PRIDCO expects to reap benefits of ‘strategic transformation’ in ’22
After wrapping up what he called a “complex year” during which many projects were kicked-off and made possible using Puerto Rico Industrial Development Company (PRIDCO) properties, agency Executive Director Javier Bayón said 2022 brings a loaded agenda in favor of Puerto Rico’s economic development.
PRIDCO officials spent the better part of 2021 reshaping the agency’s internal proceedings and setting off several strategies that he said will be executed in 2022.
In an interview with News is my Business, Bayón said the first initiatives on deck for this year is completing the agency’s digitalization, including its Real Estate Catalog — to make it easier to navigate and complete the leasing process — and finishing the revision of the agency’s extensive regulations.
“Those are things that we will see this year. We’re looking to eliminate bureaucracy and continue moving forward with expansion plans, new business development, and achieving greater presence across Puerto Rico and outside the island,” he said.
Part of the work already completed entailed acting jointly with the Financial Oversight and Management Board for Puerto Rico, the Fiscal Agency and Financial Advisory Authority (AAFAF, in Spanish), government agencies, mayors and manufacturing sector representatives.
“That was required to move ahead with the feasibility studies required by the Fiscal Plan. This includes, among other things, the inspection of more than 200 buildings, to quantify the capital improvements necessary for PRIDCO’s portfolio of properties, to optimize and rent them,” he said.
So far, Federal Emergency Management Agency (FEMA) has allocated $210 million to repair damages to the agency’s infrastructure caused by the 2017 hurricanes and the 2019 earthquakes. The repairs will address current structural issues and future industry needs, Bayón said.
The final figure of how much is needed to complete the capital improvements should be revealed this month, when the Oversight Board is expected to get a report from Ernst & Young providing that estimate, he said.
Currently, PRIDCO has an inventory of properties that includes industrial warehouses and lots of land in 77 of Puerto Rico’s 78 municipalities. There are 1,122 occupied properties providing tenants with nearly 16 million square feet of space, 120 reserved and under negotiation for rent, 106 vacant with 1.7 million square feet available, and another 161 facilities that have environmental problems and could be demolished.
“We’ve reached interagency agreements with the corresponding municipalities and with Invest Puerto Rico to maintain the industrial parks in optimal conditions, meet the needs of manufacturers, and marketing vacant properties to future entrepreneurs,” Bayón said.
The agency is “focused on promoting the expansion of current industries and the development of new strategic industries that contribute to the Puerto Rican economy of the future,” he said, mentioning as examples the creation of more solar technology developers and cannabis operations.
Past-due debt reaches $35.5M
Meanwhile, the agency’s Real Estate division — which has 15 employees and additional engineers on call — is working on moving ahead with renewing expired contracts, reducing the number of month-to-month renewals, and speeding up the reservation and leasing of properties, he said.
“Some 35 contracts were already renewed as part of that effort,” he said.
Another aspect that the agency is tackling is collecting on past-due debt, which as of November 2021 stood at $35.5 million, including current debt, legal cases, and payment plans.
“Debt with active repayment plans amounts to $3.8 million, reflecting our commitment to helping businesses to make their accounts current,” he said.
Bayón also confirmed that as of October 2021, PRIDCO had granted tax credits to 33 companies, totaling $108.2 million. The figure breaks down to $72.1 million in expenses claimed and a little more than $36 million in credits claimed, News is my Business confirmed.
“This year we have 33 companies that have been granted tax credits for innovation and development, with the goal of increasing investment in scientific and technological innovations that advance Puerto Rico’s capacity to develop processes, products and/or services of high commercial value for the global market,” he said.
PRIDCO is also focusing on promoting the Foreign Free Trade Zone Program, which he said when coupled with the island’s tax benefits, could draw new and existing tenants. Bayón said several companies based in the Dominican Republic are considering establishing operations in Puerto Rico’s Free Trade Zones, as the ones in their country are 100% occupied.