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[Jaykar]

Five-star JW Marriott to break ground before year-end
By : ELSA FERNÁNDEZ MIRALLES
elsa@casiano.com
Edition: August 21, 2008 | Volume: 36 | No: 33

$250 million investment in Trump International development in Río Grande will include 427-room hotel plus condo-hotel; first 56 Founders units on sale

It is an inked deal. Before the end of 2008, a second five-star hotel, the first JW Marriott Hotel & Resort at Coco Beach, will break ground in Río Grande near the Trump International Residences & Golf Resort Puerto Rico. According to Arturo Francisco Díaz, executive vice president of Empresas Díaz, the 427-room hotel will consist of a $250 million investment in the hotel and a condo-hotel, which will be developed in several phases.

Empresas Díaz is the owner & partner, along with the Donald Trump organization, of the Río Grande area known as Coco Beach, which features an 18-hole golf club that is already in operation and a residential-tourism development under construction that will include homes, villas, apartments and the new JW Marriott Hotel & Resort.

Trump International will follow a green master plan, to become one of the most sustainable projects of its kind in the world. (See related story)

Construction of the five-star hotel is slated to begin before year-end. The JW is one of Marriott’s most elegant and luxurious brands. The Río Grande property will feature 11 restaurants and deluxe comfort and personal service for business and leisure travelers.

With the new hotel, Puerto Rico joins 39 other JW Marriotts worldwide, 16 in the U.S. and its territories and 23 in other markets.

The announcement coincides with Trump Organization’s worldwide sale this week of the first 56 units in Founders Villas, the first subdivision of the Río Grande development. The sale was to take place Aug. 23 in to a select group of investors in New York City.

Spread over 1,000 acres in Río Grande, the Trump International development will include 700 residences. In the first phase, the owners will become part of the exclusive Founders Club, which will provide residents such benefits as preferred tee times, elite services, permanent lockers, founders’ plaques and discounts throughout the property.

Phase two of the residential development will include chic beachfront apartments followed by golf villas. A full array of residences will be created over the next few years, including large homes with pools, 10-foot ceilings and the lavish amenities associated with the Trump name. There will also be large waterfront parcels for owners to create their own estate homes.

http://www.caribbean....id=261&ct_id=0

Empresas Santana to invest $240 million in six of its hotel projects
Isla Verde Howard Johnson to be demolished for construction of $45 million Four Points by Sheraton; government permitting delays pushing costs way up
By ELSA FERNANDEZ MIRALLES


Although the government assures the eternal permits dilemma has been simplified and that now construction and other related permits are more agile, Empresas Santana is still waiting to go ahead with several of its hospitality projects that have been in the pipeline for a few years. As a consequence, with the increase of oil and other materials, including cement, most of the projects now will cost more.

The newest development in this company’s hospitality division is the confirmation it will demolish the Isla Verde Howard Johnson Hotel to construct a 250-room Isla Verde Four Points by Sheraton. The approximate investment is $45 million and demolition and construction are scheduled to begin by 2010.

The 250-room Sheraton hotel that would anchor Ponce’s new 60,000-square-foot convention center that was due to open by March 2009 (CB March 22, 2007) at an approximate cost of $32 million is delayed. Now the Ponce Sheraton Hotel & Casino is expected to begin construction in 2010 with an investment of around $60 million.

And $60 million is also the new estimated cost of the 140-room Barceloneta Four Points by Sheraton Hotel & Casino to be built adjacent to the area’s outlet mall. Initially, this was to be a 200-room hotel, but the number of keys has been reduced and the budget increased from $32 million to $60 million.

Plans have also changed in the case of the now 115-room Manatí Four Points by Sheraton with an increased investment of $7 million. Its construction was to begin at the end of 2008, with an investment of $23 million and without a casino, but now the $30 million project will include a casino although the company is still waiting for the necessary permits and hopes to begin construction by 2009.

In the case of the condo-hotel scheduled for construction in September or October of 2007 next to the 107-room Four Points by Sheraton at Palmas del Mar, Empresas Santana has been waiting for a permit from the Department of Natural & Environmental Resources since 2007. This development will consist of 55 condo-hotel villa units with a total of 120 rooms at an approximate investment of $25 million.

With regard to Isla Verde Aloft Hotel (another Starwood brand, the first one in the Caribbean) on the site of what used to be the hotel school in Isla Verde, Empresas Santana is still waiting for the Puerto Rico Tourism Co. (PRTC), the owner of the property, to demolish it. “We are talking with the PRTC and trying to reach an agreement to make this process more agile,” commented Enrique Grau Pelegrí, spokeperson for Empresas Santana. The investment in the Aloft Hotel is around $20 million.


http://www.prwow.com....p?archID=26216

GDB to provide direct financing for $120 million St. Regis Hotel construction
FirstBank preapproves St. Regis loan, but with full GDB guarantee; Paseo Caribe controversy impacts major tourism-development project financing
By CARLOS MARQUEZ, ELSA FERNANDEZ MIRALLES


The ongoing Paseo Caribe permit saga, the so-called environmentalist intervention to paralyze its construction, the derailment of important projects such as the proposed San Miguel Four Season in Luquillo and Dos Mares in Fajardo, and the still unresolved situation at the Marriott Courtyard in Isla Verde, among others, has changed the landscape of tourism development project financing on the island.

“The board of directors of the Tourism Development Fund (TDF) and the Government Development Bank (GDB) approved late last week the direct financing of a $120 million construction loan for the 150-room Bahía Beach St. Regis five-star hotel in Río Grande,” confirmed GDB President Jorge Irizarry.

“The GDB has the responsibility and the financial capacity to assume its fiscal agent role when the private sector is limited by present economic conditions. We will take this role without necessarily competing with the private-sector banks. The St. Regis represents an important development in the tourism industry, so we must ensure its viability through the TDF. As soon as the private banks are in a position to support the project, they will do so,” added Irizarry.

“FirstBank had preapproved the construction loan, but with a GDB full guarantee. Apparently, the GDB decided to provide the financing directly instead of the requested guarantee as a matter of public policy,” said Luis Beauchamp, FirstBank board chairman & chief executive officer.

Various CARIBBEAN BUSINESS sources confirmed negotiations regarding the financing of the construction of the Bahía Beach St. Regis five-star, 150-room hotel development in Rio Grande have been going on for several weeks between the GDB and FirstBank.

“I can’t deny that the Paseo Caribe situation has had and is having an impact regarding the perception of financial institutions, developers and investors,” said Terestella Gonzalez Denton, Tourism Co. executive director.

Beauchamp acknowledged that the FirstBank request to the GDB for a full guarantee didn’t have anything to do with the credit risk of the owners / developers.

“Antonio Muñoz’s Muñoz Holdings and Federico Sánchez’s Interlink Group are excellent clients with excellent credit. We believe in the project and understand the importance it has for Puerto Rico, but we have a fiduciary responsibility to the regulators, the credit-rating agencies and our shareholders,” Beauchamp explained.

Muñoz and Sánchez are also developers of the $210 million, 500-room Sheraton at the Convention Center and FirstBank is the prime lender.

FirstBank also has an exposure of more than $100 million in the controversial Paseo Caribe project and $7 million in the Marriott Courtyard in Isla Verde, according to sources.

“Beauchamp is not going to let the same dog bite him three times. The first time was the Marriott Courtyard, the second Paseo Caribe and he is not going to let the same dog bite him a third time. It would show very poor business judgment and he is a veteran banker with plenty of it. The government allowed this situation to happen, so now it has to face the consequences. This applies not just to FirstBank, but any other bank willing to finance substantial tourism projects in Puerto Rico,” said an industry source.

“In Puerto Rico, there are only three banks left in that segment (financing of major tourism projects) of the industry: FirstBank, Scotiabank and Popular,” he added.

Other major tourism-development projects in line for financing include the five-star, $198 million, 157-room Mandarin Oriental and the $300 million, 147-room Regent Punta Candelero, both at Palmas del Mar in Humacao.

“Of course, there is an element of discussion among the GDB board of directors, but I can only speak as a member of the board of the Tourism Development Fund (TDF) and the Hotel Development Corp. (HDC). Our priority has been and still is to participate in conjunction with private-sector banks,” said González Denton.

“For years, TDF and GDB policy has been to not be a direct lender, letting private-sector banks provide the financing, and that continues to be the priority. But if private-sector banks can’t or don’t want to assume the risk and demand certain conditions that for them are not negotiable, then we have to rethink our function and assume a more active role in the financing of essential tourism-development projects, such as the five-star St. Regis, Mandarin and Regent,” added González Denton.

“These projects are so important that even before the discussions with the GDB, the HDC had approved investing in the projects. As partners, we also share the concerns of Paseo Caribe as HDC has been part of the project,” she added.

http://www.prwow.com....p?archID=26709

Welcome St. Regis
Edition: June 26, 2008 | Volume: 36 | No: 24


Puerto Rico’s economy is in dire need of good news. And today we bring you a blockbuster.
Gov. Aníbal Acevedo Vilá and other government officials along with project developer BBP Partners’ executives are expected to break ground today on the construction of Puerto Rico’s first five-star hotel, the St. Regis Resort Bahía Beach in Río Grande.

But the news is not just the groundbreaking of a new hotel, although that alone would merit front-page treatment given the unfortunate record of failed or aborted hotel projects Puerto Rico has had in the last few years.

More than the beginning of construction of a new hotel, today’s historic groundbreaking ceremony actually marks the birth of a five-star luxury hospitality industry in Puerto Rico.

The prestigious St. Regis Hotel will be an up-scale, top-of-the-line boutique hotel that will add only 139 units to the island’s room inventory. But the hotel, with its sophisticated tropical plantation flair, will anchor a much larger resort whose developers are convinced will position Puerto Rico among the best five-star destinations in the world such as Aspen, San Francisco, Rome, Shanghai, Singapore and Bora Bora.

An initial $360 million investment helped fund the acquisition of the land-where the Bahía Beach Golf Club had been operating for years-as well as the development of six mixed-use projects including the St. Regis Resort Bahía Beach hotel, the world-class Robert Trent Jones Jr. golf course and club house and several up-scale residential complexes, including the St. Regis Residences Las Estancias, Las Verandas Villas, Las Olas Townhomes and others, some of which are already built and occupied.

While the St. Regis Hotel-which will house arch-famous Jean Georges, one of the top-10 restaurants in the world-is expected to open in November 2010, developers of the ambitious multiphase project estimate completion of the entire resort area will take five years. Once complete, industry experts estimate the total investment in the project could exceed $500 million and BBP Partners say the fully operating resort will help generate more than 3,000 new direct and indirect jobs.

The Bahía Beach Resort complex sits on a 483-acre expanse of land just 16 miles away from Luis Muñoz Marín International Airport. A two-mile stretch of sandy beach and 70 acres of interconnected lakes are protected by the region’s immaculately conserved green areas, which include more than 3,500 transplanted trees. Contrary to other large-scale developments, Bahía Beach Resort’s master plan was conceived around the area’s natural setting and will conserve 65% of the property’s green areas.

Private and public sector tourism industry officials all agree that this Bahía Beach Resort complex is the kind of world-class development that puts Puerto Rico on the world’s five-star hotel and residential map. Not only that; it’s the kind of development that piques the interest of other potential investors in our tourism industry. The presence of world- renowned brands like St. Regis, Trent Jones and Jean Georges alone speaks volumes of Puerto Rico’s potential as a first-class, up-scale tourism destination. To paraphrase a familiar advertisement for a financial company— if it’s about up-scale, world-class tourism, when St. Regis, Trent Jones and Jean George talk, people listen.

If you stop to think about it, it makes all the sense in the world. We believe there’s room for virtually any kind of tourism development in Puerto Rico. But, let’s face it: we are a relatively high-cost economy. Puerto Rico’s high labor costs alone make it more difficult of us to compete effectively in the low-cost, mass tourism segment that has flourished in neighboring low-wage destinations like the Dominican Republic.

But we’re not alone in that boat. Other Caribbean islands have also opted out of the massive, all-inclusive market and chosen to develop instead a highly sophisticated, up-scale tourism product. The important thing to remember is that, like in every industry, the key to success will be our ability to deliver value and quality over time. If we expect to charge up-scale tourism prices, we better get ready to deliver an up-scale tourism product and service.

There’s a market for everything, and Puerto Rico seems ideally positioned to deliver a high-end, up-scale, world-class tourism product. The St. Regis Resort Bahía Beach is proof of it.

http://www.caribbean....id=74&ct_id=10

New life for Cayo Largo Resort
By : ELSA FERNÁNDEZ MIRALLES
elsa@casiano.com
Edition: July 10, 2008 | Volume: 36 | No: 27


To become a premier, upscale-brand hotel in the Flagship chain; 314-room complex may be operated as an independent property following renovation
One year after the takeover of the Cayo Largo Hotel & Resort in Fajardo by Credit Suisse and Flagship Services, Rick Newman, president of Flagship, revealed the company is looking for an upscale brand that can make the operation of the 314-room complex more feasible.

“We have been working hard and the restoration is 75% completed,” assured the hotelier, whose other successful tourism projects include the San Juan Holiday Inn in Isla Verde and the Rincón Beach Resort in Añasco.

“The work has been hard because after four years of complete abandonment it has taken us more time than expected to redo the property. The site was infested and we had to clean it thoroughly. It was also covered by mildew and mold, not to mention that we refurbished the 18-hole golf course. With the hike in construction costs and the exorbitant operational costs we face, our only possibility of success is to make Cayo Largo an upscale hotel.”

The chairman of the board of the Puerto Rico Hotel & Tourism Association (PRHTA) told CARIBBEAN BUSINESS that construction costs have risen so much that it has been impossible for him to build extra rooms at his San Juan Holiday Inn property, as he had hoped.

“That’s why we’re being extra careful with our Cayo Largo project. We need a brand that can embrace all the components of a high-end product, and we are even considering running it independently, as one of the possible scenarios. That is yet to be decided, and because of it, we are in no hurry,” he concluded.

Credit Suisse is one of the world’s largest investment firms with real-estate developments all over the world.

Choice hotels to expand its local room inventory from 254 to 800 rooms
New projects include a hotel in Centro Médico, an already existing 450-key hotel and condos in Isla Verde and a new 100-room hotel in Mayagüez
By ELSA FERNANDEZ MIRALLES


Choice Hotels International, one of the largest and most successful lodging franchisors in the world, will more than triple its current inventory of 254 rooms on the island to about 800 rooms. The new properties will include a new $10 million, 100-room Comfort Suites hotel with a casino in Mayagüez-just in time for the upcoming Caribbean & Central American Games, a 39-room hotel inside Centro Médico in Río Piedras, and the reflagging of an already existing hotel and condo-hotel in Isla Verde of around 450 keys.

“We already reopened three venues under our different flags: El Portal Quality Inn, a 47-room hotel at Condado; a 99-room El Tuque Quality Inn in Ponce, and Le Consultat on Magdalena Avenue in Condado, a 20-room boutique hotel from our Clarion Collection,” informed Raúl Fuentes, director of emerging markets for Choice Hotels.

Fuentes said by March they expect to open the Campomar Comfort Inn, a 60-room hotel with two full restaurants in Levittown, Toa Alta, near the Bacardi Distillery.

“The Centro Médico project will have several meeting rooms because right now there are no meeting or group facilities there. It will serve the medical community as well as the public in general. We haven’t decided under which flag it will operate because the lease is still being negotiated. We still don’t know how much the investment for remodeling will be, but I guess it won’t be cheap. When in operation, it will employ 10-15. Nor do we know yet the brand for the Isla Verde hotel and surrounding condos, which is also in negotiations, but it certainly will expand our visibility in Puerto Rico in a big way. I can only say that right now it operates privately, under no flag,” he said.

The 100-room Mayagüez Comfort Suites number of employees will depend on whether the developer decides to build a casino and how big it will be. “For a 100-room hotel, 25 employees will be enough, but then with a casino, depending on its size, it will need several more employees,” expressed Fuentes.

Next month, the executive will be in Puerto Rico working with Reineiro Torres, developer & owner of the Quality Inn & Suites in San Germán on Interamerican Avenue behind the town square. “In March, they will begin the demolition of the existing structure (the former Cardol Discount Store) and in 18 months will have a four-story hotel completed,” said Torres.

Quality Inn, a pioneer in consistent midpriced lodging, is the foundation on which the Choice Hotel chain was based. Choice Hotel is now the world franchisor of Cambria Suites, Comfort Inn, Comfort Suites, Quality Inn, Sleep Inn, Clarion, Mainstream Suites, Suburban Extender Stay Hotel and Roadway Inn Brand hotels.

http://www.prwow.com....p?archID=25790


Next Stop Ponce, P.R.
Puerto Rico’s Second City Steps Out

By JEREMY W. PETERS
Published: February 17, 2008

RENO has Las Vegas. Thessaloniki has Athens. And Ponce has San Juan.

Second cities, the stepdaughters of the urban world, have always had trouble emerging from the shadows of their more glamorous big sisters. And ever since it was founded in 1692 on the island’s southern coast between a mountain range and the Caribbean Sea, Ponce has had to contend with San Juan’s pre-eminence.

It was San Juan that settlers chose as the island’s seat of government and center of commerce. It was San Juan where developers built glittery casinos and high-rise hotels. And San Juan is where cruise ships deposit thousands of tourists every day.

But in the last few years, Ponce has started making a serious effort at big-city respectability. Tourist visits jumped 8 percent from 2005 to 2007, partly because three airlines — Continental, JetBlue and Spirit — now offer direct flights from the continental United States to Ponce’s renovated airport.

JetBlue started flying to Ponce from Kennedy International in the summer of 2005, and it has had enough demand from both tourists and Puerto Ricans traveling back to visit their families that it now also offers direct flights to Ponce from Fort Lauderdale and Orlando.

You don’t have to look far to see stirrings of development across Ponce. Construction crews are busy repaving its narrow 19th-century street grid. Billboards advertise new condos and apartments. Many of Ponce’s historic Spanish colonial, Art Deco and neo-Classical buildings are being restored. And the city is spending $20 million to renovate and expand its cultural crown jewel, the Ponce Museum of Art, which claims to have the most extensive art collection in the Caribbean.

All of this expansion is exactly the type of development the Puerto Rican government had in mind when it started actively promoting Ponce as a tourist destination in 2006. For decades, Ponce has drawn at least a little interest from foreign visitors. Two cruise lines, Holland America and Celebrity, make occasional stops in its port. And a few large beach resorts have sprung up in the Ponce metropolitan area over the years.

But the Puerto Rico Tourism Company wanted to push Ponce harder. It borrowed a page from its successful marketing strategy for the island’s western coast and rebranded the entire southern region Porta Caribe. Advertisements touted the area as an alternative to vacationing in the San Juan area.

The Ponceños now eagerly await their moment. Local pride spills out of them so effusively, you’d think the city’s drinking water had been spiked.

The city has no fewer than five museums that honor different aspects of its history and culture. Among them are the Museo de la Historia de Ponce (the Ponce History Museum), the Museo de la Música (the music museum) and the Museo de la Arquitectura (the architecture museum.) There are also museums honoring the city’s baseball stars and the nearly two dozen people killed when the police fired on a group of protesting Puerto Rican nationalists in 1937.

Residents greet tourists with gratitude and warmth — if not a little bit of surprise. They know you could just have easily gone to one of Puerto Rico’s more conventional destinations, so they go out of their way to thank you for choosing their city instead.

“Are you American?” a little old man asked me in a downtown cafe, as if he thought I were some exotic polo-shirted creature who had strayed too far from the Hilton Ponce Golf and Casino Resort. When I replied that I was indeed American, his face lit up and he began talking about how he had once lived in Spanish Harlem but moved back to Ponce, which he was proud to call the city of his birth.

As eager as Ponceños are to show you their city, they can also be humorously realistic about its shortcomings. “In Ponce?” was the reply I received more than once when I asked what new clubs or bars the city had to offer someone who wasn’t ready to turn in at 10 p.m.

But you don’t go to Ponce for thriving night life. The city is best for those who admire art and architecture and can enjoy soaking in its ambience.

A stroll through downtown makes you quickly forget that you are still in the United States. Puerto Rico is, of course, an American commonwealth. But from the looks of the city, you could be forgiven for thinking you were in Spain.

Its downtown is a hodgepodge of ambitious designs, from the Spanish colonial row houses, to the neo-Classical-style high school modeled after Grand Central Terminal, to the red and black candy-striped wooden firehouse on the town square.

The growing museum of art, which is to reopen in January 2010, is another example of how this ambitious city has strived to stand out. Designed by Edward Durell Stone, whose credits include Radio City Music Hall and New York’s Museum of Modern Art, it houses more than 3,000 pieces, from ancient Greece to Goya.

Ponce’s downtown is actually about three miles north of the sea. For a waterfront scene, you have to head to the boardwalk along the harbor, known as La Guancha.

It has one large restaurant, El Paladar, which tends to be over-air-conditioned but makes up for it with large windows that face the marina and a hearty menu of local Puerto Rican cuisine like mofongo, a dish of seasoned mashed plantains. It also serves a fried whole red snapper that was extremely tender and moist the night we tried it.

Farther down the boardwalk, a number of small food stands have Puerto Rican staples like stewed chicken and rice and beans. The city is not known for its beaches, but the coast to the west of it is. It is an easy day trip to one of the nearby coastal towns like Guánica, which has a downtown so small it makes Ponce feel like San Juan, and it is only about 40 minutes away. From there, it costs $6 to take a short ferry ride to the uninhabited Gilligan’s Island, which is popular for snorkeling.

Closer to Ponce is the uninhabited Isla Caja de Muertos, or Coffin Island, a popular day-trip spot by ferry for swimming, sunbathing and hiking.

THE natural setting around the city is one of the less promoted but most appealing parts about visiting Ponce. It is well worth a drive up Route 10, a corkscrew of a highway that winds north and south through the island’s verdant interior, to see how quickly the landscape changes from urban and flat to rural and mountainous. Suddenly, it feels as if you’ve somehow crossed into Guatemala.

That Ponce doesn’t feel like the Puerto Rico advertised in commercials from the island’s tourism bureau or seen from the busy streets of San Juan is precisely why some tourists seek it out.

“We’re not the kind of people who say, ‘Let’s go to a place where there are a thousand other people from New York at the hotel,’ ” said Judith Kleinberg, a retired state employee from Washington County in upstate New York, who was visiting Ponce on a two-week trip of Puerto Rico with her husband, Ivan Kazen.

They were planning to stop “everywhere but San Juan,” she said. “You come down here, and it’s quiet.”

WHERE TO STAY

Hilton Ponce Golf and Casino Resort, (877) 464-4586; www.hiltoncaribbean.com/ponce) is the place to go for a full-service, big-beach-resort feel. It includes a 27-hole golf course and a spa. Winter rates start at around $200 a night excluding taxes.

Fox Delicias Hotel (6963 Calle Isabel; 787-290-5050) is a renovated theater right off the town square that has clean, cheap rooms. Winter rates start at $69.

Hotel Meliá (75 Calle Cristina; 800-448-8355; www.hotelmeliapr.com) is a more upscale option for staying in Ponce’s city center. Doubles start at $105.

WHERE TO EAT

Rincón Argentino (69 Salud Street; 787-840-3768) has a large menu with seafood, steaks and sangria, and is connected to one of Ponce’s hippest (and loudest) bars. Most main dishes are $15 to $25.

El Paladar on La Guancha, the boardwalk (787-842-1401), is good for big, hearty helpings of Puerto Rican specialties like mofongo ($10 to $36) and fried snapper ($11.50).

http://travel.nytime...vel/17next.html

Plaza Internacional gets under way
Former Pan American Village site to be transformed into a top retail hotel-business center; Crowne Plaza lands hotel operation; 600,000-square-foot mall ready by 2010
By FRANCES RYAN


Considered one of the most ambitious and exciting private-sector collaborations to Ciudad Mayor, Plaza Internacional is a multiuse development including a major shopping center, a four-star hotel and a state-of-the-art office tower complex.

Plaza Internacional will require an approximate $430 million investment to finalize two construction phases, which should help generate more than 5,000 jobs once all three main buildings are fully operational, CARIBBEAN BUSINESS has learned. The project’s first phase, developed at $220 million, consists of the joint shopping center and hotel facilities, followed by an office-tower complex that will begin construction in late 2010.

Ciudad Mayor is Gov. Aníbal Acevedo Vilá’s initiative to transform the San Juan metro area into the premier metropolis of the Caribbean.

Plaza Internacional will occupy the footprint area of the former Pan American Village, adjacent to the entrance of the Teodoro Moscoso Bridge to the airport. It will kick off with the construction of the project’s hotel portion, which will operate under the Crowne Plaza flag, a division of InterContinental Hotel Group, explained Rafael Rovira, executive director of New Century Development Inc. and Plaza Internacional Hospitality Group. The latter will oversee Plaza Internacional’s hotel development portion. New Century Development is a locally owned company with two main partners: Luis Rivera and Frank Trogolo.

“Indeed, this project is emblematic of our firm belief and commitment to invest in Puerto Rico. We can’t let cyclical economic changes or difficult economic times cloud our vision of a better Puerto Rico for future generations. Plaza Internacional is a key component of the Ciudad Mayor initiative. As such, we will contribute with the development of a state-of-the-art integrated facility that not only improves the quality of life in the area but also contributes by attracting new investment and creating much needed jobs,” said Rovira, who confirmed the hotel construction will get under way first, as negotiations to finalize the future shopping center’s anchor tenants aren’t final.

Scheduled to begin operations late 2009 and developed with an estimated $77 million investment, the new hotel successfully marks the re-entry of the Crowne Plaza flag into the local hospitality industry. Meanwhile, Rovira explained the future 264-room hotel will help generate 1,150 jobs during construction and another 400 once it is operational.

“It will be a four-star hotel focused on 24-hour service and a diverse offering of restaurants and entertainment options for hotel guests and comfortable rooms averaging 380 square feet to 420 square feet. Its ideal location, only minutes away from the airport and closely located to the metro area’s business district, will enable the future Crowne Plaza to attract conventions and special events to its 20,000 square feet of meeting space, including a large 11,000 square foot banquet / ballroom facility,” said an enthusiastic Rovira, adding the hotel will consist of two 11-story towers with a panoramic terrace facing the lagoon on the fourth floor with a view that extends from San Juan to Isla Verde in Carolina.

The property’s avant-garde design will connect the hotel with the future 600,000 square foot shopping center, located to the east of the Teodoro Moscoso Bridge. The hotel and shopping center facilities will be connected through the interior much like other similar mixed retail-hospitality developments in Orlando and Las Vegas.

The 600,000-square-foot retail facility will be designed as a fashion mall including top fashion labels currently not available on the island. While Rovira declined to comment on potential anchor tenants-noting, however, that conversations with two top contenders are moving full speed ahead-he did indicate it will be the hottest new fashion destination in Puerto Rico. Retailers such as Nordstrom, Saks Fifth Ave. and designer retail operations such as Prada, Michael Kors and others could be on the short list of future upscale tenants. The new Plaza Internacional shopping center will complement the soon-to-open strip mall inside the airport, and it will be midway between the island’s two largest shopping centers, Plaza Las Américas in Hato Rey and Carolina’s Plaza Carolina. The shopping center is expected to begin operations in 2010, will require an approximately $200 million investment and generate more than 3,000 new direct and indirect jobs.

Meanwhile, the office towers complex is expected to begin construction between late 2010 and early 2011 at an approximate cost of $150 million, concluded Rivera.

http://www.prwow.com....p?archID=25226

Chupacabras Marvel back

LEWIS BEALE

Wednesday, December 26th 2007, 12:42 PM

You think you’ve got problems? Try being Ben Grimm, aka the Thing. All he wants to do is head out solo to Puerto Rico for a few days to chill in Old San Juan.

While there he intends to enjoy the adulation of the locals, who think his pebbly skin reminds them of the Spanish-era fortress El Morro — which is why they’ve taken to calling him El Morrito.

But no! Grimm's Fantastic Four buds — that’s Mr. Fantastic, Invisible Woman and the Human Torch to the uninitiated — just can’t leave him alone.

So they fly down to La Isla where — Gasp! Pow! Ka-chunga! — they run into a rabid band of chupacabras, those goat-sucking monsters of Boricua legend.

Will the Fantastic Four save the rain forest El Yunque from the evil monsters? Will the jealous Human Torch manage to attract his own following of sun-kissed Latina honeys? And will Marvel Comics sell tons of copies of “Fantastic Four: Isla de La Muerte,” due out in English and Spanish-language editions on Friday?

“My aim in this book was for the reader to learn about Puerto Rico,” says Tom Beland, the Guaynabo, Puerto Rico-based writer of “Isla de la Muerte,” which contains numerous references to Boricua cultural touchstones like Old San Juan, mofongo — a mashed plantains dish — and the tiny frog coquí.

“I wanted whoever had been to this island to be able to pick up this book and recognize the culture instantly,” adds Beland. “We’re eliminating 95% of the comic readership by doing this, but I didn’t give a s-”

The idea for the chupacabras tale came after Beland, who describes himself as “the guy who writes about relationships” for Marvel Comics, was asked to do a story on the Fantastic Four and how they operate as a family unit.

After attending Old San Juan’s annual San Sebastian festival, he came up with the germ of the concept, “that this is where Ben Grimm comes [for vacation], because he looks like the fort. If you remotely resemble anything on this island, you’re automatically a cult hero.”

Beland then wrote the story, but also did some brainstorming about what Puerto Rican tidbits should be included with editor Alejandro Albona and artist Juan Doe, who are, respectively, Puerto Rican and Nuyorican.

“We were like three school girls at a slumber party,” says Beland. “It was this cool little P.R. thing we were talking about.”

Even better, Marvel’s honchos went for the concept. The only thing they asked for was that there be a major villain in the piece.

So Beland added one of the Fantastic Four’s old adversaries, Mole Man, since a good part of the story takes place in caves underneath El Yunque.

What emerged was a potent mix of Marvel-mania and sort of a “short cultural history of P.R. for gringos and others.”

“Latino culture is a very untapped source for comics,” says Beland. “In this book we really hit on the culture. I think Puerto Rico is probably the fifth member of the Fantastic Four in this piece.”

Well, yeah. And if nothing else, there’s that wonderful moment in the story when good old Ben, using the catch phrase that every comic geek knows by heart, says “It’s chupa-clobberin’ time!”


http://www.nydailyne....k.html?ref=rss

CPG completes transaction to acquire Dorado Beach and Cerromar hotels
New owners evaluating possible operators; retrofitting and rebuilding of properties could begin first quarter of 2009
By JOSE L. CARMONA


The transaction to acquire landmark hotels Dorado Beach and Cerromar in Dorado through a joint venture by Caribbean Property Group (CPG) and local developer Federico Stubbe was completed Dec. 7, Stubbe confirmed to CARIBBEAN BUSINESS.

Stubbe said the transaction with the Pritzker family, owners of the Hyatt hotel chain to which both hotels belonged, was made through a private equity fund for an undisclosed amount and involved the Dorado Beach, Cerromar, four golf courses, adjacent properties and residential developments.

Tentative plans call for converting the Dorado Beach into a five-star hotel and the Cerromar into a four-star hotel plus residential and commercial developments. Total planned investment in both properties surpasses the $1.5 billion mark, noted Stubbe.

“Right now, we are evaluating who will be operating those two hotels, the Dorado Beach and Cerromar. We will also begin evaluating the architectural part, and the main issue here will be whether it’s more feasible to remodel Cerromar, how to do the rebuilding and the extent of the demolition if it comes to that. There are several main issues here to consider,” commented Stubbe.

The local developer said the structural and design codes have changed since the structures were originally built back in the ’60s and therefore they cannot rebuild using the same old building codes. Secondly, luxury facilities nowadays are much more demanding and require amenities and facilities not currently available at both properties.

“All this is under evaluation. We expect to have some decisions made by January in order for us to proceed,” added Stubbe. “We first have to go through a design and permitting process, which will probably take us all of 2008, and we will hopefully begin construction full blast by the first few months of 2009. We hope to have all the planning structured by the first quarter of next year.”

Best-case scenario has both hotels opening sometime in 2010.

Stubbe said that in order for Puerto Rico to compete in the global market, it needs large-scale projects of the kind not currently available on the island.

“To be a world’s best destination you have to go large scale, and that’s why we’re being so cautious in the way we disclose information about this project,” added Stubbe.

The 206-room Dorado Beach closed in 2006, laying off some 700 employees, while the 506-room Cerromar closed in 2003. At the time, the hotel had 500 employees.

CPG is already the owner of the Ritz-Carlton Hotel & Casino, Ambassador & Casino and the Normandie, as well as other real estate and shopping centers.

http://www.prwow.com....p?archID=25391

PRTC unveils ‘small hotel’ pipeline
Thirteen small hotels at an estimated combined investment of $83 million would add 560 new rooms and create 437 jobs outside the metro area
By ELSA FERNANDEZ MIRALLES


With the first Puerto Rico Investment Forum (PRIF) fast approaching (Dec. 4-6) Puerto Rico Tourism Co. (PRTC) executives announced that a total of 13 small hotels or inns throughout the island are currently in the agency’s pipeline of projects that could soon become reality. According to officials, the projects when finished-worth a combined $83 million-would add 560 new rooms and create 437 new jobs outside the San Juan metro area. Officials could not pinpoint when exactly the projects would be operational since some of them have been in the planning stages for quite some time.

Among the projects announced were Hotel Novell Plaza in Cabo Rojo, with a total of 180 rooms at an approximate investment of $18 million to be developed by Carlos Caraballo; Hotel Villa Montaña II, a condo-hotel in Isabela with 70 new rooms at an approximate cost of $26 million; and Hacienda San Pedrito in the mountains of Adjuntas, a 75-room hotel with an approximate investment of $3 million. When finished, these three projects could generate 125, 25 and 33 jobs, respectively.

Also endorsed by the PRTC is the condo-hotel Villas del Pepino in San Sebastián, a 48-room operation costing some $4.5 million with the possibility of generating 40 jobs when completed; Hotel Imperial in Aguadilla, a 30-room property at a cost of $5 million; Hotel Puerto Real in Cabo Rojo, with 30 rooms at an investment of $4.5 million and the expansion of the Inn on the Blue Horizon in Vieques, 32 rooms at a cost of $11 million. It is estimated that these four projects will generate 40, 40, 21 and 28 jobs, respectively, when finished.

Small inns and ecotourism developments are being promoted as a viable alternative to tourism entrepreneurs. Accordingly, the PRTC will highlight to potential investors El Yunque Eco Club Resort in Río Grande, with 24 rooms at a cost of $4 million, that could create 20 jobs; Hotel Villa Castillo in Humacao, 24 villas at an investment of $3.5 million; Luquillo Sunrise Beach Inn, a 15-room structure at an approximate cost of $1 million and Hotel Passion Fruit in Fajardo, a 12-room venue that will cost $2 million. These three projects could generate 20, 10 and 15 jobs, respectively, when operational.

Finally, Rincón has two new small inns in the Tourism Co.’s pipeline: Hotel Isleña, a $708,800, 10-room facility that will generate 35 jobs, and Hotel Lazy Parrot, a $426,000 investment in 10 additional rooms that when finished could translate into 20 new jobs.

http://www.prwow.com....p?archID=25038

Walgreens takes over 10-plus El Amal stores
By : FRANCES RYAN
frances@casiano.com
Edition: July 17, 2008 | Volume: 36 | No: 28


Fast-track schedule to remodel and reopen former El Amal locations; some sites still under renovation as CVS Pharmacy prepares to enter market
Starting this week, 10-plus stores of the former El Amal drugstore locations officially begin operations as Walgreens drugstores, CARIBBEAN BUSINESS learned.

Although Walgreens never revealed the total number of stores it acquired from El Amal, industry sources confirmed it didn’t acquire all 20 included in the original offer. Some locations, such as the Isla Verde El Amal, are still being remodeled.

Walgreen’s aggressive conversion schedule is expected to further strengthen its market leadership, as Rhode Island-based CVS Pharmacy prepares to enter the local market.

As reported earlier, El Amal, Puerto Rico’s second-largest drugstore chain, announced the sale of 20 of its 60 locations and the decision to transform its remaining 40 stores into new clinical centers.

While terms of the sale transaction to Walgreens were undisclosed, it would help fund the $25 million transformation of El Amal stores, as the chain moves to becomes a network of clinical centers.

Future El Amal clinical centers are expected to provide such specialty pharmacy services as infusions, preventive health and nutritional services. The new El Amal format will still carry a limited retail selection.

Stereo Vision Entertainment Forms SVE Studios Puerto Rico

LOS ANGELES — Stereo Vision Entertainment, Inc. (OTCBB:SVSN), a film production company focused exclusively on developing high quality, low cost, polarized 3D feature films, announced today that it is forming a wholly owned subsidiary named SVE Studios Puerto Rico. Andres Romero-Barcelo, 52, son of the Honorable Carlos Romero-Barcelo, Puerto Rico's former Governor, U.S. Congressman, and Stereo Vision Board member, has been appointed President with immediate effect.

Stereo Vision's Chief Executive Officer, Jack Honour, stated, "We're forming SVE Studios P.R. because with a wholly owned Puerto Rican company we can better capitalize on the many incentives provided to film producers by the Puerto Rican government. Puerto Rico's diverse topography will also allow us to produce virtually any kind of movie. From a wild west ghost story, to a pirate's movie on the high seas, Puerto Rico has it all. Working with Puerto Rico's already strong film production community, SVE Studios P.R.'s business mission is to develop the infrastructure necessary to take a film from pre-production, through principal photography, and then wrap post production on the island. This will allow us to circumvent the high cost of working with the studios and unions in Hollywood, and bring in additional revenue by being a one stop shop for other production companies coming to Puerto Rico. We expect this to be the beginning of a permanent Stereo Vision presence in Puerto Rico."

About Stereo Vision

Located in Van Nuys, California, Stereo Vision Entertainment Inc. (stereovision.com) is a film production company focused exclusively on high quality, low cost, next generation 3D feature films. Responding to the incredible growth of digital projection 3D theater system worldwide, and the exploding demand for polarized 3D feature films, Stereo Vision has for several years, been developing an exciting slate of commercial 3D feature films. Led by a management team that includes Chairman and Chief Production Officer Douglas Schwartz, creator and executive producer of "Baywatch," the world's most watched television series in history, and Chief Financial Officer, Goldman Sachs veteran Theodore Botts, Stereo Vision intends to produce and release at least fifteen 3D feature films over the next 5 years. Capitalizing on its long-standing studio relationships, Stereo Vision is uniquely positioned to be a significant player in future of the 3D motion picture industry.

http://www.centredai...ory/570251.html

Edited by Jaykar, 26 August 2008 - 04:55 PM.

[Jaykar]

Puerto Rico’s economy is in its third year of recession
What is the government doing to turn this around?
By FRANCES RYAN


Against all odds
Ten-agency economic development agenda to create 18,000 jobs by 2010; Tourism nears 100% and four-year 5,000-room goal, reviews plans for seven new casinos; one million square feet of new laboratory space ups Puerto Rico’s chance of becoming bioisland; top Pridco projects attract $500 million in new economic activity; test of revamped permit system under way

Despite the island’s challenging political climate and the third-consecutive year of local economic recession, the Department of Economic Development & Commerce (DEDC) is committed to delivering tangible results regardless of a hectic 2008 economic agenda.

Projects in the pipeline-several of them already under way or to be started this year-should generate approximately $1.5 billion in new investment in the next two years as officials continue their efforts to create 18,000 new jobs by 2010.

Following the resignation of former Economic Development Secretary Ricardo A. Rivera Cardona late last year, designated Secretary Bartolomé Gamundi took over, vowing “not to stand in the way of the work the team had already begun” and pledging to support and complement the agency’s ongoing efforts.

Gamundi is concentrating his efforts on the island’s small and midsize businesses, providing opportunities for regional consortia (i.e., Intenor, Inteco, Intene, Intesur) to become an integral part of the DEDC’s economic development initiatives and identifying more opportunities to increase global exports for Puerto Rican companies.

Against great odds, the 10-agency umbrella is focusing on its individual yet complementary economic development agendas. CARIBBEAN BUSINESS sat with the economic development team for an exclusive economic development roundtable to review 2007 results and the outlook for the remainder of 2008.

Since last year’s review (CB, Feb. 8, 2007), more than 40 high-impact economic initiatives have either gotten under way or were completed for the two-year period ended December 2007, representing a total investment of $1.5 billion and the creation of more than 3,500 new direct jobs.

Chief among those high-impact projects was the overhaul of the island’s permit system. Currently in the first phase of its implementation in 15 municipalities, it is expected that, when fully implemented, this revamped permit system will expedite the approval of some $1.3 billion worth of new investment activity over the next three years.

Already expedited through the Puerto Rico Industrial Development Co. (Pridco), there are 21 major biotech and manufacturing projects totaling $900 million in new investment. Chief among them, Pall Life Sciences ($58 million), Abraxis Biosciences in Barceloneta ($32 million), St. Jude Medical in Arecibo ($200 million and 1,200 new jobs), General Electric’s multimillion-dollar expansion and Microsoft ($66 million digital expansion).

Activities of the DEDC’s smaller agencies including the Convention Center District, the Puerto Rico Film Commission, the Puerto Rico Land Administration and the Horseracing Administration raked in a combined $145 million for the island’s economy during 2007 and helped maintain more than 7,000 direct jobs, according to DEDC officials.

Considering the team scarcely has eight months before the end of the calendar year, CARIBBEAN BUSINESS also took a realistic view of their plans for 2008. “We’re not belittling the difficulty of the times we’re going through, there’s no denying that. But we have also made progress in some areas, sometimes amid extremely difficult circumstances. Despite it all, Puerto Rico still has many great assets and competitive advantages over other regional competitors, and all of us have the responsibility of continuing to move forward for Puerto Rico’s sake,” said Gamundi.

At a glance, the DEDC’s 2008 agenda-already into the second quarter-contemplates the confirmation and/or completion of an additional 30 high-impact projects, several of them already under way mainly in the areas of biotechnology, life sciences, tourism, exports, film, entertainment and commercial real estate that will generate another $1.5 billion in new economic activity by the end of 2010.

The DEDC oversees a wide range of agencies including the Puerto Rico Trade & Export Co. (PRTEC), Pridco, the Puerto Rico Tourism Co. (PRTC), the Cooperative Development Administration, Puerto Rico Film Commission, Convention Center District & Coliseum Authority, Port of the Americas Authority in Ponce, Roosevelt Roads Development Authority, the Horseracing Administration and the Land Administration. Combined they manage a budget of $449 million and allocate more than $35 million annually to promote Puerto Rico as an important economic center within the region.

The DEDC also oversees some of Puerto Rico’s top strategic initiatives including Portal of the Future (Roosevelt Roads), expansion of the Port of the Americas in Ponce, the San Juan Waterfront, the Knowledge Corridor, which will be called Ciudad de las Ciencias (Science City), and the overhaul of Puerto Rico’s permit system.

Slowly moving forward, Portal of the Future (Roosevelt Roads development) is expected to turn the former naval station in Ceiba into a mixed-use district including tourism, manufacturing, transportation, and research and development. Still pending, however, is the public auction of some 2,949 acres of the Roosevelt Roads land, which should have been auctioned earlier in the year with a starting bid of $65 million. Once completed, the Portal of the Future development is expected to generate 20,000 permanent jobs, an additional 50,000 during construction and a long term $6.7 billion over the 30-year development plan.

Ponce’s Port of the Americas, on the other hand, completed the Ponce Bay dredging to 50 feet, now the deepest in the Caribbean region. The bay’s depth will enable the port to service the largest vessels in the market, post-Panamax, which typically surpass 900 feet in length.

With a $250 million financing to complete the expansion, the Port of the Americas should be capable of servicing post-Panamax vessels with a controlling depth of 50 feet, handle over 1.5 million TEUs (20-equivalent-units) per year, over 1,000,000 tons of general cargo with over 5,000 feet of pier surface and provide logistic support under the protection of a free trade zone and secure environment once it is completed. Efforts to select the company that will administer the Ponce port are slowly moving forward, however, and should be announced before the end of the year.

Pridco’s top projects call for $900 million investment
Despite the transformation the global manufacturing industry is going through-shifting from an intensive labor to a research-and-development (R&D) industry-Puerto Rico’s manufacturing sector still represents the island’s largest economic sector contributing 42% of Puerto Rico’s gross domestic product, a share that has remained steady for the past 15 years. The Puerto Rico Industrial Development Co. (Pridco) has an “ambitious yet attainable” agenda for 2008, according to Boris Jaskille, Pridco’s executive director.

A total of 23 earmarked projects, seven of which are deemed “high impact,” are expected to attract $900 million and help create nearly 6,000 new jobs once all are fully operational.

In 2007, Pridco had to deal with the expiration of the Industrial Incentives Act. Now the soon-to-become Economic Development Incentives Law is expected to be unveiled at the beginning of May and subsequently approved by the Legislature during the current session. “Despite all of this, we were able to move forward several high-impact projects, four of them in the Mayagüez region (Lockheed Martin, Honeywell Aerospace, WSIFB and Essig Research), Abbott’s $450 million expansion in Barceloneta in a former Pfizer building and the expansion of Recoms, a local bioscience company dedicated to process validation,” noted the Pridco executive.

An important accomplishment for Pridco amid the local economic chaos was the arrival of Beckton Sciences in Cayey, investing more than $53 million including new construction to develop what it calls its company’s best facility to date. Novartis will be expanding its Humacao facility to the tune of $36 million with a focus on its thin-film medical products and, jointly with the board of directors of Integra, it kicked off construction of three new clean rooms at its Añasco plant at an additional $9 million investment.

Pridco has identified 23 new projects in the pipeline for 2008, seven of them deemed high impact, and expects to create 5,790 new jobs. “Chief among the 2008 projects already confirmed is Angiotech in Aguadilla, a medical devices company that will hire 559 people, many of them laid off by Hewlett-Packard. They’re investing $13 million to retool a Pridco building for their expansion. Others include Coopervision in Juana Díaz with 100 employees and a $170 million investment, Lockheed Martin and the Bioprocess plant, both in Mayagüez, with a combined $63 million investment, and Microsoft’s $52 million digital distribution initiative,” Jaskille confirmed.

In absolute terms, while prospects for biotech and life sciences look good, the island’s traditional manufacturing continues to battle closings or significant job reductions of top industry players such as GlaxoSmithKline, Bristol-Myers Squibb, Pfizer, Amgen, Colgate-Palmolive and Tyco Safety Products. These closings or significant job reductions have affected more than 2,000 direct employees and likely more than double that number in indirect job loss, not to mention the long-term economic impact these voids will leave in the industry and the island’s economy.

However, it’s not just one reason, group or person responsible for the closings that have recently been announced in the manufacturing industry, according to Edgardo Fábregas, president of the Puerto Rico Manufacturers Association and vice president of operations, Puerto Rico, Latin America and Asia Pacific for Global Pharmaceutical Supply Group of North America, a unit of Janssen Ortho LLC.

“There has been a fundamental change in the way companies are supplying their products globally. There has been a shift toward regional coverage from that of traditionally supplying just one jurisdiction. Companies are taking a regional strategy by supplying full regions as opposed to one individual country and that can change the manufacturing supply chain by shifting production to certain jurisdictions, which can better supply a region,” noted Fábregas.

He said another peculiar phenomenon occurring in the pharmaceutical industry is that the Food & Drug Administration (FDA) is stricter in its drug-approval process because of prior problems with certain medications on the market. “As a result, we have seen a significant reduction in the number of new drug approvals. In 2005, I believe the FDA approved 30 new drugs; in 2006, it was 31 new approvals, but so far this year only 10 new approvals have been granted. Combine this with numerous patent expirations, which far outweigh the number of new drugs in each company’s pipeline, and you can clearly see how this imbalance will affect manufacturing plants,” noted Fábregas.

“Many people measure the success of Pridco’s efforts solely on the basis of new openings, but given the transitional nature of traditional manufacturing around the world, retention of existing companies is just as important. For every Honeywell that begins operations, there are many like Lifescan-already operating here-that we have to fight hard to keep from leaving for Ireland or other emerging markets. We were able to do a lot in 2007 despite difficult times and a nearly expired Industrial Incentives Act,” said Jaskille.

Contrary to departure rumors fueled by Hewlett-Packard’s (HP) layoffs last year, Jaskille feels positive about HP’s local operations. “They’re going through a very comprehensive restructuring process, but their commitment to Puerto Rico remains firm,” said Jaskille. Meanwhile, local technology outfit Halo has partnered with DreamWorks, Disney’s film studio division, to promote its new remote teleconference technology that will be serviced from Puerto Rico to global DreamWorks clients 24 hours a day, seven days a week, CARIBBEAN BUSINESS was told.

The shift Puerto Rico is experiencing within the manufacturing industry, according to industry experts, is rapidly taking the labor-intensive bonanza of the 1970s and 1980s to an intelligence-based biotech and life sciences industry that could be just as profitable-if not more-in the long run. Whether these new industries employ as many people as traditional manufacturing remains to be seen. “Our task ahead will be more of a balancing act, maintaining what we have while rapidly establishing the kind of infrastructure that will enable us to insert Puerto Rico in the knowledge economy as a leading competitor. Our world-class, high-skilled and bilingual labor force, coupled with decades of leadership in the manufacturing industry, will serve as the launching pad of our biotech and life science industry,” concluded Jaskille.

In science we hope
To become the global biotech power center Puerto Rico wants to be, namely Bioisland, a lot of hope-and resources-have been placed on science. Efforts run the gamut from technology, life sciences, scientific research and equipment, to continuing education for teachers, marketing of scientific discoveries, intellectual property and the attraction, development and retention of world-class scientists.

The Science, Technology & Research Trust (STRT), charged with the efforts of converting the island into a global biotech center, has one million reasons to celebrate as it begins construction of one million square feet of new laboratory space, CARIBBEAN BUSINESS has learned. The projected new lab space is scheduled to open in various phases starting this year, continuing over the next couple of years, and will place Puerto Rico in the biotech major leagues. Of the new laboratory space to be added around the island, 30,000 square feet are already open in the Mayagüez area.

As Puerto Rico moves forward in its quest to become Bioisland, it will not only have to have hope in science, but seriously invest in it to have a fighting chance against the East River Parks (New York) or Biopolis (Germany) of the world.

Although the STRT was created in 2004, it wasn’t until last year that it was able to capitalize the initiative by completing the transfer of 70 cuerdas of land, formerly occupied by the state penitentiary known as Oso Blanco. For STRT, this means having a permanent footprint to develop the future Science City sector, which will include the Molecular Science building, the Puerto Rico Cancer Center, the Botanical Garden, the University of Puerto Rico and the Medical Sciences Campus.

Area construction, research and development (R&D) initiatives and general commercial activity in the area are projected to generate $1.7 billion, as well as give way to the new one million square feet of laboratory space, the equivalent of half of Plaza Las Américas, solely dedicated to scientific research.

Luis E. Rodríguez-Rivera, executive director of the trust said: “With one million square feet of new laboratory space, in addition to various existing lab facilities around the island and the 30,000 square feet of lab space in the new Mayagüez facility, we will jump right to the major leagues of the biotech and life sciences industry. Up until now, we didn’t have the kind of capital needed to effectively compete on a global scale. The land transfer capitalizes the trust for future construction which, in turn, guarantees an ongoing source of income to support our quest to become Bioisland.”

Also last year, the trust kicked off its integrated development plan including five core areas: knowledge base (development of intellectual capital at all levels from elementary school to ongoing education for existing scientists); education funding (education and research grants and subsidies for recruitment of scientists); infrastructure (completion of landmark buildings such as the Cancer Center, Molecular Building and others); and financial support (funding for investigative research) and promotion and marketing (everything from intellectual property to the marketing and sales of new ideas and products developed through the STRT).

Educating tomorrow’s scientists today“To strengthen the field of sciences, last year we began the laboratory program in partnership with the University of Puerto Rico, Department of Education and participating municipalities to deliver $10 million in matching funds to guarantee all 180 public high schools in Puerto Rico have the laboratory infrastructure needed to educate our future scientists. Early success has come from the mayors themselves as they adopted the program as part of their regions’ economic development plans,” explained Rodríguez-Rivera.

“Large municipalities received matching funds, a dollar for each dollar they invested, whereas smaller municipalities got their initiative under way in partnership with manufacturing companies and trade organizations who donate in-kind services, staff and equipment,” explained Rodríguez-Rivera. So far, 26 municipalities have enrolled in the program with 32 participating schools and another eight schools in negotiations. The goal is to have 40 schools enrolled in the laboratory initiative by the start of school in August.

The laboratory initiative will be paired with the teachers’ grant program to ensure there are prepared teachers for each laboratory. Already in its third year, Pridco’s teacher grants for continuing education in math and science will be complemented with $1 million in research scholarships.

During the first year, the scholarships will be awarded to those scientists who already received federal funds to complement their research. “We are looking at various solutions to identify funds for more researchers. Meanwhile, as part of the legislative effort to approve a new Economic Incentives Law, we’re also recommending relevant tax exemptions, credits, recruitment subsidies and other incentives not only to attract but to retain the world’s top scientists,” concluded Rodríguez-Rivera, adding the new Transfer Technology Unit will be responsible for, among other things, marketing the new products, licensing initiatives, scientific discoveries and other products and services generated throughout the different units of the Science City district.

Tourism Co. nears 5,000-room goal
Official figures put Puerto Rico’s tourism industry as contributing 7% of the island’s gross domestic product, while unofficial industry figures estimate it closer to 10% and growing. However, for the Puerto Rico Tourism Co. (PRTC) to meet its goal of adding 14,000 hotel rooms by 2011, or doubling the island’s existing 13,577-room inventory, it must have 5,000 new hotel rooms either available, under construction or breaking ground by year-end. Among the 21 new hotel properties added to PRTC’s project pipeline for this year, there are seven new casino bids and seven five-star hotels under review.

The combined investment from these initiatives is estimated at a whopping $3.26 billion and could create more than 9,459 new jobs by 2011, according to PRTC projections. As first reported by CARIBBEAN BUSINESS, another initiative helping fund PRTC’s economic development agenda is the agency’s historical $150 million local tax-exempt bond issue, scheduled for issuance next April 28 (CB, April 10).

Terestella González Denton, PRTC’s executive director, said: “With 4,581 new rooms already under way, we’re 93% closer to our 5,000 new-room goal, and we’ll have the rest secured before year end.” As of February, PRTC’s new-room tally included 1,234 new hotel rooms already inaugurated, 2,636 under construction and 664 ready to break ground.

“Last year, was a tough year, but we managed to make progress in each of our strategic areas: hotel development, air access, marketing, product development and customer service. We’re on track with our first bond issue, which will help us capitalize the Hotel Development Corp. and participate as facilitators in the development of top projects. As we increase our room inventory, we’ve attracted renowned hotel flags including our first three five-star hotels compared to none just four years ago,” said González Denton.

Despite much skepticism from industry observers, last year PRTC launched its catalog of 15 government properties at the first Tourism Investment Forum. González Denton confirmed PRTC will issue a request for proposal (RFP) for the development of most of the properties in the catalog and is looking to add more properties to the list including privately owned locations. “After last year’s Tourism Investment Forum, we received many calls from local property or land owners expressing their interest in selling their real estate through our catalog. Each property will be evaluated on its merit to make sure it fits with the development strategy for that particular region,” explained the tourism executive.

As the front-page story details, economic development agencies are partnering with different regional consortia to leverage their existing economic initiatives. PRTC, in partnership with two of those regional consortia, Intene and Inteco, has formed the East-Central Tourist Region, which includes 24 municipalities. “The fastest-growing numbers in hotel occupancy in Puerto Rico are coming from this region. In 2005-2006, the area registered a 4.4% increase in hotel occupancy and last year (2007) averaged 69.3%, even higher than the island’s 68.4% average,” explained González Denton. The new tourism region will include Aguas Buenas, Aibonito, Caguas, Canóvanas, Carolina, Cayey, Cidra, Ceiba, Comerío, Culebra, Fajardo, Gurabo, Humacao, Juncos, Las Piedras, Loíza, Luquillo, Maunabo, Naguabo, Río Grande, San Lorenzo, Trujillo Alto, Vieques and Yabucoa.

Growing air access has proven tough for Puerto Rico amid skyrocketing oil prices and airlines cutting back on new routes. However, targeted stateside promotions coupled with aggressive rates from local hoteliers are keeping passenger arrivals at more than five million, or 95,000 more passengers than in 2006. With most airlines cutting back on routes and seat capacity, growing the number of visitors to Puerto Rico will become an increasingly difficult task competing against top regional contenders.

“One of the most challenging aspects of expanding our air access has been the decentralization of airport arrivals; meaning, creating opportunities for more and more passengers to fly into Aguadilla or Ponce instead of Luis Muñoz Marín International Airport in Isla Verde. The $4 million fund created for this purpose has helped us secure 29 new flights to regional airports with an economic impact of $120 million to complement the tourism development initiatives in Porta Del Sol and Porta Caribe, but there’s still more work to do in this area. Clearly, hotel development within those regions must also continue to meet passenger-projected demand,” noted González Denton, adding cruise ships are starting to arrive in Ponce and Aguadilla. Overall, PRTC projects a modest 2% increase in cruise ship passenger arrivals for 2008.

“Again, our difficult economic situation, coupled with signs of trouble with the stateside economy, has forced us to be more aggressive in marketing. This has also opened up opportunities to diversify our tourism product as we saw with the Puerto Rico Open, the Salsa Congress, Saborea (gourmet festival), the Culebra Heineken International Regatta and many other opportunities. Despite difficult times, Porta del Sol registered an 8.5% increase in nonresident registrations and Porta Caribe 5%, which points to the need of increasing room inventory in those regions as well,” added González Denton. Arguably, some hoteliers say they’ve maintained their hotel occupancies by seriously cutting back on their rates and thereby eating up their profits. Although relatively new, these leisure tourism and alternative tourism events helped generate more than 27,000 hotel room nights in 2007.

Seven new casinos in the pipeline
Puerto Rico’s slot machines generate more than $310 million in revenue for the island and will help PRTC back its first-ever tax-exempt bond issue. This “new money” will support PRTC’s strategic development efforts over the next five years, González-Denton explained.

Funds raised through the bond issue will also go to the Department of Transportation & Public Works as matching funds for infrastructure projects; another portion will supplement development of necessary infrastructure works to facilitate major tourism developments-for example, the erosion repairs at public beaches or improvements to Governors Avenue in Isla Verde, considered a major tourism route near the airport, and infrastructure improvements in Palmer Ward to improve access to and from El Yunque rain forest.

“Indeed, the economic situation has slowed down slot machine and casino revenue in general, but it will not impact the bond issue; we will proceed as planned,” González Denton reiterated. The $306 million in slot machine revenue collected in Fiscal 2006-2007 was distributed back to the casinos ($153 million), the University of Puerto Rico through the Treasury Department ($93 million) and the PRTC ($59 million). “In addition to the recession, which has impacted the industry as a whole, we’ll continue to partner with the Treasury Department to fight illegal video games, which is truly putting a dent in casino profits,” she said.

And speaking of casinos, González Denton confirmed there are seven casino projects proposed for Puerto Rico, many of which, according to the PRTC executive, have a good chance of coming to fruition. As of Dec. 31, 2007, there were 20 casinos operating on the island and more than 6,000 slot machines. Slot machine annual bets total approximately $4 billion a year, according to Héctor Rivera Dávila, director of the gaming division for PRTC. All casinos are in hotels.

On the acquisition side, PRTC acquired two properties listed in the agency’s tourism catalog, La Princesa (current PRTC headquarters) and Punta Lima Camp for $8 million, and is expected to participate in other tourism developments similar to the joint development agreement with the Land Administration and the Condado Duo, or acquire properties to add to the catalog, after the bond issue.

Puerto Rico still searching
Will Puerto Rico get a new branding platform anytime soon? Maybe not. PRTC efforts have been very aggressive and inclusive, but the current political climate and less-than-ideal economic conditions may not be conducive to reaching broad consensus on a subject that many people feel passionate about.

“Efforts are very advanced, and many of the strategies included in the branding platform have been outlined. I do believe we will see a unified branding initiative for Puerto Rico soon with the support of various industry sectors. I think it will work precisely because of the involvement of the private sector from day one. However, consensus on this subject is crucial to make sure all Puerto Ricans understand what the brand is all about, rally around it and, most importantly, feel empowered to promote the brand accordingly,” said González Denton regarding the strategic effort that began two years ago.

The tourism executive does anticipate the new branding platform will require legislation to give the effort teeth, longevity and continuity despite the island’s ongoing political fray. To think that would happen before the end of the year may be a bit ambitious, say industry insiders, considering other pending initiatives and top economic priorities, not to mention the upcoming general elections.

Entertainment among fastest-growing industries
With more than two million people attending local concerts, special events or local conventions last year, the island’s entertainment industry is poised to become one of the fastest-growing segments in the local economy. Much of that growth came from activities of the Convention Center District (CCD), which oversees the operations of the Puerto Rico Coliseum, the Convention Center and the $1 billion-plus, real-estate development within the district including new hotels as well as residential and commercial construction.

Puerto Rico’s Convention Center was built to hold conventions with a capacity for 7,000 people. Up until now, conventions visiting the island have averaged 3,500 visitors, but the Convention Center’s calendar, booked through 2009, already includes the center’s first 6,500-person convention, said Manuel Sánchez Biscombe, CCD’s executive director.

“We continue with our ongoing maintenance and repairs program, top security and new feasibility studies to develop the center’s second phase for additional capacity,” confirmed Sánchez Biscombe, adding the center is ready for Phase II expansion.

Pointing to the demand for more space at the Convention Center, there are several booked conventions that have requested 200,000 additional square feet of exhibit space “which we’ll accommodate with outdoor tents. Also, our coordination of citywide conventions has gotten very effective with shuttle services to and from the Convention Center and hotels in the entire [San Juan] metro area,” said Sánchez Biscombe. Last year, the center booked 11 international conventions, and there are more than 10 already confirmed for 2008. “As room inventory within the district increases, we will also be able to increase our service capacity.”

The Sheraton continues construction of its initial 500 rooms in the Convention District with plans to break ground on another 300 in 2009 during the second construction phase. The Sheraton also brings the first mixed-use development to the district with 80 units allocated for retail and office space. “We’re also evaluating construction of the second hotel in the area, a Marriott Courtyard. Even the Sheraton is considering an additional 250 rooms once it inaugurates its first phase, bringing the area’s total room inventory to 1,000,” Sánchez Biscombe confirmed.

With the projected traffic increase, Convention Center executives have issued RFPs for a multilevel parking garage to expand existing parking capacity. District statistics indicate more than 200,000 cars have self-parked at the Convention Center since it began operations.

Puerto Rico Coliseum among top-10 arenas worldwide
The Puerto Rico Coliseum, or el Choliseo as its popularly known, ranks No. 8 in worldwide ticket sales among venues of the same size, putting Puerto Rico on the global entertainment industry map. Gross ticket sales since the venue began operations in 2005 already exceed $80 million, and food and beverage sales nearly $17 million at some 871 events with a combined attendance of nearly 800,000 people.

“Every year, the quality of events goes up making it a very exciting venue for all Puerto Rican and foreign promoters. This year we’ll see a great ‘Disney on Ice’ show that’s second to none, and anything with the Disney franchise name represents an important vote of confidence in our venue,” Sánchez Biscombe continued. To date, rental income and ancillary income for the coliseum venue is some $8 million. Coliseum statistics confirmed a total of 41,415 room-nights were generated as a direct result of the venue’s activities since it began operations, having a total gross economic impact of $38.1 million in the local economy.

Trade Co. gears up for World Trade Center

To finalize approval of 1,000 new small businesses before year-end; DEDC’s small agencies raked in $140 million in 2007

Charged with the task to help create, develop and promote the island’s small and midsize businesses, the Puerto Rico Trade Co. (CCE, by its Spanish acronym) is confident it will meet its goal to have 1,000 new small businesses approved-mostly up and running-before year-end, CARIBBEAN BUSINESS was told. To date more than 800 have been approved. Under Puerto Rico Exporta, CCE’s export platform, a series of programs are aimed at getting local entrepreneurs “export ready” to tap into increasingly competitive export opportunities.

Meanwhile, as the new multimillion-dollar World Trade Center slated for construction in 2009 within the Convention Center District is being planned, CCE is already offering training, consulting, market analysis and business development services from its CCE offices in Hato Rey to companies that either want to export their products and services or want to do business in Puerto Rico.

Under its flagship program, La Llave Para Tu Negocio, CCE offers small business loans up to $50,000 backed by the Economic Development Bank with a 12-month grace period at an attractive interest rate of prime plus 0.5%. “The most important aspect of this program is what we call ‘capturing,’ where we help entrepreneurs prepare to become successful business owners, from the 30-hour business plan course to the advanced course where the person validates his or her business plan after completing a 12-hour business administration course,” explained Juan M. Román, executive director of the Puerto Rico Trade Co.

“While 2007 was a difficult year for many sectors, Puerto Rico’s small and midsize businesses effectively competed helping the economy move forward. Under our flagship program, we secured more than 800 new businesses for Puerto Rico that represent an investment of $36 million and more than 9,000 new jobs.” Of the 800 approved new businesses, 530 have received their loans and nearly 300 are already in operation. The company’s goal is to have more than 1,000 llaves (businesses) confirmed before year-end.

“At our CetPymes (the fast-track permit processing centers for small businesses) we try to eliminate the guessing and complications often associated with the permit process. At CetPymes the business can process its valid permits from the Regulations & Permits Administration (ARPE), the Health Department and the Trade Co. in 20 days, down from 120 prior to the new fast-track permit system. Since the program began last September, we have reviewed more than 13,000 cases, approved 11,998, plus another 1,000 subject to some conditions,” added Román.

For the more than 30,000 local businesses that do business with the government of Puerto Rico, the new Certificación Ideal (Ideal Certification) offers an online certification process that facilitates doing business with the Treasury Department, the Municipal Tax Collections Center (CRIM, by its Spanish acronym), the Labor and Police departments, the Family Department’s Asume Program (child support) and the Film Corp. “Through the single-certification process, all of the participating agencies can view the profile of the company and facilitate communication and payment processes when doing business with the government,” noted Román, adding that from 162 applications submitted in 2007, 159 received their certifications.

Also under Puerto Rico Exporta’s initiative, CCE conducted 12 major trade events in 2007 including hosting international delegations. “The combined results of these trade missions have a projected sales potential of $32 million among the 251 companies that participated,” explained Román, adding that of those, 147 are export-ready. Some of the most successful trade missions of 2007 include the one to Madrid and the Buyer’s Fair to China, with 29 participating companies that purchased a combined volume of $30 million in merchandise,” reported the CCE executive. Scheduled for 2008, CCE will repeat its trade mission to Orlando, Fla. earlier this month and has New York coming up in August and Cumbre de Exportadores in September. The Cumbre or Export Summit will attract company buyers from six countries including Spain, Mexico, Costa Rica and the Dominican Republic interested in buying Puerto Rican products and services.

Ranked among the top 20 Foreign Trade Zone markets in the country, Puerto Rico has three foreign trade zones, most of them focusing their work on manufacturing companies-one of them Zona Libre 61 operated by the Puerto Rico Trade Co. “As we make our operations more efficient by leveraging the international offices (currently in the Dominican Republic, Costa Rica, Panama, Chile and Spain), facilitating access to more local companies in the Free Trade Zone program, directing our International trade missions to potential markets and helping new exporters through Puerto Rico Exporta, the greater our return on investment is from trade and export activities,” explained Román, adding ROI (return on investment) per dollar invested last year yielded $169.00 compared with the $54.00 the same activity produced in 2005.

Activities of the DEDC’s smaller agencies raked in a combined $145 million for the island’s economy during 2007 and helped maintain more than 7,000 direct jobs, according to DEDC officials.

Hollywood, Puerto Rico
The smallest of the DEDC’s umbrella of agencies, the Puerto Rico Film Commission, continues to grow steadily and attract exciting new projects that benefit from Puerto Rico’s attractive tax incentives, which reimburse producers up to 40% of the total film’s budget if more than 50% of the film is shot in Puerto Rico. Last year, the commission’s tax credit reimbursements totaled $13 million. During Fiscal 2007, the commission increased its total filming days to 516, up from 474 in Fiscal 2004, reported Luis Riefkohl, executive director of the Puerto Rico Film Commission (PRFC).

Complementing the island’s tourism activity, 2007 Film Commission projects generated 12,605 roomnights and help support 6,268 jobs. Those projects had an economic impact of $37.5 million on the island’s economy compared with $11 million in 2004.

But in addition to difficult economic times, like most in the film industry, the local Film Commission was also impacted by the Writers Guild strike that started last year and is preparing for a possible strike from the Screen Actors Guild later this year.

“The strike certainly slowed down our production, but we are back on track with 32 projects in the pipeline including short films. Another challenge we face is insurance, given our tropical weather and somewhat limited filming period. And because of our hurricane season, productions tend to line up their projects during the first half of the year. So, we are working on other programs like the one to develop new screenwriters or special collaborations like the popular Chilean novela (soap opera) that is being shot on the island in the area of Dorado with both Puerto Rican and Chilean actors,” said Riefkohl.

On the promotions end, the commission is actively participating in all major international film festivals. Four locally produced films last year are scheduled for release in 2008 including Benicio del Toro’s “Maldeamores,” the comedy “Manuela y Manuel,” “Party Time” and “La Mala,” based on the life of singer La Lupe. And another four major productions are scheduled for this year, including a Fox Studio sequel of the popular Behind Enemy Lines series, a Disney film and “Kabo & Platón,” a local film action / drama.

Converting idle land to cash
Juan Vaquer, executive director of the Puerto Rico Land Administration (PRLA), briefly explained the agency’s dual role as a facilitator of the administration in protecting the island’s land inventory while creating opportunities to convert idle land into cash.

“The Land Administration has the unique opportunity to participate in a myriad of diverse development projects. Last year, our efforts contributed to advancing the development of the San Juan Waterfront, primarily by making possible two such key projects as Harbor Plaza, adjacent to the Ochoa Building, with a $130 million investment; and Capitolio Plaza, also in the area, which has finished its first tower with a $50 million investment and is set to start the second tower for an additional $90 million,” said Vaquer.

In Mayagüez, the administration facilitated the development of Central American Village, already under construction, to house athletes and visiting delegations for the 2010 Central American Games.

For 2008, top projects under the purview of the Land Administration include the restoration of the Paramount Theater, construction of an office project in Isabela and the investment in the infrastructure of the Finca Multeado Estrella in Ponce for future tourism activity. “Our current development pipeline includes seven major projects with a combined investment of $450 million over the next two years. And from the tourism end, we’re working with the PRTC on the development of the tourism real-estate catalog, which includes the development of such projects as La Pared de Luquillo and Lucía Estate in Yabucoa. In many instances, we secure all the permits for the proposed development and turn them over to the developers so they are ready to start construction,” added Vaquer.

Originally, the central government made the decision to sell $150 million worth of available properties it requested from the Government Development Bank (GDB) as part of its fiscal year budget exercise. The Land Administration, under the leadership of the GDB, is the facilitating agency to dispose of the available properties. But things can be complicated in Puerto Rico, even for the government.

“First, we had to determine which specific properties were available. After that determination, DTOP had to establish the property location, size, title, liens (if any) on the property, any drawings available in their files, description of structures (if any) on the property, past and present use and other relevant information necessary for the sale,” explained Camille Toro Torruella, GDB first vice president, during a separate meeting. Toro, among other things, is in charge of the “properties for sale” program at the GDB. Before June 30, an additional 12 properties with a total appraised value or estimated sale price of $89.4 million will be transferred to the PRLA. When sold, $80.5 million will go to the General Fund.

A photo finish for the Horseracing Administration
Marisela Santiago of the Horseracing Administration deemed 2007 as a solid “photo finish” for the Horseracing Administration, which supports an average of 10,000 direct jobs on the island. “After Puerto Rico’s double victory in the Caribbean Classic, we have become its official and permanent home. That makes us very proud, but also opens up a myriad of development and training opportunities for our local breeders as well as potential jockeys,” said the executive.

Having the Caribbean Classic in Puerto Rico will definitely help the administration’s efforts to increase annual betting, which dropped in 2007 as a direct result of the Camarero Racetrack reduction and business restructure. “We’ve seen a strong start to 2008 on the betting side and, after six years, we have secured funding and resources to operate La Esmeralda Equine Park in the south region of the island,” confirmed Santiago. The multimillion-dollar mixed-use development will include a condo-hotel, training, stables and residences for visiting jockeys.

Cooperative Administration to grow outside the DEDC umbrella
Moisés Méndez, executive director of the Cooperative Administration (CA), had an important victory last year successfully lobbying for an amendment to Puerto Rico’s existing Cooperatives Law to allow Puerto Rico co-ops to export their services to the U.S. mainland. Efforts are already under way to export local co-op services to the Chicago area, one of the largest U.S. Hispanic markets.

This year, the CA is moving forward with efforts to elevate the island’s cooperative sector to a cabinet-level position and secure direct participation in the island’s economic development plans. This would require bipartisan legislation, which Méndez confirmed is already under way. Last year, statistics confirmed there are more than 400 cooperatives on the island, which help support 6,268 jobs and hold combined assets totaling more than $8 billion. More than one million people in Puerto Rico are actively engaged in the co-op movement.

http://www.prwow.com....p?archID=26411

Demographic storm
By : ALEXANDER F. DIAZ
alex@casiano.com
Edition: August 14, 2008 | Volume: 36 | No: 32


Puerto Rico's birthrate plummets-now one of the lowest in the world-while the senior population continues to rise, the brain drain proceeds unabated and the death rate among young people remains staggering.

Here’s why you should be concerned for your business.

Birthrate crisis, Puerto Rico style

The rest of the world has been dealing with the consequences and policy options of a falling birthrate for years. Now it’s our turn.

Better said: now it’s your turn.

Ask what the biggest demographic shift in Puerto Rico will be in the coming 10-20 years, and you’re likely to hear one word: aging, thanks to the imminent retirement of baby boomers and the extended life expectancy of seniors.

But while aging is no doubt up there as a huge demographic concern, lurking beneath the surface as if unnoticed has been what may very well turn out to be an even bigger shift, one the rest of the world has been struggling with – unsuccessfully thus far – for more than a decade and which is now thrust upon local businesses like a storm.

It’s not just that so many of us are aging. It’s also that such few of us are being born.

The birthrate on the island has been on a deep dive since 2000, dropping from the long-time average of 58,000-60,000 births per year to less than 49,000 today and just over 40,000 by 2025, according to data compiled by the local office of Information Resources Inc. (IRI), a leading market research firm. Puerto Rico’s birthrate now ranks 167 out of some 200 countries in the world.

Meanwhile, the death rate has risen to more than 32,000 per year – mainly the result of world-leading crime and more elderly deaths – and is expected to climb past new births in 2026.

That change will lead to the first net drop in the island’s population since the exodus of Puerto Ricans to the states in the 1950s, a looming threat to economic growth. As a general rule, an economy grows when it increases the number of people working and when those who work become more productive with advances in technology. That’s why countries want births to outpace deaths, so population can rise.

“The big problem in the 1940’s and 50’s was that we had too many people,” said Sergio Marxuach, director of public policy at the Center For The New Economy (CNE) in San Juan. “The island was overpopulated, and now, ironically, it may be the reverse. To the extent Puerto Ricans migrate to the mainland U.S., where the economy may have better prospects, it will actually make the situation worse.”

Societies need each woman to give birth to 2.2 children, on average, for a population to remain stable – that is, to replace itself from generation to generation and not shrink. For countries with rising death rates, like Puerto Rico, the birthrate must be higher still. In Puerto Rico, according to the local Health Department, each woman is now giving birth to fewer than one child, on average, following the dive in births.

“When birthrates and populations decline and the dependent population, mainly seniors, outpace workers, an economy usually enters a long period of stagnation and reduced living standards,” said Edwin Aquino, IRI analyst and commercial director.

In Puerto Rico, thanks to the fast-falling birthrate, the 65+ population will surpass the 20-34 age group in 2021 and outnumber the under-19 population starting in 2026, a first in island history.

Why the effect on the economy? a) There is a shrinking pool of resources among working families and the government to care for the expanding pool of elders; b) the labor market shrinks; c) the consumer market also shrinks, courtesy of seniors who spend less, a smaller youth market and adults whose resources are stretched too thin to create economic growth; and d) there are fewer young and middle-age entrepreneurs to innovate, start new businesses and take risks. (Seniors are the least entrepreneurial of all age segments.)

In places where the labor market not only shrinks but becomes on average less skilled – because a growing proportion of workers comes from disadvantaged families and communities where birthrates are higher and health habits are poorer – productivity suffers.

That is, instead of productivity making up for the decline in the labor force, it too begins to drop, removing one of the remaining sources of growth in an economy undergoing a population decline.

“That’s the risk now faced by Puerto Rico within the next 20 years,” Aquino added.

Poverty makes it worse

The main culprit is the declining birthrate. With such few youth being born, the up-to-19 population is expected to represent only 21.9% of the total in 2025, a sharp drop from 32% in 2000 and 28% today.

If aging is shocking enough when looking at absolute numbers – 65+ folks will rise from roughly 70,000 today to 675,000 in 2025 – it becomes jaw-dropping as a percentage of total population when factoring in the sharp decline in young people. That is, the proportion of seniors in Puerto Rico skyrockets as the birthrate plummets.

The exact same trend is found in most of the world. First came developed countries, as the United States, every European country, Russia, Japan and Australia were struck by declining birthrates starting in the 1970s. Policymakers and business leaders were slow to react and are now scrambling to reverse the trend and manage the consequences.

Most recently, developing countries have seen their birthrates decline as well, but the decline there and in Puerto Rico has come far more rapidly and with worse consequences.

The difference in the case of Puerto Rico and developing countries are high poverty rates. As a recent article in Foreign Affairs magazine put it, “developed countries at least got a chance to grow rich before they grew old. Today, most developing countries are growing old before they get rich.”

The poor in Puerto Rico, after dropping dramatically as a percentage of the population in the 25 years following industrialization (1950-1975), have remained stuck at more than 50% of the population since.

And already the 50+ population – grouping everyone older than 65 plus most baby boomers soon to retire – is more than 30% of the total, a figure expected to surpass 40% by 2025.

A challenge to business

The demographic trend will pose significant challenges to companies on the island.

“On the consumer side, the steep rise in 65+ will depress consumer demand, as seniors either will not have the disposable income to spend much or will not have the need to spend even if they have the income or savings,” said Aquino.

The socioeconomic group most giving birth is the so-called welfare generation, where public assistance serves as an incentive to have more children. That will increase the number of young people who are financially strapped in proportion to the total population.

With low-income people and those on public assistance already representing more than half of the island’s population, by 2025 the bulk of youth and 20-34-year-old adults on the island will be low-income and/or on public assistance. Their parents, who will be ages 35-55, will also be of leaner means.

“This whole trend will drag down median purchasing power and therefore overall sales on the island, put a significant strain on government coffers – higher social spending and a smaller tax base – and otherwise hurt prospects for economic growth and prosperity,” said Graham Castillo, president of consulting firm Estudios Tecnicos Inc.

The implications for companies and marketers that target the youth market are huge. Consumer products from electronics to school supplies to clothing to refreshments will be hit hard, as will schools and colleges. As the youth become adults during the 10-20 years after that – and with no rise in the birthrate to produce a bigger pipeline of new consumers – “the sales and growth crisis will spread to other product categories and the economy as a whole,” added Aquino.

Labor-market crunch

The shrinkage in the number youth will not only reduce demand for youth-market products, but will represent an unprecedented shortage in the market for workers with the skills, education and work ethic (respect, innovation, vision, social mores prevalent in the workplace, etc.) required to fill the jobs of the present and the future, given that the welfare generation grew up with substandard education, on public assistance – no need to work – and in neighborhoods and schools rife with crime, drugs and other social problems.

The implications are tremendous. The labor participation rate, or the number of people working as a percentage of total population – at 45% today, already among the lowest in the developed world – may decline, according to Aquino.

Not everyone agrees. The decline in the birthrate, said Joaquín Villamil, chairman of Estudios Técnicos, “will probably increase the labor participation rate, or the proportion of people between 16 and 65 who are in the work force, since younger people generally have lower participation rates.”

But as large numbers of older workers retire, said Aquino, “labor participation will drop.”

Worse yet, the competitive edge enjoyed by Puerto Rico for some 60 years – the quality and availability of our blue-collar workforce and management personnel – may weaken. The cost of managing labor will rise, given higher turnover and greater difficulty in training.

“From a labor standpoint, companies that don’t prepare now for this situation that is coming will not last in the market,” said Felix Garcia, vice-president and principal of HR consulting firm IKON Group. “Given the dwindling number of people who will be available in the local talent pool, those who are available may not necessarily have the required skill sets required by companies.”

The problem becomes even more complex when factoring in the gender profile of today’s university students, added García. “The majority of students are women, which means that 15 to 20 years from now, there will be more women than men in the labor force.”

In fact, one of the solutions to declines in the labor market in countries around the world is to encourage labor participation by more women. “Because more women will be working, they will have fewer children, as happens with most women who work today. This will further contribute to declines in population and ultimately in the labor pool,” said García.

On the senior side, demand for elderly-related goods and services will continue to rise. But as workers, seniors earn a lower median income and therefore yield reduced purchasing power and sales as well.

When the labor prospects are combined with likely reductions in consumer demand and sales, the number and profitability of businesses are expected to fall, particularly as overall population begins to decline past 2025.

‘Not ready’

“Puerto Rico is not ready for this type of change,” said Marxuach. “I don’t see the government taking any steps to prepare for this, which will negatively affect us if no action is taken. The one thing in our favor now is that we’re still on time to prepare.”

A growing number of elders represents greater dependence on public assistance, putting an even bigger strain on government resources and on the fewer taxpayers who will remain to foot the bill, added Heidi Calero, president of H. Calero Consulting Group.

For a government already stretched thin and facing deficits and deficit financing every year, the prospect of a ballooning demand on public-assistance funds among young and old alike is daunting, with a shrinking productive population stuck in the middle.

“The government will have to reorient its focus toward the growing elderly population,” said Marxuach. “For example, primary education costs will have to be reduced from now until 2025, and government priorities will have to be refocused to address the needs of the aging population, such as health issues.”

As CARIBBEAN BUSINESS reported last summer in an exclusive cover story (July 12, 2007), aging is poised to become a growth sector for the economy, as private companies rush in to fill the need for long-term care services and the government facilitates the growth with numerous policy changes.

“The elderly population have all sorts of needs, and therefore it creates markets that at this time may not exist,” said Jose “Chenti” Feliciano, president of Advantage Business Consulting. The firm conducted a landmark study for the Puerto Rico Family Department that was also featured in the CARIBBEAN BUSINESS front-page story.

“For example, housing for the elderly, becomes an interesting market, as well as services to care for the elderly, things like cruise ships, which is an attractive vacation option traditionally popular among older individuals,” said Feliciano. “So you have a bigger market for this sort of entertainment. The population shift presents lots of challenges, but also lots of opportunities.”

So far, however, the public-policy changes needed for these opportunities to materialize have been slow in coming.

Brain drain

The longer that inaction continues on the elderly front, the worse the brain drain is likely to become, as workers and professionals with smaller families to take care of their parents decide to leave the island in search of a better way. And that, in turn, will only exacerbate the labor-market crunch.

The brain drain is already blamed for a dramatic decline in certain specialized practitioners on the island, including the doctors and nurses who are needed to take care of the aging population.

“We need to work on keeping our doctors on the island and on training our medical staff in geriatrics in order to keep pace with the demand,” said Jaime Pla Cortés, president of the Puerto Rico Hospitals Association.

Projecting these demographics to 2025 – barely 17 years from now – presents the island with one of the biggest challenge it faces today, since so many other problems are made worse the longer this one goes unsolved.

“In Puerto Rico, we have a problem with long-term planning, and this is one of those issues where everybody sees that problems are brewing ahead, but they say it is too far away,” concluded Marxuach. “If nothing is done, it could mean a severe economic slowdown. We will have a big portion of the population without the means to support itself and an economy that will not be able to grow because there will not be enough labor to support growth. This [demographic alert] should be on top of the priority list.”

Liisa Nido Nylund, Lawson Thurston, José Carmona and Gina Hernández contributed to this story.

http://www.caribbean....id=246&ct_id=0

Puerto Rico’s image tarnished throughout the nation
Edition: July 31, 2008 | Volume: 36 | No: 30


When Puerto Rico became a territory of the U.S. as a result of the Spanish-American War, we were labeled “The Caribbean Poorhouse.”
We were poorer than Cuba, Jamaica, the Dominican Republic and Haiti.

Puerto Rico not only was very poor, we also lacked public school and health systems. Many families lived in thatched huts built on the ground. Children played naked and their abdomens were inflated, not with food, but with hookworms. They went around barefoot and had insects (niguas) underneath their toenails and lice in their hair. Life expectancy was amongst the lowest in the entire Western Hemisphere.

As a U.S. territory, Puerto Rico, with help from Washington, started to build public school and health systems. Little by little, as conditions improved and more Puerto Ricans gained experience in management and graduated from universities, the management and leadership in the public education and health systems passed to us.

Throughout the first half of the 20th century, living conditions, education and the health system improved rapidly and continuously. By the second half of the 20th century, Puerto Rico was no longer called the “Caribbean Poorhouse.” On the contrary, by the beginning of the second half of the century, Puerto Rico had achieved much more participation in our local government. We elected our own House of Representatives and Senate and our own governor. Our per capita income was higher than that of all other major Caribbean islands. Our standard of living had improved so much that Puerto Rico became “Democracy’s Showcase” instead of “The Caribbean Poorhouse.”

During the second half of the 20th century, after a massive migration to the U.S. mainland, the G.I. Bill of Rights, implementation of the food stamp program and a very aggressive federal public housing and low-cost housing construction, Puerto Rico’s standard of living had improved to the point that it was higher than that of most Latin American countries. Puerto Rico’s image as a good place to invest and establish manufacturing plants became widely acknowledged.

Whereas, before 1950, the leadership in Congress used to say Puerto Rico wasn’t ready to become a state or an independent nation, such statements were practically unheard of by the end of the century. I doubt any self-respecting, unbiased senator or member of Congress would seriously argue today that we lack the political or economic know-how to become a state or a republic.

As the level of education, professional training and capability and overall standard of living of Puerto Ricans who migrated to the mainland U.S. improved, so did Puerto Rico’s image. The fact that in 20 of the past 32 years of the 20th century we had pro-statehood governors also has contributed strongly to Puerto Ricans being perceived by our fellow Americans as U.S. citizens who have more than earned the right to political equality.

Puerto Rico’s image improved continuously during the 20th century. The perception of the island in the 50 states of the union and in most of the world was much more positive by the beginning of the 21st century than at the beginning of the 20th century.

However, at the beginning of the new millennium, with Sila Calderón as governor, things began to deteriorate. Her vicious accusations against the U.S. and her confrontational campaign against Americans during the Vieques demonstrations made Puerto Ricans look very anti-American. Her confrontational campaign was unnecessary because Rosselló, as governor, had negotiated with President Clinton an agreement to:

1. Put an end to the bombarding of Vieques;
2. Clean-up the unexploded ordnance; and
3. Return the Navy-occupied land to Vieques.

As a result of Calderón’s confrontational campaign and encouragement of destructive acts against the Navy, Clinton’s and Rosselló’s agreement was violated and Puerto Rico ended up in a more unfavorable situation in Vieques. The Navy’s attitude became less cooperative than ever.

To many citizens and leaders throughout the nation, Sila’s anti-American campaign estranged them from Puerto Rico. Many leaders in Congress and others throughout the nation felt less friendly and less inclined to do anything for Puerto Rico. We were perceived more than ever as a people who asked and demanded all benefits available to U.S. citizens but were unwilling to assume the responsibilities expected of all Americans. We were perceived as opportunists and parasites. If what she had done weren’t enough, when the nation went through one of its more tragic moments as a result of the terrorist destruction of the World Trade Center and the death of thousands, she sent the money collected in Puerto Rico with the caveat that it was to be used only for the victims and relatives of Puerto Ricans who died on Sept. 11.

How stingy and mean-spirited that caveat made us look! The whole nation had come together to help all victims and their relatives, regardless of origin. Only Puerto Rico didn’t want to share in helping other fellow citizens and their families. Mayor Rudy Guilliani rightfully refused to accept Puerto Rico’s money and sent it back to Gov. Calderón. At that moment, Puerto Rico’s image sunk to its lowest depth. Only the outstanding performance of our baseball players, singers, actors and musicians during this decade kept our image from sinking any lower.

No one could imagine that any future governor could hurt our image more than Calderón. We were wrong. Acevedo Vilá has damaged our image even more.

To begin with, he discredited us with our bondholders by starting his administration with a request for $800 million more in expenditures, when everyone knew Puerto Rico had no less than a $1 billion deficit. How could anyone expect to bring a deficit under control without a meaningful reduction in expenditures? Everyone in the world of government financing realized Puerto Rico’s governor either didn’t know anything about public financing or else didn’t give a damn about Puerto Rico’s future.

If that weren’t enough, Acevedo Vilá proceeded to openly break his most memorable campaign promises and started increasing taxes and public service rates that he had vowed not to touch.

Each and every one of his financial measures not only was ineffective but, even worse, helped deteriorate our economy and increase our cost of living.

Above all, Acevedo Vilá lied, cheated and broke the law to get elected. He has publicly admitted having received over $50,000 in cash for very expensive clothing, thereby violating several federal and local laws. He has publicly accepted having committed fraud at federal and local levels. His campaign records and sworn statements from people involved in his campaigns have established he committed serious crimes during his fund-raising while in Congress.

As a result, he has been indicted in the U.S. District Court on 19 counts of federal law violations. Not only has he refused to resign, but has threatened and extorted the leadership in his political party to support him for re-election. His party has become an accomplice to his corruption.

While I was in Washington, D.C. last month, I met with quite a few members of Congress and senators with whom I worked during my years in there. Not a single one of them could believe Acevedo Vilá had not resigned. They couldn’t imagine a governor in their state who would ever attempt to stay in office after being indicted on 19 counts in federal court. Neither the press nor the people would tolerate it. “Is he really still in office?” “Hasn’t he resigned yet?” These were the questions everyone asked me. In other words, how can you people tolerate such arrogance and insolence? A corrupt governor will necessarily have a corrupt administration.

In the 20th century, no one ever thought Puerto Rico’s image would sink to the depths that Acevedo has managed to drag it down to.

http://www.caribbean....id=203&ct_id=0

Cattlemen Co. Steak House to open next month at a cost of $1.05 million
Budget for San Germán’s Paseo Gastronómico now $7.7 million
By ELSA FERNANDEZ MIRALLES


When engineer Reineiro Torres decided to semi-retire to his wife’s native town of San Germán and dreamed about turning its town square into a sort of Soho alternative with all types of restaurant offerings, he never thought it would be such an adventure. But March 1 is the date set for the official opening of the Cattlemen Company Steakhouse & Cantina, a concept created by Torres’ company Interpec Group on the U.S. mainland. It consists of a 220-seat, two-level restaurant that will employ 42 people with an approximate investment of $1.05 million. Following this, Torres is planning to invest $7.7 million in three more restaurants in the same area, La Plazuela Santo Domingo and the 50-room Quality Inn & Suites Hotel on Interamericana Avenue.

“We are doing a pre-opening ceremony to thank all the people involved in the project, from carpenters to engineers and their families. It is a very special occasion because it marks the beginning of our Paseo Gastronómico de San Germán (or San Germán Gastronomic Route), a concept that includes three more restaurants around the town square that will be developed and managed by Interpec. Next on the list is O’ Dougall’s Authentic Irish Pub, a concept we also developed on the mainland that should be ready by next summer because it doesn’t need construction, and all the equipment has been ordered. It will employ 18 people,” said the entrepreneur.

Following this, he said, is Encounters Fine Cuisine & Spirits, another concept the Torres family developed on the mainland that now is successfully operating in Florida. “For the 500th anniversary of the discovery of America, my sons and I came up with a theme that fuses Spanish, Mexican and American cuisine. This will be the biggest of all our restaurants with two levels and 235 seats and approximately 50 employees. And last but not least will be Pink Lobster, a seafood restaurant, that will seat 175 people and employ 35 people,” he said.

The Quality Inn will have a smaller restaurant, to cater to the needs of its guests, with around 50 seats. Torres calculates the five projects will employ around 200. Will these venues be successful? “I’m sure they will,” pointed out engineer Torres enthusiastically, “because our prices will be the same in Puerto Rico and the mainland. Our meats will be top choice, always fresh not frozen, and our lobsters will be from Maine. Although we are going to be profitable, we will always be thinking of delivering the best quality at the lowest price to our customers. There is no way people won’t want to come to San Germán: the best food at the best price. And the scenery alone is worth the trip,” he concluded.

http://www.prwow.com....p?archID=25884

Four commercial projects receive go-ahead
Combined construction investment exceeds $60 million; to generate 500 new jobs once fully operational; new Home Depot in Hatillo store in public hearings
By FRANCES RYAN


Local consulting and planning firm, Almeyda & Almeyda, is moving forward with final efforts to secure approval on four small to midsize commercial projects that will generate a combined $40 million investment in new construction, CARIBBEAN BUSINESS has learned. Total investment is to exceed $60 million including real estate and the projects are expected to create more than 500 new jobs once fully operational. Their individual construction timelines vary but should all be complete within 12 to 24 months.

Planning consultant Camilo Almeyda indicated that several of his firm’s projects had disappeared in the Planning Board’s backlog, but were recently cleared to move forward through the fast-track permits task force organized by the Department of Economic Development & Commerce. “The fast-track permit process worked well. They followed up with pending documents and helped move projects from one reviewing agency to the next expediting the overall process. We hope the new permits system, scheduled to be in place within a month or so, follows some of the same processing principles of the task force,” said Almeyda.

“These projects are extremely important for Puerto Rico because they help keep the economy moving forward with much needed construction jobs, new permanent jobs and retail sales. What I like the most about these developments is that they’re small- to mid-size commercial centers located throughout the island in areas where the local community truly needs those services,” said the planning consultant, adding that for every 1,000 square feet of new retail space an approximate 2.5 new jobs are created.

The first project moving forward is a small shopping center in Route 2’s Corujo Industrial Park in Bayamón. Built with a $10 million investment, the new more than 92,000-squarefoot retail facility will house a car wash, two fast food restaurants, a small convenience store and several retail outlets and should generate more than 250 new jobs once operational.

Local developer and entrepreneur Edgardo Rivera has two commercial projects underway, one a shopping center in Juana Díaz, at the corner of Route 2 and road 149 featuring more than 180,000 square feet of retail space. The second development is an addition to a Santa Isabel proposed development, at the corner of Road 153 and PR 52, to increase the project’s square footage to 165,000 square feet. The combined investment of Rivera’s projects will exceed $30 million and help create another 310 new jobs.

Sembler of Puerto Rico, already in the shopping center business here and owners of Juncos Plaza among other properties, received the go ahead to build a 65,000-square-foot commercial center featuring various retail outlets with an estimated construction cost of $6 million.

Next in Almeyda’s project pipeline is a Home Depot store, slated for Hatillo, currently going through the standard public hearings process.


http://www.prwow.com....p?archID=26019

Amount of available commercial space is expected to go up
Vacancy rates have doubled since 2006 in some cases; decrease in relocations and lower demand for new office and commercial space blamed for glut
By JOSE L. CARMONA


According to recent estimates, the island’s 22-month-long criollo recession is also taking its toll on the commercial real-estate sector, mainly increasing the number of available offices in the San Juan metro area.

“Prior to 2006, the local office market was very stable, with vacancy rates in the range of 8% to 10%. Since 2006, however, the prime office real-estate market has been increasing its vacancy rate to a level of 14%, and up to 16% in some cases,” Mercy Zayas, president of local commercial real-estate firm Value Added, told CARIBBEAN BUSINESS.

When Doral Financial Corp. and Popular Inc. built their new office buildings in Puerto Nuevo and Altamira they left behind office space, some which are still available today, noted Zayas. Additionally, new office construction in Guaynabo (City View Plaza II and GAM Plaza) and in Hato Rey (Banco Popular building across from the new Fine Arts Cinema) further increased the availability of prime Class A office space, noted Zayas.

In turn, the excess office space has motivated landlords of older Class B and C buildings to invest and remodel their properties to compete with the new constructions and to formulate attractive relocation packages for new tenants.

As a result of the economic slowdown, there was a marked decrease in relocations and a lower demand for new office space in 2007 compared with 2006, Zayas pointed out.

“In order to compete, many landlords remodeled while having to keep the same rents or in some cases reducing these in reaction to the local market situation,” added Zayas. For 2008, the local Realtor forecasts a slower commercial real-estate market given the fact this is an election year and many tenants prefer to “wait and see” before making any decisions.

The Value Added president wondered how many clients out there right now could pay between $265 per square foot and $375 per square foot for a remodeled space. She pointed out the government and the private sector are looking to build new office buildings, which will leave more Class B and C space available in the market. “The construction costs are higher, and since demand is slowing, the vacancy ratio will certainly grow even more,” she warned.

Zayas indicated the commercial real-estate sector has also been impacted by stricter, tighter mortgage underwriting standards imposed by local financial institutions.

“Banks are more careful in the analysis of their client’s capacity to repay loans, and this will further restrict the financing alternative for user-buyers. On the other hand, the decrease in interest rates and stable market values make the current commercial real-estate market a buyer’s market,” added Zayas.

Based on information compiled by Value Added, there are in the pipeline or in the planning stage as much as 4.5 million square feet of office and commercial space slated for the next five years just in the Hato Rey area alone, noted Zayas.

“This would double the number of existing Class A and B buildings. Commercial banks indirectly control construction by approving loans to developers that have leased at least 50% or more of a building. But how do we control the space that is left behind? The natural balance in the real-estate market forecasts that prices will inevitably go down,” commented Zayas.

http://www.prwow.com....p?archID=26132

Puerto Rican officials push to legalize pot, no health problem required

The Associated Press

Thursday, June 19th 2008, 11:12 AM

SAN JUAN, Puerto Rico — A former health secretary and an ex-university president want to legalize marijuana in Puerto Rico, saying it will reduce a burgeoning prison population and prevent young adults from being exposed to violent criminals.

Under the plan, marijuana would be taxed as liquor and tobacco are now, with proceeds going toward drug-treatment programs, said former Health Secretary Enrique Vazquez Quintana.

The proposal, also supported by other former public officials and a medical doctor, calls for stricter penalties against drug traffickers, and comes as the U.S. Caribbean territory prepares to launch drug-treatment programs to wean addicts from crack, heroin and other substances.

About 24 percent of the island's 13,500 inmates have been convicted on drug charges, and an estimated 80 percent of crimes are drug-related, according to the Department of Corrections.

"The fight against drugs, using punishment, has not worked," said Jose Manuel Saldana, former president of the University of Puerto Rico. "This is a social reality."

People should not go to jail for smoking pot, he said. Too many young adults become criminals in prison and also risk contracting hepatitis and AIDS while there, Saldana and Vazquez said.

Proponents have been discussing the measure with prison officials and legislators.

Lawmakers have said they are open to discussing the legalization of marijuana but only for medical purposes.

Puerto Rican Senator Maria de Lourdes Santiago said she opposes legalizing any kind of drug, but is pushing to eliminate penalties for possessing drug paraphernalia.

"Sometimes that serves as an excuse to put a young man in jail when he needs a different kind of treatment," she said.

"In Puerto Rico, that's an issue that nobody wants to touch."

More than 21,000 children under age 18 were detained from 1990 to 2005 for drug-related incidents, according to the most recent police statistics available.

Corrections Secretary Miguel Pereira said he favors drug-treatment programs and the legalization of marijuana — but only for medical use.

"It's a proposal that we should be open to discussing," he said.

At least 12 U.S. states allow marijuana for medical use, but federal law still makes possession of it illegal.

http://www.nydailyne....galize_-2.html

Puerto Rico to suffer from local movie piracy
By : FRANCES RYAN
frances@casiano.com
Edition: July 24, 2008 | Volume: 36 | No: 29


Island ranks third worldwide, with millions in losses; Hollywood pushes local crack down; violators face jail time, $250,000 fines

Warner Films has decided to keep the Batman summer blockbuster, “The Dark Knight,” in the dark on the island until after it hits U.S. mainland theaters next week, CARIBBEAN BUSINESS has learned.

You can blame rampant DVD movie piracy in the local market. It is being felt throughout the industry and is now expected to delay the release of movies in Puerto Rico. Film studios, production companies, distributors and movie theaters estimate the economic impact of illegal DVD sales to be hundreds of millions of dollars.

The latest industry report from the Motion Picture Association of America (MPAA) ranked Puerto Rico among the top-three markets in DVD movie piracy worldwide, indicating the island had become a “major supplier” of black-market movies to such Latin American markets as Bolivia and Venezuela.

The MPAA warned it would increase local-market policing and vowed to prosecute violators to the fullest extent of the law.

MPAA’s warning took on a serious connotation earlier this month when a local individual was arrested at a Barceloneta movie theater while recording the movie “The Happening.” Minutes before, the same individual had been secretly recording the blockbuster movie “Hulk.”

The arrest, according to local and federal authorities, brought down one of the largest illegal operations of its kind-known as P Studios-which had diversified with sales to Latin America and to an online video-on-demand site. Puerto Rico and federal officials intervened in the arrest, which carries mandatory federal penalties of $250,000 and up to five years in jail.

The film studios’ recent decision to delay local film releases followed MPAA’s own warning to increase local market policing and prosecute violators to the fullest extent of the law.

“It’s very simple. DVD piracy is stealing and therefore a crime. Every time an individual buys a duplicate DVD copy, he or she becomes an accomplice in that criminal enterprise,” said Senate President Kenneth McClintock, a longtime advocate of simultaneous movie releases for Puerto Rico and stateside markets.

“This illegal activity, which will be prosecuted, is wiping out years of hard work to position Puerto Rico as a top film market.”

Local productions hurt

Filmmaker Flora Pérez Garay worries about the impact black market DVD sales are having on Puerto Rico’s local film industry.

“Independent film making is a tough and competitive business as it is, mostly due to limited financing options. Despite that, the industry is experiencing a renaissance in Puerto Rico, and a production slate of local productions finally is opening up opportunities for local movies to be released on the island and internationally. Black market DVD sales aren’t limited to Hollywood movies only. Local productions such as Benicio del Toro’s “Maldeamores” and “Manuel y Manuela” were distributed on the black market even before the local release. This is killing our film industry, since investment in production is nearly impossible to recoup. Without financing, we have no movies, and without movies we have no film industry.”

She added that until now, “Puerto Rico releases have been simultaneous with those on the mainland U.S. However, it could take weeks or even months to reach some Latin American markets. By the time releases get there, our [Puerto Rico’s] black market distributors would have sold thousands of copies in advance, killing chances of box office success in those markets,” Pérez Garay continued.

“The local black market has gotten so big that it is having an impact on stateside revenues. Film studios find themselves fighting illegal online sales and movie file sharing even before films hit stateside theaters.”

Looking forward, major film studios’ legal departments will review Puerto Rico release dates on a case-by-case basis, said industry executives interviewed by CARIBBEAN BUSINESS.

“So far, my distribution hasn’t been affected, but as soon as Sony’s legal department deems it appropriate to hold back a release to protect its investment, it can do just that,” said Annette Monserrate from Sony’s local distribution office.

The multiplier effect of DVD movie piracy also affects local distributors who invest up to $2,800 a copy to distribute the movie at local theaters. A blockbuster release may require as many as 100 copies plus marketing costs.

“If a blockbuster film is distributed before release time, our chances to recoup our investment are greatly reduced,” Monserrate explained. “This has an impact on movie theaters, since they depend on moviegoers and concession sales to maintain operations. The video division also feels the impact, since black market copies reduce movie rentals and even DVD sales.”

Mayra Ramírez, marketing director for industry leader Caribbean Cinemas, told CARIBBEAN BUSINESS that the movie chain “remains vigilant inside our theaters and will report any suspicious activity. In the end, moviegoers are the ones inconvenienced.”

CARIBBEAN BUSINESS estimates the local movie-theater industry has $55 million to $60 million in annual sales. Caribbean Cinemas is the industry leader with 254 theaters and average ticket prices of $3.50 for children and $5.50 for adults.

Meanwhile, stateside box-office sales have slumped for 11 consecutive weeks, with year-to-date ticket sales down 5.4% from last year, even as ticket prices rose 3% to an average of $7.50, according to the latest report from industry tracker Exhibitor Relations. Stateside theater attendance also has dropped about 8%.

http://www.caribbean....d=181&ct_id=20

Opportunities to Invest in Puerto Rico as Global Center for Biotechnology
Tuesday February 12, 10:00 am ET
25% of world's biological manufacturing capacity is in Puerto Rico

MEXICO CITY, Feb. 12 /PRNewswire/ -- A quarter of the world's biotechnology manufacturing capacity is located in Puerto Rico, making it one of the largest concentrations in the world.

Over the past four years, more than $4 billion has been invested in biotechnology in Puerto Rico by such giants as Eli Lilly, Amgen, Abbot, Ortho Biologics, BD Biosciences and Bristol Myers Squibb. The Puerto Rico Conference, Investment for Growth, organized by the Puerto Rico Chamber of Commerce, will feature a panel on The Biotech Island. Panelists will discuss the factors that are making the island so attractive for this type of investment.

The panelists will include Emilio Rivera, Vice-President of Manufacturing Operations of Amgen Puerto Rico, a company that has expanded twice in the past six years and invested $2 billion; Samuel Malone, President of Eli Lilly & Company Puerto Rico; and Edgardo Fabregas, Vice-President of Pharmaceutical Manufacturing at Johnson & Johnson and the person responsible for the corporation's manufacturing operation in Puerto Rico, Asia and Europe. Eli Lilly built the world's largest modular biotechnology facility in Puerto Rico, where it produces Humalog, recombinant human insulin for the treatment of diabetes.

The Puerto Rico Conference, to be held February 19 & 20 at the Hotel Ritz Carlton in San Juan, is aimed at presenting investment opportunities in Puerto Rico. "We organized the conference around the many areas of interest to investors in which Puerto Rico offers unique opportunities," said Francisco Rodriguez-Castro, organizer and Chair of the Conference. "The response so far has been very positive. We are getting a lot of interest from investors in the U.S. and Puerto Rico," he said. "Our mission is to showcase Puerto Rico's business sector and its many possibilities as we strengthen it with this type of event," said Jose Julian Alvarez, Chairman of the Board of the Puerto Rico Chamber of Commerce.

The conference will also focus on a general presentation of Puerto Rico's economy, growing opportunities in the health sector, and banking, financing vehicles available, real estate investment trusts as a new investment opportunity in Puerto Rico, and developments in tourism, retail and communications.

The Puerto Rico Chamber of Commerce is a non-profit organization established in 1913. It is the most inclusive multi-sector organization on the island and it has traditionally been the voice that represents the private sector. Each year, multiple events, such as this one, are organized to promote and facilitate opportunities that will support the socioeconomic development of Puerto Rico. To make reservations and/or obtain more information, log on to www.camarapr.org; or call 1-787-721-6060 extension 2209 from Monday to Friday during work hours (8:00a.m. to 5:00p.m.).

Contact:
Nancy Robles
Puerto Rico Chamber of Commerce
(787) 721-6060 ext. 2209
(787) 474-6092 direct.
Email: nrobles@camarapr.net

http://biz.yahoo.com...u002.html?.v=97

Edited by Jaykar, 26 August 2008 - 05:10 PM.

[Jaykar]

Front Page: Adapt and compete
Posted: Wednesday, January 9, 2008 - 04:05 PM
By Frances Ryan of Caribbean Business


A homegrown economic recession, increasingly if fierce competition from multinationals, a new sales tax (IVU, by its Spanish acronym), increasing energy costs and higher costs of doing business on the island have not been able to slow down Puerto Rico’s food industry, which continues to grow and prosper against all odds.

Contrary to what many industry observers had forecast in the early 1990s, the arrival of such stateside megastores as Wal-Mart, Sam’s Club, Costco and others have neither wiped out local operations nor undermined local operations’ abilities to compete. Instead, it fired up the industry’s entrepreneurial, innovative and competitive spirit. The result: a thriving food industry which has quietly become one of the most important success stories in Puerto Rico’s recent economic history.

Since the arrival of these megastores, the island’s food industry has steadily continued to grow at an annual average rate of 3% to 4% in sales compared with most other local industries that have either consolidated or remained at zero growth. Today, Puerto Rico’s food sector contributes an impressive $6 billion in sales annually to the local economy and helps support more than 250,000 direct and indirect jobs, according to the latest figures from the local food industry trade organization MIDA.

The local food industry is primarily made up of two segments. The first sector includes retail, wholesale and distribution operations, and generates more than $4 billion in annual sales, a whopping 100% increase compared with the $2 billion-plus the sector generated only 25 years ago. The second food industry segment is the island’s thriving restaurant business, which has doubled in size since the mid-1990s, and currently generates about $2 billion in annual sales.

“Puerto Rico’s food industry track record during the past two years is best described as impressive and somewhat unprecedented with some 125 to 150 new food establishments opened during that period of time. I do not know of any other industry sector within our local economy that continues to grow at the rate of the local food industry,” said Dr. Benjamín Negrón, president of MIDA. Negrón expects food industry growth to keep the same expansion pace with the opening of ranging from small establishments to megastores in 2008 alone.

A quick glance at the industry’s development pipeline is enough to get people excited about what has been happening and what’s yet to come. For example, Econo, Selectos, Ralph’s Food Warehouse, Grande, Amigo, Sam’s Club, Mr. Special, Pueblo, Oscar Cash & Carry, Supermercados Pitusa, V. Suárez, Méndez & Co., Puerto Rico Supplies and virtually every other key player in the industry have plans to either open additional locations, expand operations, improve service, introduce new programs and incentives, or diversify inventory in 2008. Puerto Rico’s top supermarket operations are among the CARIBBEAN BUSINESS Top 400 Locally Owned Companies.

“Our food industry is a great example and a solid business case study of what entrepreneurs can do when market conditions get tough. We got creative, sought greater efficiency, increased product diversity, secured better technology applications to facilitate operations and delivered better service. Most importantly, we faced the competition head on instead of retreating ourselves, instead of being afraid of the proverbial ‘big bad wolf’ as so many describe the megastores,” Negrón continued saying. “Instead, the majority of our food retailers, wholesalers and food distributors chose to put up a good and fair battle, and today they’re not only growing but giving some of these large companies a good run for their money.”

Industry pioneer, Atilano Cordero Badillo, founder & president of Supermercados Grande, believes in the old saying, “When the going gets tough, the tough get going.”

“The story of our supermarket industry is that of one that has grown, thanks to the entrepreneurial spirit of our people, folks who recognize that there’s only one constant in our business, and that constant is change. Those who have their ears to the ground, who are hands-on in their business and keep abreast of the latest trends both locally and worldwide, can anticipate local changes and decide whether to adapt or not,” Cordero Badillo added. “Many of those who in the early 1990s refused to change are no longer around to tell their story. Fortunately, the majority of our local key players recognized the arrival of the multinationals well in advance, and thanks to their entrepreneurial spirit and preparedness they have made our food industry stronger than ever. I bet the multinationals never thought our local entrepreneurs would be as smart and resilient as they are.”

MIDA’s Negrón also hopes the growth of the local food industry serves as an example for other industry sectors to follow suit. “The fact that we continue to grow is not only a good indication that even when things get tough, if we organize ourselves, we can thrive and succeed. Most importantly, I think Puerto Rico’s food industry leads by example in what it means to bet on Puerto Rico; to keep reinvesting in the local economy and not stand by waiting for what can or should be given to us, but rather going after what we want. In the end, by strengthening our food industry we’re making Puerto Rico’s economy more financially solid, and we are laying fertile ground for other industries to do the same,” added the MIDA executive.

SUPERMARKETS RULE

Within the local food industry, the segment that groups the island’s supermarket operations is the one that has experienced the most growth. One of the most dramatic changes in this segment comes from the industry’s outlook, shifting the way it operated, from being reactive to becoming a proactive business sector.

For example, some 25 years ago many local food retailers just relied on stateside manufacturers or local exclusive distributors to introduce the latest food products or new industry technology. During the past decade or so, retailers have grown more involved in all aspects of the business, gaining access and firsthand knowledge of products and new technologies to improve their businesses.

Competition, however, has been the main driving factor within the industry. “Puerto Rico’s food industry is a dynamic, changing and proactive industry. Most importantly, it is a customer-driven industry, where the voice of the consumer is very much a part of the way we do business. Today’s consumers are more sophisticated and knowledgeable about products, nutritional values and other industry trends. Consumers have also become more demanding regarding price, convenience, store appeal and security. Given the hectic lives most Puerto Ricans live, they also prefer to meet their food needs with as few visits to the store as possible and get what they need all in one place,” explained MIDA’s Negrón.

The local food industry accounts for 60% to 80% of the island’s consumer segment with an estimated 700 to 800 food-sales establishments, 300 of which are supermarket locations. Of the total $4.2 billion in annual industry sales, $1.3 billion comes from the U.S. Department of Agriculture’s Nutritional Assistance Program (PAN, by its Spanish acronym) for financially disadvantaged families.

New Pueblo owner Ramón Calderón is bullish not only about Puerto Rico’s food industry, but about Puerto Rico’s future in general. His optimism was best evidenced by the fact that, in what some industry experts considered a heroic move, he acquired the absentee-managed Pueblo supermarket chain after its former owners, Venezuelan Grupo Cisneros, had fi led for bankruptcy.

Last November, Calderón, also president of local bakery company Holsum, acquired Pueblo’s 21 stores and distribution center in Carolina for $137 million. The transaction, financed by Westernbank, enabled new Pueblo executives to reopen in record time before the end of the year, thus allowing 2,300 people currently employed by the chain to keep their jobs. The historical transaction also put Pueblo in the hands of local entrepreneurs for the first time. “If I had to do it all over again, I’d do it exactly the same way,” said an enthusiastic Calderón, president of Pueblo, reflecting on the recent Pueblo acquisition.

“I have the utmost respect for our local food industry. It’s a tough business, but it keeps Puerto Rico healthy and the economy moving forward. I’m honored to be a part of it,” said Calderón, who vows to restore Pueblo operations to their glory days when Milton Toppel was at the helm of the company. “As a matter-of-fact, one of my first calls after acquiring Pueblo was to Mr. Toppel whom I consider a mentor. He was moved by the gesture and, of course, willing to help in any way he could.”

For most supermarket companies, the year 2008 will continue to see new store openings. For Pueblo, however, which just reopened 21 stores, reconditioning the stores, fine-tuning inventory and delivering good service will be its top priority. And, of course, Calderón also plans to continue opening more Pueblo locations in the near future.

“Meanwhile, we continue to invest to bring the stores to optimum conditions. Next in line is the reconstruction of 94,000 lineal feet of refrigerators, and we’ll continue to deliver the best service the food industry has. Something amazing happens when you can hire back so many employees who had lost their jobs: they come back with greater appreciation for what it means to come to work every day. I have no doubt I have the most motivated workforce on the island,” said Calderón, who in addition to the store upgrades is investing an additional $5 million to upgrade the Carolina distribution center to continue serving Pueblo’s 21 stores and other local companies that need warehousing starting this year.

From a product standpoint, Pueblo’s new management set another record before the end of the year by restocking the stores in two weeks’ time. The chain will focus on expanding its product variety by maintaining full inventories of national and locally known brands and adding national private-label lines such as Food Club, a complete product line from dairy to produce, at economic price points; World Classic, a line of gourmet products also moderately priced; and Value Time, meats, dairy and other products also with midpoint prices. In addition, Pueblo extended its deal with Omaha Inc., one of its meat suppliers.

The supermarket industry pipeline has been full with expansions during the past few years, including Supermercados Grande. The chain, owned by local entrepreneur Atilano Cordero Badillo, recently completed its latest $30 million expansion which included six new stores and a remodeling program. During the past 20 years, Grande alone has invested more than $60 million in expansions and renovations in the chain.

“Whatever you do in life, do it with passion. That’s the secret. Whether it’s mopping the floor or running a multimillion-dollar corporation,” said Cordero Badillo, one of Puerto Rico’s most respected and admired self-made entrepreneurs.

Cordero Badillo’s first official job was as a bagger at Grand Union’s Hato Rey store at the age of 15. Some twenty years later he would go back as the owner of the entire chain of 18 supermarkets. He had bought and sold his first grocery store, Colmado La Patria in Cataño, gone into the wholesale business and then back into retail. He opened the first Supermercado Grande in La Cerámica when he bought Supermercado Tuyo. Nine stores later, he bought Grand Union, then Uni-Coop...and Grande just keeps growing. Today, it’s a 31-supermarket chain with sales exceeding $400 million a year and more than 3,600 employees. Selectos, a supermarket co-op chain, opened several locations in 2007 with plans to open another 10 within a couple of years. Out in the western region, entrepreneur Santos Alonso’s Mr. Special is still king. It opened four stores last year bringing the chain’s total annual sales of $245 million. Even smaller chains such as Cooperativa de Isabela opened three new stores in one year, and Centro de Ahorros supermarket chain already boasts an impressive supermarket network of 40 locations.

ECONO’S ASCENDING ROAD TO THE TOP

However, not many people could have anticipated that a group of independently owned supermarkets would become the most visited chain in Puerto Rico in only 15 years. Econo’s ascension to the top as the island’s No. 1 food retailer is arguably one of the most important success stories of the local supermarket industry. Commanding a 26% market share, Econo is also the most visited chain in Puerto Rico with retail sales that average an outstanding $1,000 to $2,000 per square foot.

To put it in perspective, depending on the Econo store being looked at, its average sales per square foot could be higher than the average of sales per square foot at Plaza Las Américas, whose sales per square foot oscillate between $900 and $1,000 from an estimated 40-million-plus people a year who visit the mall.

Econo’s stores have transformed themselves from their previously independent 4,000 to 6,000 square feet they averaged 15 years ago, to the 60,000 square feet of store space they hold today, a dramatic transformation in a relatively short period of time.

“Our strength comes from our union; it’s as simple as that,” said Alfredo Soegaard, president of Econo supermarkets. “We are the most diverse group of entrepreneurs working together in Puerto Rico. Each one of us is an owner/operator. That’s why we pour our hearts and energy into our stores to make sure we stay in touch with the clients’ needs at all times. Collectively, we’re a force to be reckoned with.”

With 47 stores, sales at $700 million and 3,500 employees, Soegaard says there’s still plenty of room to grow in Puerto Rico. “I see no limits to what Econo can do. As I said earlier, our strength comes from our union and the cohesiveness we find as we come together as a family, a family of 32 individual owners-members. Things can happen, and if one of our stores faces difficulties and has to close, that is unfortunate. But we will continue to work together to avoid that from ever happening; you can throw one of us out, but you can’t throw all of us out, so Econo is going to be around for a long time,” said Soegaard in response to how he sees the company growing together in the future.

Econo, which bid to acquire Pueblo’s bankrupt stores, did manage to acquire four of them and has another six stores scheduled to open within the next year to bring its total network to 53. “Yes, the acquisition of Pueblo could have facilitated some of the plans we have, especially to grow our distribution to keep pace with the stores’ growth. But by no means will we stop growing. We’re already working on expansion plans for our distribution center and more stores,” explained Soegaard.

“For a moment, think about the strength and soundness our industry has. At the time of Pueblo’s bidding process-not one, or two or even three-but rather four local companies were in a position to successfully acquire the Pueblo stores. That’s fantastic, and true testimony that Puerto Rico’s food industry is one of the most solid industries in our local economy to date,” noted Soegaard. “As an industry, we couldn’t have let the closing of Pueblo go without doing something about it. As a sector, we are stronger and better because Pueblo can continue to operate.”

GROCERY WHOLESALERS THEN AND NOW

The island’s grocery wholesalers-or cash & carry operators as some people call them— continue to play a significant role in supplying provisions to small bars, restaurants and colmados throughout the island. However, it is the food industry segment that has seen the biggest transformation in recent years.

During the 1970s there were more than 200 grocery wholesalers in Puerto Rico supplying 16,000-plus locations. During that period, it was estimated that grocery sales via 12,000 colmados and colmaditos represented 25% of grocery market sales.

Today, the number of grocery wholesalers— who continue to serve mostly the colmados and other small outlets-has decreased to fewer than 100, 20 of which probably account for 80% of the segment’s sales. The segment’s total sales represent barely 10% of the industry’s total sales of $6 billion. Some of the remaining key players include: Oscar Cash & Carry (Caguas); Hermanos Santiago (Ponce), J.F. Montalvo; Progreso (Ponce); Ralph’s Food Warehouse; and Unión Cooperativa de Mayoristas.

Industry observer Information Resource Inc. (IRI) estimates place the number of colmados at 5,000. The drop in the number of colmados is one of the reasons for the decline in the number of grocery wholesalers and not just the arrival of megastores or food clubs as some industry insiders have argued for years.

“The fact of the matter is that the expansion of supermarket chains, stateside and local alike, has brought a greater level of convenience to even some of the most remote areas around the island that many years ago relied on the colmaditos for their main grocery shopping. Nowadays, not only roads are better and cars more prevalent, but supermarkets are more accessible and convenient for consumers,” explained Negrón. “That is not to say, however, that competition from larger formats like megastores and food clubs hasn’t contributed to the segment’s market share decline, but it has not been the only factor.”

The entry of food clubs such as Sam’s, Wal- Mart Supercenters and Costco as well as sales of groceries at pharmacies, has impacted the grocery wholesaler business. More and more, colmados, restaurants and small bars are purchasing some of their merchandise at these food clubs.

“What we have noticed, however, is that small businesses have not switched entirely to purchasing their weekly provisions from the traditional wholesalers. They are visiting both the grocery wholesaler and the food club,” said Edwin Aquino, market analyst for IRI. “IRI’s observations indicate many of the small businesses will purchase beverages and paper products at the food club when on sale, for example, yet buy the bulk of their other provisions from the traditional grocery wholesaler,” he noted.

ADAPT AND COMPETE

Adapt and compete are words entrepreneur Rafael “Ralph” Soto, president of Ralph’s Food Warehouse, lives by. Soto has grown by merging it with the retail supermarket operation in the same location, a new type of industry hybrid. “I am not afraid of anyone. As a matter-of-fact, whenever possible, I’d like to open a Ralph’s wherever the megastores have one of theirs. Initially, I was seriously criticized when I decided to jump into this industry segment at a time when many key players were leaving. I realized that even before megastores arrived, Puerto Rico still had underserved areas. I decided to prepare for their arrival, adapt to new market conditions and compete. And compete we have,” said Soto who runs an estimated $300-million-plus and 2,000-employee (he calls them co-workers) food warehouse emporium that spans northeastern Puerto Rico, including his native Las Piedras.

“I figured we needed spacious and modern locations to serve customers the way they deserved. I decided to establish the warehouse operation adjacent to the retail supermarket and serve both types of customers at the same time; that way I leverage the investment and logistics of the warehouse and could supply my retail stores from my own warehouse immediately without delays and at convenient prices,” Soto explained. He currently owns 11 locations and has started the new year with plans to open a 12th location in Las Piedras, a store in Fajardo sometime in October and at least one more in the San Juan metro area. Ralph’s stores average 80,000 to 90,000 square feet, including both the wholesale and retail space in one facility.

“I still see tremendous growth opportunities. I have yet to go to Guaynabo, Bayamón and on to Río Grande, Canóvanas and Loíza,” Soto continued, adding, “The key to success is to work every day, remain involved in every aspect of the business, educate yourself about the latest industry trends and maintain the greatest variety, competitive prices and best service.”

Carlos Toro of Oscar Super Cash & Carry operates his stores in the traditional cash & carry format. “The industry has been transforming over the past 10 to 15 years. As key players adapt, they have chosen different ways to compete, from a revised version of the traditional cash & carry to new hybrid concepts, or others who have completely migrated toward the retail end of the industry. We have stayed with the traditional cash & carry format, but carrying packaging options that some of the larger food clubs can’t or don’t do has given us an important competitive edge. Some of the large food clubs like Sam’s Club (owned by Wal-Mart) operate a food club, but also serve individual customers; we only want to serve small business owners and make sure we give them the tools to continue growing their businesses,” explained Toro, adding they maintain a sales workforce that visits clients out in the field on a regular basis to help them maintain adequate inventory levels and facilitate ordering and reordering processes.

“We have also been very successful with our El Criollazo marketing program. Through it clients are feature in our shopper and can also advertise their store locations. We also place banners and develop other point-of-sale materials for them,” Toro explained. As of today, more than 100 small bars, colmados, convenience stores and pharmacies are members of El Criollazo.

“The best example of how we better serve our customers through El Criollazo is the volume discounts we can pass on to our customers so that a local drugstore like Farmacia Ruiz Belvis can sell a two-liter Coca-Cola bottle for seventy-nine cents like the large supermarket chains,” noted Toro, whose stores begin operations daily at 5 a.m. with a heavy traffic of small business owners or operators refilling their inventories. Although Oscar Super Cash & Carry doesn’t have expansion plans at this time, its network covers Caguas, San Lorenzo, Juncos, Las Piedras, Trujillo Alto, Naguabo, Humacao and San Juan.

La Cava de Oscar, which carries more than 1,000 wine labels, offers wine tastings for its small business customers as a means to help them improve their sales to individual customers.

Industry experts agree the grocery wholesalers, or cash & carries, are not going to disappear. There may be fewer now than there were 25 years ago but they remain a viable player in the local market.

For MIDA’s Negrón, the cash & carry or grocery wholesaler sector will remain stable. “Most importantly, as long as they remain competitive in their service and the type of packaging options they can offer, they’ll always have a solid market to serve. They need to continue increasing their variety and diversifying their service by expanding delivery, operation hours and even offering credit options to facilitate payment. All of these measures will go a long way to serve the island’s small businesses and colmaditos which are vital in the food sales chain for thousands of families,” explained Negrón.

As supermarkets, cash & carries and other food operations continue to grow, so does the island’s food distribution sector dominated by such locally owned companies as V. Suárez and Méndez & Co., both of which are significantly expanding their operations in 2008.

V. Suárez & Co., Puerto Rico’s leading beverage and provisions distributor, and seventh largest locally owned company, recently acquired the 26-acre lot previously occupied by Atlantic Pipe Corp. in the Barrio Juan Sánchez industrial zone in Bayamón. Construction of the new 322,000-square-foot facility is quickly moving forward to develop the new integrated warehouse, distribution and office facility. Industry experts estimate V. Suárez’s expansion costs at between $20 million and $25 million based on acreage, extraordinary location and access.

“We’re truly excited about the construction of this integrated facility. This not only represents an important investment in the future of our company, but a vote of confidence about the future of our industry and Puerto Rico,” said Francisco Marrero, vice president and general manager of V. Suárez Real Estate Group.

Also, leading Puerto Rican food and beverage distributor Méndez & Co. will be moving to Bayamón in the near future after relocating the company’s main distribution, warehouse and administrative functions into one efficient megacomplex. The multiphase project, scheduled to begin construction this year within the Lucchetti Industrial Park in Bayamón, will require a $62 million investment from Méndez & Co., Bayamón Mayor Ramón Luis Rivera, Jr. told CARIBBEAN BUSINESS. The estimated total investment includes $13 million to acquire the land, according to commercial real-estate investment sources.

The ambitious Méndez & Co. project will be developed in three phases beginning with phases I & II, which include design, construction-site conditioning, offi ces, a multilevel parking garage and one of several warehouse buildings the complex will have. The project’s third phase will include the construction of an additional 350,000 square feet.

As it prepares to celebrate three decades of operations, the supermarket chain of independent supermarkets Supermercados Selectos, continues with its aggressive expansion and plans to open an additional eight to 10 stores during the next 24 months. In addition, slated to begin operations later this year, Supermercados Selectos plans to inaugurate a new multimillion-dollar distribution center in Dorado to service the chain’s 30 stores. The new state-of-the-art facility will include 80,000 square feet for distribution and logistics and an additional 10,000 square feet of offi ce space to house the company’s new central offices. Supermercados Selectos employs 1,500 people and has annual sales of $300 million.

THE WAL-MART FACTOR

While Wal-Mart’s arrival in 1992 may have transformed the retail end of the industry, it was met by tough competition by local supermarket and food cash & carry operators.

Wal-Mart’s Corporate Affairs Vice President Iván Báez is the first to admit Puerto Rico’s food industry is a solid and extremely competitive industry. “We have excellent competitors and that helps us all keep the industry growing and moving forward.”

Wal-Mart is the island’s largest retailer with estimated annual sales of $1.5 billion from all its operations combined. It operates 31 Amigo supermarkets, nine Sam’s Clubs and six Wal-Mart Supercenters with in-store food sections.

“When Wal-Mart decided to come to Puerto Rico, it was because it saw an opportunity to bring its ‘everyday low prices’ philosophy to the local retail market. That successful formula was extended to the food industry segment, and we have been extremely successful there, too,” said Báez. “But what we’re most proud of is our record of excellence in all aspects of the operations which not only affords us the opportunity to deliver everyday low prices, but provide the best service to our customers. By doing so, we have elevated the industry’s standards and competitive level only resulting in a stronger industry and with greater advantages for consumers.”

Báez is quick to point out the increasing volume of local products that Wal-Mart buys from local distributors and manufacturers. “This is one of the programs that we’re particular proud of, our suppliers’ partners program whereby we can sell excellent quality merchandise from local manufacturers and distributors which allows us to reinvest in the local economy and help local businesses grow,” he commented. “In fact, some of our suppliers have not only placed their products through our local operations, but companies such as Arroz Rico, Carla’s Sweets and a whole series of fresh produce products are now introduced and sold through our Wal-Mart stores in other markets. In our local stores, customers can identify those programs by looking for the “Busca el Sello, Invierte en Ti” (Look for the Stamp, Invest in You) logo which identifies those products that are manufactured locally.”

http://www.prwow.com....=17771&ct_id=2

[Jaykar]

On the Border to create 500 jobs in Puerto Rico
By : FRANCES RYAN
frances@casiano.com
Edition: August 21, 2008 | Volume: 36 | No: 33

First restaurant set for Plaza Guaynabo in 2009; 3-4 locations planned with $5.4 million investment; Chili’s Isla Verde to open in October

The largest casual Mexican-food franchise in the United States, On the Border Mexican Grill & Cantina, is heading south of the border.

To Puerto Rico, that is.

International Restaurant Services Inc. (IR), local franchise owners and operators of Chili’s Grill & Bar and Romano’s Macaroni Grill, have inked an exclusive deal to develop On the Border restaurants in Puerto Rico, CARIBBEAN BUSINESS learned.

The company expects to open three to four locations to the tune of $5.4 million, or about $1.8 million per location, over the next three years.

Each new restaurant will create 140 jobs, or more than 500 direct jobs once all locations are fully operational.

Separately, the company will open the 16th Chili’s Grill & Bar on the island, this one in Isla Verde across from El San Juan Hotel. The location will feature two floors and extended operating hours for breakfast, lunch, dinner and late-night entertainment.

Just minutes from San Juan, the first On the Border restaurant will open in Plaza Guaynabo at the former Ruby Tuesday location, which IR also acquired.

Dallas-based On the Border, known for its vibrant décor, “delivers traditional Mexican dishes with a ‘twist’—more like Tex-Mex combined with an American influence typically found at border locations between Mexico and the U.S.,” explained Ramón Leal, vice president of operations at IR.

“The whole corillo [staff] from IR just got back from Dallas, where we had a chance to taste the entire menu and go through the On the Border experience. I’m convinced Puerto Rico not only will like the concept, but will enjoy the blend of good food, affordable dining and an entertaining ambiance,” Leal continued, adding the company may open more than four locations opening on the island if the market is receptive to the concept.

“Our original plan with Chili’s was to open five locations in five years. We ended up with eight within that time and are now up to 15,” he said.

On the Border was established in Dallas in 1982 and was later acquired by the national franchise company Brinker International. It has 158 locations in 32 states. Other Brinker concepts include Chili's Grill & Bar, Romano's Macaroni Grill and Maggiano's Little Italy, the latter being the only Brinker concept IR does not have on the island.

http://caribbeanbusi...?...259&ct_id=0


Give Puerto Rico Medicaid parity now
Edition: August 21, 2008 | Volume: 36 | No: 33

Puerto Rico isn’t alone in its plight over skyrocketing healthcare costs. But it needs help the most.

Admittedly, first and foremost, we need to educate people on healthcare and how to take care of themselves. Studies show that prevention and high-quality medical care lead to lower mortality and lower overall medical costs. We need to continue to move toward preventive care, educating patients on prevention and healthier lifestyles.

In the meantime, the impact of the spiralling cost of healthcare on local businesses, consumers and the economy as a whole is dramatic and will get worse. An already huge government budget deficit is getting bigger, employers’ and employees’ pockets are being squeezed, as are the island’s hospitals, and health services for those who need them are becoming more limited.

The greatest impact is being felt on the government-funded healthcare plan for the medically indigent. The finances of La Reforma-as the government health plan is universally known-are spinning out of control. They are already one of the principal reasons for the government’s inability to balance the budget.

The fiscal year 2009 budget for the Puerto Rico Health Insurance Administration (ASES by its Spanish acronym)—the agency that administers the health plan-stands at $1.4 billion. But ASES expects to spend a whopping 30% more than that, or $1.8 billion, leaving a $400 million deficit just this year. Last year, ASES spent $1.6 billion, i.e., $200 million more than the budget it is being assigned this year.

In fact, on average, ASES gets roughly a 1.7% annual increase in revenue to meet a 7% annual hike in costs, math that will yield bigger deficits every year until the two numbers are brought into balance.

ASES’ budget-breaking spending is the result not only of rising costs but of an unforeseen hike in people served by the plan, courtesy of a deeper and longer-than-expected economic recession on the island. Although there are maximum income and asset levels for people to qualify, as Puerto Rico’s economy keeps worsening, new unemployed workers are flocking to La Reforma and the number of people in the government health plan is expected to increase further. Officials don’t know for sure how many new beneficiaries have enrolled recently, but hospital officials report a roughly 30% increase in the past two years in the number of Reforma patients visiting emergency rooms.

Against this background, it is imperative for Puerto Rico to achieve parity with the States regarding not only reimbursements to hospitals and providers under the federal Medicare program-despite recent progress, it is still roughly 75% of what is received in the States-but funding parity under the federal Medicaid program as well.

Medicaid is a federal government-run program that provides medical and healthcare services to indigent and impoverished citizens, exactly what La Reforma does in Puerto Rico. The federal government treats Puerto Rico’s Reforma as a state Medicaid program in terms of the application of federal compliance standards-and, therefore, associated costs-but fails to fund the program in the same proportion as it does in the 50 states. The big difference is that states have no cap on their Medicaid funds while, for the territories, Medicaid funds are capped.

Today, Puerto Rico receives only $260 million under Medicaid. With parity, the island would receive an estimated $1 billion in Medicaid funding, which would go directly to the government health plan. The difference would wipe out ASES’ deficit overnight, and then some.

It is a fact that because we don’t pay federal income taxes-among other reasons-Congress can treat Puerto Rico differently than the States when it comes to extending full treatment under certain federal programs in which spending is discretionary.

But healthcare for the poor should be such an overwhelming public policy priority that it is high time for Congress to consider according Puerto Rico equal treatment under the Medicaid program.

http://caribbeanbusi...?...67&ct_id=10


Trump goes green
By : ELSA FERNÁNDEZ MIRALLES
elsa@casiano.com
Edition: August 21, 2008 | Volume: 36 | No: 33

Trump project at Coco beach aims to become one of the most sustainable developments of its kind in the world, with solar, hydrogen, LEED and other initiatives

CARIBBEAN BUSINESS has learned that the Trump International Residences & Golf Club currently under development at the Rio Grande mega-site will feature enough eco-friendly initiatives to make it one of the most sustainable projects of its kind in the world.

Owner Arturo Díaz Jr. and grandson Jorge Arturo Díaz, who is in charge of development for the Trump-brand residential, tourism and entertainment complex, revealed plans to include at least seven cutting-edge green initiatives at the site.

The master plan will follow the generally-accepted LEED guidelines for green construction. LEED is short for Leadership in Energy and Environmental Design, a standard established by the U.S. Green Building Council to promote and guide the development of eco-friendly buildings and projects around the world.

The decision follows more than just a global trend. It is ingrained in the DNA of the Díaz family, said Jorge Arturo.

Among the initiatives to be included in the local Trump development is a solar power plant, which will consist of a large lot littered with solar panels to provide much if not all of the power to be used by residents and operators of the development upon completion. The size and megawatt capacity of the plant has yet to be determined.

A second initiative will be the use of hydrogen energy to power the golf cars and maintenance vehicles, as well as for the electric generators used when the power is down.

“We will include a hydrogen station that residents and guests can use for their hydrogen-propelled vehicles,” Jorge Arturo explained. “We have already initiated talks with some manufacturers that have prototypes for this type of car, like BMW, Mercedes-Benz, Toyota, Honda and Volkswagen.”

Trump International will also feature a series of measures that fall under the umbrella of green building – that is, making buildings as energy-, water- and resource-efficient as possible.

At the recently completed Founders Villas, for example, state-of-the-art energy-saving air conditioners were installed, as well as other conservation features, according to the young Díaz executive.

7,000 new trees

As for water, the Coco Beach Utility Corp. owns and operates a water treatment and recycling plant with a capacity to produce more than one million gallons of water daily. The water will be used to irrigate the golf course and will be stored with a two-month capacity during dry spells.

For the construction phase, the developers implemented several measures that go beyond what the law requires to minimize contamination, minimize soil erosion and control dust emissions, added the young Díaz.

The project has also set aside 90.1 acres of mangroves and wetlands for conservation, as part of a broader effort to preserve green areas.

“We have a plan to conserve mangroves and wetlands,” said Jorge Arturo. The 90.1 acres, he said, is “divided in two sectors. The first is about 46 acres and is on the west side of the property, along the Espíritu Santo River. The second area is about 44 acres and is also on the west side of the property, next to the service parcel. To secure the protection of this land, our family created a title deed called a Perpetuity Natural Reserve.”

On the subject of green-area preservation, the project’s master plan includes the planting of more than 7,000 new trees and palms, including 16 new variations of palm trees and 27 other plants, as well as creating impressive gardens and landscapes. Plans are to continuously expand the resort’s visual and ecological characteristics.

Green passion, commitment

Since don Arturo purchased the Coco Beach site more than 50 years ago, the conservation of the region’s mangroves and habitat has been one of his principal objectives.

As the patriarch of Empresas Díaz recently stated, “We not only view our property as a beautiful place to live and play golf, but as an important representation of Puerto Rico. This has been my dream for many years, a part of our family, and we treat it as such. That is why we want to create the most positive visual and environmental impact on the area.”

His grandson concurs, and he is now taking the family dream and raising it to a new level, emphasizing the new eco-technologies and initiatives.

So enthused is Jorge Arturo with the concept that he has decided to study eco-conscious architecture and design once he wraps up the sustainability improvements at Trump International.

“What most people don’t know about the Trump development is that, since the beginning, my grandfather has been concerned about the environment. Actually, way before I started working with this project three years ago, it was my uncle who was working closely with the U.S. Fish & Wildlife Service, particularly to conserve Coco Beach’s mangroves and wetlands. For us, this is more of a family project than merely a commercial one.”

http://caribbeanbusi...?...72&ct_id=23

[Jaykar]

Giant Columbus statue finds new Puerto Rico home
08/18/2008 | 01:21 AM

SAN JUAN, Puerto Rico - A giant statue of Christopher Columbus has found a home after years of sitting in pieces in a park in the Puerto Rican city of Catano.

The city paid US$2.4 million to bring the 310-foot statue to Puerto Rico ten years ago, but then couldn't raise the extra cash needed to erect it.

Now, Catano Mayor Wilson Soto says port management company the Holland Group has agreed to take the disassembled, bronze and steel statue off his hands.

The company plans to install it in the western city of Mayaguez, where it runs the port. The town is set host the Central American and Caribbean Games in July 2010.

http://www.gmanews.t...uerto-Rico-home


St. Jude gets OK for new Puerto Rico plant

Last update: August 20, 2008 - 8:06 PM

St. Jude gets OK for new Puerto Rico plant

St. Jude Medical Inc. won U.S. approval to open a plant in Arecibo, Puerto Rico, to manufacture electronic heart devices as part of a company-wide expansion. At least 1,250 new jobs will be created at the plant within the next three years, the company said Wednesday. St. Jude, based in Little Canada, already has a plant in Caguas, Puerto Rico. The new, 150,000-square-foot facility will make implantable pacemakers, defibrillators and the thin wires, or leads, that connect electronic devices to the heart.

http://www.startribu...s/27205729.html

Daddy Yankee gives McCain his support

The Denver Post Mon Aug 25, 9:01 PM ET

PHOENIX — While Democrats launched their convention in Denver, Sen. John McCain scooped up the endorsement of Daddy Yankee, the reggaeton star popular with young people and Latinos. At Central High School in Phoenix, McCain visited with students and urged them to vote, noting "this is a tough presidential campaign we're in." "I brought a special friend, a great American success story," McCain told the students. "He's from Puerto Rico, married 15 years, and has children ages 14, 12 and 10.

"One of his songs I know you're familiar with: "Gasolina." Oohs and aahs of disbelief greeted McCain's announcement as he said, "There he is, Daddy Yankee!"

Later, McCain flew to California for a star turn on "The Tonight Show with Jay

http://news.yahoo.co...post/10302702_1

Edited by Jaykar, 26 August 2008 - 05:35 PM.

[Jaykar]

CVS opening closer than ever
By : FRANCES RYAN
frances@casiano.com
Edition: August 7, 2008 | Volume: 36 | No: 31


Initial investment more than $200 million; plans call for 100 locations in three years; Humacao first in line in ‘08
The on-again, off-again Puerto Rico penetration by Massachusetts-based CVS drugstore chain is on again.

And not only is this time for real, but CARIBBEAN BUSINESS has learned that expansion plans are far bigger than anyone imagined.

The chain’s plan, according to sources at the Puerto Rico Planning Board, calls for the development of 100 CVS drugstore locations around the island during the next three years.

On average, a new retail drugstore costs about $2 million to $3 million, which puts CVS’ initial investment at more than $200 million.

About 11 CVS stores have already been approved by the Planning Board, according to one industry source. Some locations under construction are in Humacao, Carolina and on Piñero Avenue in San Juan. The Humacao location could be the first CVS store to open in Puerto Rico before year-end.

CVS’ standard store format, ranging from 9,000 to 12,000 square-feet in size, will help bring some parity into that retail category, where Walgreens has reigned supreme during the past 15 years.

Industry followers indicate Walgreens never had any illusions of keeping the market all to itself after El Amal, Puerto Rico’s second-largest drugstore chain, decided to become the island’s first chain of pharma-clinics (see related story).

To be sure, Walgreens hasn’t taken the news lightly, as it has been quietly but aggressively expanding and preparing for CVS’ certain arrival.

Walgreens and CVS have grown to become retail giants throughout the U.S. mainland, with 65% to 70% of their square footage dedicated to the sale of general retail merchandise. CVS has become the more dominant chain, with a store opening every 17 hours.

http://www.caribbean....d=215&ct_id=17

Burlington Coat Factory to open in Puerto Rico
By : FRANCES RYAN
frances@casiano.com
Edition: July 3, 2008 | Volume: 36 | No: 26


National retailer to inaugurate first two stores by October; largest store slated forformer Pueblo on 65th Infantry Avenue; each store to generate about 100 new jobs
National retailer Burlington Coat Factory (NYSE: BCF) began construction of its first store, slated to open sometime in October this year, CARIBBEAN BUSINESS has learned. Company spokesperson Audrey Shapiro also confirmed company plans to initially open two stores on the island of 76,000 square feet and 38,000 square feet. After many years under consideration, Burlington –which sells a lot more than just coats–will finally begin local operations this year.

Still relatively early in the construction phase, Shapiro declined to comment about the new store locations. However, she told CARIBBEAN BUSINESS: “[Puerto Rico] has always been an area of interest to us and we’re very excited about bringing our great assortment of merchandise to Puerto Rican consumers, who happen to be very fashion-savvy and price-conscious, a perfect market fit for Burlington’s brand labels at value prices.

“Most importantly, with each of our stores we should help create about 100 full-time and part-time new jobs. And in such difficult economic times, the savings we bring for our consumers will be greatly appreciated,” continued Shapiro.

With more than 395 stores nationwide, don’t let the name Burlington Coat Factory fool you. The national retailer offers clothing, footwear and accessories for the entire family and everything in between. A stiff rival for up-until-now lonesome Marshalls, Burlington features an extensive home décor department, a specialty baby product department, Baby Depot and Luxury Linens as well as a large assortment of current, high-quality, designer and brand-name merchandise at up to 60% less than other department stores.

While Burlington will carry the chain’s staple line of coats, the chain has over the years evolved to become a complete department store filled with brand-name merchandise for all occasions and for the entire family. “Definitely, Burlington is about a lot more than coats. But that’s how we started and have evolved into a retail one-stop shop for the entire family. Since we shop the world for our coats, we carry more than 200 different lines of coats. We know our selection of coats will still be ideal for college students, those who travel to cold weather for business or pleasure,” said Shapiro.

http://www.caribbean....id=91&ct_id=17

Aeropostale Opens in Puerto Rico

NEW YORK — New York City-based teen retailer Aeropostale announced today their plans to roll out stores in Puerto Rico and the opening of its first Puerto Rico store at Plaza Carolina in Carolina. The remainder of the initial roll out will occur in the weeks following at Plaza Las Americas in San Juan, and in the latter part of the year, at The Prime Outlet Puerto Rico in Barcelonesa.

"We're excited to be expanding Aeropostale in Puerto Rico," says Tom Johnson, Chief Operating Officer, Aeropostale. "We feel Puerto Rico is the natural next step as we continue to connect with our core customer, young men and women." The company plans to open an estimated 10 to 12 additional stores by 2010.

Puerto Rico is Aeropostale's second expansion outside the United States. In 2007, Aeropostale opened 15 stores in Canada.

"The energy of the teens in Puerto Rico mixed with our excitement for being here, will prove the right fit," says Johnson, "With the anticipation of the opening growing, as well as the company's success in the United Sates, we know Aeropostale will becomes a teen favorite in Puerto Rico."

The openings will be supported through an integrated marketing effort. Some of these efforts include outdoor advertising, in-mall marketing, radio remotes, and in-store grand opening giveaways.

Aeropostale offers trend-right clothing at compelling value for teens and young adults. Each Aeropostale store carries both men and women's apparel and a full range of accessories.

eropostale currently operates 825 stores in the United States and Canada as well as having an e-commerce site, aeropostale.com since 2005. The first Aeropostale store was opened in 1987.

For more information on Aeropostale and its Puerto Rico launch please visit aeropostale.com.

About Aeropostale, Inc.

Aeropostale, Inc. is a mall-based, specialty retailer of casual apparel and accessories, principally targeting 14 to 17 year-old young women and men. The company provides customers with a focused selection of high-quality, active-oriented, fashion and fashion basic merchandise at compelling values. Aeropostale maintains control over its proprietary brands by designing, sourcing, marketing and selling all of its own merchandise. Aeropostale products can only be purchased in its stores or on-line through its e-commerce website (www.aeropostale.com).

http://www.centredai...ory/570249.html

Aéropostale and American Eagle Outfitters to open at Plaza Carolina
Posted: Wednesday, April 30, 2008 - 03:00 PM
By Frances Ryan of Caribbean Business

Multimillion-dollar expansion continues; new G by Guess, Godiva, Marc Ecko, Sony Store, Starbucks labels turn mall into a fashionable destination; Capri store to expand

A simple walk through Plaza Carolina’s hectic halls will suffice to confirm Puerto Rico’s second-largest shopping center is undergoing a subtle yet exciting transformation. For starters, the Simon Malls property, which this year celebrates its 30th anniversary, is moving full-speed ahead with the expansion of its existing 1.1 million square feet to include more than 10 new tenants, add more than 60,000 square feet of retail space, relocate and revamp the food court area and add a new catalog of activities to enhance the shopping experience for the more than 40,000 customers who visit Plaza Carolina every day. Pending is the possible construction of a Best Buy store, which would add yet another 50,000 square feet of new retail space.

Simon Malls, one of the country’s leading shopping center companies with nearly 380 malls in operation, declined to comment about the expansion’s investment slated to conclude in 2010 and should help create 200 new direct jobs. While the estimated multimillion-dollar expansion and remodeling of Plaza Carolina is significant, changes taking place within the tenant mix are already giving mall-goers-and other shopping center operators-something to talk about. Set to begin operations tomorrow is specialty retailer Aéropostale featuring its latest casual apparel and accessories collections at its first Puerto Rico store. And one of the ultimate youth-brand retailers in the market to date, American Eagle Outfitters, confirmed it will begin operations at Plaza Carolina this summer.

The only World Footlocker store on the island, with nearly 9,500 square feet, will be the next-door neighbor of the future American Eagle Outfitters store and is set to open this summer.

During the past 14 months alone, such name-brand retailers as Marc Ecko, Godiva Chocolatier, G by Guess, World Footlocker, Bebe, Chi by Journeys, Gymboree, Charlotte Rousse, the Sony Store and Starbucks have become Plaza Carolina tenants. In the past, the Carolina regional mall has been associated with mass market discount-retail stores, but through the ongoing expansion, the mall is becoming more fashionable by attracting new exciting designer labels while maintaining the affordable price points to which customers have grown accustomed. Some of the top local tenants are also expanding with the mall as in the case of Capri stores, which will relocate to a larger location with a new store design.

“This is one of the developments we’re most excited about,” said Tomás Sifontes, Plaza Carolina’s manager. “The fact that this significant effort is not only going to attract new retailers but also give our own local stores the opportunities to grow with them is wonderful. The Capri store, one of our main tenants, will relocate and take an even larger retail space.” Capri, which currently occupies approximately 38,000 square feet, will move behind the Old Navy store on the first floor to a larger footprint.

Under the remodeled footprint, La Plazoleta food court will relocate from its current site next to the cinemas creating the mall’s entertainment center.
Early results are paying off. Industry skeptics have been surprised by the success of the Starbucks kiosk whose average midsize cup of java ranges from $4 to $5 compared with a cup of Puerto Rico’s premium coffee, which is still under $2. “We offer both types of coffee at the mall, and they’re both successful. The Starbucks concept is a retail experience customers are willing to pay for, whereas coffee drinkers who love Puerto Rican coffee are likely not to switch. By adding Starbucks to our tenant mix, we simply expand the choices we offer our clients,” explained Carolina’s Sifontes.

Fashionably affordable

On the fashion side, new retail arrivals are creating a lot of excitement. Given the region’s young demographic, Plaza Carolina has traditionally catered to a large client base of 15- to 25-year-old customers. Long gone are the days of only jeans and tennis shoe stores. Plaza Carolina’s new fashion choices for young consumers include cutting-edge label Marc Ecko, the young designer who launched the urban apparel line out of his Rutgers University apartment in New Jersey in 1993. Today, Marc Ecko Enterprises’ wholesale business exceeds $500 million a year. Marc Ecko’s skateboard and hip-hop subculture style translates into graffitilike casual wear and t-shirts with price points starting as low as $19.99. The Marc Ecko store window features the line’s iconic rhino.

The Los Angeles-based G by Guess, a division of designer empire Guess Inc., delivers cutting-edge fashions at affordable prices. Mostly suited for young clients, sizes 0 to 12, the G by Guess store with 4,500 square feet at Plaza Carolina is the first of its kind in Puerto Rico. The store’s fashion-forward store design is but a sneak preview of the fun mix-and-match collections including denim and cotton clothing, jeans, pants, skirts, dresses, shorts and blouses. Guess also grants licenses to manufacture and distribute a variety of products ranging from eyewear to watches, handbags, swimwear, fragrances and jewelry.

For many local buyers who have fallen in love with the European H&M fashion discount retailer, G by Guess will be the local alternative with prices ranging from $19 to $49.99, with the occasional leather pieces retailing for up to $150.

A Lady Godiva hand-painted mural is a conversation piece at the new Plaza Carolina Godiva Chocolatier 471-square-foot boutique store, the chain’s second location on the island. All white Italian tile and brown hand-carved wood frames showcase the extensive Belgium chocolate collection. Irene Dávila, store manager said: “We’re very excited about our new location which features the chain’s new store design. Beyond the retail cases, this store is a self-treat location featuring our line of chocolate frozen drinks, our chocolate-dipped jumbo strawberries, the customized assorted chocolate boxes and our popular chocolixir, already a best-seller.”

Local tech personality Otto Oppenheimer has converted the Sony Store into a retail and entertainment destination. From Sony Vaio’s TZ series, weighing less than three pounds and available in a fashionable line of colors, to plasmas, cameras and the latest Blu-ray video player technology, the Sony Store, with nearly 3,500 square feet, is one of the most fun places within the new Plaza Carolina.

http://prwow.com/new....=18195&ct_id=2

[Jaykar]

City of Opportunity: transforming San Juan into a world-class city
By : JOSÉ L. CARMONA
josec@casiano.com
Edition: August 28, 2008 | Volume: 36 | No: 34

Shepherded and facilitated by the central government and the City of San Juan, the private sector is spearheading a potential $15 billion investment in the capital city

For a visitor driving around certain areas of San Juan, it would appear that far from suffering its deepest recession since the Great Depression, Puerto Rico is going through a period of runaway growth.

Dozens of projects under construction or in development stand to create a vibrant capital city full of opportunity for local & foreign investors, businesses and entrepreneurs.

Puerta de Tierra, Isla Grande, Condado, Santurce, Bechara, Hato Rey, Río Piedras – nearly every major sector of the city is either in the midst of a major redevelopment project, with construction cranes spotting the landscape, or in an advanced stage of planning & development.

If all projects materialize, the total investment in coming years would amount to a jaw-dropping $15 billion by both the public and private sectors, primarily the latter.

The vision is of a vibrant, world-class city full of opportunity for local and foreign investors and business people – opportunities during the construction phase, a major boost to an industry that has seen its fortunes fall with the decline of other segments, and opportunities for businesses of all kinds that stand to benefit from economic activity as construction is completed.

There are opportunities for companies engaged in marinas, for developers of hotels, housing and office buildings, for companies that supply laboratory-related goods and services, for green-economy businesses, eco-tourism service providers, private shuttle and transportation companies, suppliers and distributors of just about anything, companies providing entertainment attractions, research and development firms, infrastructure development companies, facilities managers, museum management, restaurants, stores, shops, boutiques, cafés, galleries, bookstores, beauty parlors, service providers, office businesses, you name it.

In recent years, much has been said about how the central and municipal governments’ dire fiscal problems have limited their capacity to stimulate the island’s economy through public-sector investment. Well, they found a better way: provide incentives, accelerate infrastructure and let the private sector do it, mainly through public-private partnerships, or PPPs.

The long list of projects includes many sponsored by the City of San Juan and others promoted by the central government. While they have largely worked on parallel paths, the result is the same: opportunities for one and all. Here’s a sampling:

The $6 billion Ciudad Mayor infrastructure plan; $1.5 billion San Juan Waterfront project; $1 billion Río Piedras 2012 redevelopment project; $800 million in upscale hotels, commercial and residential projects under way in Condado; the continued expansion of the $1.3 billion Convention Center District; $1 billion redevelopment of Santurce; $1 billion development of the Hiram Bithorn/Roberto Clemente sports complex; $400 million Ciudad Red mass transit-oriented development project; and $400 million redevelopment of the Bechara sector.

Most of this development is so advanced that continuity is assured no matter who occupies La Fortaleza and City Hall come January. And judging from their public statements and party platforms, all candidates are largely aligned.

As to the rest, it is impossible to say at this point which projects will proceed and which will not, be it for political or economic reasons. But one thing is certain: today, they represent opportunities the private sector can jump into and help materialize.

In this special coverage, CARIBBEAN BUSINESS provides a rundown of the major projects underway and planned. Some projects will be familiar, since they have been previously reported. Others will be new. And one thing that is definitely a first is the combination of central-government and city-government initiatives in a single story, providing a unique perspective and as total a picture as has ever been presented of everything going on and all the opportunities created as a result.

It is written as a sort of tour, starting at Puerta de Tierra and working down to Río Piedras, so you can “walk” through the development and see which opportunities are of sufficient interest to warrant picking up the phone and taking part.

Waterfront to bring old-town piers to 21st Century

For decades, the area of Puerta de Tierra along the southern part of the Old San Juan Peninsula bordering the San Antonio Channel, has become one of the ugliest eyesores of the city. But that’s about to change.

The 87 acres dedicated almost exclusively to maritime port activity along the channel will undergo a $1.5 billion revamping in a massive project called San Juan Waterfront, a bay-front tourism-residential development that will create countless business opportunities along the channel.

Both the San Juan Waterfront and the Convention Center District began as the Golden Triangle development in the 1990’s by then-Gov. Pedro Rosselló and the Puerto Rico Tourism Company. Both the Sila Calderón and Aníbal Acevedo Vilá administrations continued the work.

The project will be divided in two phases, the first stretching from Pier 6 to Pier 9 and the second along the rest of the piers up to the mouth of the Convention District and Condado. It will open up opportunities for shops and stores, restaurants and cafés, small inns and apartment buildings, and more, all following the general design and feel of the Waterfront, said Secretary of State Fernando Bonilla during an exclusive interview with CARIBBEAN BUSINESS.

The first phase is well underway, as the piers of all cargo-related facilities have been cleared for development. Piers 6-9 will feature a large park, a 96-slip marina, a 240-room hotel on Pier 9 and new retail space, all with the unique look and feel of the Waterfront. Bonilla awaits only the final permit from the U.S. Army Corps of Engineers to proceed with construction, expected to break ground in October.

One company already taking advantage of this development is Island Global Yachting, which has been awarded the contract to build the $115 million marina. The latter will include 76 slips for yachts below 80 feet long and 20 slips for mega-yachts of more than 80 feet. The marina will also include 67,000 sq. ft. of retail and commercial space, providing business opportunities for companies that want to cater to tourists, marina users, yacht-related products and services, and more.

“The San Juan Waterfront, when it’s all finished, will be up to the standards of the best waterfronts in the Mediterranean and the best known in the United States, such as South Street Seaport and Baltimore,” said Bonilla.

The Waterfront project includes the redevelopment of Puerta de Tierra’s public housing complex, a process that is well underway. Some existing buildings have been demolished, and construction of approximately 370 new public housing units will begin in six- to eight weeks, Bonilla said.

“The housing development will use a much more modern, practical and attractive urban design. All buildings will have commercial spaces on the first floor, with a preference given to residents who want to open their own small businesses. It’s a way to foster entrepreneurship,” he added.

Convention District: magnet for business travelers

Right next to San Juan Waterfront is the Convention Center District, yet another magnet for business opportunities. The Convention Center itself is now a reality, but that is just the beginning of a $1.3 billion development slated for a 113-acre expanse of land in Isla Grande.

Under construction and expected to open September 2009 is the new $210 million Sheraton Hotel, which will add 503 much-needed rooms and commercial space to the District.

CARIBBEAN BUSINESS reports this week that a 300-room Aloft Hotel will also begin construction in the coming weeks (see related story). That will be followed by a 300-room Courtyard Marriott, bringing total rooms at the District to 1,100.

Also under construction is the District’s first mixed-use complex, with a private-sector investment of $100 million. The project will include 100 residential units, commercial spaces in the first floor, and adjacent office space. The complex is designed to complement activities at the Convention Center. Completion is expected in mid-2009.

A development team has already been selected for the second mixed-use development at the District. Construction is expected to begin before year-end on 170 residential units and 15,000 sq. ft. of commercial space, at an investment of $90 million.

Construction of the District’s $65 million, 282,000-sq.-ft. World Trade Center is also slated to begin in the coming weeks, with completion expected in 2011, Bonilla revealed. It will serve as the new headquarters of the Puerto Rico Trade Company and the Puerto Rico Tourism Company, as well as place companies and organizations engaged in international commerce together under one roof.

The District is opening up unprecedented opportunities for green-economy companies. Every single building going up at the District must follow LEED green-building guidelines, or Leadership in Environmental Engineering and Design. “This is a very exciting aspect of the entire development,” said Bonilla.

He added that as part of the transportation enhancements to the Convention Center District and surrounding areas, the Puerto Rico Transportation and Public Works Department (DTOP) begins construction next month on an elevated off-ramp on Intersection Five, where Muñoz Rivera Avenue meets Baldorioty de Castro at the entrance to Condado and Isla Grande.

That will eliminate the current loop in front of the Dos Hermanos bridge. Access to Puerta de Tierra and Condado will be restructured as well in subsequent phases.

After three years of inactivity, DTOP’s Highways and Transportation Authority renewed demolition and construction work on the $25 million Dos Hermanos bridge. Work on the bridge was halted in 2005 after the U.S. Army Corps of Engineers did not renew the construction permit because of changes in its original design and the discovery of coral colonies by the National Marine Fisheries.

$800 million facelift for Condado

Across the bridge is Condado, one of San Juan’s prime tourism zones. The area is in the midst of an $800 million private-sector-led investment in hotels and commercial and residential projects. (CB, May 31, 2007.)

The area’s facelift is spearheaded by the $300 million renovation of the Marriott Renaissance La Concha Resort and the Condado Vanderbilt Hotel and by the $67 million makeover of the Condado Plaza Hotel & Casino. Also undergoing a $40 million transformation is the 95-room San Juan Beach Hotel.

The former Regency Hotel will be torn down by a local developer to make way for a $250 million, 17-story condominium with 270 executive residences, and will be co-developed with the Trump Organization and called Trump Condado.

Already built is the $100 million Gallery Plaza, which now confers a majestic portal to Condado on De Diego Avenue with its two 24-story luxury condominium towers with 109 units each plus commercial spaces.

To look at Condado, in fact, is to see what can happen in the other San Juan sectors undergoing redevelopment, as businesses are drawn to the area by renewed consumer and economic activity.

UBS Financial Services pumped $2 million to transform the former Pizza Hut locale on Ashford Ave. into an ultra-chic branch. Even the area’s elite private schools, Robinson and St. Johns, expanded and upgraded their facilities. Across from La Concha, an entire strip of formerly boarded-up store fronts has reopened for business. Other businesses have done the same.

Condado’s rebirth has also drawn a large portfolio of new housing, which has climaxed during the past 24 months, mainly consisting of luxury apartments priced between half a million and several million dollars, mostly in smaller-scale high-rises.

The central government and the City of San Juan are following this flurry of development with their own infrastructure improvement projects.

San Juan City Hall is slated to invest $1.4 million to redo Condado’s sidewalks, while the Puerto Rico Aqueduct & Sewer Authority is addressing the area’s sanitary infrastructure problems with a $17.4 million investment.

Focus on Santurce

To the south of Condado, redevelopment of Santurce has also been underway for more than 15 years. But the bulk of the action has been in the areas surrounding Ponce de León Avenue.

Now other parts of Santurce, particularly areas surrounding Fernández Juncos Avenue to the south, are getting a new lease on life, thanks to a group of developers who are bent on leading the renewal of this depressed urban sector.

Seeing the ship taking off, City Hall jumped on board, as the redevelopment coincides with the city government’s master plan for San Juan. The latter calls for repopulating the inner city – bringing people back to San Juan – by combining housing, commercial, retail space, and office and professional buildings, in a city-within-a-city concept, explained San Juan Major Jorge Santini.

That will create a bigger consumer market and thus additional opportunities for local businesses, in addition to construction opportunities being created.

In an effort to accelerate development, several PPPs have been created between developers and the city, with more to come. The city, if you will, is open for business.

“There are six major PPP initiatives ongoing, mainly housing projects in areas that used to be dilapidated or underutilized,” explained Santini. They include construction of 1,565 residential units and an estimated investment of at least $1 billion, all private sector.

The central government is also investing heavily in Santurce, mainly to strengthen the sector’s cultural offering for residents and visitors, which in turn has created opportunities for businesses in that segment.

Already completed is the 200-seat, $5.5 million Victoria Mendoza Theatre. Opening before year-end will be the new $12 million Music Conservatory facility in Miramar and the new 1,300-seat, $37 million Symphony Hall at the existing Performing Arts Center. The $15 million reconstruction of the old Paramount Theatre began this month and is scheduled for completion in 2010.

Surprise! Bechara sector a hotbed for development

Just to the south and west of Santurce lies the Bechara sector, commonly known as Transportation Alley for its cluster of auto and boat dealerships along Kennedy Expressway.

Under the radar and largely unknown to anyone outside City Hall and a group of developers, the zone is undergoing a radical transformation.

The area, also home to several industrial and commercial establishments, has been the subject of constant flooding over the years that have cost auto dealerships, Puerto Nuevo residents and consumers millions of dollars in insurance claims and losses, prompting the U.S. Army Corps of Engineers to begin a $78 million flood-control project in 2002.

The project, known as Contract 2AA, is scheduled for completion next year, opening the floodgates to a slew of development projects.

For starters, a request-for-proposal (RFP) process was recently begun for development of San Juan XXI Century Complex, a 58-acre site promoted by the city government next to the former landfill. San Juan XXI will feature hotels, condo hotels and apartments.

Auto dealership owner and developer Emérito Estrada Rivera plans to relocate his Isuzu dealership to make room for a $130 million, 400-room hotel and auto museum.

“Bechara must be remodeled in tune with the new Puerto Rico. I have been here since 1982 and have dedicated all my efforts to work with the local government to improve the area, because we cannot expect the government to do it all,” Estrada Rivera told CARIBBEAN BUSINESS.

Alberic Colón, yet another dealership in the strip, is also interested in moving vehicle operations from Kennedy Expressway and using the site for commercial development or another hotel, revealed Estrada Rivera.

The second phase of the city’s golf range at the former landfill, including construction of an 18-hole golf course, could be undertaken by Estrada in a joint venture with the municipality as an added-value to his proposed hotel/car museum project. Development of the golf course would represent an estimated $30 million investment. It would include a clubhouse, restaurants, pro shops, classrooms and activity rooms.

The city government is also investing in Bechara as a way to spur private-sector development. The $12 million, 55,000 square foot Flora & Fauna museum is currently under construction and will be the largest of its kind in Latin America and a full-fledged green, or environmentally-friendly, building.

The museum will be complemented with an additional 12 miles of trails the city plans to build along the area’s wetlands to create what would presumably be the largest eco-park in the region, spanning from Bechara to the Adolfo Dones Park next to the Teodoro Moscoso bridge, once the dredging of the Martín Peña creek is completed.

In addition, the city will relocate its public works complex out of Bechara to make room for a 46-acre commercial/industrial complex, of which 30 acres will be used for the city’s waste-to-energy plant (to be built and operated by the private sector) and a central market.

On an eight-acre lot next to Parque Central, called Finca Las Corozas, the city envisions the construction of a large parking structure and an Olympic-size skating and bicycle track, along with restaurants, to provide additional recreational and tourism-related activities to the area.

Hato Rey gets in on the act

Moving east from Bechara to Hato Rey, the municipal government has slated 65 acres next to the Roberto Clemente/Hiram Birthorn sports complex for private-sector development of office, hotel and parking facilities – projected as an additional $1 billion investment.

For its part, the city will build a new pavilion in the complex to host exhibits, presentations and fairs.

Separately, the central government has just signed the deal to relocate the Family Department headquarters across from the Puerto Rico Coliseum, along with new commercial and office space, part of the government’s campaign to move agencies near train stations to maximize the use of mass transit.

Río Piedras 2012 to bring urban center back to life

South of Hato Rey, in the old Río Piedras town center, the city government has launched its most ambitioius urban redevelopment plans yet: Río Piedras 2012.

The first phase alone represents more than $1.2 billion in private-sector investment, according to Santini, with over 1.5 million square feet of new construction encompassing more than 1,300 housing units, 166,240 sq. ft. of retail space, 972,400 sq. ft. of mixed-use projects and 1.1 million sq. ft. of parking structures with 3,140 new spaces.

In a space of approximately 38 acres, the city will make 17 street blocks available for large-scale development by the private sector from now until 2012. Additional developments will come later, spreading outwards to cover a much wider area of Río Piedras.

The city is in the process of designing the RFPs for these projects. Each block will have its own master plan within the bigger master plan, the mayor said, adding the city has already invested $22 million into the project and is in the midst of expropriating land parcels to be developed.

“We have already acquired an entire block on Georgetti Street, except one parcel, at a $5 million investment. This was a dilapidated area plagued with prostitution. We are going to demolish the structures and make the space available to investors and developers so they can build projects that promote housing, retail stores and light commercial spaces for the next generation of doctors, lawyers, accountants, engineers, dentists, and more,” explained Santini.

A remodeling of the landmark Río Piedras town square, the island’s largest, has also begun at a $15.7 million investment, and the infrastructure around the square’s perimeter is being readied.

“We want to get the permits and financing lined up. Getting the financing isn’t easy, but there might be developers who can finance their own projects. We want financing that is accessible,” Santini said.

Science City to anchor knowledge-based institutions

Immediately to the south of the town center, along PR-1 Highway, construction has already begun on the equally ambitious $1.7 billion Science City, a research and development district that will include the former State Penitentiary (known as Oso Blanco), the nearby Río Piedras Medical Center, the land surrounding the train’s Cupey station, the Botanical Gardens and the University of Puerto Rico.

Science City, also known as the Río Piedras Knowledge Corridor, is designed to house scientists and R&D companies from around the world to innovate and commercialize cutting-edge products, services and processes in various fields, including life sciences, aerospace technology, information systems and more.

The initial thrust has been the central government’s plan to turn Puerto Rico into a Bioisland, or one of the world’s leading R&D centers for biotechnology products and services, rivaling well-known centers in San Francisco, North Carolina, Massachusetts, Singapore, England, Ireland and Finland.

“San Francisco has its Biobay and Singapore its Biopolis. Now, Puerto Rico will be known as Bioisland,” Gov. Aníbal Acevedo Vilá is fond of saying.

Science City will include lab buildings, housing, commercial space, parks and pedestrian areas, small hotels, shops, restaurants and other amenities, all for the thousands of scientists, research and administrative personnel expected to work and live at the site, plus the constant flow of tourists, patients and visitors expected, all of which will create countless opportunities for local and non-local entrepreneurs and businesses across a wide range of segments and niches.

A mid-1990s landmark study by consulting firm Arthur D. Little identified R&D as a potential growth sector for the local economy, including manufacturing in Puerto Rico many products to be developed and commercialized at the center. The government began laying the groundwork back then, and the result today is a beehive of activity both in Río Piedras (Science City) and in the Mayagüez region.

Science City’s first two facilities are already under construction: the 152,000 square-foot, $66.5 million Molecular Science building across from the train’s Cupey station and the 48,200 square-foot Comprehensive Cancer Center in the Río Piedras Medical Center.

Next is the 70-acre former San Juan State Penitentiary in Río Piedras, which was recently designated for use as a Science City facility and will begin a massive conversion from a prison to a life-sciences research center.

Train station TODs

The impact of the Urban Train mass-transit project, Puerto Rico’s first modern rail system, goes way beyond the 11 miles of tracks, the 16 state-of-the-art train stations and the reduction in traffic congestion and air pollution.

The train represents a unique opportunity to transform and reshape the San Juan metro area’s urban growth pattern into one that is more habitable, livable and pedestrian-oriented. The main principle is that by using the train, commuters can carry out 99% of their daily tasks by traveling from one station to the other without having to use a car.

This will be accomplished by redirecting public and private investment towards the Urban Train corridor, or, more specifically, to areas around certain train stations, essentially transforming these into intensive, varied-use urban redevelopment zones through the land-use pattern commonly known as Transit Oriented Development (TOD).

TOD refers to pedestrian-friendly land development activities built within easy walking distance of a major transit station. TOD’s generally include a compact mix of different land uses oriented to public walkways, and automobile parking is minimized to promote pedestrian activity and mass transit use.

Originally the project was called Ciudad Red, but the name was dropped and now the focus is simply on developing the TODs.

Ten parcels in total are being developed with a total private investment of $637 million. Most of the projects, which are located mainly around the Sagrado Corazón, Martínez Nadal, Cupey and Roosevelt stations, will be mixed-use residential, office and retail complexes.

San Juan-wide eco network

Businesses is in the eco-tourism industry, or that provide services to parks, stand to benefit from the central government’s ongoing upgrade of parks throughout San Juan, part of Ciudad Mayor’s 15,000-acre parks network for residents and visitors.

Already completed or soon to be inaugurated are: the 9-acre Barbosa Park in Ocean Park, Jaime Benítez Park along the eastern edge of the Condado Lagoon, and the Santurce Park and Martí Coll Boardwalk next to the new Recreation and Sports Department headquarters.

Additional parks are slated for improvements or development, as are various paths to connect the parks and create an integrated network, complete with signage and amenities.

From north to south, some of these include: Luis Muñoz Rivera Park and the new San Juan Waterfront in Puerta de Tierra, the new Fountain Park in the Convention District, the new Condado Lagoon Park, the city government’s new recreational facilities in the former landfill, the Martín Peña Channel, San José Lagoon, Central Park, the Luis Muñoz Marín Park and San Juan sports complex in Hato Rey, and the Botanical Gardens in Río Piedras.

Associate Editor Frances Ryan contributed to this story.


Miramar, South Santurce become redevelopment hotbeds

Area revived by private-sector initiatives under the wings of the central government and San Juan City Hall

Miramar and South Santurce are in the midst of a redevelopment boom spearheaded by private-sector investment and shepherded by the central and municipal governments.

Some of the redevelopment projects undertaken by the private sector under the central government’s wing include:

Ponce de León 1800-176 apartments, 354 parking spaces and an 18,700-square-foot commercial area. The $40 million project by Interlink Group began construction in December 2006 and is slated for completion in March 2010.

Ciudadela-mixed-use complex with 513 apartments, 2,000 parking spaces and a 150,000-sq.-ft. commercial area (including parking). Estimated cost is $100 million and completion of the project, developed by Miramar Real Estate Management, is expected in December 2010.

MetroPlaza Towers-150 apartments, 416 parking spaces and 6,808 square feet of commercial space to the tune of $50 million. Puerta de Tierra Investment Group is the developer.

Miramar Lagoon residential project—$40 million complex with 124 apartments, 300 parking spaces and a commercial area of 9,700 square feet. Construction is already underway and slated to finish by August 2009.

Cosmopolitan in Miramar—$75 million residential complex with 62 upscale units featuring three townhouses, six junior penthouses and one penthouse. Completion is slated for first quarter 2009.

Conservatory Tower in Miramar—$13.4 million mixed-used project with 31 apartment units and 5,000 sq. ft. of commercial space, being developed on a 1,900 square meter lot between Ponce de León Avenue and Cerra Street in Santurce’s Monserrate sector.

Some of the private sector projects in Santurce and Miramar under City Hall’s wings include:

Bayside I & II-Currently under construction, Bayside I & II is a mixed-use residential and commercial project in Miramar consisting of a marina and 531 apartment units divided between two 50-story towers, all overlooking San Juan Bay. The waterfront property is located next to the Parque Central and the Fisherman’s Village and represents a private-sector investment of $125 million.

San Agustín-this 221-unit apartment building in Puerta de Tierra (across from the U.S. Army Corps of Engineers) was awarded to Picerne Properties and is awaiting final construction permits.

San Mateo-To be located on what used to be an empty plot of land belonging to the city government, this 60-unit apartment complex will have 75 parking spaces and has a social-interest housing component to it. It represents an $8 million private-sector investment and is awaiting final construction permits.

Monte Flores-The $24.8 million Parque de Monte Flores, a private-sector residential development, will have 100 units plus 220 parking spaces. It is located on the site of the former hospital in the Monte Flores sector of Santurce, next to Sagrado Corazon University. The project was awarded to Hal Development, which is currently cleaning up the parcel to begin construction.

Canals-48-unit residential project on Canals Street in Santurce, near the Farmer’s Market. The project is totally private-sector driven, with the city providing the parcel of land and certain incentives to facilitate construction.

Plaza 18-Located on the site of the former Plaza 18 strip mall owned by the city, the new Plaza 18 project was awarded to developer Alberto Rubí of Three R Group through an RFP process. The original strip mall structure was demolished to make room for the $100 million mixed-use project with 100 residential units, 969 parking spaces and 150,000 square feet of commercial space.

“This project has actually sparked the flame and created a domino effect in the area, enticing entrepreneur Toñito Muñoz along with a group of investors to redevelop all the area of the former Corona Beer facility under the city’s master development plan,” commented Mayor Jorge Santini. The municipality is stepping in by making infrastructure improvement to the area. The project is in the permit process, and the developer is negotiating with prospective tenants.

Doctor’s Center Hospital-Just a few steps from Muñoz’ planned area redevelopment, is the Doctor’s Center Hospital complex, a $115 million investment to include improvements to the hospital, a state-of-the-art medical office building and an elderly-care center.

The all private-sector investment is the work of Doctor’s Hospital President Carlos Blanco and a group of private investors headed by Carlos López Rosario (CB, Aug. 7, 2008).

Completion of the three components of the project (remodeling of hospital, addition of medical plaza and the elderly center) is expected to take three years and create approximately 840 direct and indirect jobs, both in the construction phase and subsequent operation.

Construction of the $39 million, 15-story medical plaza building will begin next month. The elderly Plaza will feature 125 private units with a living room and kitchenette, concierge service, restaurant, gym, Internet connection, beauty salon, chauffeur and mini bus service.

“Now Pavia Hospital Santurce has noticed what Doctor’s Hospital is doing and wants to do the same. It just shows you the domino effect redevelopment has in surrounding areas,” commented Santini.


http://caribbeanbusi...?...0&ct_name=1

Edited by Jaykar, 28 August 2008 - 11:28 AM.

[Jaykar]

$100 million Hato Rey development in the works
By : FRANCES RYAN
frances@casiano.com
Edition: August 28, 2008 | Volume: 36 | No: 34

Mixed-use complex would add office space, hotel and 1,300 parking spaces near Coliseum

A group of local investors is awaiting final anchor-tenant confirmation from the Puerto Rico Family Department to proceed with the development of a $100 million mixed-use complex in Hato Rey’s business district, CARIBBEAN BUSINESS has learned.

The project will be located on a parcel between the State Elections Commission and the San Juan Municipal Tower, next to the Puerto Rico Coliseum and the nearby train station.

The land is owned by the Puerto Rico Land Administration, which entered into a public-private partnership (PPP) to develop the lot by way of a long-term lease contract.

Since then, “they have been working on the development concept, securing permits and are now securing tenants,” said Juan Vaquer, executive director of the Puerto Rico Land Administration.

“This type of public-private partnership enables Puerto Rico to protect and even add value to its land inventory while facilitating important infrastructure development for Puerto Rico. In this case, the project will complement the area’s existing economic activity as well as accommodate future growth.”

The urban design, to be developed in three phases, contemplates the addition of more than 1,300 parking spaces, originally proposed in the master plan of the Puerto Rico Coliseum, and would provide much-needed relief to the congested area.

Developers also recommend construction of 288,000 square feet of office space and nearly 30,000 square feet of retail space during the initiative’s first phase.

Phase II could add yet another 300 parking spaces and 12,000 square feet of leasable office space.

The final phase contemplates construction of a business hotel, given its strategic location within the Golden Mile’s financial district.

Chief among the candidates vying for space in the new mixed-use development is the Family Department, which has been in negotiations with developers to become the project’s anchor tenant.

The investment group developing the project includes architect Segundo Cardona and developers Kiko Bechara, Luis Laverne, MB Holdings and José “Papo” Roldán.

http://caribbeanbusi...?...291&ct_id=0


252-room Aloft Hotel coming to Convention District
By : ELSA FERNÁNDEZ MIRALLES
elsa@casiano.com
Edition: August 28, 2008 | Volume: 36 | No: 34

Interlink to build $70 million hotel next to the Sheraton; hotel to add 16,000 sq.-ft. commercial space to the District; St. Regis to open in 2010

CARIBBEAN BUSINESS has confirmed that a 252-room, $70 million Aloft Hotel will begin construction in the Convention Center District in May of next year.

The development is part of a broader effort to accommodate the growth in convention business at the center.

A 503-room Sheraton Hotel is currently under construction and is expected to open a year from now, to be followed by a 300-room Courtyard by Marriott. The Aloft will be built next to the Sheraton. It was first conceived as an extension of the Sheraton, but Starwood Hotels & Resorts, the parent company of both hotel chains, decided it should be a separate, lower-price property tailored for guests looking for longer stays.

The new hotel, which will have approximately 16,000 square-feet of commercial space, has obtained all the necessary permits, according to information released by the Puerto Rico Tourism Co.

“Right now, we are in the design stage for the hotel to be built in the lot next to our Sheraton property,” said Jaime Fortuño, vice president of sales & marketing for Interlink, the development company.

“We believe in the District’s and Puerto Rico’s possibilities, especially now that the Lesser Antilles are so expensive and require several flights to get to the different islands. So, we are confident about Puerto Rico’s potential as a one-stop flight destination,” he added.

St. Regis update

Interlink, which is also developing the five-star St. Regis Bahía Beach Hotel in Río Grande, expects construction of that facility to be completed in the fall of 2010.

“That will be the soft opening because, as is required, we need to be fully functioning 90 days before the official opening, which we expect to be around November 2010,” Fortuño said.

http://caribbeanbusi...?...288&ct_id=0


St. Jude to expand in Arecibo
By : LAWSON D. THURSTON
lawson@casiano.com
Edition: August 28, 2008 | Volume: 36 | No: 34

FDA approves 150,000 square foot facility to manufacture pacemakers and other products; expansion to create 1,250 new jobs over the next 3 years

The U.S. Food and Drug Administration (FDA) has approved a new 150,000 square foot facility in Arecibo to be operated by St Jude Medical, Inc. The approval comes after a six month review by the FDA.

The company initially plans to manufacture pacemakers and cardiac leads for both domestic and international markets. Later in the year, St. Jude plans to manufacture implantable cardioverter defibrillators. In all, the expansion is projected to create up to 1,250 jobs over the next three years.

“Our success in Puerto Rico reflects our commitment to the highest quality standards, so we are pleased to expand our manufacturing capabilities there. The expansion of our Puerto Rico operations enhances our ability to provide life-saving devices to people around the world,” said Daniel J. Starks, chairman, president and CEO of the St. Jude parent company.

“St. Jude Medical Puerto Rico employs some of the most advanced technologies and talented people available in our industry to produce top-quality medical devices and products. The expansion will further enhance the competitiveness of our operations on the island,” said Ángel L. Ortiz, general manager of St. Jude Medical Puerto Rico, who currently oversees Puerto Rico operations in both Arecibo and Caguas.

St. Jude first began operations in Puerto Rico in 1987 with a 25,000 square foot facility in Caguas and 25 jobs. Today the company manufactures more than 220 models of cardiovascular and cardiac rhythm management products in Puerto Rico.

St. Jude Medical develops medical technology and services that focus on putting more control into the hands of those who treat cardiac, neurological and chronic-pain patients worldwide. The company is dedicated to advancing the practice of medicine by reducing risk wherever possible and contributing to successful outcomes for every patient.

http://caribbeanbusi...?...284&ct_id=0


U.S. Farm Bill funds arrive in Puerto Rico
By : GINA M. HERNÁNDEZ
gina@casiano.com
Edition: August 28, 2008 | Volume: 36 | No: 34

San Lorenzo-Caguas trunk sewer project receives first funds; thousands of families supplied by Río Grande de Loíza to benefit

The San Lorenzo-Caguas trunk sewer project has received $524,000 in federal funds from the recently approved U.S. Farm Bill, José Otero García, U.S. Department of Agriculture (USDA) state director for Puerto Rico, told CARIBBEAN BUSINESS.

Already in its second construction phase, the $14.3 million project will benefit nearly 55,000 people in the municipalities of San Lorenzo, Caguas and Gurabo by replacing San Lorenzo’s water treatment plant with two pump stations and connecting them to existing lines.

According to Clery Morales, rural utility-service engineer for the local USDA Rural Development office, all of San Lorenzo’s wastewater discharges will be rerouted to Caguas, which has a larger water-treatment capacity and complies with the U.S. Clean Water Act.

“We’re working closely with the Puerto Rico Aqueduct & Sewer Authority (Prasa) on this project because we believe it’s a priority to the residents of these municipalities. It will supply cleaner water to 9,940 families in the area and the thousands of families whose water supply comes from Río Grande de Loíza, because that river begins in San Lorenzo,” said Otero, who expressed his satisfaction with the federal USDA’s quick response to local funding needs.

Upon completion, San Lorenzo will comply with the Clean Water Act and get in sync with Prasa’s master plan to correct every plant in violation of this environmental legislation.

http://caribbeanbusi...?...289&ct_id=0

[urbanguy]

Thanks a lot for the updates and post. BTW do you have any renderings of some of these proposals?

[Jaykar]

urbanguy, on Aug 31 2008, 01:59 PM, said:

Thanks a lot for the updates and post. BTW do you have any renderings of some of these proposals?

You are welcome!!! All of them, including their actual status can be seen in vivesanjuan.com. I will try to post the renders and the actual pictures. The majority of this projects are currently in construction or already approved.  BTW how are you urbanguy? Long time since we last "talked".

[Jaykar]

Air Access to Puerto Rico and Caribbean Still Going Strong
Thursday September 4, 12:00 pm ET
September 3rd Was to Mark End of Many Routes to Puerto Rico and Caribbean; Instead, Air Access to Region Shows Signs of Growth

SAN JUAN, Puerto Rico, Sept. 4 /PRNewswire/ -- On a day that was to mark the significant reduction of air access from the U.S. mainland to Puerto Rico, and other destinations in the Caribbean, the region is celebrating the addition of new flights and the preservation of routes that were slated for cancellation. Through a series of negotiations and the implementation of an airline incentive program by the Puerto Rico Tourism Company (PRTC), the airline industry is once again looking to the Caribbean as a region with tremendous potential for revenue. For local businesses, especially those connected with the tourism industry, this is a much-needed vote of confidence.

"The cancellation of these flights was not just an issue for Puerto Rico, but for the entire the Caribbean," Terestella Gonzalez-Denton, Executive Director of PRTC said. "As the gateway to the Caribbean, Puerto Rico is a conduit for travelers visiting other islands. Air access to the region is especially important to our hotel and cruise industries and the consequences of limited air access would have had devastating results. However, our work with the government of Puerto Rico, and the visionary thinking of our partners in the airline industry, is giving the Caribbean the tools it needs to sustain the growth we've experienced in the past few years," added Gonzalez-Denton.

In response to the threat of losing vital routes to Puerto Rico, the PRTC, in association with the government of Puerto Rico, set out to create programs that would entice airlines to retain and increase their service to the island. PRTC has also embarked on an aggressive media campaign to sustain demand for flights to Puerto Rico and remind travelers that the island is still very much accessible. In addition, a co-op marketing program created by the PRTC will match every dollar, up to $3 million, that the airline industry spends in the promotion of travel to Puerto Rico. PRTC continues its negotiations with airlines to increase seat capacity for primary markets.

New / Reinstated Air Service to Puerto Rico Includes:

-- American Airlines will continue non-stop service from Los Angeles (LAX) and Baltimore (BWI) to San Juan Luis Munoz Marin International Airport (SJU)

-- JetBlue Airways announced that it will add four flights to San Juan Luis Munoz Marin International Airport (SJU) from John F. Kennedy International Airport (JFK) at the beginning of September 2008. Additionally, they will add a fifth daily flight from SJU to JFK in November. Two additional flights (SJU - JFK) will be added in December for a total of seven extra flights

-- JetBlue will also add two flights per week to San Juan San Juan Luis Munoz Marin International Airport (SJU) from Logan International Airport (BOS) in Boston. From December 2008-January 2009 the airline will add a second daily flight between BOS and SJU

-- Additionally, JetBlue will offer new daily nonstop flights between Orlando's International Airport (MCO) and San Juan Luis Munoz Marin International Airport beginning in the fall of 2008

-- AirTran Airways began flying between Hartsfield-Jackson Atlanta International Airport (ATL) and San Juan Luis Munoz Marin International Airport (SJU) on March 5, 2008

-- AirTran also now offers two nonstop flights between Orlando International Airport (MCO) and San Juan, Luis Munoz Marin International Airport (SJU)

-- On December 20, 2008 Air Tran Airways will launch non-stop service from Baltimore Washington International Airport (BWI) to San Juan Luis Munoz Marin Airport (SJU).

http://biz.yahoo.com...094.html?.v=101

[Jaykar]

Medtronic Puerto Rico expands spinal division in Humacao
By : LAWSON D. THURSTON
lawson@caribbeanbusinesspr.com
Edition: September 4, 2008 | Volume: 36 | No: 35

Invests $30 million, adds 45,000 square feet to building space and creates 105 new jobs; total Medtronic employment now up to 2,400

Medtronic Puerto Rico has expanded its spinal division in Humacao with a $30 million investment that doubled existing space to 90,000 square feet. The expansion will be inaugurated next week.

Of the $30 million, $16 million paid for the new building and $14 million for new machinery and equipment.

“We just finished our fiscal year (ended in May) with 200 employees. With this expansion, we should finish the current fiscal year with 305 employees, a net job creation of 105 jobs,” said Sal Aloma, senior director of operations for Medtronic’s spinal division.

When asked what the factors were to encourage corporate headquarters to expand operations in Puerto Rico, Aloma said it was a combination of factors.

“One of the biggest things that corporate saw in Puerto Rico was that we already had other divisions operating on the island. So, it was a lot easier to take advantage of systems already in place. Tax incentives have always been a favorable consideration, and the fact the company is always looking for opportunities in Puerto Rico.”

Aloma sees potential for future growth and indicated that Medtronic is running three shifts a day in Puerto Rico, Monday through Friday, and a pilot 12-hour shift on Saturdays and Sundays.

“We are machine-oriented, and a lot of our equipment is very capital-intensive, so we want to run them as much as we can to maximize the investment. Eventually, we plan to run the plant 24 hours a day, seven days a week,” Aloma added.

In addition to the spinal division, Medtronic has cardiac rhythm disease management (CRDM), neuromodulation and diabetes divisions on the island.

Medtronic first established operations in Villalba in 1974 with 75 employees manufacturing leads for pacemakers. In 1978, the company opened a plant in Humacao and later opened another in Juncos in 2003.

Today, the company has five plants in Puerto Rico: two plants each in Villalba and Juncos, each with neuromodulation and CRDM divisions; and the spinal plant in Humacao. It also has a sales office in San Juan. The company employs 2,400 people in Puerto Rico.

http://caribbeanbusi...?...315&ct_id=0

[Jaykar]

The whopper is king
By : FRANCES RYAN
frances@caribbeanbusinesspr.com
Edition: September 4, 2008 | Volume: 36 | No: 35

Nearly 40% rank BK as top fast-food brand in P.R.; McDonald’s stands at 21%; chicken chains favored by older customers

QSRs, or quick-service restaurants, as fast-food locations are now known, are an integral part of Puerto Rico’s $2 billion restaurant industry.

Although the local recession has forced families to cut back on their dining trips, fast foods maintain an important place in the island’s fast-paced lifestyles-part of the average family’s eating habits as well as an entertainment option. It is no surprise, then, that fast-food companies invest a pretty penny to make their brands the most memorable for consumers.

With a whopping 39% consumer awareness, Burger King, the home of the whopper, reigns supreme as the fast-food chain with the highest top-of-mind brand awareness among Puerto Rico consumers, according to this week’s CARIBBEAN BUSINESS/WOSO Radio/Gaither International poll of 1,000 people.

The Gaither survey confirms Burger King has a distinct competitive advantage in brand space, also claiming consumers’ first consideration at the time of purchase. The fact that Burger King has a comprehensive network of restaurants around the island further adds an element of convenience to consumers’ high brand awareness.

Burger King’s brand awareness surpasses that of McDonald’s, which claims the top spot around the world as the largest hamburger franchise. In Puerto Rico I ranks a distant second with a 21% top-of-mind brand recall.

Nino Rotondi, the new head of McDonald’s in Puerto Rico, was unfazed. “We’re very pleased with the brand awareness we enjoy in the local market but realize there are still many growth opportunities. For us, it isn’t entirely a matter of competition, but rather delivering what customers want. We continue to grow the number of locations and bring to market the kind of exciting products they want.”

He added that the first McCafé will open before year-end, featuring the island’s top-notch coffees.

McDonald’s 21% brand awareness is itself significantly higher than such chicken fast-food chains as Church’s and KFC, which have 10% and 9% top-of-mind recall, respectively.

Wendy’s came in third among burger chains with an overall 8% top-of-mind recall, a strong showing considering it operates the smallest burger chain.

More than 15 years after Wendy’s introduced the 99¢ value menu, which shifted the entire industry into a price-driven fast-food war, local Wendy’s value menu, combined with its brand claim of serving the freshest burgers, is still going strong among local consumers.

Other fast-food chains below the top-five cut were Subway (2%), and El Mesón, Taco Maker and Taco Bell, each with a 1% top-of mind brand recall.

Taco Maker has been serving its Mexican food via Puerto Rico to top international markets as part of its aggressive expansion.

“We look at brand awareness within the category, and Taco Maker is by far the preferred Mexican-theme QSR choice of Puerto Rico consumers,” said Carlos Budet, president & CEO of FransGlobal, parent company of Taco Maker.

Fast-food choices for all

Regardless of age, socioeconomic status or education, Puerto Rico loves fast food. Younger consumers tend to recall burger chains easily, while older folks are more partial to chicken fast-food options.

The Gaither poll shows that those age 34 or younger are significantly more likely to think of McDonald’s as more hip and “in” compared with 15% of those between 35 and 54.

Burger King’s long tenure and familiarity in the local market seems to make it a top-of-mind brand among older folks, with 71% of those age 35 or older thinking of the king of whopper first. Wendy’s large burger versions seem to sit in well with men, who easily recall the burger chain as their favorite option.

Those in the workforce are slightly more likely than unemployed people to first think of Subway as the top-of-mind fast-food chain, while the unemployed are more likely to first recall KFC. The latter places a great deal of emphasis on value and family combos, conveying a stronger image of affordability.

“Church’s and Subway are far more popular among the college-educated, who are significantly more likely than their less-educated counterparts to think of the two fast-food chains first,” explained Beatriz Castro, research analyst with Gaither International.

“Perhaps Subway’s Jared weight-loss campaign and/or chicken options are associated with healthier eating habits practiced by better-educated consumers,” she added.

Church’s and Subway also seem to command higher top-of-mind among those from mid- and high-socioeconomic levels, with 11% and 15%, respectively.

McDonald’s, on the other hand, is significantly more likely to have higher top-brand recall among low-income respondents, with 23% compared to only 15% of respondents from a higher socioeconomic level.


http://caribbeanbusi...?...22&ct_id=26




Lilly Carolina plant grows as global supplier
By : LAWSON D. THURSTON
lawson@caribbeanbusinesspr.com
Edition: September 4, 2008 | Volume: 36 | No: 35

Significant recent hike in business providing products to Europe, Asia, Latin America; new $45 million state-of-the-art lab built to fill the need

Lilly del Caribe’s Carolina plant has shifted its focus to supply global markets with its line of pharmaceutical products, CARIBBEAN BUSINESS learned.

The result has been a boom in sales and exports to markets in Europe, Asia Pacific and Latin America, with volume expected to increase further in the months and years ahead, according to Seamus Malone, plant manager. The plant will also address certain higher-standards needs of the Japanese market.

One of the products that is manufactured by Lilly, Humalog, used to control high blood sugar (glucose ) in people with diabetes, has been approved to supply over 140 countries from the Carolina plant.

Lilly’s Carolina plant currently manufactures the following molecules; Zyprexa, Cialis, Strattera, Cymbalta, Symbyax, Evista, and Humalog.

The growth increased employment at the plant’s laboratory to the limit, provoking construction of a new state-of-the-art $45 million lab, which will employ 54 existing workers.

The two-floor lab, to be inaugurated Sept. 11, totals approximately 50,000 square feet. Also included within the facilities is an isolated laboratory for special security substances.

Lilly, which has been operating in Puerto Rico for over forty years, has had an excellent track record in terms of production quality with Food and Drug Administration (FDA) inspections.

One example is Lilly’s $1.2 billion, 500,000 square-foot biotechnology plant in Carolina. The project initially began in 2001 and received product approval in 2006. The extensive FDA inspection received zero observations, a perfect score.

In addition, Lilly’s talented and experienced workforce has been key to the company’s success on the island. These and other factors have earned the plant credibility and trust from corporate headquarters to give the green light for centralizing global production in Puerto Rico.

The new lab will support and centralize the analysis of some of the raw materials and finished products for the Carolina manufacturing operations.

The laboratory boasts 145 specialized pieces of laboratory equipment, including such new technologies as UPLC (Ultra Performance Liquid Chromatography), ICP (Inductive Couple Plasma) and Robotics Systems (Multidose D3 for Dissolution and Tablet Processing Workstation for Potency).

Malone, who has spent seven years with Lilly in Puerto Rico, will be transferred to the Lilly operation in his native Ireland in October. He will return to Puerto Rico on occasion as part of his new responsibilities.

“As part of my duties in Ireland, I will assume a technical management role. One of the plants in Ireland is basically the center for bringing in new products, and some of those new products will actually end up in places like our Guayama plant. I will probably be visiting the Guayama plant three to four times a year,” he added.

Once he leaves Puerto Rico for his new role, Malone indicated that Lourdes Colon will be assuming the role of Lilly’s plant manager in Carolina.

http://caribbeanbusi...?...24&ct_id=18


El Convento switches focus from leisure to business
By : ELSA FERNÁNDEZ MIRALLES
elsa@caribbeanbusinesspr.com
Edition: September 4, 2008 | Volume: 36 | No: 35

Hotel makes key changes in technology and customer service to cater to local business as well as travelers; occupancy remains stable at 84%

Two years ago, when the management of the four-diamond El Convento Hotel in Old San Juan realized the profile of its guests was changing, the hotel switched focus from totally leisure to one that actively caters to business guests.

Today, the hotel reports that business travelers and local business events is up to 40% of the total, while leisure stands at 60%.

El Convento’s occupancy rate averages 84%, and according to Efraín Rosa, general manager of El Convento, it is close to reaching that number now, following the transition to business customers.

To achieve the feat, management had to make some changes. The first was a major upgrade in technology, to satisfy the connectivity needs of executives.

The other change was customer service. Rosa and the hotel’s sales director, Hermes Croatto, began rethinking of ways to sell the hotel to business guests. The first step was ensuring top-of-the-line customer service, a feat made easier by the fact that the hotel only has 58 rooms and a staff of 55.

“Commitment to the best customer service is a key element among our employees, and it shows,” Rosa pointed out, saying the strategy also became the best publicity for El Convento.

Word spread quickly, and the hotel has been able to attract a steady stream of business travelers.

During Spanish colonial times, El Convento was known as the Carmelite Convent. More recently, it was purchased in 1959 by Robert Frederic Woolworth, heir of the Woolworth fortune. It changed hands several times until 1997, when a group of San Juan business executives acquired and reopened it completely refurbished.

The landmark treasure is a member of the Small Luxury Hotels of the World and Historic Hotels of America, among other recognitions it has received.

“We offer a lot compared to other venues. We are right at the heart of Old San Juan and are small enough to provide personalized service, as a boutique hotel does. It is so personal that when guests come in, we give them our cellphone numbers: Hermes’ and mine,” Rosa said.

El Convento, he added, has become quite popular among local businesses for board meetings and other gatherings.

http://caribbeanbusi...?...32&ct_id=23


HIMA-San Pablo’s $800 million expansion on schedule
By : LIISA NIDO NYLUND
liisa@caribbeanbusinesspr.com
Edition: September 4, 2008 | Volume: 36 | No: 35

Hospital ranked among fastest-growing companies in the U.S. by Inc. magazine; converting operations from independent hospitals to integrated healthcare network

HIMA-San Pablo’s $800 million expansion plan is well on its way, promising to make the hospital chain one of the fastest-growing companies in Puerto Rico for years to come.

And not just in Puerto Rico. In its latest ranking, Inc. magazine recently ranked HIMA the No. 1,648 among the 5,000 fastest-growing companies in all of the U.S.

“We were compared with 5,000 other companies and ranked No. 59 in the Top 100 companies by revenue; No. 71 in the Top 100 health companies; and No. 49 in the Top 100 companies by gross dollar growth,” said Armando Rodríguez, senior vice president of Grupo HIMA-San Pablo.

The company’s growth was fueled by results of its flagship hospital in Caguas and the purchases of San Pablo Hospital in Bayamón and San Pablo del Este. The latter is now San Pablo Fajardo.

When HIMA-San Pablo completes its investment, the organization will convert its operations from a series of independent hospitals into an integrated healthcare network that will include specialized hospitals, nursing homes, pharmacies, ambulance services and a state-of-the-art 72,000 square-foot emergency room, the largest and most technologically advanced in the Caribbean.

In Caguas, an investment of about $132 million includes a nursing home, medical office building with commercial space on the first floor, the 72,000 sq.-ft. emergency room, 800 additional parking spaces and 40 additional beds dedicated to cancer patients.

“We are investing 10% of our $800 million investment on technology alone,” Rodríguez informed.

HIMA-San Pablo in Bayamón will witness an investment of about $200 million. “We will start construction of a long-term care facility with an investment of about $20 million, which is awaiting the final Health Department permit,” Rodríguez said.

The next phase, he said, includes a shopping center, medical office building, nursing home, gymnasium and 6,000 additional parking spaces.

“Next to Palmas del Mar in Humacao, we will invest $250 million in an all-private-room hospital that will reinforce Puerto Rico’s medical-tourism industry. We will start that construction in the second quarter of 2009,” Rodríguez said.

The former San Carlos Hospital, which was expected to open in the summer of 2007, is slated to open during the summer of 2009.

“Total investment for HIMA-San Pablo Santurce will be about $53 million,” Rodríguez added. The hospital will feature all-private rooms, sports medicine, preventive medicine, reconstructive surgery, orthopedic and rehabilitation services and acute care.

HIMA-San Pablo Santurce will open with 50 beds, a reduction from its current 96, to better execute the idea of having an all-private-room hospital.

“Our mission is to lead the way in better healthcare services in Puerto Rico. It is a way to tell other companies that investing in better equipment, the latest technology, upgrading facilities and offering quality services is what top-notch healthcare is about,” Rodríguez concluded.

http://caribbeanbusi...?...23&ct_id=14

[Jaykar]

Monday, Sep. 08, 2008
T-Mobile USA Launches Service in the Carolinas and Puerto Rico and in Additional Former SunCom Markets

BELLEVUE, Wash. — T-Mobile USA, Inc. today announced it has launched the T-Mobile brand and service in former SunCom markets throughout North Carolina, South Carolina, Tennessee, Georgia, Puerto Rico and the U.S. Virgin Islands.

"Today, millions of consumers now have a new and powerful choice in national wireless communications - and that choice is T-Mobile®," said Sue Nokes, chief customer and operations officer, T-Mobile USA. "Our commitment to customers, existing and new, is that you will find a happy home with T-Mobile. Our customer service is top-ranked. We've invested millions to build out local networks. And we have a proven track record of bringing dynamic new offerings to market that make it easy and convenient to keep important people close -- no matter how near or far they are."

These new T-Mobile customers (former SunCom customers) now can receive the benefits of T-Mobile's nationwide network, improved regional coverage, top-quality customer service, and breakthrough communications products and services. This completes the transition of SunCom Wireless to T-Mobile. The acquisition, for an aggregate of approximately $2.4 billion in cash and assumed debt, was announced in September 2007 and completed in February 2008.

With the changeover to T-Mobile, customers can have access to rate plans comparable or greater in value to the ones they enjoyed with SunCom. The vast majority of customers also can enjoy the new benefits of T-Mobile service while keeping their current mobile phone and number, making the transition to T-Mobile easy and hassle-free.

Today, former SunCom retail locations have been re-launched as T-Mobile stores, allowing customers to shop close to home and at familiar locations that now feature a new selection of products and services from T-Mobile. Former SunCom customers will be getting detailed information on their transition to T-Mobile later this month. Customers can also visit http://www.lobuenoseponemejor.com/ in Puerto Rico and the Virgin Islands and www.verygoodday.info in the U.S. to learn more about the transition and find answers to a variety of commonly asked questions.

T-Mobile will continue to deliver innovative products and services that offer customers better ways to communicate with those most important to them. This includes services such as Unlimited HotSpot Calling and T-Mobile @Home® that provide great call quality and unlimited nationwide calling from home via Wi-Fi for a low, flat rate.(1) It also includes access to T-Mobile's myFaves® service offering unlimited nationwide calling to five people.(2) T-Mobile offers a wide variety of exclusive handsets such as the T-Mobile Sidekick®, T-Mobile Shadow™, and T-Mobile Dash™, as well as in-demand phones such as MOTOROKR E8, Nokia 5610 XpressMusic, Samsung Katalyst and Sony Ericsson TM506, plus a wide variety of BlackBerry® devices.

With the transition, new T-Mobile customers now have access to T-Mobile's coast-to-coast national network as well as regional coverage, which is greatly enhanced from SunCom's former network. Since the acquisition, T-Mobile has invested more than $100 million in strengthening the network in the Carolinas and Puerto Rico to give customers a stronger signal in a wider area, as one example of the enhanced regional coverage. The transition also increases T-Mobile's national network coverage so that the company now serves 99 of the top 100 markets nationally.

T-Mobile operates an all-digital network based exclusively on GSM technology, which is the most widely used digital standard worldwide. T-Mobile customers benefit from this global technology platform by having the choice to use their same phone and same phone number when traveling across the country and internationally. Consistent with its stick together® mission, T-Mobile provides customers with voice coverage in more than 220 countries worldwide, including through T-Mobile's roaming partners. T-Mobile HotSpot subscribers also can enjoy Wi-Fi wireless broadband service at more than 45,000 total locations, across 25 countries, throughout North America, Europe and Asia.

(1) Unlimited HotSpot Calling and T-Mobile @Home require capable devices and qualifying plans. Calls must originate on Wi-Fi network.

(2) MyFaves allows unlimited nationwide calling to five U.S. numbers; some exclusions apply.

http://www.centredai...ory/823466.html




Trailer Bridge To Co-Sponsor Puerto Rico's International Coastal Cleanup

September 4, 2008

JACKSONVILLE, Fla.--(BUSINESS WIRE)--Trailer Bridge, Inc. (NASDAQ: TRBR) today announced that it will be a co-sponsor of Puerto Rico's International Coastal Cleanup (ICC) on September 20, 2008. The ICC was started 22 years ago by Ocean Conservancy, a major Washington D.C. based environmental group, and the worldwide beach cleanup on the third Saturday in September is the largest volunteer event of its kind. Last year, more than 378,000 volunteers donated their time to remove more than six million pounds of debris from over 33,000 miles of coastline in 76 countries. Last year, the ICC's group in Puerto Rico, coordinated by Alberto Marti of Scuba Dogs Society, a 501 C-3 non-profit organization, involved 9,325 volunteers at 115 sites covering 162 miles of coastline. They removed over 362,000 pounds of debris, making it among the largest ICC efforts worldwide. This year's cleanup in Puerto Rico is expected to be even larger with more than 10,000 volunteers at over 150 sites. Additional information for those interested in volunteering is available at 787-783-6377 or the www.scubadogssociety.org website.

"Alberto Marti has done an excellent job of helping to educate policymakers and the public on the importance of preserving Puerto Rico's coasts and underwater environment. We share his commitment to improving the environment in Puerto Rico and believe that Trailer Bridge's vessels, which exclusively use a cleaner distillate fuel, do that by resulting in geometrically less particulate matter emissions. We are pleased to support the ICC's and Scuba Dogs Society's island-wide cleanup. We are also pleased to operate vessels which result in a much cleaner over-the-water environment for everyone in Puerto Rico," said John D. McCown, Trailer Bridge's CEO.

Trailer Bridge was the first marine company to join the EPA's SmartWay Transport Partnership, a voluntary business/government collaboration focused on increasing efficiency and reducing emissions. Because all of its vessels use a cleaner distillate fuel all the time, Trailer Bridge's entire fleet already meets all the fuel quality standards recently recommended by the U.N.'s International Maritime Organization (IMO). The U.S. Senate passed a bill approving the IMO framework and on July 21, 2008, President Bush signed that bill into law.

Under the IMO framework and United States law, any emission control areas which are established in the U.S. will require fuel with no more than 1% sulphur in 2010, further reducing to 0.1% by 2015. This is expected to be achieved with distillate fuel, which is the cleaner type of fuel that Trailer Bridge's vessels already use. Separately, there are other local regulatory initiatives focused on the vessel fuel quality issue. In late July, the California Air Resources Board adopted a regulation requiring the use of cleaner distillate fuel within 24 miles of its coast starting in 2009. More recently, five states, including California and New Jersey, sent a letter to the EPA demanding that it regulate vessels by requiring them to use cleaner distillate fuel and threatening legal action if not acted upon within 180 days.

Trailer Bridge believes the vessel fuel quality issue is gaining momentum because the data linking the health effects of particulate matter emissions from vessels burning the typical residual fuel is compelling. A recent study by the leading academic experts in the field linked those emissions to 60,000 deaths each year in coastal areas worldwide, growing by 40% in several years. A wholesale change from typical residual fuel to cleaner distillate, which is what the IMO framework and the other initiatives are focused on, would reduce particulate matter emissions and their resulting morbidity effect by a factor of ten.

Mr. McCown continued, "We like being aligned with the volunteers and other co-sponsors who will make this year's ICC cleanup in Puerto Rico bigger than ever. Their advocacy of greater awareness on this environmental issue fits with our efforts to increase awareness on the vessel fuel quality issue. We have a different transportation system and some of the same elements that deliver efficiency also follow-thru with some significant environmental benefits. We are increasingly seeing indications that marine shippers are incorporating environmental aspects into their decision making process. The fuel quality and emissions aspects of our system are noteworthy differentiating characteristics. The change to distillate fuel is coming and it is a paradigm-shift that will further enhance Trailer Bridge's competitive cost advantages. This is why I continue to address this issue."

Trailer Bridge provides integrated trucking and marine freight service to and from all points in the lower 48 states and Puerto Rico and the Dominican Republic, bringing efficiency, service, security and environmental and safety benefits to domestic cargo in that traffic lane. This total transportation system utilizes its own trucks, drivers, trailers, containers and U.S. flag vessels to link the mainland with Puerto Rico via marine facilities in Jacksonville, San Juan and Puerto Plata. Additional information on Trailer Bridge is available at the www.trailerbridge.com website.

http://www.pollution...p;VNETCOOKIE=NO

[Jaykar]

Palmas to construct $400 million Mandarin Oriental resort
By : ELSA FERNÁNDEZ MIRALLES
elsa@caribbeanbusinesspr.com
Edition: September 18, 2008 | Volume: 36 | No: 37


Palmas del Mar Properties and Hines Development join forces to build five-star hotel, spa, condo residences and estate homes

After a long journey filled with ups and downs, Jaime Morgan Stubbe, president of Palmas del Mar Properties Inc., confirmed the Houston-based Hines Corp. will be its partner in the development of Mandarin Oriental, a five-star resort that will be built on the Humacao property.

The venue will consist of a 142-room luxury hotel; an 18,000-square-foot Signature Mandarin Oriental Spa; 44 Mandarin-branded Condo Residences and 25 branded Estate Homes. The approximate investment of the multiphase project is $400 million. The cost of the hotel (and Spa, of course) plus the Condo Residences will be around $230 million.

The five-star venue will be constructed on a breathtaking 40-acre site on Punta Guayanés in Palmas with spectacular views of Vieques, Culebra and, on a clear day, even St. Thomas U.S.V.I. A ground breaking ceremony is slated for Monday.

As anticipated by CARIBBEAN BUSINESS (Jan. 17), the Hotel Development Corp. is lending $18 million, the Tourism Development Fund $230 million and the private partner will be funding an equity investment of about $80 million. The cost of the Estate Homes hasn’t been established but, based on market value and construction costs, the developers estimate total investment of the entire project will be around $400 million.

“We are extremely satisfied that after a long journey, we will be able to celebrate our groundbreaking ceremony Monday,” said Morgan Stubbe who added that the hotel and Condo Residences will begin construction this year and are expected to be completed by 2011. On the other hand, the Estate Home Residences will begin construction in 2011 and be completed by 2013.

“We have been trying to do a joint venture with Palmas del Mar Properties for some years now,” said Michael Harrison, senior vice president of Hines Corp. “However, it wasn’t until six months ago that we finally put our act together and finalized a wonderful project with the Mandarin Oriental. What better sponsorship could we dream of?” he queried.

“This is the perfect place and the perfect time. From a strictly economic point of view, this is a spectacular investment for Europeans now that the euro and the pound are so strong. From a more practical point of view, Puerto Rico has an infrastructure that no other Caribbean island has. Not to mention that regardless of the recent troubles with fuel prices and the aviation companies cutting their capacity, Puerto Rico is still a nonstop Caribbean destination from most important hubs in the mainland U.S.,” Harrison pointed out.

Based on an economic impact study made by local economic consultancy firm Estudios Técnicos, once operational the Mandarin Oriental will generate 528 direct and an additional 567 indirect and induced jobs for a total of 1,095 jobs. The construction phase will generate 1,286 direct jobs and 1,576 indirect and induced jobs for a total of 2,862 jobs.

Estudios Técnicos calculated the fiscal impact to the government of the construction and operational phases to be $12 million in construction permits, municipal excise and personal income taxes as well as corporate taxes from contractors. Its operational phase will yield the government approximately $5 million a year in an assortment of taxes.

http://www.caribbean.......374&ct_id=0

[Jaykar]

Expansion of local Merrill Lynch office still a go
By : JOSÉ L. CARMONA
josec@caribbeanbusinesspr.com
Edition: September 18, 2008 | Volume: 36 | No: 37

Global acquisition by Bank of America not expected to halt $3 million Metro Office expansion; minimal local impact from Lehman bankruptcy

A stunning makeover of the Wall Street landscape sent stocks falling precipitously Monday, with the Dow Jones industrials sliding 500 points in their worst point drop since the September 2001 terrorist attacks.

Investors reacted badly to a shakeup of the financial industry that took out two storied names: Lehman Brothers Holdings Inc. and Merrill Lynch & Co.

As Lehman Bros. filed for bankruptcy protection Monday morning-the largest bankruptcy filing in U.S. history-Merrill Lynch announced Bank of America had agreed to acquire the firm in a $50 billion all-stock transaction that would create the largest brokerage firm in the world with more than 20,000 advisers and $2.5 trillion in customer assets.

Although calls to the local Merrill Lynch office were referred to the firm’s corporate media affairs representatives in New York, CARIBBEAN BUSINESS learned the previously reported expansion plans and recruitment efforts will continue (CB July 17).

“Although Bank of America will assume control of Merrill’s global wealth management and investment banking divisions, Merrill will retain its brand,” commented a local source with knowledge of Merrill’s Puerto Rico operations.

According to the source, who asked to remain anonymous, as Bank of America and Merrill Lynch were still squaring out details of the acquisition expected to close by the first quarter of 2009, Merrill’s $3 million local investment to add 8,000 square feet to its new office in Metro Office park, as well as the recruitment of additional advisers on the island, was still a go.

“In fact, construction of the office expansion is set to begin in about two weeks,” the source added. “It’s business as usual at the local Merrill Lynch office.”

Lehman bankruptcy filing

Michael McDonald, president of Popular Securities, said the most impressive thing about the Bank of America and Merrill Lynch transaction is that it was negotiated in 48 hours.

“Although Bank of America’s stock traded down, generally speaking, the transaction is being viewed favorably. It will create another powerhouse in the financial markets and prevent what could have been the failure of another financial services firm,” McDonald told CARIBBEAN BUSINESS.

Commenting on the Lehman Bros. bankruptcy filing, McDonald said it is too early to tell what the final impact of that action will be on the global financial markets.

“However, at least initially, the financial sector has traded sharply down. On the positive side, interest rates have declined since there has been a flight to quality, meaning investors are buying treasuries and other high-grade securities. The impact on the local market should be less severe, since local investors tend to invest more in fixed income,” McDonald noted.

The Popular Securities president added that Lehman’s operation on the island were more of a marketing office and didn’t directly hold positions.

“However, there are local clients who hold securities [equity, fixed-income, derivatives, etc.] that were issued by Lehman. The value of those securities will vary depending on the guarantee or collateral,” McDonald said.

http://www.caribbean.......373&ct_id=0

[Jaykar]

AAV confident in presidential disaster declaration
By CB Online Staff

President Bush acting quickly to sign declaration, according to Aemead executive director

Gov. Aníbal Acevedo Vilá said on Thursday he was confident U.S. President George W. Bush will react promptly to his request to declare eight municipalities severely affected by rains and floods as disaster areas.

Acevedo Vilá said that according to Karilyn Bonilla, executive director of the State Emergency Management Agency (Aemead by its Spanish acronym), “Washington is acting with great promptness.”

“When would the declaration go down, I cannot say, but she is satisfied with the way the situation is being handled by the Federal Emergency Management Agency (FEMA) central office and President Bush himself,” said the governor during a press conference.

On Wednesday, Acevedo Vilá requested Bush to declare the municipalities of Humacao, Yabucoa, Salinas, Maunabo, Patillas, Guayama, Santa Isabel and Ponce, whose damages were assessed on Tuesday by Aemead and FEMA officials.

The governor added it is possible the list of municipalities grows, as other damage reports from the other municipalities assessed by officials are delivered and evaluated. A total of 13 municipalities were severely affected by rains produced by a tropical wave system earlier this week.

According to the FEMA director for Puerto Rico and the Caribbean, Alejrandro de la Campa, once Bush signs the emergency declaration, flood victims have to call a toll-free number or access the agency’s website in order for officials to start the evaluation process.

Once a the person makes his or her request for help, a FEMA inspector would visit the affected residence within seven days to evaluate the damages. If the case gets the approval of the agency, the economic help would arrive approximately five days later.

http://www.caribbean.......1&ct_name=1



Aerospace investment takes off
By : LAWSON D. THURSTON
lawson@caribbeanbusinesspr.com
Edition: September 25, 2008 | Volume: 36 | No: 38

Honeywell to create 868 jobs within next five years, with $16.75 million, 150,000 sq. ft. facility in Aguadilla; Lockheed to anchor new Mayaguez center

Significant investments by two of the largest aerospace companies in the world have kicked the local aerospace industry into high gear, reaching $80.2 million in investment and nearly 2,000 jobs since the first entry by a company as recently as 2006.

Boris Jaskille, executive director of the Puerto Rico Industrial Development Co. (Pridco), informed CARIBBEAN BUSINESS of this month’s aerospace expansion by Honeywell Aerospace.

“Honeywell has an incredible projected growth plan for Puerto Rico. It plans to expand into a 150,000-square-foot Pridco building in Aguadilla, which will involve a $16.75 million investment and create up to 868 jobs over five years,” Jaskille said.

“A little over a year ago, Honeywell initiated a project in Mayagüez to create 105 jobs; they currently have 200 jobs,” he added. “This is an expansion we have been working on with Honeywell for months.”

In Aguadilla, Honeywell will create a microcosm of everything it does as a company: engineering, software, supply chain, project management and contract management. “This is a very important project,” Jaskille said.

Separately this week, Pridco inaugurated the Guanajibo Innovation Center, a joint $1 million venture between Pridco and the Puerto Rico Technoeconomic Corridor in Guanajibo Industrial Park in Mayagüez.

The Center, which is an incubator for technology projects, will be anchored by Lockheed Martin Corp., a global aerospace company.

Lockheed, which is already collaborating with the University of Puerto Rico in research and development, will establish an internal information-technology service center in Mayagüez for its other global operations.

“The concept will be very unique and particular to Puerto Rico: to export technology services from the island. For us, this represents an incredible opportunity to have our engineering and information-systems professionals sharing their knowledge and expertise inside a global company like Lockheed Martin, which is an enormous provider of information technology and systems to the federal government,” said Jaskille.

According to the Pridco executive director, Lockheed Martin’s operations at the new center are expected to commence immediately and will employ 61 people, the majority of whom will be professionals educated in engineering and information systems. They will occupy about 4.000 square feet of the 11,700-square-foot Pridco building in Mayagüez.

The aerospace industry has been gaining momentum in Puerto Rico, given the unique value proposition provided by the island.

Since 2006, nine major aerospace projects have been initiated: Infotech, Hamilton Sundstrand, Lockheed Martin, Honeywell Aerospace, Forida Turbine, Essig Research, Axon, the latest Lockheed announcement for the Guanajibo Innovation Center, and the $16.75 million Honeywell expansion.

Much of the production in Puerto Rico is related to defense contracts held by these companies, work that by law can only be performed in states and territories of the United States.

http://www.caribbean.......399&ct_id=0

[Jaykar]

Scotiabank extends $161 million loan for JW Marriott
By : ELSA FERNÁNDEZ MIRALLES
elsa@caribbeanbusinesspr.com
Edition: September 25, 2008 | Volume: 36 | No: 38

Hotel to be developed by Empresas Díaz as part of bigger Coco Beach complex neighboring Trump International; joint venture with Redwood

Empresas Díaz has confirmed it received a $161 million loan from Scotiabank to build a JW Marriott Hotel & Resort in the company’s Coco Beach property in Río Grande.

Jorge L. Díaz, executive vice president of Empresas Díaz, explained that the five-star hotel will be a joint venture between Coco Beach Development Corp. and Redwood Capital.

According to Díaz, Steven Goodman, an executive of Redwood Capital, has been instrumental in raising $46 million in equity and additional sources. The project will include the hotel and other properties for a total investment of $250 million.

Díaz explained that although the new hotel site is near the Trump Residences & Golf Club, it is a different project and consists of a luxurious 371-room hotel and 63-unit Marriott Fractional Vacation Club.

“We already began preparing the grounds for construction, which we estimate will take 30 to 33 months. A portion of the hotel will consist of 174 condo-hotel rooms, while the hotel will have 197 rooms,” he said.

Since the environment is a huge concern for the Díaz family, the entire project will be environmentally friendly, including a treatment plant that processes used water for use in the gardens and golf course.

“We are very serious about complying with most of the latest trends in the market because, although it is more costly, it will be cost-efficient in the long run,” said Jorge Luis Díaz.

René Di Cristina, vice president in charge of all Coco Beach developments, stated the venue will consist of 500,000 square feet of construction divided into four towers. It will include a 12,000 square-foot main ballroom, a 6,000 square-foot junior ballroom and nine other boardrooms with a combined 20,000 square feet of meeting space.

About 500 jobs will be generated during construction and nearly 400 people will be permanently employed by the project once it is completed.

Architect Jim Wurst of Nichols, Brosch, Wolfe & Associates, the firm that is also designing the Trump International project in Coco Beach, explained that although they have used JW Marriott’s standards, he told CARIBBEAN BUSINESS the best way to describe the design is traditional Mediterranean with a more contemporary look.

http://www.caribbean.......397&ct_id=0

[Jaykar]

Something’s brewing at Montehiedra Town Center
By : FRANCES RYAN
frances@caribbeanbusinesspr.com
Edition: October 2, 2008 | Volume: 36 | No: 39

With $3 million investment, The Coffee Beanery to open 7 stores on island; create 200 jobs; chain will feature Puerto Rican coffee

Local entrepreneurs Edwin Hernández and wife Aileen González recently secured the exclusive development agreement for specialty-coffee franchise The Coffee Beanery in Puerto Rico, CARIBBEAN BUSINESS learned. The couple has plans to open seven locations around the island, under the local EH Caribbean Specialty Coffee corporation, to the tune of nearly $3 million, or an average of $450,000 per location, helping to create 200 new direct jobs over the next three years.

As part of the company’s development plans, the couple is finalizing the incorporation of Puerto Rican coffee to their international coffee menu “to be sold locally and in all our locations around the world,” Hernández said during an exclusive interview. “We’re very proud to facilitate the promotion of Puerto Rican coffee throughout The Coffee Beanery’s international network and share our great coffee tradition, and our best coffee, with other cultures.”

“We first visited The Coffee Beanery a couple of years ago, and decided its family environment and top-notch quality coffee would be great in Puerto Rico. Here we are, ready to open our first Coffee Beanery location in Montehiedra Town Center’s food court, near the Marshalls entrance,” continued Hernández, who isn’t afraid of this important commitment given the difficult economic conditions the island is going through. The first local Coffee Beanery location was financed with a loan from the Puerto Rico Economic Development Bank.

The Michigan-based The Coffee Beanery was established in 1976, long before consumers discovered the “specialty coffee” category. Since then, the franchise has grown to more than 160 locations throughout the U.S. and in top international markets. Contrary to the reputation as a “hang out” place, which other coffee franchises have become, The Coffee Beanery was built with a unique family-business approach that remains strong to this date.

“It is exciting to have our first store in Puerto Rico,” company trainer Dell Laiken said. We see a big market here and great prospects for the future given Puerto Ricans’ love affair with coffee. I attribute the growth of the specialty-coffee business to changes in demographics; it used to be for grownups. Now, new customers are getting younger and getting excited about learning about new coffees and, most importantly, learning to appreciate good coffee.”

http://caribbeanbusi...?...425&ct_id=0



Citi Puerto Rico to move back to the Golden Mile
By : JOSÉ L. CARMONA
josec@caribbeanbusinesspr.com
Edition: October 2, 2008 | Volume: 36 | No: 39

To locate administrative office Oct. 14 to 270 Muñoz Rivera Ave. Building; follows Popular’s acquisition of Citibank headquarters in Cupey earlier this year

Citibank returns to Hato Rey’s financial district, effective Oct. 14, when it moves from its former headquarters in Cupey to 270 Muñoz Rivera Building in Hato Rey.

In March, Banco Popular acquired Citi’s Cupey headquarters for $68 million, the last part of a three-part strategic move to capitalize on Citibank’s exit from local retail banking and broker-dealer operations in Puerto Rico.

In September 2007, Popular acquired the consumer retail-banking operations of Citibank Puerto Rico for $120 million, which consisted of 17 bank branches, approximately 230 employees, $1.1 billion in deposits and $230 million in loans.

The branch acquisition was followed a month later by the purchase of broker-dealer Smith Barney’s Puerto Rico operations from Citigroup, Citi’s parent company, for an undisclosed amount. With the transaction, Popular acquired Smith Barney’s securities business on the island which, at the time, consisted of approximately $1.8 billion in assets under management, some 15,200 accounts and 42 employees, including 26 financial advisers.

“Citi will continue to provide all corporate banking services to its customers from its new location in Hato Rey and through its corporate centers in Hato Rey, Caguas Bayamón and Carolina,” explained Ignacio Morello, Citi country officer for Puerto Rico.

As part of the relocation, CitiFinancial will move its main offices to Parque Las Américas 1 Building on Federcio Costa Street, while the International Private Banking business operations will be moved to the Guaynabo area, Morello added.

The relocation of Citi’s remaining business in Puerto Rico coincides with the bank’s 90th anniversary on the island, which began local operations in 1918.

Morello said that with the relocation, Citi intends to be more accessible to corporate clients and have better accommodations for them as well.

“We have made an important investment in equipment and technology, completely renovating the spaces we are going to occupy. Citi reaffirms its commitment to continue serving the needs of our local and international corporate clients from its new location, with the leadership and experience that has characterized us up to now,” Morello added.

http://caribbeanbusi...?...426&ct_id=0


PRHTA expects boom in high-end hotels in near future
By : ELSA FERNÁNDEZ MIRALLES
elsa@caribbeanbusinesspr.com
Edition: October 2, 2008 | Volume: 36 | No: 39

The Puerto Rico Hotel & Tourism Association (PRHTA) foresees a new era of high-end hotel development in Puerto Rico with the recent announcement of several five-star hospitality venues, with the most recent being the Humacao Mandarin Oriental in Palmas del Mar.

“The construction of a five-star resort under the Mandarin Oriental flag, at an investment of more than $400 million that will create around 2,800 direct, indirect and induced jobs, is precisely the type of project Puerto Rico needs to develop as a first-class tourism destination to bring new energy to the entire industry,” explained Clarisa Jiménez, PRHTA president & CEO.

Jiménez pointed out that in addition to the Mandarin Oriental at Palmas del Mar, six other five-star hotels are under construction or are nearly ready for groundbreaking. These are the Condado Vanderbilt in San Juan, the Regent Punta Candelero in Humacao, Bahía Beach St. Regis in Río Grande, JW Marriott at Coco Beach Resort, W Martineau Bay in Vieques and the Ritz at Dorado.

“We have around 14,000 hotel rooms endorsed by the Puerto Rico Tourism Co. and we need that inventory to grow for Puerto Rico not only to compete with the Caribbean but with the whole world because each day the competition gets tougher. At the PRHTA, we have always favored well-planned and environmentally sensitive tourism developments. We are truly convinced that if we put our minds and hearts to it, tourism can become one of our main industries,” Jiménez emphasized, reminding that back in 2006 the PRHTA published a very interesting study on the local tourism industry.

“The study revealed that if Puerto Rico doubled the number of hotel rooms, it could represent a real 3% annual revenue increase for the industry,” she said optimistically.

http://caribbeanbusi...?...34&ct_id=23


P.R. agriculture swamped with $18 million loss from recent floods
By : ELSA FERNÁNDEZ MIRALLES
elsa@caribbeanbusinesspr.com
Edition: October 2, 2008 | Volume: 36 | No: 39

Plantains took $11 million blow; soil is too saturated; additional rain could result in more devastation

Widespread flooding from the heavy rains experienced last week left behind about $18 million in losses to cattle ranches and farmers, according to Agriculture Secretary Gabriel Figueroa Herrera. These losses could be just the beginning if the additional rain from the depression is headed our way causes more damage to Puerto Rico’s already troubled agricultural sector.

This is why Agriculture has announced a series of actions to help farmers and ranchers through this difficult situation.

The plantain crop was the hardest hit, with $11 million in losses, according to an Agriculture survey. The second hardest-hit sector was coffee, with about $2 million in losses. Vegetable crops lost more than $1 million. Damage to fruit crops totaled $676,209 for papayas and $566,551 for bananas. A shortage of plantains and other vegetables typical of Christmas dishes is expected.

“We can’t control the climate, much less the weather. The only responsible thing we can do is help our farmers recover from this very difficult period and pray no other weather-related phenomenon happens. It is all in God’s hands,” Figueroa said, warning the soil is too saturated and additional rain would be devastating.

According to the secretary, the Cattle & Agricultural Services & Development Administration (ASDA by its Spanish acronym), an Agriculture Department division, was expected to begin payments to affected farmers last week. ASDA will use 75% of the net payroll in the 1Q of FY ’07-’08 as the base to calculate payments in the agricultural regions comprised of farmers and ranchers from Caguas, Ponce and San Germán. No deductions of any kind will be made for payments received from insurance claims, Crop Protection Program or other sources, Figueroa said. Payments, however, should be completed by farmers during 2Q FY ’09 (October- December 2008)

Farmers should now file their applications to receive the remaining 25%, if applicable. Figueroa commented that the Tick Control Program, also part of the ASDA, would be free of cost until Dec. 31. It covers both dairy and beef cattle. Figueroa foresees 1,100 cattle ranchers will benefit from this program.

Meanwhile, the Land Authority will exonerate all farmers affected by flooding in the island’s southeastern region-including the municipalities of Yabucoa, Maunabo, Arroyo, Guayama, Salinas, Santa Isabel, Juana Díaz, Ponce, Guánica, Lajas, Cabo Rojo and San Germán-from any payments due up to Nov. 30. This area covers about 28,000 acres and involves 225 farmers.

The yam, sweet potato and similar crops are covered by vegetable insurance from the Agricultural Insurance Corp. (CSA by its Spanish acronym), through the federal crop protection program, so all farmers of these crops thus insured may file the appropriate claim.

http://caribbeanbusi...?...33&ct_id=49

[Jaykar]

Puerto Rico becomes 'Iraq' in George Clooney's new movie

The Associated Press

Thursday, October 9th 2008, 4:03 PM

SAN JUAN, Puerto Rico  — Puerto Rico is standing in for Iraq as George Clooney and other major stars begins filming a new movie in the U.S. island territory.

Clooney and co-stars Ewan McGregor and Kevin Spacey are filming "Men Who Stare at Goats" in the central Puerto Rican town of Comerio.

The movie is based on a 2004 book about alleged U.S. military efforts to develop paranormal powers for American soldiers.

Puerto Rican film corporation Marketing Director Cristina Caraballo said Wednesday the island was chosen because of government incentives offered to the producers.

http://www.nydailyne...orge_cloon.html

Reggaeton icon Daddy Yankee to moderate debate for Puerto Rico governor candidates

Associated Press

Last update: October 9, 2008 - 3:05 PM

SAN JUAN, Puerto Rico - Tom Brokaw, Jim Lehrer, Gwen Ifill — and Daddy Yankee? The 31-year-old reggaeton star is taking a turn as moderator of a debate Thursday among candidates for governor of Puerto Rico in an effort to lure young voters to the polls on Nov. 4.

The artist, whose real name is Ramon Ayala, will be one of three moderators at the debate under the slogan "Vota o quedate calla'o" — "Vote or keep your mouth shut." A local journalist and a television personality will join him

Best known for his song "Gasolina," Daddy Yankee has already made a plunge into national politics by endorsing Sen. John McCain for president "a fighter for the Hispanic community."

But he has said he is not biased toward any of the four island candidates.

"I am going to be an instrument to deliver the people's questions," he told the newspaper Primera Hora.

His selection by sponsors including the local Univision network has gotten mixed reviews.

A group of young people burned Daddy Yankee albums Thursday outside the convention center hosting the debate. One, Jose Perez, said the artist is being used as "bait" in a system that otherwise neglects young people.

Gov. Anibal Acevedo Vila is facing three challengers in the debate. Some of the questions were submitted through social-networking Web sites including Facebook and MySpace.


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