Less than five months after seeking bankruptcy protection, Marina Puerto del Rey in Fajardo has a new owner with big plans on the horizon for its newest Puerto Rico property.
Late last month, Putnam Bridge Funding LLC, a hedge fund based in Greenwich, CT, agreed to pay $47.5 million for the property through an agreement signed off by the U.S. Bankruptcy Court that has cleared the way for “substantial investments in the marina,” Nicholas Prouty, partner of the hedge fund, told this media outlet in an exclusive interview.
While Prouty refrained from specifying how much will be pumped into the marina to operate it as a “first-class facility,” sources have told News is my Business that the amount will be in the neighborhood of $200 million.
“The marina has world-class assets, with [more than] 90 acres, with piers and docks constructed of steel and concrete. These assets will be enhanced and brought to an extremely high level to accommodate large yachts as well as the day boater,” Prouty said.
Putnam Bridge Funding officially took over the property on June 1, upon which it began to evaluate the condition of the operation. Initially, the marina is undergoing immediate upgrades to all of its public facilities such as restaurants, bathrooms and Wi-Fi access. As part of the improvements, the company is expecting to create some 200 jobs.
“When we’re finished, this marina will be among the world’s best,” Prouty said, noting that the company should have a strategic plan in place in the next 120 days, after which it will go public with it. “All I can tell you is be prepared to be amazed.”
Through the court-endorsed plan signed in late May, Putnam Bridge Funding picked up a total of 34 properties that compose the sprawling marina — including commercial buildings, undeveloped land, and residential apartments in Plaza del Puerto Condominium II. The amount paid covered outstanding debts pending with major creditors, headed by FirstBank, which at the time of the January filing was owed $43 million.
With a capacity of 1,100 boats, Puerto del Rey has been in operation since 1988. It operates year-round, offering 700 slips on concrete fixed piers and 450 covered dry racks for smaller boats three-high, with extra spaces along piers and at anchor for transient boats. Boats anchored at the marina range in size from 30 feet up to 150-foot yachts.
But despite its impressive specs, Marina Puerto del Rey has been navigating through some choppy waters since the recession hit in 2006, when relatives of original developer Daniel Shelley operated it.The Puerto del Rey complex includes retail operations that are likely to benefit from the improvements.
Now, its new owners are steering the course toward returning the facility to its former glory and position it to compete head-on with similar operations in the Caribbean.
“The marina, like many other businesses, was affected by the recession and by the lack of capital. However, the marina has all the essential assets to be a world-class operation,” Prouty said.
“Putnam is committed to making the necessary capital improvements and offer first-rate services without increasing rates. The marina is clearly the dominant facility in the Caribbean, and once Putnam’s plan has been executed, it will stand among the best marinas in the world,” the executive noted.
Aside from sprucing up the boating complex, Putnam is also evaluating various development opportunities for the surrounding land that it picked up as part of the deal. Those plans are still under review, he said.
‘Believer in investing in P.R.’
The acquisition of Marina Puerto del Rey is the second major transaction for Putnam Bridge Funding in Puerto Rico recently. Last year, the company picked up the Ciudadela upscale apartment complex in Santurce and already has major plans for the property, including adding a second tower.
“Putnam is a big believer in investing in Puerto Rico,” Prouty said. “The government has established a business friendly environment, the labor force is skilled and hard working, and Puerto Rico is perfectly situated as the gateway to the Caribbean.”
Putnam Bridge is “very selective in its investments and balances the cost of the acquisition and long-term future returns,” he said.
“Putnam is not afraid to take a long term view toward its investments in Puerto Rico,” despite the economic hardships the island has been weathering in the last seven years.