$20M passenger building complex planned for San Juan’s Pier 3
Construction of a new $20 million passenger building complex on San Juan’s Pier 3 will get underway in March, when Duty Free Americas will break ground on the project, Puerto Rico Ports Authority Executive Director Joel Pizá confirmed.
The two-story building — which will house a Duty Free shop on the ground floor and 16,000 square feet of office space on the second level — will generate $24 million in rental revenue for Ports over the life of the 20-year contract, he said.
The complex will comprise “modern security facilities for the screening and processing of cruise passengers, which are currently non-existent in the Caribbean,” Pizá said in an interview with this media outlet.
“Upon completion of construction, Ports will become the owner of a building valued at more than $ 11 million,” he said, noting that the agreement with the private investor entails leasing the pier space where the complex will be located.
The development of the project, he said, was originally slated to begin in 2016. However, legal tangles and the onslaught of back-to-back Hurricanes Irma and María in 2017 put all of it on hold, including the permits.
“When I arrived in 2019, I wanted to fix the situation because to me, it was in the best interests of the people of Puerto Rico to encourage construction and development,” he said.
Dredging planned for June
Several cruise ship piers in the usually busy Old San Juan area will undergo a $4.2 million dredging in June, which Ports will pay for, borrowing equipment that the US Army Corps of Engineers will bring in to clean its own areas, Pizá said.
“We’re going to dredge Piers 1, 3 and 4. While some may think it’s not a lot of money to spend, for us its significant because COVID-19 has hit Ports hard,” he said.
Prior to coming to a screeching halt, the cruise ship industry represented $30 million in annual revenue for the agency. But there has been no activity since mid-March 2020, other than the infrequent stop by a ship to refuel and restock — as will happen today with the one-day visit of the Brilliance of the Seas.
“That stop will generate $3 million for Puerto Rico, because it means business for local suppliers of food, gasoline, recycling services, among others. None of the crew will disembark and the ship has no passengers,” he said.
While other islands in the Caribbean have opened their piers to cruise ships wanting to dock, or “lay-up,” for days or weeks at a time, Puerto Rico has been unable to because it lacked a rate structure for that type of long-term stay.
The Ports Authority charges $9,000 a day for cruise ships to dock in Old San Juan. Companies said the fee was too high for a ship wanting to anchor for an extended period.
“So, we included an amended rate structure and submitted it to the Financial Oversight and Management Board for Puerto Rico, which approved it in November,” he said, while refraining to reveal the special rate in place, citing competitive reasons. “It’s the cheapest in the Caribbean.”
“We’ve sent letters to all of the cruise line CEO’s and travel agents. But we still have another limitation, which is that Puerto Rico isn’t allowing cruise ships to replace their crews, which normally fly in,” he said.