(June 4, 2019 – New York) Governor of Puerto Rico Ricardo Rosselló announced that the former Gran Meliá Puerto Rico Hotel was acquired by Monarch Alternative Capital in partnership with Royal Palm Companies and Aimbridge Hospitality, who will re-launch the hotel as the Hyatt Regency Coco Beach Resort.
Likewise, the chief executive announced that the developers contemplate a ten year master plan that will locate a total of six hotels on the Coco Beach peninsula. It has been projected that three of these six hotels will have opened by 2022.
“It is with great enthusiasm that we share this information in the most important forum of hotel investment. Transactions like these that are taking place today validate that our commitment to tourism is a wise one and that there is a positive environment for investment,” stated Rosselló.
The governor also emphasized that “the Government of Puerto Rico is open for business. We have managed to streamline processes for granting tax benefits and granting permits, which demonstrates that this administration sustains a war against bureaucracy, so that the private sector can have better investment opportunities”.
The announcement was carried out during the 41st New York University (NYU) International Hospitality Industry Investment Conference, before a large group of developers, investors, and hotel brand executives.
The Hyatt Regency Coco Beach Resort will have five new restaurants and is estimated to create over 200 new jobs. The average rate is expected to be around $300 per night.
During his presentation, Rosselló unveiled images and plans of how the property is expected to look. He also talked about the different partners of the transaction, in order to demonstrate that Puerto Rico has a fertile and positive environment for hotel investment.
The Hyatt Regency Coco Beach Resort is part of a $120 million transaction that was made possible through an agreement with the Puerto Rico Tourism Company (PRTC), in which tax credits were granted in accordance with the benefits available under Act 74.
The governor presented the details of the transaction in a panel moderated by Arthur Adler, president of Americas, Hotels and Hospitality Group, JLL Hotels & Hospitality. Tyler Morse, chief executive officer and managing partner of MCR, also participated and offered details on the newly opened TWA Hotel at John F. Kennedy Airport (JFK).
The PRTC has been working on this transaction together with the group of investors for several months.
After the passage of Hurricane Maria, Monarch Alternative Capital, a company that had interests in the peninsula already, saw the opportunity to acquire the former Gran Meliá Hotel with 486 rooms, 135 one-bedroom units, and an additional 14 acres of land.
To proceed with the transaction, Monarch carried out a joint venture with Royal Palm Companies and Aimbridge Hospitality.
The executive director of the PRTC, Carla Campos, said that “from the PRTC we continue focused on increasing our hotel inventory in the short term, while creating awareness on the competitive and incomparable advantages the Island has for hotel investment.”
Campos also explained that “we have been working during the past months so that this transaction, that enables the reopening of the hotel, is achieved in the short term and to direct the development of the long-term master plan, which will add to the hotel inventory some 2,500 rooms, with a projection of 1,500 new jobs. This will result in a total investment of around $1.5 billion when the six hotels materialize.”
In the framework of this conference, both the governor and the executive director of the PRTC announced the strategic positioning of Puerto Rico and the momentum of hotel investment that has been generated in the market based on the principles that position Puerto Rico as the most competitive jurisdiction in the United States for hotel investment.
This includes the positioning of Puerto Rico as a connector of the Americas, as it is an American territory and a bridge between the United States and Latin America; and the structural reforms that place the Island as a destination for doing business and that is committed to the private sector.
The officials also highlighted the investment tools that provide a combination of tax benefits at the state level; in addition to the competitive advantage of being an almost entirely eligible territory for the benefits of the federal Opportunity Zones.
The chief investment officer of the Government of Puerto Rico, Gerardo Portela; and the chief executive officer of Invest Puerto Rico, Rodrick Miller, also joined Rosselló during the conference.
There remain several opportunities for developers, investors, lenders, and brands to get involved with Coco Beach. Those interested in learning more should reach out to the Puerto Rico Tourism Company to hear about the level of governmental support available for this project.
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