Billionaire Nicholas Prouty’s latest investment in Puerto Rico — the $108 million expansion of the Ciudadela housing and commercial complex in Santurce — will benefit from local tax incentives to achieve savings he plans to pass on to future buyers.
The expansion involves building five towers with a combined total of 50,000 square feet of commercial space, 252 apartments, and 553 parking spots. It also includes adding amenities like a swimming pool and a clubhouse, and transforming an empty lot in the neighborhood into a $6 million public park.
Some 1,000 direct and indirect jobs are tied to the project.
“We’ll take advantage of all of it,” Prouty, the CEO of Putnam Bridge Funding, LLC., told News Is My Business, referring to the tax credits his company assumed from the former developers upon purchasing the then bankrupt Ciudadela project two years ago.
He paid $100 million for it.
The credits are worth $58.5 million, Prouty said in a brief aside, following the glittering groundbreaking ceremony attended by Gov. Alejandro García-Padilla, several former governors and members of Puerto Rico’s government and business elite.
Calling the expansion “the most important” project of Santurce Moderno, the governor noted how Ciudadela has changed Santurce for the better and set in motion a process of urban renewal.
“You have made a big investment in Puerto Rico in challenging times,” the governor said in praising Prouty’s latest plan. “I thank you for believing in Puerto Rico.”
In the two years since the billionaire moved to the island with his family, his company has invested around $750 million, including $450 million to overhaul the Puerto del Rey Marina in Fajardo. Putnam Bridge is known for buying troubled real estate properties in the initial stages of bankruptcy.
Set in the heart of Santurce, the current Ciudadela is like a small town within the city: two elegant glass towers house 312 apartments and residents have access to a supermarket (Pueblo Supermarket), a gymnasium and a restaurant, all of which are located on the ground floor.
When Putnam bought the bankrupt property at the end of 2012, only 63 apartments had been sold.
To make the project more sellable within a marketplace where Ciudadela was competing with other real estate projects, Prouty said “we spent a little more money” to improve the apartments and the landscaping. A new marketing plan was hatched.
The company also enlisted Trillion Realty Group, the local representative of Christie’s International Real Estate, as its sales and rental agent.
Ciudadela’s two original towers are now completely sold, much faster than the company anticipated. And while some units were marketed at prices below those set by the former project owner, prices have steadily appreciated. For example, a buyer who purchased a Ciudadela apartment for $225,000 recently sold it for $280,000, said Prouty.
Apartments in the new buildings will be 10 percent larger than existing apartments and feature superior finishes.
The new buildings will be equipped with solar panels to reduce energy costs. Putnam Bridge is already enjoying a savings from the solar panels it has added in the existing project.
They “cost a lot” but are reducing operational costs by 45 percent, Prouty said.
Although the date for the start-up of construction is not set yet, it should begin at some time before the end of the year.