Navigating Past the Storms: Sint Maarten Resilience Amidst Hurricanes and the Covid-19 Crisis
The Hurricanes of 2017
In September of 2017, Sint Maarten was slammed with a category five (5) hurricane. The hurricanes caused billions of dollars’ worth of property damage and lost-lives. The Hurricane had a devastating impact on Sint Maarten’s economy. By 2018, tourism plummeted to -56% from the previous year. According to The United Nations (UN), the estimated damage was $10 Billion. It took more than two-years of rebuilding and recovery efforts for Sint Maarten’s economy to start-up again.
The COVID19 Pandemic
Just about the time, Sint Maarten was starting to recover from the hurricanes The COVID19 Pandemic brought an almost 100% shut down to Sint Maarten’s economy. According to the Caribbean Hotel and Tourism Association, an estimated 75% of hotels were forced to close in the wake of the crisis, leading to an immense loss of revenue. The economy contracted by an estimated -17.9% in 2020, with major impacts on fiscal revenues. There also was a significant increase in the cost of living due to the rise in prices for food, housing, energy, and healthcare. This abrupt halt in tourism activities left many businesses, including restaurants, tour operators, and local artisans, struggling to survive.
Unemployment and Migration:
With the closure of hotels and the cessation of cruise ship operations, the repercussions reverberated throughout the labor market. The lack of employment opportunities compelled thousands of individuals to leave the islands in search of alternative means to support themselves and their families.
Government Response and Support:
The Sint Maarten Government swiftly recognized the urgency of the situation and implemented various measures to mitigate the economic impact. Stimulus packages were rolled out to provide financial relief to affected individuals and businesses. These packages included wage subsidy programs, grants, and low-interest loans aimed at preventing further job losses and stimulating economic activity.
Road to Recovery:
Despite the immense challenges faced by Sint Maarten, today there are strong signs of resilience and recovery. According to the International Monetary Fund (IMF), Sint Maarten projects a strong tourism recovery in 2023 with an expectation of 5% growth. Economic activity is anticipated to recover to pre-hurricane/pandemic levels with a 1.4 Billion GDP in 2023 and per capita GDP of $32,000 USD.
The Princess Juliana International Airport (SXM) continues with its ongoing reconstruction and is expected to be complete by 2024. According to Tourism Analytics, total airport arrivals were 416,209 people or almost 65% of 2019 levels.
A new record for cruise ship daily arrivals was set for St Maarten on January 17, 2023 with 30,349 people. Projections for 2023 are for 1.1 MM passengers and back to stabilized levels of 1.5MM for 2024.
According to data by the Saint Martin Hospitality & Trade Association, as of December 2022, there are approximately 2,231 hotel and time share units on the island. Hotel occupancy has been steadily increasing with record occupancy of 71% in 2022 and ADR’s at peak or above peak levels.
There appears to be a positive shift post COVID19 in terms of the seasonality of Caribbean travel. The summer season, which is normally the low season, has seen a significant increase in occupancy in 2021 and 2022. This occupancy increase has been primarily from family travel seeking destinations more affordable and closer to home (US/Canada).
Length of Stay
The length of stay has increased post COVID19 as travelers continue to blend leisure with business – “bleisure”.
Sint Maarten’s resilience in the face of the 2017 hurricanes and the Covid-19 pandemic is a testament to its people and determination. Despite the devastating impact of these crises, the island has made significant strides in rebuilding its economy. With government support and stimulus packages, Sint Maarten has seen a strong rebound in tourism, reflected in increased hotel occupancy and the resumption of cruise ship activities. Projections for 2023 indicate a robust recovery, with anticipated growth in tourism, a recovering GDP, and positive trends in seasonality and length of stay. Sint Maarten’s ability to adapt and rebuild offers hope for a prosperous future and a testament to the resilience of the Caribbean region as a whole.
If you are interested in learning more about the Caribbean, join us at this years’ CHRIS conference in Coral Gables, Florida from May 22-25, 2023.
AG&T is a real estate development and consulting company founded in 1998 with headquarters in Miami, Florida. Our track record spans over 55 real estate development projects in Puerto Rico, Sint Maarten, Costa Rica, Panama, Mexico, Dominican Republic, and various other Caribbean islands. www.agandt.com
It was clear from the conference panelists, that after more than fifteen years of stagnate growth, Puerto Rico appears ready to build back better. Billions of dollars of FEMA and CDBG-DR funds are being allocated in what will be the largest government funding program in US history. While much of the Federal funds will be used to subsidize projects, the group was in agreement that there is a huge need for private investment and capital to bridge the financing gapMichael McDonald, Executive Vice President and Group Director at Firstbank, made the historic announcement that the bank is opening up its construction division. Several members from the newly formed team were present in the packed room including Carlos Navarro and Mei Li Tsai Rivera. “There is no better indicator of an economy that is ready to grow that when a bank reopens its construction division”, quoted Alfredo Martínez-Álvarez, Jr., Chairman of the Puerto Rico Builders Association.
Equally promising, Luis Alemañy President and CEO at the Economic Development Bank of Puerto Rico, was asked about the much awaited CDBG-DR funding. Mr. Alemañy explained that the Economic Development Bank of Puerto Rico has already started allocating over $225 Million dollars to small entrepreneurs. The group was especially receptive to the fact that the grants are being disbursed in $50,000 tranches and does not require repayment.
Since 2008, Puerto Rico has gone from twelve financial institutions to less than four. Eric Delgado Business Banking Relationship Manager at Acrecent Financial Corporation, sees a new role for niche lenders filling that gap in Puerto Rico. He specifically discussed how Acrecent can play a role in funding new construction projects. “We are able to get to funding much faster than traditional banks and also have the capacity for higher loan to coast ratios. Both Firstbank and Acrecent mentioned that capital is seeking anywhere from 25%-35% of project equity.
“As Puerto Rico gets ready to build thousands of much needed homes, critical infrastructure and other key projects, it will be up to both private and public institutions to step up and provide the much needed capital and leadership”, quoted Adam Greenfader of AG&T. All of the panelist were in agreement that the island in the next few years is ready for strong growth. They specifically mentioned that in addition to the more than 8 billion dollars of Federal Grants, Puerto Rico has one of the most robust tax incentives and credit programs in the world. The hospitality incentive with a 40% tax credit was specifically highlighted as a very strong component of any capital stack today.
” I think this down time gives the travel and tourism industry our George Bailey moment. “We have all seen that without travel it’s pretty ugly….there is a lot greater value to travel than most of us ever realized..travel lifts spirits, it connects people, it leads to progress, exclaimed Brad Dean.”[/vc_column_text][/vc_column][/vc_row]
Adam Greenfader, managing principal, AG&T, said hurricanes Maria and Irma destroyed or damaged a large share of Puerto Rico’s housing and commercial structures, spurred insurance insolvency and changed the market for coverage. Greenfader spoke with AM BestTV at the RMS Exceedance 2019 conference, held in Miami.
As the idea of developing micro units becomes more prevalent, we must rethink how to functionally furnish them within a limited amount of space. The size of a micro units is typically less than 350 square feet and just like any other unit, the kitchen and bathroom are permanently fixed. Due to the smaller size you can’t fit a standard, bed, couch, dining table set or even store your other belongs efficiently. So, if developers want to sell or lease micro units they must provide potential consumers with hassle free furniture and storage solutions.
Resource Furniture (https://www.resourcefurniture.com), a distribution company specializing in functional multipurpose furniture for small spaces, is committed to raising the bar when it comes to furniture functionality, quality and sustainability. Their furniture ranges from murphy style beds that transform into desk and seating area that can be used for everyday task.
Advances in technology are also assisting with the way we can furnish micro units. Powered by modular robotics, Ori (https://www.orisystems.com) is a modular system that includes a full or queen-sized bed, closet space, a desk and much more, developed by a start up from MIT’s Media Lab and designer Yves Behar. With the simple touch or voice command, this system seamlessly allows you to adapt the space in your unit for any activity. The Ori system can be installed in both existing and new buildings and can be assembled on site and can be plugged into a conventional electrical outlet.
Besides the attractiveness of space conservation, incorporating hassle free modular or transforming furniture will allow developers to charge consumers a higher premium for furnishing the unit. Both parties benefit and the consumer will be satisfied knowing that they can live comfortably and efficiently in a smaller unit…and might never have to “make the bed.”
As construction cost continue to increase, we must find more affordable solutions. One Solution may be modular construction. What is modular construction? Modular construction is a process in which a building is constructed off-site, under controlled plant conditions, using the same materials and designing to the same codes and standards as conventionally built facilities. It has been proved that building units offsite reduced the construction time in half.
Constructing units offsite allow for more quality control and more flexible when it comes to design. While the units are being prepared off-site, the building structure is also being simultaneously built. So once the units are complete, they can be transported and inserted directly into the structure. This also can be a solution to unexpected natural weather conditions which can extremely delay construction. Remember time is money. This faster a building is constructed, they faster you can satisfy your investors and lease up space.
According to the Modular Building Institute (http://www.modular.org/), building modular is Greener, Faster, and Smarter. Due to the factor-controlled process, waste is greatly reduced, and air quality is improved. Modular buildings can be disassembled, and the modules relocated or refurbished for new use, reducing the demand for raw materials and minimizing the amount of energy expended to create a building to meet the new need. Structurally, modular buildings are generally stronger because each module is engineered to independently withstand the rigors of transportation and craning onto foundations, which creates more resiliency than on-site building construction. Not only is modular construction budget friendly it is also environmental friendly.
Assuming that the standard opportunity cost is 10% annually, and using industry standards for loans, modular construction will cut the construction time in half and save around 15% of the total development cost.
For more information about modular construction in the Caribbean contact us at AG&T.
Hydroponic Parking Garages, what are those? If you are familiar with hydroponic farming, you would understand that it is a technique used to grow any plant without using soil…. but this time it is in a public parking garage.
With the possibility of a driverless future, places where we store our cars, such as parking garages, will soon cease to serve a purpose. Also, with more people moving into urban cores there is more of a demand for access to fresh produce for consumption. This is a great opportunity to turn existing parking garages into urban farms. Imagine garage to table – fresh produce within an urban environment. Does this mean we can improve the access to fresh food for economically and agricultural disadvantaged communities?
As we move into a more advanced future, we must rethink how we efficiently develop and use our resources. With limited developable space and agricultural zoning restrictions, hydroponic parking garages may be one very good solution. Instead of spending thousands of dollars demolishing existing parking garages, why not repurpose them and give them new life; literally. Since hydroponic technology eliminates the need for soil, urban cores can benefit from having fresh produce in close proximity, reducing cost and the amount of time it takes to reach consumers. Food can be the sold to restaurants or at a farmer’s market, given to a local soup kitchen or church, the possibilities are endless. Hydroponic parking garages could possibly increase values of surrounding developments and provide a new revenue stream for the owner.
Idea: Rather Than spend millions of dollars to totally reposition a parking garage, building hydroponic farms in the vacant garages will create a much more affordable and immediate source of revenues for the building owner. If one were to plant basil and lettuce and sell wholesale to local stores the farm will provide around a 90% yield annually on the $115k starting cost.
In a number of projects and proposals, architects and urban planners are working with water instead of against it
In 2003, Jacques Lacour and his brother, Ovide, built a fishing lodge on a sliver-shaped lake called Old River that was once part of the Mississippi, near Batchelor, Louisiana. Leveraging local knowledge and techniques that had been developed over decades, they hit on an architectural concept that is becoming in vogue as climate change drives flooding events around the world. They made their business, called Old River Landing, amphibious.
Instead of building Old River Landing on a foundation, the Lacour brothers built the whole structure on a base of polystyrene foam—8,100 cubic feet of it. That was enough to float the building in the event of a flood, leaving an extra tolerance for the action of waves from storms or boats. For added stability, sliding sleeves on each corner of the building encircle vertical poles, meaning Old River Landing can go up and down, but it settles back into place, impervious to the water currents and waves that might push it about.
“Old River tends to rise and fall with the Mississippi, which makes the fishing great and terrible. It can change overnight,” says Lacour. “Being able to resume business immediately after a flood recedes was critical in our minds to being successful.”
Batchelor is an agricultural community, specializing in sugar cane. But Old River hosts anglers, who come up from Baton Rouge or Lafayette and stay in private or public lodges called camps. Starting in the late 1970s, some homeowners started making their camps amphibious. Now, when the lake rises, so do the camps.
Architecture firms in the Netherlands and elsewhere are offering upscale versions of these amphibious houses, or even homes that float outright. In the famously vulnerable Lower Ninth Ward of New Orleans, Brad Pitt’s Make It Right Foundation contracted the American firm Morphosis Architects to build an amphibious home called the FLOAT house. And the Buoyant Foundation Project, a nonprofit founded by Elizabeth English, an associate professor at the Waterloo University School of Architecture in Ontario, uses modern engineering techniques to retrofit houses in flood-prone areas.
“We need to acknowledge that the water is eventually going to do what the water wants to do, and shift our approach, as human populations living on the Earth, from one of trying to dominate nature to one that acknowledges the power of nature and works in synchrony with that,” says English. “We’ve already set ourselves down this path of dams and levees and water control systems, and it’s really hard to turn back. But we don’t need to keep replicating that. We don’t need to make the situation worse. It’s time to step back from the approach of control and fortification.”
When Hurricane Katrina flooded 80 percent of New Orleans, displacing a million people and causing more than $100 billion in damages, English was working at the Louisiana State University Hurricane Center on the aerodynamic behavior of windborne debris. The disaster, especially the failure of the levees, made her realize that flooding could do far worse damage than wind ever could. More recent hurricanes, too, have had their effects exacerbated by the design of the cities they have hit. While Hurricane Irma caused less-than-expected flooding in Florida, Hurricane Harvey was catastrophic due to the rainfall it dumped on Houston. City planners have attributed much of the flooding there to the prevalence of blacktop and concrete, which keeps water atop the landscape rather than letting it settle in.
To protect homes from flooding, FEMA encourages static elevation (raised houses) and won’t certify amphibious homes for the National Flood Insurance Program, meaning residents often have to climb stairs and deal with the visual impact of elevated houses. “The response of the Federal Emergency Management Agency was, in my opinion, entirely insensitive to the cultural context of New Orleans in particular, and South Louisiana in general,” says English. The permanent, static elevation was disruptive to the aesthetic feel of the historic neighborhoods there. A student told her about Old River Landing, and she began to discover amphibious homes in other parts of the world.
But there are more ways to work with water than mitigating flood impacts. Architects and urban planners are reevaluating all the ways cities interact with water, from transport to recreation to energy to drinking water, and their ideas have the potential to fundamentally alter cities the way the car did in the 20th century.
“Cities that today start to embrace water and take advantage of the skills of water, will be the cities that have a better performance economically and socially and politically in 20 to 30 years,” says Koen Olthuis, founder of Waterstudio, a Dutch firm that has found designing around water to be more than a niche market. “When situations change—and that’s happening now, the environment is changing, the climate is changing—cities have to react. You have to change the skills and the performance of the city to give a reaction to this situation, and the reaction should be not fighting it, it should be living with it.”
Olthuis calls this idea the Blue City, and sees a coming progression, from green cities (low impact) to smart cities (connected and responsive), to blue cities, which use water to be both of the previous. An ideal city, he says, would accomplish this by using water to achieve three types of goals—to reduce energy needs, to generate energy, and to store energy.
Waterstudio is working with Oddysea Development to showcase these strategies and more in a multipurpose entertainment resort on a one-square-kilometer man-made island in Bahrain. Called Arabian Oddysea, the project is scheduled to break ground in 2019 and be completed in 2023, according to chairperson Dara Young. The estimated $6 to 7 billion project will include shops, hotels and restaurants, as well as an aquatic sanctuary, a man-made mountain and an Arabian horse track. But along with—and integrated into—the entertainment, Arabian Oddysea will incorporate water in ways designed to improve energy efficiency.
“Integrating ways to sustain our needs by channeling energy allows us to lead by example. Bahrain was first to discover oil, so we’d like Bahrain to be the first in the region to introduce architectural hydropower,” says Young. “Over the next five years, the gulf countries are expected to need to generate 40 percent more electricity than they are now … and it’s important to stay ahead of the curve and come up with alternative solutions.”
To do that, Arabian Oddysea is incorporating several Waterstudio-designed elements that each use water in a different way. One is a sea wall, but it’s not designed like normal sea walls, which tend to be big chunks of concrete that waves smash up against and eventually demolish. Called Parthenon, the seawall is made of columns of turbines hanging underneath like the pillars of its namesake. As waves flow in and out, they drive the turbines, which generate enough energy for about 50 houses, but also reduce the action of the water so that behind the wall, the water remains calm.
Another feature is an array of floating solar panels that lie just beneath the surface of the ocean. In hot climates, exposed directly to sunlight, solar panels quickly exceed the optimal operating temperature. But when water is allowed to flow over them, they absorb sunlight at a balmy 80 degrees.There will be floating solar panels just offshore of the man-made island in Bahrain. (Waterstudio)
All that energy needs to be stored, somehow, and batteries are expensive. Arabian Oddysea plans to use it to pump water into tanks housed high in tall buildings called blue batteries, and then let it flow back down to run turbines once the sun is down. According to Young, 25 percent of off-peak energy needs will be housed in the blue batteries.
Another element of the Oddysea is a system of water-filled tubes running through walls and floors in buildings, squares and city streets. The water pumped through helps cool the city, reducing load on air conditioning.
Even the entertainment will incorporate water, says Young. The horse track will be suspended over water features. The water drained from the blue batteries will tumble down 200-foot “hydrokinetic waterfalls” that house the turbines.
Othuis’ vision doesn’t stop with the Bahrain project. He speaks of floating museums or stadiums that could be shared between cities across bodies of water, or even whole cities that move, or expand and contract, with the seasons, increasing density to maintain warmth and opening like a flower in the summer. A true blue city would incorporate these designs and more to treat water like a tool, rather than a threat.
“There are many things that won’t work, [and that] will maybe always be part of a futuristic scope or vision,” Othuis says. “But you see that some of these ideas in the end will be part of the next generation of cities.”
With the Bahrain project, Waterstudio has the benefit of working on a new development, where designs aren’t constrained by what’s there already. Much of our waterways, however, already share coastlines with buildings or other structures that would need to be adapted or discarded. That is what Baca Architects and H+N+S Landscape Architects, are doing on the Waal River in the Netherlands. A 1995 flood led to the development of that nation’s Room for the River program, which seeks to accommodate the changes to the rivers there, and the Waal River is a flagship project for the program.
At a bend in the river, near the German-Holland border, the town of Lent was at risk. A low-lying area just inside a higher peninsula, sort of a short cut for the river flow, was liable to flood. Over the last decade and a half, the city relocated around 50 dwellings and farmsteads, and H+N+S dug out a channel, turning the peninsula into a seasonal island. Now, the river would have space to flow, alleviating flooding not just in Lent, but downstream as well.
“This marks a fundamental shift in thinking, to date, in Holland, Germany, the UK, who have consistently built … with the presumption in terms of policy is we hold water out,” says Richard Coutts, director of Baca Architects.
The landscaping has been completed, and bridges to the new island of Veur-Lent have been built. Now, Baca Architects are working on designs for the space. It’ll include parks, a campground, and an equestrian center. New homes will be developed based on the flood risk of their location. Those on the water will float, able to rise and fall with the tide each day. Those vulnerable to the expected seasonal variation of up to 12 meters will be amphibious in a similar manner to Old River Landing. Higher still, houses will be built with a flood-resilient lower floor, to minimize damage in the case of larger floods.
If the Veur-Lent project goes well, it could serve as a model for other cities and riverways. But there are still regulatory hurdles to building in a style that’s unfamiliar. FEMA’s National Flood Insurance Program denies coverage to floating homes, while extending it to houses that are on the ground and likely to flood. Amphibious buildings, like Old River Landing, are ineligible at any price. Just like many of their neighbors, the Lacours built it anyway.
“It’s a way of life that we’re all accustomed to,” says Lacour. “Growing up on the river, there’s nothing like firsthand experience of seeing what water can do, and if you try to, you may find a solution for those situations. I think we’ve adapted to the changing conditions of our rivers.”