Puerto Rico gov’t evaluating Opportunity Zone applications representing $915M in investments
The Opportunity Zones program in Puerto Rico is gaining momentum as the Department of Economic Development and Commerce (DDEC, in Spanish) evaluates several dozen applications from both local and foreign investors aiming to develop projects across the island. Carlos Fontán, director of the Business Incentives Office at the DDEC, shared this update in an interview with News is my Business.
“Things are moving along in the Opportunity Zone program,” he said. “We have about 55 applications, but the good news is that about 10 months ago, I had said that we had approved about seven decrees, and we were going to approve about 10 in the upcoming days. To this day, we have approved 20 decrees.”
Fontán noted that the number of approved decrees has doubled compared to last year, thanks to increased human resources in the Business Incentives Office.
“We have approved 20 decrees, thanks to the new resources we have in the office,” Fontán said. “And in those 20 decrees, the total projected jobs is 2,887. But what is most relevant is the investment, which is $915 million.”
He explained that “what really counts” about the OZones program is the amount of money being invested in projects.
“Right now, I may have awarded 1,000 decrees in another incentives program, but it will never reach an investment that is close to $1 billion,” he added. “The average investment in Ozones applications is about $50 million. OZones are real estate property developments for sale or rent, and we have developments of urbanizations, apartments, businesses.”
Fontán said there are “projects in the San Juan metropolitan area, but I also have projects in Bayamón, San Juan and in Guaynabo. In San Juan, there is the one everyone knows about, Campus Popular. You can see it when you drive by it.”
Campus Popular, a Banco Popular commercial project, is under construction in Hato Rey’s Milla de Oro, or Golden Mile, sector.
Other approved projects include Metro Paseo in San Juan and Parque del Lago in Cidra, both of which are housing developments.
Fontán noted that there are developments in Cidra, Hatillo, Humacao, Río Grande, Gurabo and Caguas, with the vast majority being low-income housing, “which is a good thing in the sense that there is talk about a lack of housing projects.”
“The Opportunity Zones program has been a stimulus for developers to develop housing projects in Puerto Rico,” he said.
Fontán highlighted that 90% of Opportunity Zone applications are currently being evaluated.
“I have more attorneys in the office, and we have approved 10 cases. About a year ago, I said we had approved 10 cases in three years, and [now] in 10 months, we have approved just about that same amount,” he added. “Things are moving much faster because we have more hands on deck working on these cases. Thanks to the DDEC secretary who has worked to get a bigger labor force at the DDEC and the Financial Oversight and Management Board, who has listened and understood the need to hire more staff at the DDEC. In 2021, I started with six lawyers, and now we have 25 lawyers. I divide them into different projects; some work on OZones, others on acts 20 and 22 and so on.”
Acts 20 and 22 provided tax incentives for businesses and investors, and were consolidated under Act 60, the Puerto Rico Incentives Code, in 2019.
