Puerto Rico Tourism Optimistic in 2017

SAN JUAN – Citing a 96% reduction in the number of new Zika cases since the peak in October, the Puerto Rico Tourism Co. (PRTC) is optimistic heading into 2017. The PRTC launched an educational outreach program in February to dissipate “the fears and communicate the real facts” about Zika, its newest press release reads. Collaborating with the Puerto Rico Hotel & Tourism Association (PRHTA) as well as Meet Puerto Rico, the PRTC presented it “Facts not Fear,” campaign. “Communicating the reality that Zika was not growing nearly as rapidly as the CDC had projected, the PRTC worked to change the Zika conversation, and emphasize the reality that reported cases are a fraction of what was projected. Cases are now at about 1 percent of Puerto Rico’s 3.5 million population versus forecasts that 25% of Puerto Ricans would eventually have the virus by the end of the year,” according to the Tourism Co.’s statement. “The dramatic decrease in the number of Zika cases in Puerto Rico is a testament to our integrated aggressive program to inform and disseminate the facts and allay the fears. The PRTC worked incredibly hard with the industry and health officials to communicate accurate and precise messages about Zika to the public,” Ingrid Rivera Rocafort, executive director of the PRTC, says in the published statement. “Ultimately, our team has been successful in not only educating our residents but protecting our visitors and our critical tourism industry.” Tourism annually contributes nearly $4 billion to Puerto Rico’s economy and was the first industry to come out of the island’s five-year recession, the public corporation explains in its release. “Since the start of Zika, total hotel registrations from Jan.-Sept. in 2016 are 1.6% above 2015 and 10 million passengers are expected to be welcomed by Puerto Rico airports by the end of 2016,” it reads.

Broadway star Chita Rivera, TV host Maía Celeste, baseball stars Carlos Correa and Iván Rodríguez, and Olympic gold medalist Mónica Puig also helped spread the word about how travelers can experience Puerto Rico worry-free. Medical influencers as well delivered the PRTC’s message. These included the late epidemiologist Dr. D.A. Henderson, scholar at the UPMC Center for Health Security in Baltimore, Maryland; Dr. Jason James, chief of obstetrics and gynecology at Baptist Hospital in Miami; and Dr. Joseph Rosado, a primary care and emergency care physician in Orange City, FL. In addition, the World Health Organization declared in November that the Zika virus was no longer considered an international public health emergency, the PRTC adds in its release. “Our collaborative efforts to date in 2016 have been effective in allaying fears, controlling Zika and the data backs it up,” notes Clarisa Jimenez, president and CEO of the PRHTA, assures in the written statement. “It is imperative that we keep our foot on the gas pedal and aggressively continue Tourism Co.:

A Fiscal Plan Towards Economic Recovery

Old San Juan

 

On October 14, the Commonwealth of Puerto Rico submitted its Fiscal plan. Here is my summary: 

Only with a change in federal policy and a change in the trajectory of the island’s economy toward real growth, will there be money for  debt service – while not jeopardizing the Commonwealth’s ability to provide essential services. 

 

  • U..S. citizens living in Puerto Rico must receive the same level of healthcare funding as citizens living in the 50 statesThe Commonwealth Can Achieve Efficiency Gains by Consolidating Overlapping Agencies and by Further Centralizing Procurement to Capture Cost Savings
  • Complete large-scale strategic projects to improve accesses and competitiveness including the Northwest Corridor (PR-22 highway from Hatillo to Aguadilla), the redevelopment of Roosevelts Roads, and the Caguas Commuter Rail
  • Position Puerto Rico as one of the premiere travel destinations of the world for local, domestic and foreign travelers by supporting the financing of 9 hotel construction projects currently on hold
  • Attract economic development, private investment, and tourism by expanding the Port of the Americas value added zone, improving the Aguadilla airport, and expanding the Panamericano docks to attract Quantum-like mega cruise ships.

 

 

Click here to see the Commonwealth of Puerto Rico Fiscal Plan : https://issuu.com/adamgreenfader/docs/fiscal_plan_v_final

Follow the Money: Paulson Compares Puerto Rico Today to Miami in the 1980s

Hedge fund billionaire John Paulson has been buying a lot of sand lately — specifically, Puerto Rican sand. Despite Puerto Rico’s massive debt crisis, Paulson sees big profits ahead. He has plowed “quite a bit” — an estimated $1.5 billion — of his personal wealth into buying hotels, a resort and office buildings on the island. Paulson compares Puerto Rico today to Miami in the 1980s.”It’s similar to that period in Miami’s history,” Paulson said Thursday at the Puerto Rico Investment Summit. “There was a lot of real estate on the beach, lots of abandoned buildings and vacant lots. That was definitely the best time to buy [in Miami].”

Below are some selected articles: 

http://caribbeanbusiness.com/paulson-buys-harbour-lakes-in-palmas-del-mar/

Paulson & Co. Inc., a New York-based investment firm, has acquired Harbour Lakes in the Palmas del Mar resort community located in the municipality of Humacao, Puerto Rico, the firm announced Thursday. The acquisition consists of 149 condominium units offered for sale, from 1,637 square feet (sq. ft.) to 2,045 sq. ft., 3 bedrooms, 2.5 bathrooms.

http://money.cnn.com/2016/02/12/investing/puerto-rico-john-paulson/

Despite Puerto Rico’s massive debt crisis, Paulson sees big profits ahead. He has plowed “quite a bit” — an estimated $1.5 billion — of his personal wealth into buying hotels, a resort and office buildings on the island. Paulson compares Puerto Rico today to Miami in the 1980s. “It’s similar to that period in Miami’s history,” Paulson said Thursday at the Puerto Rico Investment Summit. “There was a lot of real estate on the beach, lots of abandoned buildings and vacant lots. That was definitely the best time to buy [in Miami].” 

The hedge-fund manager said he’s still considering moving to the Caribbean island from New York after flirting with the idea in 2013. Beautiful weather, real-estate opportunities and tax breaks have resulted in Paulson buying luxury hotels and a 326,000 square-foot (30,286 square-meter) office building in San Juan’s financial district, he said during the 2016 Puerto Rico Investment Summit in San Juan on Thursday. He plans to expand his St. Regis Bahia Beach Resort and develop new condominiums in the Condado neighborhood of San Juan. He already owns a home and an apartment on the island.

http://www.bloomberg.com/news/articles/2016-02-11/john-paulson-says-he-s-still-considering-move-to-puerto-rico-ikiv6c1w

“I came here because I think they’ve hit bottom,” said Tennenbaum, 80, who manages assets of over $6 billion and moved to the island two months ago on Paulson’s urging. “In a democracy, it takes a crisis for change to take place.”Tennenbaum plans to form a corporation under Puerto Rico’s Act 20, which gives businesses that move to the island a 4 percent corporate tax rate and exemptions on dividends and property taxes. He also plans to create a merchant bank. On Thursday, the island received a lift from one of its biggest cheerleaders, John A. Paulson, the billionaire hedge fund manager, who is investing $20 million for the San Juan Beach Hotel.

http://www.nytimes.com/2014/09/07/realestate/puerto-rico-luring-buyers-with-tax-breaks.html

And it is true that Puerto Rico is a bargain. At the St. Regis Bahia Beach, for example, arguably some of the most expensive real estate in Puerto Rico, condos with oceanfront views are priced at around $600 a square foot; in Miami, a similar unit would cost around $2,000 a square foot.Over the last 10 months, the St. Regis Bahia Beach sold nine condos, priced at $800,000 to $1.6 million, all to American buyers, according to Paulson & Company. The resort is also constructing six oceanfront villas, priced at $10 million to $12 million; two have already sold.

http://www.nytimes.com/2015/07/24/business/dealbook/john-paulsons-hedge-fund-to-buy-another-puerto-rico-hotel.html?_r=0

Paulson & Company, Mr. Paulson’s $20 billion hedge fund, has agreed to renovate the San Juan Beach Hotel and turn it into an “ultraluxury boutique hotel” over the next few months, the Puerto Rico Department of Commerce and Economic Development said. Mr. Paulson has been buying real estate on the island for years. He is building a home there and has acquired some of the island’s most exclusive hotels, including the Condado Vanderbilt Hotel, La Concha Renaissance Hotel and Tower, and the St. Regis Bahia Beach Resort.

http://www.wsj.com/articles/some-investors-bet-on-puerto-rico-hotels-1438092464

Some Investors Bet on Puerto Rico Hotels. Fund manager John Paulson boosts his stakes; Blackstone cuts back. Puerto Rico’s worsening debt crisis only seems to whet the appetite of a small but devoted group of distressed investors.

http://www.bloomberg.com/news/articles/2014-06-26/paulson-s-puerto-rico-paradise-lures-rich-fleeing-taxes

Paulson is betting that millionaires will come in droves. In his presentation, in which he forecast that Puerto Rico would become “the Singapore of the Caribbean,” he said he plans to develop residential and office properties to go beyond the current high-end offerings. Since the first homes were built in 2007 by BBP Partners (BBP) – a joint venture between two of Puerto Rico’s leading real estate developers, Interlink Group and Muñoz Holdings – more than $125 million worth of residences have been sold at the resort and the $150 million St. Regis Bahia Beach Resort opened in 2010. Paulson is acquiring a majority interest in Bahia Beach through a comprehensive recapitalization. The firm has roughly $18 billion under management and has offices in New York, London and Hong Kong.

http://www.reuters.com/article/usa-puertorico-paulson-idUSL2N0QL20Q20140815

U.S. hedge fund Paulson & Co is upping its bet in Puerto Rico real estate with the purchase of an office building in San Juan’s financial district from American International Group Inc .The 326,000 square-foot building is the latest real estate purchase for the $23 billion hedge fund on the Caribbean island where Paulson & Co is betting on an economic turnaround. He owns 8.6% of Banco Popular, the island’s largest bank.

From Vision to Reality: The Evolution of Moncayo and Puerto Rico’s Next Great Luxury Destination

From Vision to Reality: The Evolution of Moncayo and Puerto Rico's Next Great Luxury Destination

 

Some of the most extraordinary resort communities are measured not in years—but in decades.

 

Large-scale luxury developments require vision, patience, significant capital, and the ability to evolve as markets, ownership, and consumer preferences change. Few projects illustrate this better than the transformation of the former Four Seasons Resort at Cayo Largo into what is now Moncayo Golf & Ocean Club—one of the most significant luxury hospitality and residential developments currently underway in Puerto Rico.

For AG&T, the project represents far more than a single transaction.

It reflects nearly two decades of working alongside world-class developers, investors, hospitality brands, and international capital to help position Puerto Rico among the Caribbean’s leading luxury destinations.

An Early Vision for Luxury Hospitality

Long before Puerto Rico’s current hospitality renaissance, the Cayo Largo site was envisioned as one of the island’s premier luxury resort communities.

Located along Puerto Rico’s spectacular eastern coastline, the project was designed to capitalize on one of the Caribbean’s most extraordinary natural settings while introducing a new level of luxury hospitality to the island.

At the time, financing a project of this scale required innovative thinking.

More than $100 million was successfully raised through the EB-5 Immigrant Investor Program, attracting international investors—primarily from China and Brazil—and demonstrating that Puerto Rico could compete for global sources of development capital.

The project also highlighted Puerto Rico’s unique competitive advantages as a U.S. jurisdiction, combining the security of the American legal and financial system with attractive economic development incentives and a world-class tourism destination.

The Evolution of a Landmark Project

As often happens with large master-planned communities, the project continued to evolve.

Markets changed. Capital markets shifted. New investors entered. The vision expanded.

Today, the property has entered an exciting new chapter as Moncayo Golf & Ocean Club, a transformative luxury community that has attracted one of the world’s most respected developers of private residential clubs—Discovery Land Company—along with a distinguished group of investment partners. The community will be anchored by Auberge Resorts Collection, marking the luxury hospitality brand’s first resort in Puerto Rico and further elevating the island’s position within the global luxury travel market.

Spanning more than 1,100 acres, Moncayo will feature an Auberge luxury resort, championship golf, private club amenities, wellness facilities, luxury residences, and extensive open space designed to celebrate Puerto Rico’s remarkable coastline and natural beauty.

While the total investment has not been publicly disclosed, the scale of the development places it among the largest and most significant luxury hospitality investments currently underway in Puerto Rico. Once completed, Moncayo is expected to establish a new benchmark for luxury residential and resort living in the Caribbean.

A Vote of Confidence in Puerto Rico

Perhaps the most important aspect of Moncayo is what it represents.

The decision by globally respected organizations such as Discovery Land Company and Auberge Resorts Collection to invest in Puerto Rico sends a powerful signal to the international investment community.

It reflects confidence in:

  • Puerto Rico’s growing luxury tourism market.

  • The island’s improving infrastructure.

  • Strong air connectivity to the mainland United States.

  • Increasing demand for branded residences and private club communities.

  • The long-term attractiveness of Puerto Rico as a destination for both investment and lifestyle.

For the broader hospitality industry, Moncayo demonstrates that Puerto Rico is increasingly competing alongside the Caribbean’s premier luxury destinations.

Lessons in Long-Term Development

Large resort communities rarely follow a straight path. They evolve through multiple ownership groups, changing market cycles, innovative financing structures, and new strategic partnerships.

The transformation from the original Four Seasons vision to today’s Moncayo Golf & Ocean Club illustrates the importance of patience, flexibility, and long-term commitment when developing world-class destinations.

It also reinforces an important lesson for investors.

Great projects are not defined by a single financing structure or ownership group.

They are defined by exceptional locations, thoughtful master planning, and the ability to attract world-class partners over time.

AG&T’s Perspective

Nearly two decades later, it is gratifying to see the original vision continue to evolve.

The emergence of Moncayo Golf & Ocean Club represents far more than a new luxury resort.

It represents the continued maturation of Puerto Rico’s hospitality industry and one of the strongest votes of confidence yet in the island’s long-term future.

As Puerto Rico enters a new era of luxury hospitality and branded residential development, Moncayo stands as a reminder that visionary projects, supported by patient capital and exceptional partners, have the power to redefine an entire destination.

Puerto Rico offers the most robust development tax incentives in all Caribbean

Puerto Rico’s tax incentives package offers hotel developers a competitive advantage over other destinations. The “Tourism Development Act of Puerto Rico” – Act No. 74 of 2010 depicts the parameters of such benefits. The benefits under this law will remain valid for a period of 10 years from the starting date of the eligible tourism-related project, and the business operation will be entitled to a 10 year extension.

“Tourism Development Act of Puerto Rico” – Act No. 74 of 2010 facilitates the establishment of tourism projects on the island. Following are details of requirements, eligibility and benefits under this Act.

To request benefits under this act, the business must engage in tourism-related activities using:

New facilities Existing facilities that have not been in use for three or more years Existing facilities where substantial renovations or expansion will take place The following business activities qualify as tourism-related activities:

Ownership or administration of:

Hotels, condo-hotels, timeshares/vacation clubs, hostels, guesthouses, excluding the operation of casinos
Theme parks, golf courses, marinas for tourism purposes, port facilities in areas that promote tourism activities Natural Resources as a source of entertainment value

Other entertainment or recreational tourism-related facilities
A business operation dedicated to renting or leasing to an exempt business dedicated to tourism-related activitiesBenefits under this law will remain valid for a period of 10 years from the starting date of the eligible tourism-related project, and the business operation will be entitled to a 10-year extension:

Tax credit of 10% of the total project cost, or 50% of cash from investors

(whichever is lowest)
100% exemption on municipal construction excise tax
100% exemption on taxes on imported goods and sales tax
100% exemption on municipal licenses
90% exemption on income tax
90% exemption on property tax

Attracting capital investment for ambitious tourism projects, particularly in highly competitive markets, requires appropriate economic incentives. This Act, known as the “Tourism Incentives for the Economic Development of Municipalities Act” – Act No. 118 of 2010 shall be a key tool in the economic development of tourism in Puerto Rico, with an emphasis on developing tourism projects in the municipalities that are most in need and in places that offer new opportunities to develop economic activity. The Act intends to facilitate the development of world-class resorts in strategic locations.

The main criteria for eligibility under this act include:

Being a world-class hotel with at least a 4-star rating
Planning for diverse commercial and recreational establishments
Other tourist attractions and facilities typical of 4-star hotels, including casinos
The project must be developed exclusively with private capital
This act will grant a rebate on net income tax payment rates from tourist facilities gambling operations according to the following scale:

Investment of $500 MM – fixed tax rate of 25%
Investment of $750 MM – fixed tax rate of 15%
Investment of $1.0 B – fixed tax rate of 10%
Investment of $1.25 B – fixed tax rate of 8%
Contact us to learn all about hospitality and hotel development incentives.

 

Urban Land Institute SE Florida and Builders’ Association of Puerto Rico Join Forces

June 2016 – The Urban Land Institute (ULI) and the Builders’ Association of Puerto Rico (ACPR) met to discuss their new alliance for the South East Florida and Caribbean Region during the annual ULI Conference in Aventura, Florida.

“We are very excited to have the ACPR become part of our group. “Members of The Builders’ Association of Puerto Rico (ACPR) have for years taken leadership roles in both local and national committees”, expressed Julie Medley, Executive Director of The Urban Land Institute – SE Florida/Caribbean.

The ACPR has been Puerto Rico’s preeminent real estate organization for developers, investors and builders since 1951. The president of the Builders’ Association of Puerto Rico, Arch. Ricardo Alvarez Díaz, sees great opportunities in Puerto Rico today and is enthusiastic about this new alliance.   “The ULI is such an important organization in our industry and we are very enthusiastic about its incredible vision and resources,” expressed Arch. Alvarez Díaz.

“We are very committed to helping our members on both sides of the “pond” learn and be able to seize these opportunities, and it was for these reasons that we created the Florida Liaison Committee,” expressed Adam Greenfader, chairperson of the committee.

The ULI will be holding its Latin America Conference on October 5-7, 2016 for those interested in development in Puerto Rico and the Caribbean-LATAM region as whole. It will host top leaders and decision makers from hundreds of its ULI members and non-members who are active in the land use and real estate industry in South America, Mexico, the Caribbean, and Puerto Rico.

Please contact Adam Greenfader managing partner at AG&T for more information at 305.363.8833.

Adam Greenfader Named Chairman Florida Puerto Rico Builders Association

Adam Greenfader Named Chairman Florida Puerto Rico Builders Association

San Juan, Puerto Rico

Adam Greenfader was recently named Chairman of the Florida Liaison Committee of the Puerto Rico Builders Association (PR Builders Association). For over sixty years, the PR Builders Association has been the island’s leading professional construction and development group. The PR Builders is responsible for government lobbying and networking. The Builders Association consists of high-level professionals in the residential, hospitality, industrial and commercial sectors.

“We are honored to have Adam Greenfader chair this new committee. Mr. Greenfader has been part of our organization for many years, is a tested professional in both markets and has a wealth of knowledge that will be a great asset,” exclaims Arch. Ricardo Álvarez-Díaz, president of the Builders of Puerto Rico.

The Mission of the Florida Liaison Committee is to be a bridge between Florida and Puerto Rico. The goal is to support  builders, bankers, investors and other professionals. The committee aims to facilitate access to services, information, and key contacts. “Our goal is that the PR Builders Association is seen as a first and most important stop for anyone that wants to expand to either market,” says Adam Greenfader.

In the last couple of years, with the passing of laws 20 and 22, Puerto Rico has seen a significant increase of interest from companies and individuals from the US mainland. There are also great opportunities for Puerto Rican companies that want to export their services and products, and use Florida as a first stepping-stone.

The Florida Liaison team is in the process of developing key stakeholders relationships and organizing its events for 2016 in both Florida and Puerto Rico. If either you or your company is interested in participating, you may contact Mr. Adam Greenfader at adamgreenfader@gmail.com or call the Builders Association at 787.751.1471. Learn more about the Puerto Rico Builders association here. 

 

 

San Juan, Puerto Rico

Por más de sesenta años, la Asociación de Constructores ha sido el principal grupo profesional de construcción y desarrollo. Esta organización ha sido responsable de promover el intercambio de información entre desarrolladores, inversionistas, miembros asociados y profesionales, en el desarrollo y la construcción de Puerto Rico. La Asociación de Constructores consiste en profesionales de alto nivel en el sector residencial, hotelero, industrial y comercial.

“Nos sentimos honrados de tener a Adam Greenfader dirigiendo este comité. El Sr. Greenfader ha sido parte de nuestra organización por muchos años, y es un profesional con gran conocimiento de ambos mercados”, indica el Arq. Ricardo Álvarez-Díaz, presidente de la Asociación de Constructores de Hogares.

La misión del Comité de Enlace de la Florida es la de ser un puente entre la Florida y Puerto Rico, apoyando y anudando lazos y relaciones entre constructores, banqueros, inversionistas y otros profesionales en ambos países. El objetivo del comité es facilitar el acceso a servicios, información y contactos claves. “Nuestra meta es que la Asociación de Constructores de Puerto Rico sea vista como el primer y más importante paso para la persona y/o empresa que desee expandir su negocio a cualquiera de estos mercados”, explica Adam Greenfader.

Durante los últimos años, Puerto Rico ha visto un aumento significativo en el interés de empresas e individuos del continente de los Estados Unidos con la implementación de las leyes 20 y 22. Existen además, grandes oportunidades para empresas puertorriqueñas que deseen exportar sus servicios y productos. Éstos ven a la Florida como un buen primer paso.

El equipo del Comité de Enlace de la Florida está en proceso de desarrollar relaciones profesionales y organizar sus eventos para el 2016 en Florida y Puerto Rico. De estar interesado en ser parte del comité, puede contactar al Sr. Greenfader por correo electrónico adamgreenfader@gmail.com o llamar a la Asociación de Constructores al 787.751.1471.

Trump Hotel and Golf Course Sold in Puerto Rico

Trump Hotel and Golf Course Sold in Puerto Rico

Reuters – Reporting by Hilary Russ; Editing by David Gregorio 

Trump International Golf Course in Puerto Rico was sold to OHorizons Global LLC for $2 million cash and the assumption of contracts, bankruptcy filings showed.

Officially called the Coco Beach Golf & Country Club S.E., the Rio Grande property is one of 17 Trump-branded golf resorts managed by The Trump Organization worldwide.

The former Gran Meliá Puerto Rico Hotel was also acquired by a trio of companies that will reopen in the fall as the Hyatt Regency Coco Beach Resort, government and company officials announced.

The hotel will operate as The Resort at Coco Beach, a Hyatt affiliated hotel, from July 2019 until the renovation is completed in the fall, when it will officially become the Hyatt Regency Coco Beach Resort, Hyatt officials said.

After the passage of Hurricane María in September 2017, Monarch Alternative Capital, a company that had interests in the peninsula already, saw the opportunity to acquire the former Gran Meliá Hotel with 486 rooms, 135 one-bedroom units, and an additional 14 acres of land. It did so in partnership with Royal Palm Companies and Aimbridge Hospitality.

The Hyatt Regency Coco Beach Resort is part of a $120 million transaction that was made possible through an agreement with the Puerto Rico Tourism Company, in which tax credits were granted in accordance with the benefits available under Act 74. The Tourism Co. said it had been working on this transaction together with the group of investors for several months.

The Hyatt Regency will be the first under that flag to operate in Puerto Rico, where Hyatt already has properties under the Hyatt Place and Hyatt House brands.

The 486-room hotel with 93 branded residencies will be managed by Aimbridge Hospitality and signifies Hyatt’s continued brand growth on the island of Puerto Rico and across the Caribbean region. The hotel will be the brand’s only full-service property in Puerto Rico.  

“The expansive redevelopment of this premiere beachfront property is a testament to the confidence among owners and developers in the destination of Puerto Rico and the Hyatt brand,” said Camilo Bolaños, vice president of development and real estate – Latin America and Caribbean, Hyatt.

“We are pleased to continue our strong brand growth in the region, proudly supporting Puerto Rico’s upward tourism sector, which we believe has an even brighter future ahead,” he said.

The hotel will be situated on a 1,000-acre peninsula within a private development known as Coco Beach on the northeast coast of Puerto Rico that includes 36 holes of championship golf.

The announcement was made during the 41st New York University (NYU) International Hospitality Industry Investment Conference, before a large group of developers, investors, and hotel brand executives.

Gov. Ricardo Rosselló said the developers contemplate a 10‑year master plan that will locate a total of six hotels on the Coco Beach peninsula. It has been projected that three of these six hotels will have opened by 2022.

“It is with great enthusiasm that we share this information in the most important forum of hotel investment. Transactions like these that are taking place today validate that our commitment to tourism is a wise one and that there is a positive environment for investment,” said Rosselló.

Once fully operational, the Hyatt Regency Coco Beach Resort will have five new restaurants and is estimated to create over 200 new jobs. The average rate is expected to be around $300 per night.

 

For information about other hotel and golf courses projects for sale in the Caribbean contact us at AG&T.