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San Juan reviving waterfront to boost tourism, conventions
The Miami Herald / September 28, 1997

By Larry Luxner

SAN JUAN, Puerto Rico -- Tourism and development officials in this city have launched a $1.2 billion project to redevelop the waterfront and lure convention business away from other U.S. and Caribbean cities.

The grand plan: To replace San Juan's aging convention center with one that's more than quadruple its size. The center is envisioned as the centerpiece of an entertainment area that will include luxury hotels and condominiums, shops, restaurants and plazas.

"The idea is to create a bayfront development, all inter-connected with water taxis," said Jorge Pesquera, executive director of the Puerto Rico Convention Bureau. "We're talking about one of the most ambitious urban development projects in U.S. history."

The Puerto Rican government apparently is over the first key hurdle.

A string of oceanfront properties that had been losing money for years has finally been sold by the Puerto Rican government to a Florida real-estate partnership.

The so-called Condado Trio -- consisting of the 245-room Condado Beach Hotel, the 235-room La Concha Hotel and the enormous but obsolete El Centro Convention Center -- was sold earlier this month to a venture between two Miami-based companies, publicly traded Atlantic Gulf Communities Corp. and privately owned Development Management Group Inc. (DMG).

The team submitted a winning bid of $25 million for its proposed Condado Beach Resort, with a total investment commitment of more than $200 million.

Under its proposal, the Atlantic Gulf partnership will demolish both La Concha and the convention center, building on the vacated spot a 400-room Inter-Continental luxury hotel that includes a 15,000-square-foot casino; it also plans to construct 100 timeshare units attached to that property. As for the Condado Beach, the new owners envision converting the mansion -- constructed by the Vanderbilt family in 1919 -- into 100 to 150 very upscale condominium units. Finally, the group says it'll build Condado Village, a 120,000-square-foot urban entertainment center around a spacious, outdoor plaza fronting the ocean along Condado's Ashford Avenue.

"This is an opportunity to do a unique project in the Caribbean," said Brian A. McLaughlin, president of DMG, in a phone interview Wednesday. "It has all the elements of a complete urban destination resort. We're right in the heart of Condado, on the beach, and yet we have available to us all the advantages of San Juan and the Old City."

McLaughlin, former president of Palmas del Mar -- a well-known resort on the island's southeastern coast -- says the new project "will reflect Puerto Rico's Spanish heritage and will dramatically enhance the character and style of the area," serving as a catalyst for the redevelopment of Condado, which has deteriorated over the years.

Other members of the Atlantic Gulf consortium include Inter-Continental Hotels; architectural firm Wimberly Allison Tong & Goo, which has designed Four Seasons and Ritz-Carlton hotels, and SWA Group Land Planners, which specializes in parks, plazas and gardens.

McLaughlin, who expects the Condado Beach Resort to open in the fall of 2000, says the partnership's investment stems at least in part from Puerto Rico's 1993 Tourism Development Incentives Act, which offers tax breaks and attractive financing packages to companies that invest in hotel projects. He said the project will create around 2,000 permanent jobs.

Marcos Rodriguez-Ema, president of the Puerto Rico Government Development Bank, selected Atlantic Gulf's proposal from a list of six offers that included a $15 million bid from the municipality of San Juan, which would have converted the Condado Beach into a Swissotel and La Concha into a Sheraton Four Points property.

Few people will regret the demolition of 79,000-square-foot El Centro, built in the 1960s and for years the island's only convention center of any size. Like the two government-owned hotels, obsolesence and lack of interest forced El Centro shut earlier this summer.

"That property was misnamed from Day One," says Jaime L. Gonzalez, vice-president of the Puerto Rico Tourism Co. "It was never a convention center, just one big meeting room."

In its place, the government proposes to build Latin America's largest convention complex on a spit of unused land along San Juan's Isla Grande waterfront.

The center, expected to cost $100 million, will be financed through a combination of casino earnings and an increase in the hotel room tax. It'll sit on a site measuring 30 to 40 acres, and will be part of a $1.2 billion waterfront project known in Spanish as El Triangulo Dorado (The Golden Triangle).

"The idea is to create a bayfront development, all inter-connected with water taxis," says Jorge Pesquera, executive director of the Puerto Rico Convention Bureau. "We're talking about one of the most ambitious urban development projects in U.S. history."

Groundbreaking for the San Juan Convention Center, as it's being called, should take place in 1999, with inauguration as early as 2001. "The new convention center will be large enough to meet our needs far into the new millenium. This could be anywhere between 300,000 and 500,000 square feet of meeting and exhibition space."

The Golden Triangle project represents more than 11 million square feet of new development valued at $1.2 billion. Proponents say the project could produce 49,000 direct and indirect jobs over the course of its construction, with over 15,000 permanent positions created.

Despite its huge size, Puerto Rico's planned convention center isn't expected to compete directly with Miami or other U.S. mainland destinations.

"Most of our shows are local consumer shows that typically do not go outside the U.S.," says Ita Moriarty, senior vice-president of convention sales at the Greater Miami Convention & Visitors Bureau. She points out that the Miami Beach Convention Center, with 500,000 square feet of space, targets a strictly domestic market. "Obviously from the international front, perhaps some associations would look at both Miami and Puerto Rico, but at this particular point, I don't see it as a direct competitor."

On the other hand, Puerto Rico's new convention center could give other Caribbean islands a run for their money, says Cheryl-Anne Sturken, Caribbean editor of Meetings & Conventionsmagazine.

"The only other place in the Caribbean Basin whose convention center that comes close to [the one planned for San Juan] is Cancún," says Sturken. "The other islands don't have convention and visitors bureaus. Puerto Rico is now going after a market that has eluded them in the past. Even without the North American market, they'll be siphoning off business from other islands."

At the moment, Puerto Rico's tourism industry is doing extremely well, says Raul Bustamante, president of the Puerto Rico Hotel & Tourism Association.

"Business is booming," says Bustamante, who's also general manager of the government-owned Caribe Hilton. "This year, if we don't get any hurricanes, is going to be our best ever, at least by six percentage points. Right now, we're at 85% occupancy for the year."

In fiscal 1996, Puerto Rico's hotel bookings ran 34% ahead of the previous fiscal year. Room nights increased by more than 42%, and the group market registered $37 million in direct economic impact. In addition, 249 groups and 108,360 room-nights were booked at hotels around the island.

Pesquera says a $1 billion-a-year meetings industry isn't far off, and to that end, the new convention center will cater not only to U.S. businesses but to Latin American customers as well.

"This will help position Puerto Rico as the meeting place of the Americas," says Pesquera, whose agency has 42 employees and a $4.4 million budget. "No other city in Latin America will have a convention center of this magnitude" -- not even huge metropolises like Sao Paulo, Rio de Janeiro or Mexico City.

Meanwhile, announcement of the 400-room Inter-Continental where La Concha currently stands signals a return to Puerto Rico by the New York-based hotel chain. For 15 years, the company operated the 170-room Ponce Inter-Continental along the island's south coast, but closed that property in 1976 after financial difficulties.

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