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Este informe no está disponible en español. CARIBBEAN BUSINESSA New Jewel In Puerto Rico’s Tourism CrownConstruction begins on $170 million Paseo Caribe megaproject that will transform the Caribe Hilton into Puerto Rico’s largest hotel–and convert the surrounding area into a major tourism, entertainment and retail center.By EVELYN GUADALUPE-FAJARDOOctober 25, 2001 San Juan’s Coco Walk: Despite a slow economy and a jittery tourism industry, local developer Arturo Madero is pushing ahead with his Paseo Caribe dream project inspirted by Miami’s famous Coco Walk. For developers with projects in the pipeline, the economic outlook before Sept. 11 was already discouraging. Amid a slowing economy, financial concerns were mounting, particularly for new hotels, which are difficult to develop even in a perfect world. And now that airlines are not operating at full capacity and hotels have rooms to spare, some developers are apprehensive because they feel no one has a clear view of the future. Despite this cloudy outlook for new development, Arturo Madero, managing partner of San Geronimo Development Corp., has decided he isn’t backing down and will push forward with his $170 million Paseo Caribe mixed-use megaproject in Condado, San Juan’s prime tourism sector. The project, owned and privately financed by San Geronimo Development Corp., will generate over 2,000 much-needed jobs during its construction phase and produce 700 permanent positions and 1,500 indirect jobs once operational. Located right alongside the Caribe Hilton, this new construction will boost the hotel’s room inventory from 645 rooms to 930 rooms, the largest number of rooms for any hotel in Puerto Rico. Its construction is expected to begin promptly following Paseo Caribe’s much-anticipated groundbreaking ceremony, which took place yesterday. "This is a world-class project, the work of more than 16 top professional consulting firms who have created a unique development in Puerto Rico. FirstBank is the lead financial institution among the all completely private-sector financing sources," Madero said. And if everything goes as planned, Paseo Caribe should be completed by October 2004, just in time for the scheduled inauguration of the island’s new Convention Center in Isla Grande (CB Sept. 10, 1998). Jose Campo, general manager of the Caribe Hilton, considers Paseo Caribe a highly significant project for the Hilton considering the hotel’s proximity to the upcoming Convention Center. "With the extra rooms Paseo Caribe will provide the Caribe Hilton, our hotel will definitely become the key property dealing with [Convention Center] group business in Puerto Rico," said Campo. The Convention Center, to be built by the government, is scheduled to begin construction BY December (See related story). Madero said there is no reason to reconsider his commitment to this project, which will be located on the existing 5,400-square-meter (5,905-square-yard) outdoor parking lot of the Caribe Hilton near Fort San Geronimo, which adjoins a seven-acre or 20,000-square-meter (12.4 square mile) lot adjacent to the hotel that once belonged to the U.S. Navy. "We’ve been working on this project for over three years now. It’s been too long of a wait not to see it happen," Madero said. It took years of court battles to obtain the necessary government approvals and building permits, which included making alterations to project blueprints in order to satisfy neighboring residents. But the time for Madero’s vision to become a reality has arrived. World-class project Paseo Caribe has four main components that make it a world-class entertainment destination center; the Condado Lagoon Villas condo-hotel, an entertainment center, Caribe Plaza condominium, and a huge parking lot. Demand for the project is such that the waiting list for apartments and villas is three times the number available. The 88 luxurious Condado Lagoon Villas are the equivalent of 264 hotel rooms, which will be leased to the Caribe Hilton for 10 years. Their construction will mark the initial phase of Paseo Caribe, slated to begin immediately. They will be built near Fort San Geronimo, where the hotel’s outdoor parking lot is now located. The completely furnished villas (measuring 1,550 square feet) will have a living room, dining room, kitchen, two bedrooms, and three bathrooms. Potential buyers for the $775,000 villas, designed by the local architectural firm Jimenez & Rodriguez Barcelo, are eligible–under the Puerto Rico Tourism Development Act of 1993–to an investment tax credit up to 10% of the total cost of the project. Owners will also be able to use the property 60 days of the year. Net income made by Hilton International for renting the villas will be split with owners, who will receive 55% of the profit. Entertainment center/parking lot The Paseo Caribe complex will also boast a state-of-the-art entertainment and recreation center that encompasses restaurants, retail stores, a 22,000-square-foot casino, and, last but not least, specialized cinema lounges featuring big screen monitors surrounded by some 200 tables where guests can eat and drink from the theaters’ own restaurant and bar while viewing movies. The entertainment center, designed by Beame Architectural Partnership, consists of 185,000 square meters of commercial space, 75% of which will be air-conditioned (See related story). An outdoor grand plaza overlooking the Condado Lagoon will feature the restaurant portion of the complex. In a nutshell, the project is expected to be San Juan’s version of the trendy Coco Walk in Miami. A promenade called Paseo San Geronimo will also be built to connect Ponce de Leon Ave. to the hotel to allow visitors to stroll to and from Ponce de Leon to Fort San Geronimo, which shares the Hilton’s property. The promenade, designed by Bruce Howard & Associates along with Gabriel Berritz, will be a wide, shaded walkway with plenty of room for families to walk together. A lineal walk will be built starting at Dos Hermanos Bridge along Ponce de Leon Ave. around to the Caribe Plaza condominium as a route for cyclists, joggers, and walkers. Paseo Caribe will have both an underground and elevated parking facility to accommodate 1,700 vehicles. The parking will have an entrance via Ponce de Leon Ave. and direct access to the Caribe Hilton’s existing parking lot. The new access to Paseo Caribe through Ponce de Leon was designed to help alleviate traffic jams that tend to occur in front of the Caribe Hilton. The new parking building will have five separate exit gates to allow reasonable departure without potential traffic jams. Caribe Plaza condo The final component of Paseo Caribe is a 14-story condominium consisting of 46 luxury apartments including six penthouses. The 3,500-square-foot apartments’ selling prices begin at $1.3 million. Penthouses measure 5,200 square feet and begin on the sixth floor, above the entertainment center. The Caribe Plaza condominium will have a gym, swimming pool, and gardens. Connecting the villas and apartments will be a central lobby and elevators to the floors above the entertainment center. Local architectural firm Sierra Cardona & Ferrer designed these apartments to harmonize with, rather than compete against the Caribe Hilton’s tropical design. Make or break Caribe Hilton’s deal If it wasn’t for Paseo Caribe, Hilton International would not have met government-imposed requirements to buy the Caribe Hilton in 1998. Hilton International executives originally offered the government $42 million in cash to buy the Caribe Hilton plus an additional $23 million in investment. To their surprise, Marcos Rodriguez-Ema, then president of the Government Development Bank, told Hilton executives that he wanted $80 million in cash for the hotel, which included seven-acres of former federal land adjacent to the Hilton. As part of the deal, the government also stipulated requirements for more restaurants and more space for retail stores and parking spaces, plus 300 more hotel rooms in order to transform the Caribe Hilton into an important element for the new Convention Center in Isla Grande and Golden Triangle urban development plan. To make the deal work, the first order of business was to find other investors to help develop a larger complex. That’s when Madero, also president of Lema Lemar Developers; Hector del Rio, senior vice president of investment banking at Doral Securities, and Chip Newell, a developer from Washington, joined the efforts to make the deal work. Del Rio, former chief of the Puerto Rico Hotel Development Corp., climbed on board to structure the transaction. The group conceptualized Paseo Caribe to answer the stipulations. It had to be exciting enough to stand on its own so they could then find the investors and financing for the project. The concept helped make the Caribe Hilton’s sale possible. The rest is history. This Caribbean Business article appears courtesy of Casiano Communications.
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