General Biz News

Plan for $200M Cayey mega mall stuck in Supreme Court

A group of residents from the Vegas sector where Ciudadela will be built have publicly expressed their opposition on grounds that, with its rich biodiversity, the land would be better suited to agricultural uses. A group of residents from the Vegas sector where Ciudadela will be built have publicly expressed their opposition on grounds that, with its rich biodiversity, the land would be better suited to agricultural uses. (Credit: © Mauricio Pascual)

Ciudadela de Cayey, a $200 million outlet mall that, if built, would be a third of the size of Puerto Rico’s largest mall stands to dramatically alter the physical and economic landscape of the town of Cayey but the ambitious project has raised bitter opposition and is currently stalled due to a lawsuit over the permitting process.

The Puerto Rico Supreme Court last year took up an appeal filed by Inversiones Joselynmarie, S.E., whose owner José A. Perez has several commercial centers in Cayey, challenging the decision of the Office of Permits Management (OGPe, by its Spanish acronym) to grant a site approval for Ciudadela.

The first step in getting a project off the ground, site approval is required ahead of the construction permit.

Currently, the case is bogged down in a legal quandary over jurisdiction. In doubt is whether it should be up to the Supreme Court or a Court of Appeals to rule on the matter. It is not clear when a decision from the high court will come down as this case is tied up with other cases that are in a similar fix, according to a source.

Besides questioning jurisdiction, the lawsuit also claims that the developers failed to notify area residents about their intention to seek a rezoning of the land for the project ahead of a public hearing held in conjunction with the permitting process.

A group of residents from the Vegas sector where Ciudadela will be built have publicly expressed their opposition on grounds that, with its rich biodiversity, the land would be better suited to agricultural uses. With Puerto Rico’s farmland steadily dwindling, these residents say it is imperative for the island to protect agricultural land as a safeguard against any future world food crisis.

Another issue they raised is that Ciudadela will occupy floodland and mitigation measures are bound to adversely affect adjoining communities, making them more susceptible to flooding. They also complained that the project will contribute to pollution and traffic congestion, hurt area businesses, and even lead to more crime.

Last year the residents started a campaign on Facebook, under the banner of “Cayey para el Mundo,” or “Cayey for the World,” designed to raise awareness about the controversy and promote an alternate proposal: an eco-tourism farm devoted to traditional plantings and geared to both tourists and locals.

“We do not want more cement because this hackneyed model of ‘progress’ ends up destroying our chances for sustainable strategies,” says the group’s Facebook manifesto.

As proposed, Ciudadela de Cayey is a combination retailing and hotel/casino complex to be developed on a 126-acre private property in the Vegas sector owned by Vaquerías Montellano, S.E. The land borders PR-52. As proposed, Ciudadela de Cayey is a combination retailing and hotel/casino complex to be developed on a 126-acre private property in the Vegas sector owned by Vaquerías Montellano, S.E. The land borders PR-52. (Credit: © Mauricio Pascual)

Ambitious project
As proposed, Ciudadela de Cayey is a combination retailing and hotel/casino complex to be developed on a 126-acre private property in the Vegas sector owned by Vaquerías Montellano, S.E. The land borders PR-52.

The developers, who operate under the name of Ciudadela de Cayey, LLC, are also behind a separate, nearby technological park project that has not yet gotten off the ground despite many years in the planning.

Plans for Ciudadela were first made public in 2012. In making the announcement, the developers said they planned to build 10 structures, some of them two-story high, to accommodate outlet stores featuring brand name retailers from the U.S., Europe, and Asia.

With more than 4,000 parking spaces, the commercial development would cover 725,000-square of space or a third of the size of Plaza Las Americas which spans 2.1 million square feet of space and is the largest mall in Puerto Rico and the Caribbean.

In addition to the shopping mall, the complex incorporates a three-story, 100-room luxury hotel and an observation tower from which a zip line would ferry visitors to the tops of nearby mountains. Located in a valley, Cayey is surrounded by the mountain ranges of La Sierra de Cayey and the Cordillera Central, a range that cuts through most of Puerto Rico’s center.

The developers have estimated the cost of the project at around $208 million.

Inversiones Joselynmarie’s Pérez was off the island and unavailable for comment. Written questions sent to a Ciudadela de Cayey representative went unanswered.

According to information submitted to the government by Ciudadela de Cayey, the project will create 2,884 direct and indirect jobs during the construction phase and around 3,000 jobs once the mall is in operation. The annual payroll is estimated at $73 million.

Last year the residents started a campaign on Facebook, under the banner of “Cayey para el Mundo," or "Cayey for the World," designed to raise awareness about the controversy and promote an alternate proposal: an eco-tourism farm devoted to traditional plantings and geared to both tourists and locals. Last year the residents started a campaign on Facebook, under the banner of “Cayey para el Mundo,” or “Cayey for the World,” designed to raise awareness about the controversy and promote an alternate proposal: an eco-tourism farm devoted to traditional plantings and geared to both tourists and locals.

The municipality of Cayey will benefit substantially through business licenses, property taxes, sales/use taxes, according to the developers.

OGPe granted site approval to Ciudadela de Cayey on Nov. 15, 2012, prompting Inversiones Joselynmarie to appeal to the Permits and Land Use Review Board. In challenging the OGPe approval, the company claimed that the rezoning was not justified, did not comply with existing regulations nor development plans for Cayey, including the municipality’s Land Use Plan.

The Review Board dismissed the appeal in April. It subsequently issued a revised resolution in June.

Joselynmarie was directed by the Review Board to appeal to the Supreme Court, as allowed under the Puerto Rico Permit Process Reform Act (Law 161) of 2009.

But in May 2013 the Puerto Rico Legislature amended Law 161 and changed the rules of the game: appeals to Review Board decisions would no longer be filed in the Supreme Court but in a court of appeals.

A decision is pending.

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