P3 Authority considering unsolicited bid to develop mega yacht marina, dry dock
The Puerto Rico Public-Private Partnership Authority is conducting a preliminary evaluation of an unsolicited proposal submitted by an undisclosed firm to develop a mega yacht marina and dry dock in San Juan, this media outlet confirmed.
The facility would be located in the zone where Piers 15 and 16 are, Puerto Rico Ports Authority Executive Director Anthony Maceira said.
Although the scope of the proposed project has not been determined, Maceira said a small, “very practical” dry dock facility would require a minimum $10 million investment — a figure that could multiply by several “dozen million” if it were developed at a larger scale.
“Because it’s an unsolicited proposal, the P3 Authority has to conduct the first evaluation to see if it accepts it or not,” Maceira said.
“It was presented a few weeks ago and there is a 30-day evaluation period, that could be extended for another 30 days,” he said, adding comments have been made and a response could be ready by September.
This is the government’s latest bid to build a facility to cater to the luxury vessel market — owners of yachts that are 100 feet in length and larger. In 2015, the Ports Authority opened a Request for Proposals period for leasing, development, financing, construction and operation of a marina for mega yachts and to transform the San Juan dry dock into a “leading center for repair and maintenance of vessels,” as this media outlet reported.
Maceira confirmed that following the RFP, Ports selected a company for the project — Edgewater Resources — with which it signed a Memorandum of Understanding in June 2016 to begin negotiating contract conditions.
After talks, the company that ultimately entered into the agreement with the government was a subsidiary of the original firm, Edgewater Port Caribe, organized as a foreign limited-liability company.
In September 2016, Ports signed the development and lease agreement with the subsidiary, which required making a series of infrastructure improvements to the dry dock located at Piers 15 and 16 in the San Juan bay. The private firm had 18 months to develop the facility before starting operations. During that time, the firm did not have to make lease payments as per the contract, Maceira explained.
“Corporate changes occurred after that and there were amendments made to the development and lease agreement that were never submitted to the Comptroller’s Office, as required, making it ‘ultra vires’ and invalid,” Maceira said. “Then there was another controversy, when in December 2016, the company converted the operation from foreign to domestic.”
Edgewater Port Caribe, as a domestic firm, ceded the contract to yet another firm, Edgewater Port Caribe Yacht Services, in January 2017. In that transition, the original company went from four partners to two, who remained part of the new firm. Although the two partners left were in the initial proposal, they never got authorization from the Ports Authority to take over the project.
“They claim that they began doing some work, but they failed on certain deliverables — they did not make the investment in the dry dock, or in a new housing project that was slated for Pier 10,” Maceira explained. “In June 2017, Ports notified the company it was in default and the ground lease agreement was terminated.”
“Informally, some of the partners tried to resume the contract, but that ended in nothing,” he said.
Now, the agency has several options to find a developer for the project. The first is through a P3 agreement, to work with the unsolicited bid — which Maceira said did not come from the same company that participated in the first RFP.
The other option is to open the call for a new RFP and work directly with the selected developer.
“The advantage of an RFP is that it’s a simpler process and since there are elements that were worked on already, we don’t have to reinvent the wheel,” said Maceira, who now has to wait for the P3 Authority’s final say on the proposal presented.
The Caribbean region lacks a maritime-industrial center that provides necessary services to mega yachts. This presents an opportunity for this type of operation and creates a new market that will benefit Puerto Rico’s commercial and economic sectors.
“Part of what we want to determine is whether the mega-yacht marina development will be a single project, or split into two: one to cater to the market that would come to San Juan to repair their vessels and the other, a luxury yacht port,” he said.
The San Juan marina has already hosted a number of the world’s most luxurious mega-yachts, including the: “A” (Alexandria) and the “Alfa Nero,” which would anchor for weeks at a time to repair and replenish the vessels.