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$70M Puerto Rico Film District project dead 3 yrs. after unveiling

Three years after the much-touted $70 million Puerto Rico Film District project in Miramar was announced in 2018, the pre-development agreement between the government and British businessman Keith St. Clair has been terminated, meaning the end of the venture, News is my Business has learned.

Puerto Rico Convention District Authority Executive Director Mariela Vallines confirmed that following several extensions to the 24-month pre-development agreement — which had been in place since 2016, prior to the initial announcement — incompliance by RKA Studios LLC., St. Clair’s company, lead to its termination effective July 31, 2021.

“We had a pre-development agreement with RKA, which was working on the Film District project. They had responsibilities that they had to meet on or before July 31, which was the latest of multiple extensions,” said Vallines.

“The last extension established that if they didn’t comply with several aspects that they had committed to as part of the due diligence, including finishing the clean-up and remediation of the plot, the agreement would be terminated. We no longer have any kind of commitment with RKA,” Vallines said.

In December 2018, St. Clair confirmed that his company had set an eight-month period for remediation work to dispose of lead and asbestos found in 18 abandoned buildings of a former naval base that once stood on the 13-acre site.

However, the work was delayed and even stalled at times for several reasons, including the 2017 hurricanes, the 2020 earthquakes and the COVID-19 pandemic, which shut down construction work for a period on the island.

For that demolition, RKA Studios LLC reportedly hired Toledo Engineering, which did most of the work, but according to several sources, has since sued St. Clair’s company to get paid. That case is still pending in court, and the plot now has piles of rubble and partially demolished structures on it, which the District Authority will have to take care of, the sources familiar added.

“They [SKA Studios LLC] were given multiple opportunities to comply, but the time came to decide that it was no longer viable. At stake was a 40-year contract with a company that was already showing signs of trouble,” Vallines said.

Had the pre-development agreement been fulfilled, the next step would have been to sign a 40-year lease agreement with the Convention District Authority for the construction and use of the prime public land in Miramar.

When the film district was publicly announced in July 2018, St. Clair — who has a list of other projects that he has announced but that have not gotten off the ground — said the “only film studio in Puerto Rico” would comprise five sound stages, administrative offices, conference rooms, post-production and editing rooms, fitting rooms, and a university.

He vowed that the first phase of construction would generate some 370 direct and indirect jobs.

Later that year, St. Clair said he was in talks with representatives from Netflix to come on as the anchor tenant of the lofty venture. At the time, he also said a new component, a 300-room hotel, had been added to the scope of the project at the request of the government. He also hinted at the possibility of adding a 1,000-seat theater to the complex to help draw permanent shows, much like Broadway in New York City.

The first components of the complex should have opened in late 2020 and the full project should have been completed in 2022, if St. Clair’s initial predictions had materialized.

However, the government said the developers never provided an actual blueprint for the project that would have complemented the revitalization of the Miramar district.

As part of the initial announcement, the government also confirmed St. Clair had been approved for a $500,000 tax credit through the Department of Economic Development and Commerce (DDEC, in Spanish).

“On March 27, 2019, RKA Studios LLC received a benefits and tax exemptions decree under Act 27-2014, as amended, for the RKA Studios Project,” said Rosi Acosta, director of the Puerto Rico Film Commission, which is under the DDEC.

“This project consists of the construction of infrastructure facilities to be used as filming studios, which qualified as an eligible project under Act 27-2011,” she said.

Although that decree was signed, the agency confirmed it is now “reviewing the obligations contained in the decree under [Act 27-2011] to assess the possibility of non-compliance with the conditions established,” she said.

“We understand that this concessionaire’s agreement to lease and develop the land located in the Puerto Rico Convention District, which would house the filming studios, was canceled,” she confirmed.

Attempts to reach St. Clair were unsuccessful.

At present, there are no plans for the plot of land that will no longer be dedicated to the film studios project, Vallines confirmed.

Author Details
Author Details
Business reporter with 29 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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