SAN JUAN, Puerto Rico -- Two investment groups announced plans on Monday to invest a combined total of more than $460 million in separate acquisitions that will significantly strengthen Puerto Rico's status as a high-end luxury resort destination.
New York investment firm Paulson & Co. said it would invest $260 million to create two high-end luxury resorts in the heart of San Juan's Condado district. The firm's plans for the historic Condado Vanderbilt and La Concha Renaissance Hotel, and the adjoining Condado Vanderbilt condominiums will fill an important niche in Puerto Rico's tourism industry by bringing world-class luxury to the popular Condado district.
In unrelated announcement, the Encanto Group said it would invest $200 million to develop a world-class beach and marina community on the island's east coast. The firm, which has operations in Puerto Rico and the mainland United States, acquired the Punta Candelero Beach Resort and the Marina at Palmas del Mar, about 45 minutes from San Juan.
The acquisition includes the Solarea Beach Resort luxury condominiums, The Yacht Club Marina and 24 additional acres of waterfront slated for future development.
The two deals, which were facilitated by Puerto Rico's Department of Commerce and Economic Development (DDEC), provide more evidence that Puerto Rico's economic development efforts are paying off as the island's economy rebounds.
"Adding high-end properties to Puerto Rico's hotel mix is an important part of the government's economic development strategy," Alberto Baco Baque, the secretary of commerce and economic development, said. "These investments are a major boost for the tourism sector. The Paulson & Co. investment will restore the grandeur of one of the stars of our all-star island. The Encanto investment will enhance the tourist experience in the island's prime destination resort.''
The Condado Vanderbilt was the epitome of luxury and the envy of the entire Caribbean when it opened in 1919. John Paulson, the founder of Paulson & Co., said he intends to make the hotel the most luxurious in San Juan. The Condado Vanderbilt is in heart of Condado, the epicenter of luxury in Puerto Rico and home to designer stores, fine dining restaurants and upscale apartment buildings.
In Palmas del Mar, the completion of The Yacht Club Marina, scheduled for May 2014, will create Puerto Rico's only resort-marina, with 158 boat slips, including 40 designed for yachts of up to 175 feet. The project is also expected to generate about 400 jobs.
"The tourism industry contributes significantly to our gross national product and the luxury market is one of the leading niche markets in the industry, with a rate of annual growth higher than the rest of the industry. Development of luxury properties such as these will continue to place Puerto Rico back into its privileged position as a premier Caribbean destination with its diversity, easy access and excellent service," added Ingrid I. Rivera Rocafort, executive director of the Puerto Rico Tourism Company (PRTC).
The Paulson & Co.'s investment in the Condado properties follows the firm's investment last year in the St Regis Bahia Beach Resort and the Bahia Beach Resort & Gold Club. The planned community, located about 25 minutes from San Juan's airport, includes two miles of pristine beach and an 18-hole golf course designed by Robert Trent Jones Jr.
Baco and his team at DDEC have worked closely with the firm to facilitate Paulson & Co.'s investments in Puerto Rico, which are expected to total as much as $2 billion by the end of 2015.
"John Paulson is just one of many savvy investors who seek attractive opportunities in Puerto Rico," Baco said. "We expect to have more good news to announce soon."
Tourism is one of several key sectors that DDEC has targeted as growth opportunities to jump-start Puerto Rico's economy. The sector has remained strong throughout the recent recession and is on a growth trajectory, aided by new hotels, an increase in cruise ship passengers and new nonstop airline service to the US, South America and Europe.
"Puerto Rico's well-established tourism industry is strong and getting stronger, but it is just one element of our comprehensive growth strategy," Baco said. Other growth sectors identified by DDEC include knowledge services, insurance, financial services and export services.
The economic development agency, which closely tracks private sector investment and hiring activity, reported last month that new investments and planned expansions at existing businesses have resulted in private sector commitments to add more than 21,000 jobs, a 50 percent increase over the outlooks last summer.