Adam Greenfader




Adam Greenfader: Tourism today is not going to look the same as it will in the future. And in my book, I talk a lot about how blockchain and other technologies are going to change the industry. And my hope is that the new technologies are going to help Puerto Rico create high paying jobs and new professions that today we can’t even imagine because they still don’t even exist.


Robin Trimingham: I know. Welcome to the Innovative Hotelier podcast by Hotels magazine with weekly thought provoking discussions with the world’s leading hotel and hospitality innovators. Welcome to the Innovative Hotelier Podcast brought to you by Hotels magazine. I’m your host, Robin Trimingham. Between hurricanes, Zika outbreaks and COVID. Puerto Rico has had its fair share of tourism industry challenges during the past few years, and yet post-COVID tourism seems to be doing better than most people would expect. The question everyone is asking is whether this current growth phase will be short lived or whether it is likely to continue. My guest today, Adam Greenfader, is the author of a new book entitled Why Puerto Rico Now: a Master Plan for Resurgence, Resiliency and Long Term Economic Growth. And he’s here today to chat with us regarding the opportunities and challenges of marketing and island tourism destination. Join me now for my conversation with Adam. For the last 15 years, Groupe GM has been a leader in the luxury cosmetic amenities industry. The group proposes a 360 solution for manufacturing to distribution, with over 40 international brands and its worldwide distribution network. Group GmbH offers different shapes and sizes of eco friendly products in hotels all over the world. Discover more on www.GroupeGM.com That’s Group with an E, Gm dot com. Welcome, Adam. Thank you so much for joining me today.


Adam Greenfader: Good morning. Great to be here.


Robin Trimingham: I think we’re going to launch right into this because Puerto Rico is a fascinating country and we’ve got lots to talk about here. But let’s set the stage for everybody just a little bit. So over the last 12 months, to what degree would you say that the situation in Puerto Rico for tourism is mirroring what’s going on in the rest of the Caribbean? And to what degree would you say that Puerto Rico is unique?


Adam Greenfader: Yeah, great question. I think that these last 12 months, obviously, to put this all in context, has really been revolutionary for the world, not just even the Caribbean. I mean, we’ve all come through this COVID pandemic. We were locked in our houses and then suddenly now we’re free. We’re able to travel, many of us, without masks. So the world is really just kind of woken up to what it wants and what’s important. And I think that travel and hospitality and tourism has really gone to the top of the list. I mean, we talk about experiences and experiential travel and really doing things that we have never done before. So the Caribbean region has seen just a big boom in the last 12 months. I mean, people are going to the islands, they’re staying longer. They’re really having different kind of experiences that they couldn’t have before, like just talking to people in a bar or sitting at a restaurant. I mean, things that we took for granted in the past today have really gone to the top of our list as being important. And I think the Caribbean region in general with its just beautiful climate, wonderful people, easy access, it’s safe.


Adam Greenfader: I mean, we don’t have major crime or wars in the Caribbean or diseases, so it’s just really a comfortable, easy place to get to. So we’ve seen just amazing 80 hours and occupancy rates in the Caribbean in the last 12 months. There’s just been more and more interest in people wanting to buy real estate in the Caribbean and kind of make it their second home or even their kind of leisure like location where they can combine travel and work. So the region really has seen this kind of new growth in French, they say EB Luis Mont, which means to blossom. And I think that really is what this is about. Now in the Caribbean, Puerto Rico is no exception. So Puerto Rico has seen numbers that have been off the charts in terms of occupancy and growth rep, class 124% higher than in the US mainland in 2019, in Puerto Rico and Puerto Rico also saw its occupancy rates hover around 78 to 80% in the San Juan metropolitan area. So all in all, I would say that the region has had a great 12 months and we’re expecting the next 12 months to be even better.


Robin Trimingham: It’s fantastic to hear of a destination that’s doing so well internationally when a lot of others are still struggling to recover in other jurisdictions. I understand, though, that locally Puerto Ricans are a little bit concerned that the spoils the profits of this great boom might be going exclusively to large hotels, and that the jobs that created are mainly entry level jobs. How do you suggest Puerto Rico leverage its tourism growth to build a more robust, resilient economy and ultimately middle class and middle class employment?


Adam Greenfader: Yeah, that’s a wonderful question. In fact, I wrote a book on that. It’s called Why Puerto Rico Now is really a master plan for long term growth, resurgence and resiliency for Puerto Rico. So I wanted to look at kind of the long term, how do we make Puerto Rico really to be able to be economically independent. So part of the book about a third of the book is looks at the history of Puerto Rico starting in 1898. Then I go to the present, but more importantly, I look to the future. So about 50% of the book is forward looking kind of that proverbial crystal ball. So part of the research for the book, I started to look at tourism in Puerto Rico, and I was shocked to find that Puerto Rico has one of the lowest tourism GDPs in the entire Caribbean. When I go to speak on tours and I go to different conferences, I ask people to guess what’s Puerto Rico’s GDP as a percentage of tourism. And I say, Well, most of the Caribbean is in the 30%, 40%. Some islands even have 50% of their total GDPs tourism base. And when I tell people that Puerto Rico’s GDP last year was 6.75% of the total GDP, people are shocked. They go, how can that be? How can an island in the Caribbean with beautiful beaches? Old San Juan is a historical landmark. It’s got a bioluminescent bay, it’s got a rainforest. How could Puerto Rico, with all these amazing natural and cultural amenities, have such a low GDP in tourism? And the reality is pretty simple. Puerto Rico’s economy still to this day, is the manufacturing hub of the world.


Adam Greenfader: Puerto Rico’s manufacturing represents 42% of the entire GDP of the island, in fact. Puerto Rico manufactures more pharmaceuticals than the next five US states combined. So Puerto Rico, since its beginning, has always been a manufacturing center, and tourism was always kind of like the next thing later down the road that Puerto Rico wanted to do. So what happened was, miraculously in the 1940s, fifties and sixties with this Operation Bootstrap that brought millions of dollars to build Puerto Rico’s manufacturing economy, really, tourism and hospitality was there just to serve the manufacturing base. So it really doesn’t have a lot of hotel rooms. When you look at the number per capita, it’s got a huge potential for growth. For example, Puerto Rico and the Dominican Republic in in the late 1990s had about 14,000 hotel kids To this day. Puerto Rico still hovering around 15,000 hotel keys whilst the Dominican Republic is close to 90,000 hotel keys. So Puerto Rico’s growth has been very small in terms of hospitality because it wasn’t one of the island’s priorities. However, that has changed. And Puerto Rico, after its last 15 years of economic crisis, Puerto Rico in the 2008 Great Recession never recovered. Puerto Rico stayed in this very, very dire economic depression where it had 50 quarters of negative economic growth, and that really devastated the island. It was a very challenging time for Puerto Rico. So long story short, Puerto Rico as of last year is officially come out of bankruptcy. The governor announced at one of our Urban Land Institute events here in Miami that Puerto Rico was out of bankruptcy. But Puerto Rico has set its sights on the low hanging fruit, which is tourism.


Adam Greenfader: And so Puerto Rico has created now a new tourism Incentive act. It’s act of 74, which provides really lucrative, robust tax incentives to build hotels and to build the industry up. So to answer your question, yes, Puerto Rico is looking forward to building this industry from a 6.75% GDP up to probably 15%, which will be in line with most of the Caribbean islands. And there are going to be growing pains. Obviously, those growing pains are going to me learning service, learning how to be a service economy. I mean, Puerto Rico is one of the best manufacturing economies, but really doesn’t have the same service mentality that other islands have. I think in the past people would come to Puerto Rico and complain about the service and the quality of the workers. It’s understandable because that’s not where the island was focused. So today is the island starts growing its tourism industry. Obviously, it’s going to need to be able to develop the infrastructure and the support systems. So as Puerto Rico starts to grow its tourism industry, it’s going to really need to develop great jobs through, I believe, new technologies. And we were talking about this before, tourism today is not going to look the same as it will in the future. And in my book, I talk a lot about how blockchain and other technologies are going to change the industry. And my hope is that new technologies are going to help Puerto Rico create high paying jobs and new professions that today we can’t even imagine because they still don’t even exist.


Robin Trimingham: Okay, So fascinating insights and a whole ton of information there. So let’s try and break this down just a little bit. You are telling us that Puerto Rico is actually in a very fortunate position because they have a much more diversified economy in some respects than a lot of other island jurisdictions. For a lot of other islands, tourism is it. And when you have a situation like COVID or a world recession, their economy just gets wiped out. Pretty much. So Puerto Rico is actually in growth mode for tourism. And I understand that you have an interesting problem as a result of all of this in that more people are working in tourism than ever before, and yet there is a clear labor shortage in the tourism business sector. How can that be if your island is coming out of a recession and tourism is in growth mode and people need jobs and there are jobs available?


Adam Greenfader: Yeah, breaking it down. I think that when you look at the Caribbean islands, the only other island that kind of comes to mind as being non tourism focused, it would be the Cayman Islands that’s obviously focused on finding.


Robin Trimingham: My homeland as well.


Adam Greenfader: And your homeland as well. So it’s the it’s not the rule, it’s more like the exception. And so having manufacturing has been kind of a recession, kind of proofing a bit for the island, especially during COVID, we saw in many of the Caribbean islands, I spend a lot of time working throughout the region, Saint Martin, for example, where we’ve been very active in the hotel sector, we saw thousands of people that had to leave the island just because all the hotels and the cruise ports closed down. It was very sad. Puerto Rico didn’t have that reason. Puerto Rico lost about half a million people from about 1999 to about 2000 and. One team because of its economic crisis. So most of the people left just because they couldn’t find jobs in all industries. So that half a million people that Puerto Rico lost. Thankfully, we’re starting to see for the first time last year, 2022 was the first year that Puerto Rico had a net migration of zero. So meaning that this flux of people leaving the island had stopped. More people were coming in and it was starting to balance out.


Adam Greenfader: We expect Puerto Rico, as the economy hits a 2 to 3% GDP, that the economy, like it has in the past, will grow its population. Part of my book, when I was uncovering kind of the history of the island’s economy, I was fascinated to find that Puerto Rico has had these huge, massive migrations of people on two different occasions from the 1960s to the 1970s, Puerto Rico lost about 600,000 people. In fact, it was called the greatest air migration in the history of the United States. People were literally paid to leave the island because there were no jobs. So Puerto Ricans, unlike most people in the Caribbean, are US citizens with US passports and can travel freely. And so that travel back and forth from Puerto Rico to the mainland. Us has a lot of fluidity and it happens regularly over the last it’s happened regularly over the last 200 years. So I do believe that we’re going to find a lot of people coming back to the island as the economy gets better and that the jobs are available.


Robin Trimingham: That’s a very interesting situation to be dealing with. I understand that part of growing tourism, of course, would be renovating hotel products that were damaged in hurricanes, building new hotels wherever you can. But I also think maybe that traditionally there has been a bit of a problem raising financing for construction. Talk to me about the Opportunity Zone program and how that’s working.


Adam Greenfader: Sure. So to understand the financing of Puerto Rico, you really have to go back to the 1990s when those Section 936 was implemented, Section 936, to make it really simple. It was a manufacturing tax incentive that really created the pharmaceutical industry in Puerto Rico. And there was a small clause in that incentive that said that banks had to either retain some of the funds and profits from that or if they sent them back to their mainland branches, they would have to pay a tollgate tax of 10%. So in most cases, the banks retained millions and millions of dollars in Puerto Rico that went into the economy, that led to the massive growth in the financial sector. Puerto Rico when I arrived, which was in 1993, had 12 financial institutions, 12 banks from the US, Spain, Canada and other locations were very active in Puerto Rico when 936 expired. That was created a huge sucking sound of financial institutions, and Puerto Rico went into its recession and today only has three and one half banks on the island. And I say a half because the other banks aren’t in the construction or hotel lending. So really with three financial institutions from 12 to 3. So there’s been a huge and there still is today a huge need for weather and construction or manufacturing or new business. So Puerto Rico today has gone from 12 banks to three, and it’s desperately seeking money and funds for new industries, new businesses and hospitality specifically.


Robin Trimingham: I have a follow up question for you then. To what extent then does being part of the US help your economy and raising finances, and to what extent does it hinder you, particularly when it comes to these tourism products?


Adam Greenfader: That’s a great question. Puerto Rico is part of the United States in almost every facet. It’s US banks, US courts, US military, US passport, US jurisdictions for regulatory agencies. The one area where Puerto Rico is considered foreign is in taxes. So Puerto Rico is considered a foreign tax jurisdiction. So the advantages and the disadvantages to this kind of hybrid system, really interesting from a let’s do business in Puerto Rico respect its kind of works like the United States and feels like the United States, obviously with a culture and Spanish and a lot of fun other things. But from a tax perspective you’re able to take advantage of tax incentives that don’t exist on the mainland. In the United States, for example, x 74, which I mentioned previously, is the Tourism Development Act, which provides up to 40% of your money back of your total project cost. If you’re going to do a hotel or any kind of tourism related business. And that’s a huge amount of money. I mean, that’s if you invest $10 Million in your project, you’re going to get $4 million of that back of which you can get 10% before you even start construction, which can be part of your equity stack. So without getting too complicated. Puerto Rico has some really good advantages of being part of the United States, and it’s got some really good advantages from having a tax incentive, a tax code that allows some flexibility that you can’t find in North America.


Robin Trimingham: I see. So let me change the conversation up a little bit. I understand that just like all countries, governments come and go and one government in power can have one idea about tourism and then another party comes to power and they have a completely different idea. So in all of this for Puerto Rico, how important do you feel it is that tourism development initiatives be research driven? And why do you say this?


Adam Greenfader: Anyone like yourself that have seen the history of Puerto Rico over the last 30, 40 years, it’s fascinating to see how Puerto Rico has had more logos, tags and themes in the last 30 years. And a really smart individual who runs Discover Puerto Rico, which is a public private partnership called Brad Dean. He’s the CEO currently said it’s like, imagine if Coca Cola would change its flavor every four years. And essentially Puerto Rico, the way it ran its tourism was that it basically with every new government, it decided we’re going to have a new tag phrase, a new line. We’re going to market Puerto Rico differently to different people. We’re going to destroy all of the other work that was done and just kind of reinvent ourselves every four years. The budgets were never very large because, as I mentioned, Puerto Rico really didn’t spend a lot of time on tourism. And it was just kind of like this thing that was just being reinvented every time Puerto Rico three years ago decided that it needed to change that, and it created a public private partnership with an entity called Discover Puerto Rico. Discover Puerto Rico is a DMO, a destination marketing organization. And the DMO has really been instrumental in kind of bringing some consistency to Puerto Rico’s tourism. It’s based its marketing on heavy research. The research has found that there’s markets that Puerto Rico hadn’t even looked at that were really active on the island, specifically the Midwest, the Midwest had never been seen as an island that was good for Puerto Rico. And part of this market research and analysis done by Discover Puerto Rico uncovered this huge opportunity in 2022. There have been direct flights now that have been opened from them, so we can see how research and really detailed analysis can uncover opportunities and create growth in an industry. Whereas before it wasn’t even thought it was important.


Robin Trimingham: Did you know that offering top cosmetic brands is a delight for your guests? For the last 50 years, Groupe GM has been a leader in the luxury amenity industry. The group proposes a 360 solution for manufacturing to distribution on cosmetic amenities and dry accessories. With over 40 international brands such as Greenland nukes, Italia Cologne. The group offers different shapes and sizes of eco friendly products in hotels all over the world. This is possible thanks to its worldwide distribution network. Thanks to their care about the Earth programme, you can offer your guests top cosmetic products with a reduced environmental impact. Discover more on www.groupegm.com. That’s group with an “E” GM dot com. So with all of these changes, to what degree has Puerto Rico struggled from the tourist perspective to establish an identity where when you say Puerto Rico to our tourists, they go, Oh, I know what you mean.


Adam Greenfader: Yeah. So in my book Discover Puerto Rico, that was one of the questions that had always come up. And what’s fascinating is I chair the Urban Land Institute, usually Caribbean Council, and I’ve been doing that for a few years, and we’re based here in South Florida, and we always provide a lot of marketing to the region in general. And what’s funny is initially when I used to say Puerto Rico to people, they would go Costa Rica. So we always get confusion on Puerto Rico, Costa Rica. And then when I would say Puerto Rico to people, I would get things like, Oh, West Side Story, yeah, I remember Puerto Rico. And so I in my book actually talk about the West Side Story syndrome, where most people’s images of Puerto Rico are kind of vague if they can even figure out it’s part of the United States. But then basically the only image they have is things from the 1950s or they were call some Miss Universe. So there’s been a lot of confusion because Puerto Rico tends to brand itself as both part of the US and not part of the US on what it is and where it comes from. They say there’s a crisis in every opportunity, and in 2017, Puerto Rico was devastated with two category five hurricanes.


Adam Greenfader: Yeah, that for anybody who’s lived in the Caribbean, a Category three is devastating enough. A Category five just don’t eat. I can’t even imagine what that’s like. But two back to back hurricanes, it destroyed the island. And in every crisis, there is an opportunity with the press and the media that came to Puerto Rico during that period of time and thereafter, Americans, North American citizens, started to hear so much about the island that the when polls were taken before and after on what is Puerto Rico miraculously North American population. A year after hurricanes Irma and Maria, 74% of Americans at least were able to say Puerto Rico is part of the United States. Puerto Ricans are American. And so I think that the island has now taken, thanks to many people, has taken kind of a new positioning. At least North America realizes that the 3.5 million people that live on that land and that island are American citizens. And that’s been huge. That’s really been a big kind of feather in the cap of the island throughout these climatic crisis.


Robin Trimingham: That’s very interesting. And just for anybody who’s watching this, a Category five hurricane, it sounds like a freight train roaring through your backyard. I’ve lived through one of those. It’s quite the experience where you do have tourism in Puerto Rico at the moment. To what extent is there friction between the industry stakeholders and local communities, and to how are you working to overcome this?


Adam Greenfader: The tourists that come to the island have really played an important role in Puerto Rico’s history. Puerto Rico has about 5 million people that live on the US mainland, and with those 5 million people that live on this US mainland, they have extended friends and family. So a lot of the tourists that come to Puerto Rico know the island already. Many of them are coming for work, whether it’s manufacturing, finance, other industries, and many of them are also coming for holidays to see old family members to go visit a place that they had heard about as kids. So the type of tourists that comes to Puerto Rico to begin with, May has some connection with the island, which is very unique. Puerto Rico’s economy, from a tourist perspective, is today mainly centered around the San Juan Condado or San Juan area. So about 60%, 70% of tourism all happens in the San Juan metropolitan area. The island today is looking to kind of expand its tourism offering to the rest of the island, because I think that when people really go to Puerto Rico, some of the first things they hear is, wow. Can’t believe how beautiful the airport is. The new renovated, beautiful airport. The roads are in great condition. My cell phone works. I can go to a Walgreens and get my prescription.


Adam Greenfader: My ATM card works in a bank machine. So the infrastructure is there from a social perspective. As I mentioned previously, Puerto Rico has gone through this really tough economic 15 year period and it’s starting to recover. So part of that recovering process is about kind of figuring out how things are going to work going forward. Puerto Rico today pays the highest sales tax anywhere in the United States at 11.5%. So the people that have been living on the island, the locals currently have a tax system that needs to be overhauled because they’re paying to try to get out of this debt. So when workers come to the island, obviously that is a very favorable thing for the island from an economic perspective. But then there’s always consequences of people coming to your island. How do you deal with people who have never come to Puerto Rico before? I remember during the COVID pandemic and just right after it, airlines prices all throughout the Caribbean and the US dropped dramatically. And so we started to see a whole new breed of tourists who couldn’t afford to fly before coming to Puerto Rico, coming to Miami, coming to the rest of the Caribbean. And initially, I think for the people in the Caribbean, not just Puerto Rico, it was kind of like a surprise, like, oh, we’re getting tourists again.


Adam Greenfader: These are not the kind of tourists we’ve gotten in the past. How do we deal with this? And I’ve been really surprised by the positive expectation. The island’s in Puerto Rico to be able to say, hey, we’re okay with having people come visit our island, but we kind of have to set a kind of a framework for how we look at that. And what I’ve seen in Puerto Rico is that Puerto Rico is adapting to tourism. Tourism is just a small percentage of the economy, and it’s learning through growing pains to kind of figure things out. But it’s really remarkable. I always make a joke that 20 years ago for me to get a glass of water at a restaurant and call the waiter could take 20 minutes. And today when you go to a restaurant, you don’t even have to do anything. You just the waiter looks down, sees it, your glass of water is empty and will pour the glass of water. That might seem like a small thing, but from a hospitality perspective, it’s really a big thing. And I’m very hopeful that the island is going to grow into a wonderful service provider for tourism and hospitality.


Robin Trimingham: Ah, you make an interesting point because since COVID, a lot of people all over the world, North America in particular, have had to entirely change their livelihood. They’ve had to accept that the what they did is no longer a viable possibility. They’re having to retrain, learn new skills, be open to different kinds of employment. So I think there’s a lot of people who can empathize with the situation in Puerto Rico. Earlier in our conversation, you mentioned the rainforest, which I understand is absolutely beautiful. To what extent do you think that Puerto Rico’s natural wonders are being properly and sufficiently marketed, or is there a concern that the natural environment is basically just being trampled on by a whole pile of new tourists?


Adam Greenfader: Yeah, I have a chapter in my book called Thinking Beyond the Shore and My Profession. I’m a real estate developer. I’ve focused, spent a lot of time building affordable housing, hospitality. So I’ve always been very involved in what’s the environment look like, how do we deal with the environment? And I think that the Caribbean islands and Puerto Rico is no exception. We are on the front line of the climate change. I mean, we’re literally at sea level. Sea level is rising. I mean, we’ve even heard of islands that are disappearing, completely disappearing. So we have to, as a region, really be concerned about how we’re going to protect these natural resources, not just for hospitality and tourism, but for our own existence. I mean, this is an existential threat. And at the end of the day, I think it’s the private sector that really has to stand up and take more responsibility for the environment. And in my book, Why Puerto Rico? Now, I specifically talk about building beyond the shore and taking responsibility beyond the shore. We tend to say that the island’s kind of development space ends at the waterline and that we can build at the waterline 100 meters back. But my thinking has been with the new technology advancements is that we really have to go into the waterline.


Adam Greenfader: We really have to start to analyze the reefs. We really have to start to look at mangroves. We really have to start to look at how we can generate energy from the water and be able to take responsibility for that. Today, there’s just a plethora of companies that are revolutionizing that space, whether it’s aquatic architecture and engineering or whether it’s energy creation or whether it’s reef building. But really the future of the Caribbean region is going to be based on how those assets are protected and not just for the assets sake alone, but what the protection that they can provide the islands. And so there’s been a lot of new technologies. I think what we’ve seen during COVID with blockchain, just simple stuff, reservations on accessing when people can go to. Certain areas like the rain forest by reservation. I think that’s made some great changes because it allows a certain amount of people to go at certain times and then they can get information while they’re there. So I would say that in the last parts of my book, I really dedicated to kind of this out-of-the-box thinking about how we can take a more innovative approach really to the island survival.


Robin Trimingham: It’s very encouraging to hear you talk about all these things because you’re right, the world is going through a phase of radical transition and we all need to be aware about what’s going on and planning accordingly. We’ve got a couple of minutes left here. Based on all of your experiences and insights from writing your book, what do you feel is the mistake that most island nations are making when it comes to marketing tourism?


Adam Greenfader: Certain islands and locations in the Caribbean do an amazing job, and I’ll start with that first and then I’ll get to the mistakes. For example, Costa Rica and its blue zones. Anybody who has heard of a blue zone, which is a place where people live way beyond their years and Costa Rica has really developed this kind of mystique about its environment and lifespan, and they’ve just done a great job of focusing on that. I think if you look at an island like Saint Martin with 500 restaurants on both the French side and the Dutch side, I mean, 500 restaurants on a population, 15,000 people, it’s just like, how can you put that much food in a single place? And so they’ve really kind of figured out this unique branding of kind of being a fun place to go hang out at night on the Dutch side and a great place to eat on the French side. And they make it all work out together. Obviously all inclusive. You can think of the Dominican Republic where you go and you can spend a week where your bracelet and you don’t have to do anything else and you’re being hosted by people that speak every single language imaginable.


Adam Greenfader: So certain islands have done a great job of kind of figuring out who they are. Cayman’s for finance, you want to go do finance. On the other hand, when I look at kind of general marketing in the Caribbean, I tend to think that islands that solely kind of market we have a beautiful beach tends to be a little limiting because tourists today are looking for the new experience, the post COVID. Tourism is really about finding yourself in this new environment, and I would say that it’s kind of contingent on on each island to kind of figure out what makes them special. I was having a conversation with the director of Tourism of Dominica, which is just an amazing, rugged mountain with these beautiful hills. And she was telling me, Adam, I think when you come see these islands and you see the mountains, you know, you’re in Dominica. And so I would say ultimately that’s what it’s about. It’s about kind of branding yourself by your unique selling proposition, what makes your island unique, and try not to just be another beach where people go and hang out.


Robin Trimingham: Yeah, I couldn’t agree with you more because you’re right. I mean, we all know now that baking yourself in the sun is not the wisest idea, and weather is somewhat obscure. We don’t always have sunshine and blue skies when we’re supposed to, and there’s a lot more that islands have to offer. Just a closing thought for you. What is the number one piece of advice that you can offer to any island tourist destination?


Adam Greenfader: The Caribbean today is dealing with an existential threat of climate change, and the faster that the region can start to deal with this, the better the region is going to be at the end of the day. And if I could wave the proverbial magic wand and say, what would I like to see the region? First of all, I’d like more collaboration between the islands. The islands have to start working as a team. There’s 300 plus islands in the Caribbean, but they have to start working as a team. When a hurricane hits the southern part of the Caribbean, tourism drops all throughout the region. When there’s a crisis in the northern part of the Caribbean, tourism drops all throughout the region. So we really have to start thinking as a team when it comes to protecting the Caribbean insurance or Parametric Insurance, which covers the region, is probably going to be one of the best investments that can happen in that region. And I think that the islands have to start thinking how do we protect each other and ourselves from climate change? Because ultimately, when a disaster happens, the answer cannot be simply to have people leave your island or rely on a private insurance agency or a.


Robin Trimingham: Foreign aid.


Adam Greenfader: A foreign aid. It just can’t be that there has to be better solutions. So obviously we want to harden our assets. We want to make our hotels be able to do more than just service the hospitality industry when things are good. But what happens to hotels when there’s a crisis? What service do they provide to insurance agencies, to relief workers, to people that have been blown out of their homes? So I think that we have to start thinking about the tourism industry both in when times are. Good. But also be thinking of the tourism industry and the hospitality specifically when times are bad. So my thought is basically that we have to start working together as a region and we have to start thinking about how to protect each other and ourselves using the tools that are currently available.


Robin Trimingham: Thank you, Adam. You’ve lots of great ideas and advice, and I’m sure our global listeners are really going to appreciate this conversation. You’ve been listening to the Innovative Hotel podcast. Join us again soon for more information and insights, specifically for the hotel and hospitality industry. You’ve been listening to the Innovative Hoteliers podcast by Hotels Magazine. Join us again soon for more conversations with hospitality industry thought leaders.


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Adam Greenfader soon to release new book



Adam Greenfader Set To Release His New Book – “Why Puerto Rico Now: A Masterplan For Resurgence, Resiliency and Long-Term Economic Growth” 


Puerto Rico and the Internal Revenue Service had created a series of tax incentives to bring in new businesses and people to the island. This 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.


Miami, Florida, November 2, 2022, Adam Greenfader’s motivation for Why Puerto Rico Now originates from his first-hand experience of living through climate related tragedies. September 2022 marked the five-year anniversary of Hurricanes Irma and Maria – the worst climate disaster in Puerto Rico’s modern-day history. Adam also had several family members perish in the building collapse in Surfside, Florida. 

New approaches are urgently needed to rebuild Puerto Rico for the long term and create an independent economic model that will last generations. The author lived in Puerto Rico for 25 years and completed over 1 billion dollars in residential, hospitality, and commercial developments in Puerto Rico. Adam continues to work on-island and is a champion for Puerto Rico and avid organizer of Puerto Rico based investment events, on-line seminars, and island promotional publications. 


Why Puerto Rico Now will be soon released in a digital share format or NFT. This new technology will allow those who collaborated in the work to participate in its success. The goal is that Why Puerto Rico Now  becomes a peer-to-peer platform for innovation.


This book is intended for the 3 million Puerto Ricans that live on island and the 5 million that live off-island primarily in NYC, NJ, and Florida. Why Puerto Rico Now may be of specific interest to the more than 15,000 Act 60 (formerly Act 20/22) grantees who are looking to Puerto Rico as a place to live, invest, or to help economically. 


On November 14, 2022, Adam will be officially launching his new book at the Puerto Rico Builders Association annual conference in San Juan, Puerto Rico. It is also available on Audio read by the author.


About The Author:


Adam Greenfader is a recognized business leader, speaker, and forward-looking thinker. He is the chairman of AG&T, a real estate development and advisory firm based in Miami, Florida.


AG&T specializes in residential development, hospitality, and island projects. Adam moved to Puerto Rico in 1993 and lived in San Juan for 25 years, where he and his wife raised their two children. Part of his motivation for this book comes from his first-hand experience of living through multiple hurricanes and climate change related tragedies.


He holds a Master of Real Estate Development (M.R.E.D.) degree from the University of Southern California and earned a Bachelor of Arts degree in Government from Clark University. Adam attributes his passion for art, design, and photography, from his studies at the Universite de la Sorbonne, in Paris, France.


Adam Greenfader was an early innovator and likes to say O.G. in Puerto Rico’s internet development with the launching of vidacool.com, a social media community for Hispanic youth. Adam is passionate about the convergence of blockchain and real estate, finding innovative solutions to sustainable development and creating resilient communities.


Adam has been a long-time member of the Puerto Rico Builders Association, the National Association of Home Builders, and the Caribbean Green Building Council. Adam Greenfader currently chairs the Urban Land Institute’s Caribbean committee in Southeast Florida/Caribbean. In his spare time, he enjoys mentoring students at the University of Miami Master of Real Estate Development program.


As Puerto Rico turns a page on a new chapter in its economic development, Adam is hopeful for  a better tomorrow. 



For complete information, visit: www.whypuertoriconow.com




Puerto Rico Mortgage Bankers Association Positive about 2022

Puerto Rico Mortgage Bankers Association

The Mortgage Bankers Association of Puerto Rico positive about 2022. See video clip about the 12 month projections for the island’s economy by Adam Greenfader, managing partner at AG&T.


La Mortgage Bankers Association of Puerto Rico (MBA) es una entidad sin fines de lucro, establecida para mantener y preservar la industria de la banca hipotecaria alentando a sus miembros a promover y llevar a cabo una práctica responsable en la otorgación de préstamos hipotecarios y en ejercer el buen juicio de la aplicación de las regulaciones locales y federales de manera que se mantenga el buen nombre y el prestigio de las instituciones hipotecarias y la credibilidad ante los consumidores.



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. 


For more information about Puerto Rico contact us.


The Puerto Rico Symposium in Miami With Historic Announcement


See All Photos Here

See Agenda and Sponsors


The Governor of Puerto Rico Pedro Pierluisi made the historic announcement at The Puerto Rico Symposium in Miami that Puerto Rico was officially out of bankruptcy. The message was well received by over 250 industry leaders from both the public and private sectors.  The event was organized by The Urban Land Institute South East Florida / Caribbean and The Puerto Rico Builders Association.


Governor Pedro Pierluisi
Governor Pedro Pierluisi makes historic announcement


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.


Speakers Panel
Dan Kodsi, Brad Dean, Rafael Rojo, Andrew Carson


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.


Adam Greenfader, Ricardo Alvarez-Diaz, Pamela Pautenade, Vanessa de Mari, Alfredo Martinez, Emilion Colon


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.


Keynote Lunch Address
Andrew Farkas, Adam Greenfader


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.

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.


18 Billion For The Next Great Construction Boom



San Juan, Puerto Rico.

Last week The Puerto Rico Builders Association held its 70th year conference in San Juan Puerto Rico. The historic event was inaugurated with a conversation on Financing the Next Great Economic Construction Boom.  The panel included Michael McDonald, Executive Vice President and Group Director at Firstbank, Luis Alemañy President and CEO at the Economic Development Bank of Puerto Rico, and Eric Delgado Business Banking Relationship Manager at Acrecent Financial Corporation and Adam Greenfader, Managing Partner at AG&T.

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.

Helping to plan a better future for the island, The Puerto Rico Builders Association will be holding its annual conference on September 20 and 21, 2022.  Speaking and sponsorship opportunities are available and you may contact AG&T at contact@agandt.com.


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.


Critical Manufacturing and Puerto Rico USA

Luis Fortuno and Congresswoman Jennifer Gonzalez


The panelists :




The ULI Webinar has an incredible array of information crammed into 90 minutes and it gives a great snapshot for the many initiatives being introduced and planned to help the Puerto Rican economy and create more quality jobs. If I had to some it up in three words, Mo is back. Mo of course being momentum.

 Each of the speakers brought a different perspective. Congresswoman Gonzalez Colon noted her primary mission is the reconstruction of the Island and to shephard the many supporting bills recently introduced in the US Congress. Former Governor Luis Fortuno brought an informed Wash DC think tank perspective, Adam Greenfader is one of Puerto Rico´s most passionate advocates, Andy Carlson of JLL (Jones Lang LaSalle) brings experienced commercial  insights from the world´s second largest public brokerage firm, Dr Deusch stated his case for the reasons he brought his Swiss/German manufacturing business to Puerto Rico because of a need for precision and reliability, while Noel Zamot has a finger on the ethical pulse of developing new business in Puerto Rico.

The conversations were upbeat and positive. For instance, Congresswoman Colon made a presentation on MMEDS which was introduced last month to Congress under the bill H.R. 7527. This bill provides tax incentives and tax credits for companies creating manufacturing plants and jobs in economically distressed areas in the US and its territories. The criteria for distressed is even stricter than the recent Opportunity Zone legislation passed in late 2017. When the Congresswoman showed the MMEDS qualifying maps there were smaller areas in very non desirable locations in the US whereas Puerto Rico literally had a much larger proportional area in some desirable locations. And she stated very clearly that MMEDS is one of the very few legislative items that is drawing bi-partisan support from both sides of the aisle.

The entire panel then weighed in on the competitive advantages that Puerto Rico has when competing with the mainland U.S. including much lower labor costs by as much as 60% lower in some cases, an experienced manufacturing labor force going back 100 years, the University of Puerto Rico at Mayaguez which is a top 10% engineering school for the entire U.S. and which is very much geared to provide the engineering and chemistry talent to support Puerto Rico´s manufacturing base. That even today five of the top ten selling drugs internationally are produced in Puerto Rico and 12 of the top 20 pharmaceutical companies have plants in Puerto Rico. Luis Fortuno noted that Puerto Rico had more than $40 billion USD in pharmaceutical exports in 2019 but has the capacity to increase this substantially. The panel noted that some closed down plants are almost in turnkey conditions should manufacturers wish to return or expand capacity. It would not take much. Maybe a recession of the Jones Act, or at least an exemption for an extended period of time, might be the necessary catalyst. There are some interesting new developments on this front as was evidenced last week by Hawaii noting that 85% of their informed populace is all for rescinding the Jones Act as it costs that Island 1.2 billion USD in additional transportation and cost of goods fees.

Progress is being made on seeking some type of exemption under the taxing provisions of GILTI as it adds a 10%+ tax on profits for CFCs (controlled foreign corporations) which unfortunately applies to the US territories since the do not fall under the IRC (Internal Revenue Code). On May 1, 2020, Congresswoman Stacey E. Plasket, representing the US Virgin Islands, filed Bill HR 6648 – the Territorial Economic Recovery Act, that if becomes law, it will exclude our territories from much or all of the GILTI taxation, under certain provisions.

On April 3, 2020, Congresswoman Jennifer González, resident Commissioner for Puerto Rico, introduced Bill HR 6643, the Securing National Supply Chain Act of 2020, to provide various tax credits to Economically Distressed Zones, including a tax credit on the amount of wages paid by an employer to employees in such a zone. The proposal has some overlap with HR 7527 noted above.

President Trump’s Special Representative for Puerto Rico’s Disaster Recovery,  Rear Admiral Peter Brown, lead two delegations to Puerto Rico in August 2020, the last visit being last week. I am told the trip was very successful as a big priority was to visit and understand the many advantages of pharmaceutical manufacturing in Puerto Rico.  AG&T is committed to bringing our network top information and access to our industry’s leaders. 


The Future of Tourism and Hospitality Panel

San Juan- “The Future of Tourism and Hospitality: Increasing Capacity and Competing in a New Caribbean Market”, will be the main topic to be discussed by a panel of experts on the subject, each one representing a sector in the ever-changing world of tourism and hospitality.

The chairman of the board of the PRBA, Eng. Emilio Colón- Zavala, stated that: “Through this panel, the Puerto Rico Builders Association (PRBA) will provide the space for a wide and varied discussion, which will cover the new trends in the Modern Tourism industry, as well as the importance of efficiently positioning Puerto Rico as a competitive destination in the Caribbean. Tourism with less than 7% of the islands GDP, is slated to become one of the pillars of our economic development and it is urgent to incorporate into our offer all new trends that continue to develop and evolve in the Hospitality Industry”.

The panel moderated by Adam Greenfader, Managing Partner of AG&T, will have the participation of:

  • Carla Campos- Executive Director, Puerto Rico Tourism Company
  • Pablo Maturana- Managing Director Development South America & The Caribbean, Hilton International
  • Rachel DeLevis- Policy Associate, AirBnB
  • Federico Stubbe- President, PRISA Group
  • Federico Sánchez- President and CEO, Grupo Interlink
  • Eric Berman- Chief Investment Officer, Lifeafar


This panel will be held on October 30, as part of the Forty-Sixth Annual Convention of the Puerto Rico Builders Association: “A Challenge to Build the Future”, which will take place at the Puerto Rico Convention Center on October 29 and 30.



About the PRBA

The Puerto Rico Builders Association is a private, non-profit organization.  Established in 1951, its main purpose is to represent leading developers and investors of housing, commercial, office, industrial and tourism projects. The Association also represents investors, suppliers, banks professionals and companies associated with development and construction in Puerto Rico. Its main objective is to promote and lead the planned, safe and sustainable development in order to serve as the island’s economic engine, in collaboration with Puerto Rico’s public and private sector.


ULI Hospitality and Recreation Council – Puerto Rico

The ULI Hospitality and Recreation Council met this month to discuss some of the recent trends and opportunities in the hotel industry.  Big shout out to the whole leadership team – to Robbie Carver and Ari Tenzer specifically for putting together an amazing panel of speakers.  

Puerto Rico this year was top of mind at ULI Hospitality and Recreation Council. Several speakers highlighted new opportunities in hotel investment and other tourism activities.  While it is part of the HRDC guidelines to keep specific project information confidential, I would like to shed some color on recent events happening in Puerto Rico that is leading to this renewed interest and demand.  

  1. Limited Tourism Supply – to date there are about 14,000 hotel keys in Puerto Rico. Most of the supply that was damaged in the hurricanes has been improved. Occupancy rates hover 80% and ADRs have been increasing every year for the last five years.  A recent market study by the Puerto Rico Builders Association,  shows a demand for 30,000 keys in next decade.   
  2. Liquidity – in the last six months the resolution of Puerto Rico debt has made significant progress with better than expected returns on the top tier bonds of  Geo & Cofina.  
  3. Pro-Business Government – For the first time in almost two decades, the island has a government that is actively seeking private investment. 
  4. Tax Incentives– The Tourism Hospitality tax incentive provides up to 40% back on capital investment for hotel and other tourism related projects. 
  5. Other Tax Incentives– Law 20/22 has has resulted in 1,200 high net worth families moving to the island as well as 175 service companies, and 75 independent financial corporations. 
  6. Better branding – In 2018 the DMO (Destination Marketing Organization)  was  launched with the goal of bringing better and more consistent messaging  to Puerto Rico’s tourism and industry.  
  7. Puerto Rico USA – After the 2017 hurricanes, 82%  of the US recognizes Puerto Rico as being “part of the United States.” 
  8. 80+ Billions of dollars –  This robust allocation will stimulate the economy in the short term and hopefully provide a launching pad for long term economic growth through CDBG-DR, FEMA, HUD, LHTC, SBA, and other programs.
  9. Opportunity Zones – applies to approximately 97% of the island of Puerto Rico.  This should de-risk equity investment and reduce the gap in cap rates between stateside and island investment opportunities. 
  10. Public-Private Partnerships – The P3 laws in Puerto Rico are some of the most modern in the world allowing direct pass-through of payment from consumer to sponsor. The current administration has placed a strong reliance on unsolicited P3 bids – in other words it is recommend that you submit your own idea of a tourism related project.  
  11. New Infrastructure – The soon to come sale of the electrical authority (PREPA) and other antiquated government facilities will dramatically reduce costs across the entire economy. This will make the hospitality sector in particular more competitive. 
Florida Product Councils (FPCs) are small groups of ULI members that commit to meet at least two times per year with fellow real estate professionals to share best practices, grow their network and discuss development practices that influence and change our communities.
If you wish to get involved: https://northflorida.uli.org/get-involved/florida-product-councils/hrdc-membership/

Undaunted By Puerto Rico’s Financial Mess, Hospitality Industry Blazes Ahead

Bisnow Article by deirdra.funcheon@bisnow.com July 24

“As you can imagine, things are a bit crazy here,” said Emilio Colón-Zavala, president of ECZ Group and head of the Puerto Rico Builders’ Association, this month — even though it has been almost a year since Hurricane Maria slammed his homeland.Puerto Rico is still recovering from hurricane-related infrastructure failures (the water system was long-neglected and the electric company has had five CEOs in a year) as well as a decade-plus financial crisis.

The commonwealth owes creditors a whopping $124B, and bondholders are fighting over who will be repaid. Investors are looking to scoop up distressed properties or take advantage of generous tax incentives, and cryptocurrency entrepreneurs have invaded with a vision to remake the island and run it on bitcoin. Meanwhile, residents still struggle; the average family income is about $20K.  Amid these challenges, the hospitality industry is putting on its best face and charging sunnily ahead. Most hotels in the commonwealth are back open or will resume operations by the time high season begins in September; some already had record occupancy for spring break.  Colón-Zavala and other experts will discuss these converging factors — and the state of the hospitality industry throughout the Caribbean — at Bisnow’s Caribbean Hospitality and Investment Summit in Miami Aug. 23.


Carla Campos, executive director of the Puerto Rico Tourism Company (a government agency), said the hospitality industry was seizing this moment to come back better and stronger. As of May, she told Travel Weekly, 12,000 of Puerto Rico’s 15,000 hotel rooms were operational and the other 3,000 were being remodeled. She said the reopening of the St. Regis, El San Juan and the Ritz-Carlton in October would be recovery milestones. The hurricane made Americans more aware that Puerto Rico is “a U.S. territory and you don’t need a passport to go there, that there is easy access from U.S. cities,” Campos said. “That puts us in this position to seize the opportunity to capitalize on this increased awareness and convert it into awareness in travel.” In addition to her agency, a Destination Marketing Organization — a private nonprofit corporation responsible for the promotion abroad of Puerto Rico as a tourist destination — was established with legislation last year and will be funded with $25M annually. Brad Dean, the former head of Myrtle Beach Chamber of Commerce, will run the DMO and recruit both leisure and business travelers. 

Colón-Zavala said in addition to remodels, new construction is on tap. A JW Marriott, Aloft San Juan Convention Center, Aloft Ponce and Four Seasons Cayo Largo are all in the works. “We have already like $1.9B in projects in the pipeline,” Colón-Zavala said. “It’s going to be like a 4,000-room increase — like 5% of hotel inventory. We have 15,000 hotel rooms in Puerto Rico and the pipeline is almost 25% more.” That means builders are in high demand — “You get proposals left and right,” Colón-Zavala said — but contractors are being selective about which jobs to take for fear of not getting paid in a timely manner. Private insurance has been slow to pay claims, and some government agencies don’t have funds due to the commonwealth’s financial crisis. FEMA is still active, and is siphoning workers from other jobs by paying 25% to 50% more, Colón-Zavala said.From an investment standpoint, Colón-Zavala said people from around the world have been interested in Puerto Rico; there is a lot of interest from China. Investors should look not just at hotels and resorts, but also at public-private partnerships in infrastructure, Colón-Zavala said. He said private companies have recently been awarded concessions to run a ferry service, a major highway and airport operations. 

Numerous solar companies have also descended on the region. “A year ago, people would not buy solar with batteries because of the expense that it represented,” he said. “This year, it’s the other way around — you would be crazy not to buy a battery with your solar panels.”    Sion Capital founder Jonathan Kracer, who advises real estate investors and will also speak at next month’s event, wrote recently that there is forward momentum pulsing through the 30 major Caribbean islands. All-inclusive resorts are doing brisk business, and low-cost airlines from all around the world have increased flights to the region. Kracer told Bisnow that following last year’s hurricanes, “I was surprised by the lack of a cohesive communications strategy to change traveler misconceptions about the conditions in the Caribbean. Only about eight islands of the [about] 30 in the Caribbean were most impacted by Hurricane Irma, and the perception of damage impacted demand volumes in the whole region.” Ultimately, though, he said that better construction techniques and stricter building standards would bode well for the region. Right now, he said the best move for investors would probably be “acquiring older independent assets or damaged properties from the recent hurricanes, and renovating and professionally managing them … As tourism is the most important economic driver for the region, the Caribbean is very resilient and will bounce back.”  

Another panelist, Rogerio Basso, principal investment officer for multilateral development bank IDB Invest, said “We have a heightened appetite to explore greenfield operations in the Caribbean and are also seeing growing interest from regional banks to fund hospitality transactions. Rising interest rates, however, are putting pressure on developers to not overextend themselves on debt and ensuring projects have sound fundamentals to withstand market trepidations.”

Hear more about tourism, hotels and investment in the Caribbean at Bisnow’s Caribbean Hospitality and Investment Summit Aug. 23.