and declines significantly impacted both professional and lower-qualified employment, mortgages, and the industries related with the production and commercialization of construction materials. In current Colombian Pesos, the Colombian mortgage portfolio grew dramatically until 1998, the year in which it reached its record (in millions of pesos).
The company successfully overcame the restructuring process and the creditor banks became a valuable support system that worked in coordination with the presidency until 2006 to take the company forward. From 2004, the firm developed housing projects like Balcones de San Diego, Santa María del Resrepo, Parques de Tibaná, Monteazul and the culmination of the Conjunto Residencial La Esperanza and El Portal de Pinar - social interest housing that developed together with the Urbansa S.A. construction company.
In addition to these achievements is the largest project in the country on marketable land, Centro Mayor shopping center, located in Villa Mayor, whose development and construction was funded by Luis Carlos Sarmiento Angulo, associate of the project; its design was managed by the Contexto Urbano S.A., that participated also as an associate of the project; other associates were Arquitectura y Concreto S.A., in charge of the construction; Ospinas & Cía. S.A. gave its experience, innovation, and success in shopping centers as an associate, leading the commercial management of the project. In addition, the projects in execution generated approximately 4,600 jobs, directly or indirectly.
In the new century, the recuperation sustained by the economy strengthened the construction sector and vice versa, converting it in one of the activities that brought the most growth to the GDP between 2004 and 2007. The last census of households registered unprecedented urban growth as compared to rural, which gave way to a growing demand of housing and infrastructure, allowing the foreshadowing of the continued strengthening of the company from 2004.