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Municipality of San Juan signs 30-yr. lease with Normandie Hotel owners

San Juan Mayor Miguel Romero confirmed the municipality will sign a 30-year lease agreement with Normandie Oz, LLC, the private firm that is proposing an investment of more than $100 million to redevelop the historic Normandie Hotel and adjacent areas in the Sixto Escobar park.

The agreement comes nearly 14 years after the iconic property that sits at the entrance of the Old San Juan islet was shut down and following two failed attempts — in 2014 and 2018 — to formalize memorandum of understanding (MOU) agreements between private developers and the municipal government to rehabilitate it.

In late 2019, the current property owners approached the municipality seeking a new MOU, which was ultimately signed in November 2021. Among other things, the document lifted the “public nuisance” designation the municipality had assigned to the property, which held back any renovation and restoration work of the hotel and the adjacent properties, Romero said.

“We cannot be an impediment to rescue the value of that historic structure, which is the Normandie. For that reason, the contract we’ll be signing today will allow the process of evaluation, permitting and financing to move forward,” Romero said during a news conference Monday.

The lease agreement with the private developer, which is represented by the Ishay Group, covers the hotel, and allows the company to build and improve upon the adjacent Sixto Escobar park, without affecting the historic elements of that public property, or blocking access to the beach — two points of contention brought up by project opponents. Those areas will remain in the hands of the Municipality of San Juan, Romero said.

“The project must comply with all applicable state, federal and municipal permits, this includes all permits related to demarcation authorizations, environmental compliance and everything that regulates the historical heritage built in Puerto Rico,” Romero said, referring to the Normandie Hotel’s designation by the U.S. National Park Service in the National Register of Historic Places.

During the news conference, Eddie Ishay, of the Ishay Group, said the investment includes another $25 million to $30 million to build a parking lot that will not impact the maritime-terrestrial zone, and the improvement of existing sports facilities — the track and field facilities as well as the soccer field that will be rebuilt on top of the parking lot. He said some 300 jobs will be created during the construction phase.

Ishay acknowledged that those elements of the project received initial pushback from the community, but that since 2019, the Ishay Group has been meeting with representatives from organizations such as Amigos del Mar, Sea Grant, and Scuba Dogs Society, which will temporarily move its operation at the park while construction is going on.

The historic façade of the Sixto Escobar Stadium will not be impacted in any way, as it was also declared a National Historic Monument in 2014. The structures that are in poor condition and that currently represent a danger to the safety of athletes and users of the park will be removed, such as the stands on the north side of the stadium. This part of the facilities does not belong to the historical structure.

The Municipality of San Juan will receive about $460,000 annually from leasing the parking and the event pavilion at the park. That facility will pass to the municipality once the contract ends, Romero said.

Normandie to be rehabilitated
Several structural studies of the hotel commissioned to Marvel Architects — in charge of the redevelopment project — concluded that the “structure is salvageable,” said Edna Echandi, partner at the firm.

“The steel and concrete elements and the load-bearing elements of the building from the basement level to level five are salvageable. The structural elements of the sixth and seventh floors must be demolished,” she said. “The structure is so affected that it’s going to be demolished and will be rebuilt, and two additional levels are going to be added.”

“One thing that makes this building so expensive is that you need to bring it to today’s building codes. And one thing I want to point out is that it’s one thing to build this building, and it’s one thing to survive so it doesn’t fail again,” Ishay said.

“When we deliver this building, we need to make sure that we fix all the issues that it’s had previously. Not having enough parking and direct beach access, for example,” he said.

Ishay said the company has not received any federal tax credits for the project, but that it is in late stages of talks with the National Parks Service because as a historical building, the Normandie is eligible for historical tax credits.

“From a federal perspective, we’re doing whatever we can to apply for economic development grants, grants that every other development project that’s on the island are applying for. So, we’re not looking for any special treatment on this,” Ishay said. “There are no municipal dollars being contributed either.”

Author Details
Author Details
Business reporter with 30 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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