By Opportunity Zone Magazine Staff
Puerto Rico is prime to receive an influx of investment dollars to the island, due to most of the country being designated as an opportunity zone. And there’s a lot of investment opportunities to go around since the recent devastation caused by Hurricane Maria.
“This is a transformative time for Puerto Rico’s economy, and our government stands ready to partner with investors and businesses who want to leverage to different investment opportunities this island has to offer,” says Gerardo Portela, chief investment officer of Puerto Rico and senior advisor to the Governor.
Puerto Rico is more than 94 percent OZ qualified, and transformative business activities can benefit from both Opportunity Zones and CDBG-DR Impact Zone benefits, according to the Puerto Rico Department of Economic Development and Commerce.
“This is our competitive advantage and makes doing business in Puerto Rico even more attractive,” says Portela.
Lifeafar Investments, a Latin American investment real estate agency, raised $16.6 million in an opportunity fund to renovate the Plaza Colón Hotel & Suites, a six-story, 40,188 square foot mixed-used property overlooking historic Plaza Colón in Old San Juan. The property is located two blocks from popular tourist attraction Fort San Cristóbal and four blocks from the main port for cruise ships.
The reimagined property will feature hotel rooms and rental apartments, a rooftop bar, lounge and restaurant and a ground-floor gourmet food hall and bar, fitness center and yoga studio and coworking space. After a complete renovation, they expect the property will open in the fourth quarter of 2020 says Eric Berman, chief investment officer for Lifeafar, in a statement.
“The investment climate in Puerto Rico is quite favorable due to a combination of local and federal tax incentives aimed at boosting tourism development in addition to the opportunity zone program incentives," Berman said. “I’d encourage OZ investors to consider Puerto Rico in view of the exceptional geographical, cultural and touristic aspects of the island as compared to many other areas in the U.S. designated as QOZs.”
Puerto Rico’s non-voting Rep. Jennifer Gonzalez-Colon (R-P.R.) won the support of former Speaker Paul Ryan and others to insert legislation in the tax reform that automatically qualifies all communities on the island as Opportunity Zones.
The proposed bill allows the federal program on the island to grant exemptions of construction excise taxes while cutting the municipal tax payment by 50 percent for a 15-year period for investors from Puerto Rico and the United States.
There is already significant long-term investor interest in sectors such as tourism, energy and public-private partnerships. Potential projects could include multi-purpose development, energy revitalization, port construction, hospitality, housing, public works, commercial and industrial, and infrastructure, according to Puerto Rico Department of Economic Development and Commerce.
“Opportunity zones will be a “game changing” economic development catalyst and we will use this mechanism to change our current paradigm and revitalize Puerto Rico,” says Portela.
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