Florida’s resilience continues to be a growing practical and financial priority. Some 80 percent of Florida’s 22 million residents live within 10 miles (16.1 km) of the coast. The stakes from climate related catastrophes are high. Topping the list of costliest storms to hit Florida, in 2022 dollars, is Ian, at $84 billion, according to the U.S. National Oceanic and Atmospheric Administration. As existing buildings age and population growth across the state invites continued losses, new sustainable solutions are needed.
Babcock Ranch in Southwest Florida is a new town expected to have over 50,000 people at buildout. It’s known globally as being “the nation’s first solar-powered town” and showcases around 800 impressive acres of solar panels. The master-planned community is best known however for withstanding hours of sustained winds over 100 miles per hour (161 kph) when Hurricane Ian made landfall in September 2022. With homes and other buildings left mostly unscathed, residents were able to remain home after the storm, and the community welcomed storm refugees to its shelters.
Today many eyes are fixed on this sustainable new town including myself and Amanda Staerker, one of the project’s early contributors in the land design. Together, we toured Babcock Ranch and have shared with you some of the site visit insights.
The main contributors to this success of Babcock include new construction to Florida Green Build Certification standards, underground utilities, native landscaping, and a land plan that minimizes intrusion into the natural systems.
In a recent ULI article, Building for Resilience: How Newer Construction Homes Fared in Florida’s Hurricane Season, the CEO of Babcock Ranch, Syd Kitson, stated,
“Storm safety was absolutely at the top of our list…How could we convince people they could shelter in place? We knew if we did it right from the beginning, we could prove they could.”
Babcock has taught us that we can design for sustainable living by promoting walkability, alternative modes of transportation, and by embracing technologies that allow us to reduce energy. It has taught us that we need to work with nature and to re-introduce back into our built environments the ecology that provides a natural protection.
Together they discuss investment opportunities in Puerto Rico. In this interview, Adam and Robbie discuss why the island is ready for great growth. They also explain why the island’s economy may provide insulation from some of the global economic issues causing the recession. Below are some excerpts from the book. Coming soon and launching in September 2022.
In every crisis, there is an opportunity.
Today, we find ourselves recovering from a worldwide pandemic. Supply line challenges caused by COVID 19 has made the production, distribution, and storage of critical supplies a top national priority. Puerto Rico, with over 70 years of critical manufacturing experience, is in an ideal position to lead the fight against COVID 19 for the United States. In the midst of all these challenges, there are silver linings.
Today, Puerto Rico is about to receive the largest allocation of Federal relief funds in U.S. History.
In what is being called Operation Bootstrap 2.0., Puerto Rico will receive over 80 billion dollars. This includes money to construct homes, critical infrastructure, renewable energy, and other vital projects.
In addition to relief funds, Puerto Rico and the Internal Revenue Service have created a series of tax incentives. Their goal is to bring in new businesses and people to the island. Act 20/22 (now Act 60) had the unintended consequence of attracting a new breed of entrepreneurs – blockchain and crypto investors. Suddenly, Puerto Rico finds itself leading a technological revolution with thousands of people bringing new ideas, connections, and capital to the island.
The Symposium was kicked-off by Scott McLaren, President ULI SE Florida / Caribbean. Scott spoke about the longstanding relationship and collaboration between ULI and the Puerto Rico Builders Association. He highlighted the work on the ULI National Advisory Services Panel on social, economic, and physical resilience in Toa Baja, Puerto Rico. https://seflorida.uli.org/toa-baja-puerto-rico-panel/
Scott Maclaren finished his remarks by recognizing Vanessa de Mari, the new President of the Puerto Rico Builders Association and the first women president in the organization’s 70 year history. The Symposium was dedicated to this historic accomplishment. In attendance were some of Puerto Rico’s top government leaders. This included the Honorable Pedro Pierluisi, Governor of Puerto Rico, Manuel Laboy, COR3 Executive Director, Maretzie Diaz, Deputy Director PR Housing Department CDBG-DR, Natalia I. Zequeira, Commissioner of Financial Institutions, and in attendance, the Secretary of Housing of Puerto Rico, William Rodríguez Rodríguez. The keynote address by the Honorable Pedro Pierluisi, Governor of Puerto Rico’s highlighted the island’s economic accomplishments, the end of Puerto Rico’s population exodus, and the conclusion of the bankruptcy which was officially announced the day of the Symposium.
In the private sector, Ricardo Alvarez-Diaz, CEO, Alvarez-Diaz & Villalon discussed some of progress of the island’s rebuilding after the 2017 hurricanes Irma and Maria. The reconstruction of the island was a constant theme throughout the day with specific examples of over 900 started projects.
The first panel, “Why Puerto Rico: Stories of Success, was a testament to the resiliency of the development community. Moderated by Andrew Carlson, SVP Country Manager, of JLL the discussion highlighted the historic growth of the island’s hospitality sector with the construction and/or renovation of over 3,000 new room keys from El Conquistador, Grand Reserve (formerly known as Coco Beach), Sheraton, AC , and many others. The panel included Federico Sanchez, President & CEO, Interlink Group.
Dan Kodsi, CEO, Royal Palm Companies, Rafael E. Rojo, President & CEO, VRM Companies. Also in attendance was Brad Dean, CEO, Discover Puerto Rico who highlighted the island’s impressive tourism growth (ADR and occupancy rates) during the Covid 19 pandemic and new expansion of tourism throughout all U.S. feeder markets.
As Puerto Rico seeks to build back its tourism and other industries, the financial sector will invariably play a major role. One of the goals of the Puerto Rico Symposium was to facilitate the conversation of growth in both traditional banking as well as new Fintech, IFEs, and other debt/equity players. Natalia I. Zequeira, Commissioner of Financial Institutions, explained the ease of regulations and process for new financial institutions as Puerto Rico shares many of the same regulations of the U.S. states on the mainland. Ms. Zequeira also mentioned that International Financial Entities (IFE) can now participate in special opportunity projects.
Michael McDonnell, Executive Vice President, First Bank, that recently re-opened its construction division, was bullish on the island’s economic prospects and announced that the Puerto Rico will achieve positive economic growth (GDP) this year– something it has not done in over a decade. Banesco USA announced the U.S. Department of the Treasury, will invest more than $8.7 billion through ECIP in institutions across the country – Banesco USA is the only bank recipient located in Florida or Puerto Rico.
Over the last few years, we have all hear about the 80 billion dollars of relief aid that has been allocated to Puerto Rico and is coming. In the “Myth versus Reality panel: Federal Funding Opportunities on The Island,” moderator Ella Woger Nieves of Invest Puerto Rico helped lift-up the proverbial transparency veil. Manuel Laboy, the COR3 Executive Director spoke with detailed facts of the funding by agency with FEMA authorizing 5 billion for temporary work, 21 Billion for 9,000 permanent projects and 800 that are currently under construction today. He also discussed the next wave of over 900 projects that are currently under engineering and design. Much of this work will be channeled through CDBG-DR and the PR Housing Department. Maretzie Diaz, the Deputy Director PR Housing Department, explained the process for companies wanting to participate in the island’s rebuilding of housing and infrastructure. Mahdu Beriwal, Owner/founder of EIM provided first-hand knowledge of the rebuilding work in Puerto Rico.
Keynote Speaker Pamela Pautenade, Ex. Deputy Secretary of HUD, was also on hand to share her experiences about the collaboration with the Puerto Rico Builders Association during the 2017 hurricanes crisis. In a moving conversation with Ricardo Alvarez-Diaz, Mrs. Pautenade explained the dedication of the island’s public and private sectors and dispelled any rumors about misuse of relief funds.
Puerto Rico, like much of the Caribbean is in the process of bouncing back from the Covid 19 pandemic. Adam Greenfader, who chairs the ULI Caribbean Council had a high level sit down conversation with keynote Speaker Andrew Farkas, CEO Island Capital Group. The conversation was focused on social equity and specifically what role the financial sector has in supporting the region with a particular focus on sustainability, ESG, and helping economic migrants return back to their island homes.
In the last few years Puerto Rico has become known as blockchain capital of the world. While thousands of tech savvy individuals have moved to the island to take advantage of federal tax incentives they have inadvertently created a new economic driver for the Puerto Rico.
In our “Fintech & Financial Innovation panel in Puerto Rico, Moderator Nathan Whigham, Founder & President, EN Capital discussed the growth of this huge industry. Rodrick Miller, CEO, Invest Puerto Rico, explained what his group is doing to change the paradigm in Puerto Rico from selling tax incentives to focusing on the island’s quality of labor, education system, and proficiency in bio science and other innovations. Stephen Inglis, CEO, Importal explained his new portal to monetize tax credits and Yael Tamar, CEO & Co-founder, SolidBlock explained how her company is integrating real estate and blockchain.
After a marathon day of conversation it was amazing to see the room still full for our last panel “Growth Industries and Tax Incentives” moderated by Carla Campos and an all-star team including Jorge Ruiz Montilla, McConnel Valdez, Francisco Luis, of Kevane Grant Thornton and Rogelio “Roy” Carrasquillo, of the Carrasquillo Law Group. In this panel, specific programs like the Tourism Tax Incentive were explained in detail and there was robust conversation regarding how these incentives have created new jobs in manufacturing, life sciences, construction, and agro-science.
On behalf of all of us at the Puerto Rico Builders Association and The Urban Land Institute SE Florida/ Caribbean, thank you to all of the people and sponsors that made The Puerto Rico Symposium possible. We are all hopeful that together both the public and private sector can create long lasting sustainable economic growth.
For more information about investing in Puerto Rico visit our web site or contact us.
Adam Greenfader, Managing partner of AG&T (7 minute video) speaks on new opportunities in Puerto Rico. Learning this video about the the island’s history and how you can learn from the past to generate real value and long term economic growth. The video includes new information about tax incentives, the tourism tax incentive, Act 20/22, and other tax credits for real estate development. Contact us for more information and to learn about Why Puerto Rico Now
ULI partnered with Heitman, a global real estate investment management firm, to assess the potential impacts of climate change on the long-term viability of real estate assets. Derived from a series of interviews with leading institutional investors, investment managers, investment consultants and others, the report provides members with an inside look at how real estate investors are factoring climate risk into their investment decision-making and management processes.
ULI publishes this updated report amid a global pandemic and economic uncertainty. For many, it may feel as if the priority of addressing climate change is dissipating as we face the immediate challenge of COVID-19. Although it is still too early to draw conclusions about the long-term implications of COVID-19 for our cities and the real estate industry, such a wide-scale humanitarian crisis throws the connections between environmental, social, and governance (ESG) issues and our economies into sharper focus.
However, just as the coronavirus has exposed many weaknesses, it has also shown us that we have the ability to adapt and change our behaviors quickly and radically.
Globally, most major economic hubs are in coastal, river delta, or other high-risk areas. These locations present many advantages, relating to connectivity, trade, quality of life and placemaking. These cities house more than half the global population, with much higher percentages of residents in some regions. About 80 percent of U.S. residents live in cities, for example, 39 percent of the European Union population lives in metro areas with 1 million or more inhabitants.
In 2020 (as of October 7), there have been 16 weather/climate disaster events with losses exceeding $1 billion each to affect the United States. These events included 1 drought event, 11 severe storm events, 3 tropical cyclone events, and 1 wildfire event. Overall, these events resulted in the deaths of 188 people and had significant economic effects on the areas impacted. The 1980–2019 annual average is 6.6 events (CPI-adjusted); the annual average for the most recent 5 years (2015–2019) is 13.8 events (CPI-adjusted).
Many of the most economically powerful coastal cities face significant climate risk. However, these cities offer some of the most attractive investment environments, meaning that the risk is worth the return. “We have a dilemma that some of the most attractive markets are also markets that are affected more by weather-related risks,” noted one real estate investment manager. However, a few investors indicated that they are beginning to suspend acquisitions or take steps to reduce their real estate footprint in city markets where they harbor climate-risk concerns. The phases after a big disaster, according to one interviewee, were to see the market buoyed up by subsidies and insurance, followed by rebuilding and speculative demand. This short-term “sugar high” of disaster support, insurance claims, and opportunistic investment likely masks underlying negative and fiscal impacts that could be exacerbated by future climate-related events (or other shocks).
The research found a number of misleading correlations, such as flooding having a positive impact on cash solvency and fiscal health, and hurricanes increasing budget solvency. However, the current model of contingencies will not be sustainable with the expected increase in the frequency and intensity of climate change impacts, as well as slow-moving stresses such as sea-level rise, which further exaggerate the effect of peak events. In other words, a weather-related event has not yet adequately “shocked” the system of contingencies as to break it. However, the COVID-19 crisis may prove to be the ultimate shock to the system that breaks it. What happens when that “extreme event” is no longer a geographically or temporally discrete event?
“There are three big mechanisms through which costs are likely to increase going forward: one is insurance, [and] the second area is . . . tax rates and the third is cost of financing as banks start to cost the added risk.
Most interviewees also expressed overall uncertainty about future insurance prices and the likely market impacts of shifting insurance policy. In an extreme scenario, some investors envisioned a future in which properties could not qualify for insurance at all and therefore became ineligible for loans. The annual insurance pricing structure can underpredict risk for longer hold periods, as well as for the underpinning infrastructure. The approach also assumes the long-term availability of underwriting capabilities, in terms of the affordability and availability of products. If sites are unable to obtain insurance, they will not be eligible for loans, leading to major potential valuation consequences.
Long-term focus: In lay terms, catastrophe models simulate “thousands of versions of next year,” not “thousands of successive years.”
All agreed that valuation is currently lagging behind recognition of climate risk and anticipate this changing in the near future. Valuation does not incorporate climate risks because it is “backward-looking”. Models typically do not allow a user to modify future climate conditions, and there are no established best practices to apply insights from climate science to catastrophic hazard risk modeling. Valuation has become more urgent for investors considering longer time horizons. Some investors have also informally discussed properties having “expiration dates” after which they may no longer be safe or suitable for residential or business use without extensive investment in surrounding infrastructure.
Anticipating steep declines in building value because of climate impacts runs counter to how buildings are currently valued. In the current model, value is derived from the residual value of the land and structure, plus discounted cash flows over time that drive net present value and cap rates. However, if dramatic changes lead the value of the structure and land to approach zero, cap rates would change significantly, with a steep decrease in value after purchase, and would need to be offset with increased cash flow and profitability to maintain net present value.
Several discussed efforts to design risk mitigation strategies for vulnerable assets and price these costs into deals. Some also spoke about resilient design as presenting opportunities to differentiate assets and enhance value. For example, one interviewee said they were exploring opportunities to create a “resilience zone” for entire neighborhoods.
Parametric insurance, where insurance payouts are linked to when predefined event parameters such as extreme weather events are met or exceeded, is an emerging option. Industry leaders note that parametric insurance may become more widespread, but it is not an appropriate solution for all scenarios. The Caribbean Catastrophe Risk Insurance Facility (CCRIF) is one example of a regional fund. #heitman
AG&T is committed to being part of the climate solution. AG&T joined over a thousand leaders from local governments, businesses, universities, and other institutions across the country as part of the “America Is All In” joint statement. To learn more click here.
As we sit today in the middle of a world pandemic, a few things seem certain. The Corona Virus health crisis has forever changed our relationship with globalism and our new understanding how manufacturing keeps us all safe. This is especially true of the pharmaceutical industry. With shortages of basic supplies, medicines and protective gear, is it time to bring critical manufacturing back to the United States?
The answer seems to be a resounding, “how fast.” But how do we do this, now that most of our manufacturing has been shipped to foreign locations? The answer might be right here at home.
Notwithstanding, Puerto Rico’s economic crisis, the island’s antiquated energy grid, and a wasteland of destruction caused by hurricanes in 2017, Puerto Rico is still in an ideal position to help USA quickly ramp up critical manufacturing production. In fact, the island today currently out preforms States like California, Indiana, North Carolina, and Pennsylvania.
Are there any Potential Roadblocks?
As part of the 2017 Tax Act, the new tax on Global Intangible Low-Taxed Income (GILTI) was proposed as a way to target profitable firms that are based abroad – known as controlled foreign corporations. For tax purposes, Puerto Rico is treated as a foreign jurisdiction and the 2017 Tax Act is bad news for companies doing business on the island. Patent-dependent sectors like pharmaceuticals and medical equipment and supplies account for nearly 35 percent of the total employment in manufacturing. Pharmaceutical companies alone employ approximately 90,000 Puerto Rico residents.
Where do we go from here?
Today there are several initiatives to help bring manufacturing back to the United States, Puerto Rico and other economically depressed areas. One such initiative is HR 6443, authored by Puerto Rico’s Resident Commissioner, Jenniffer González-Colón and sponsored by Donna Shalala (D-FL), Representatives Rob Bishop (R-UT), Darren Soto (D-FL), Ruben Gallego (D-AZ), and Peter King (R-NY).
PONCE, PUERTO RICO—Ponce Paradise—a 900-acre resort, healthcare village and marina located here—is giving guests all the conveniences and amenities of mixed-use, but with a twist.
Adam Greenfader, managing partner, AG&T, the development firm behind Ponce Paradise, said, “There is a trend in hospitality development for travelers searching for a destination that offers a wellness package or amenities.”
Conceptualized by LandDesign and Winstanley Architects & Planners along with AG&T, the teams consulted engineering and aquatic architecture professionals to make the vision a reality, bringing together a mixed-use development and a wellness destination.
“Economies of scale seem to indicate mixed-use projects will be getting larger. The live-work-play concept is really taking hold as more people want to be in the center of it all,” Greenfader said.
Ponce Hospital and Wellness City
Still in its early design and community involvement phase, Ponce Paradise will comprise a hotel and spa, wellness community, farm-to-table agricultural setup, a micro-grid, residential neighborhoods, a town square and a university medical center, with a total investment of approximately $1 billion.
Specifically, the 166-acre Wellness City will have research, university and care facilities, which will include a branded hospital, rehabilitation centers, outpatient, recovery rooms, assisted living facilities, nursing home, short-term residential units and condominiums. The wellness lagoon will have restaurants and retail, and a plaza will be home to a worship center, park and entertainment venue.
The development will not only promote health and wellness but sustainability as well. About 60% of the site is untouched and will remain in its natural state, according to the Puerto Rico Conservation Easement Law. Additionally, the developed area has acres of green space, waterways and parks.
“Wellness tourism has been estimated as a $563 billion industry in 2018,” Greenfader said. “Puerto Rico is ideally situated to capture a large part of this market due to its central location, airlift and cruise traffic, U.S. medical doctors and great infrastructure.
“There are many medical treatments that can be done in Puerto Rico for a fraction of the cost—and you get to enjoy an amazing Caribbean vacation experience,” he added.
There are, of course, some challenges. “Less than 7% of Puerto Rico’s GDP is tourism based. For a Caribbean island with great beaches, people and infrastructure, this in incredibly low. The city of Ponce, in particular, has a convention center, port and airport that are highly underutilized,” Greenfader said, highlighting the project’s necessity.
He said the first challenge is to get the Municipality of Ponce and the Fiscal Board controlled by the U.S. Congress to fully use its assets. The second challenge—which is common in any large mixed-use project—is to provide the right combination of uses.
“The last challenge is financing,” he said. “In Puerto Rico, there are $20 billion of Community Development Block Grants for Disaster Relief. We trust some of that will be allocated to critical projects such as Ponce Paradise.”
Following meetings with the municipality, major medical associations, cruise lines and community leaders—each with their own concerns—Greenfader is confident that they will be able to address each group while also honoring Ponce’s natural surroundings.
Master Plan for Wellness City and Hospital
“Our job as project sponsors is to balance the concerns of each group with the stewardship of the environment,” he said. “The project must make economic sense but also be a valuable contributor to the local region, protecting and enhancing natural assets.”
Greenfader said that as hospitality as a whole faces its own challenges, differentiators like mixed-use developments are gaining more momentum.
“Airbnb and other disruptors have proven that the market is changing and that guests are seeking new experiences. Budget allocations, the desire to be together in large groups and ease of booking a reservation are just a few reasons the hotel industry is adding more residential units,” he said.
According to Greenfader, residential space generates revenue that can assist with the financing capital stack, while also creating a rental pool of additional units for the high seasons.
Ponce Paradise plans to offer three residential options: single-family homes, smaller vacation rentals and affordable “shotgun-style” housing, all with their own facilities and security.
Its attention to health, however, is the real differentiator, with nature serving as both the basis for its design and Ponce Paradise’s mantra.
“Everyone realizes that wellness is holistic; we don’t just treat the physical but the whole mind, body and spirit,” Greenfader said. “Doctors know that a patient’s success rate is often a result of a positive mental attitude. A cold, sterile room doesn’t necessarily lend itself to great health. Great architecture, beautiful landscaping, water vistas, amazing smells, community, etc., can make the difference between success and failure in a person’s treatment.”
Wellness extends far beyond simple offerings here. “Doing yoga with goats may not prove to have ‘legs,’ but resort wellness has just begun to take off. The reasons are simple: Industrialized nations are getting older, people are living longer, and with two billion new tourists coming from India and China, there are many more potential people for this market niche,” he said. “Some experts say the wellness resort industry is expected to double within the next 20 years and become a $1-trillion industry.”
The sustainability factor is also attracting hoteliers, especially in an area that’s been struck by natural disasters.
“Developers are starting to realize that a weather-related crisis can have a devastating effect on operational risk,” he said. “If a hotel cannot withstand hurricane-force winds, floods and mold, then it will suffer huge downtimes and repairs. In fact, hotels may not ever come back online at all.”
Greenfader said that hotel buyers are now evaluating their portfolios for climate risk and realizing that initially spending 15-20% more in construction costs to make a project resilient and sustainable makes good business sense.
“Developers also realize that if they can stay open during a crisis, their occupancy will be 100% or more,” Greenfader said. “During a relief and rebuilding period, hotels host thousands of relief workers, insurance adjusters and other critical workers. It’s a win-win to be resilient and sustainable.”
This couldn’t be more clear than at the current time, when Puerto Rico is beginning to recover from a series of earthquakes, which Greenfader noted had hit the south particularly hard—especially structures built before 1990, when codes were updated to bolster construction for seismic activity.
“The earthquake reaffirms that a project like Ponce Paradise needs to build a resilient infrastructure into its master plan and be forward-looking in its design,” he said. HB
The ULI Roundtable on Climate Resilience in The Netherlands was held to discuss how hurricane destruction in the Caribbean (and specifically Puerto Rico, Sint Maarten in 2017 and the Bahamas in 2019), reveals an urgency to rethink urban resilience and regeneration in the Caribbean. The ULI Roundtable brought together Dutch planners, designers, architects, engineers, financial institutions, developers, and investors to discuss new solutions and share global best practice. Specific issues focused on the Dutch knowledge and leadership on climate mitigation across urban design, development and investment. The two speakers included:
Mr. Adam Greenfader, Chair of the ULI SE Florida/Caribbean Council – shared experiences and outcome advice from the ULI Advisory Services Panelists in the Municipality of Toa Baja, Puerto Rico after the catastrophic and deadly 2017 Hurricane Maria.
Mr. Henk Ovink, Dutch special envoy to the United Nations on Water, and flood expert shared insights into global climate change challenges and the Dutch resilience plans for both the Netherlands and Dutch Caribbean.
Congratulations to Hannah Greenfader, one of our past thought leaders on helping achieve the Hazon Seal of Sustainability! Your efforts are greatly appreciated and so needed in this time of great climatic change.
Hannah Greenfader is interned with the Miami- Dade County Office of Resilience researching sea-level rise strategies and creating content for educational programs about sustainability and resilience in Miami.
Today, Hannah is program associate at World Wildlife Fund which was was founded in 1961 and is the largest privately supported international conservation organization in the world. As program associate, I am responsible for supporting “America Is All In” which is the most expansive coalition of leaders ever assembled in support of climate action in the U.S.
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. Our thought leadership program includes mentoring students from the University of Miami Master of Real Estate Development program in finance, sales, and Caribbean development.
Governor Announces Puerto Rico’s First Hyatt Regency
The Weekly Journal Staff 6-4-19
Gov. Ricardo Rosselló announced that Gran Meliá Hotel was bought by Monarch Alternative Capital in partnership with Royal Palm Companies and Ambridge Hospitality. Together they will rebrand and relaunch the hotel as the Hyatt Regency Grand Reserve. The governor announced that the developers are contemplating a 10-year master plan. This will include six hotels in the Grand Reserve (Coco Beach) peninsula in Río Grande, of which three are expected to be opening by 2022. “Transactions such as these that are happening now validate that our commitment to tourism is a successful one, and there is a positive environment for investment,” Rosselló said at the 41st International Hospitality Industry Investment Conference by New York University (NYU). The governor added, “we have managed to streamline processes to grant tax benefits and permits, which proves that this administration maintains a bureaucratic battle so that the private sector may have better investment opportunities.”
The Hyatt Regency Grand Reserve Resort will have five new restaurants and will create roughly 200 new jobs. The average rate is expected to fluctuate by $300 per night. During his presentation, Rosselló revealed blueprints and mockups for the property. He stressed that Puerto Rico’s “fertile and positive” environment for investments in the hotel industry. The Hyatt Regency Coco Beach Resort is part of a $120 million deal made possible through an agreement with the Puerto Rico Tourism Co. (PRTC), which granted tax credits conforming to the P.R. Tourism Development Act (Act No. 74-2010). Of the total investment, $100 million correspond to development costs to elevate the property to Hyatt’s luxury standards. The PRTC has been working on this business deal along investors for several months. PRTC Executive Director Carla Campos assures that Tourism is focused on increasing the island’s hotel inventory in the short term, emphasizing Puerto Rico’s “competitive and incomparable” investment advantages.
After damages caused by Hurricane Maria in 2017, Monarch Alternative Capital, which already had interests in the peninsula, seized the opportunity to acquire the Gran Meliá Resort, with 486 rooms, 135 bedroom units, and 14 more terrain acres. In order to proceed with the transaction, Monarch made a conjoint agreement with Royal Palm Companies and Ambridge Hospitality. According to Campos, this project makes part of a “long-term master plan” that seeks to add 2,500 new rooms to the island’s hotel inventory and 1,500 new jobs. “This will result in a total investment of roughly $1.5 billion, when the six hotels are finished,” she added.Both the governor and the PRTC executive director stressed Puerto Rico’s strategic position as a connector between the United States and Latin America and the island’s structural reforms, which they claim positions Puerto Rico as the most competitive U.S. jurisdiction for hotel investment.
The officials also highlighted the investment tools that provide a combination of tax benefits at state level, in addition to the competitive advantage of being almost entirely eligible for certain benefits and exemptions under the Opportunity Zones incentive as included in the U.S. Tax Cuts and Jobs Act of 2017.