Ready to Finance Puerto Rico's Next Great Economic Construction Boom.

Last week, The Puerto Rico Builders Association held its 70th?year anniversary and conference in San Juan Puerto Rico. The historic event was inaugurated with a conversation on?Financing the Next Great Economic Construction Boom.??The panel included?Michael McDonald, Executive Vice President and Group Director at Firstbank,?Luis Alema?y?President and CEO at the Economic Development Bank of Puerto Rico, and?Eric Delgado?Business Banking Relationship Manager at Acrecent Financial Corporation and moderated by Adam Greenfader, Managing Partner at AG&T. ?

It was clear from the conference, that after more than fifteen years of stagnate growth, Puerto Rico is ready to build back better. Billions of dollars of FEMA and CDBG-DR funds are being allocated in what will be the largest government funding program in US history.??While much of the Federal funds will be used to subsidize projects, the group was in agreement that there is a huge need for private investment and capital to bridge the financing gap.??

Michael McDonald, Executive Vice President and Group Director at Firstbank, made the historic announcement that the bank is opening up its construction division. Several members from the newly formed team were present in the packed room including Carlos Navarro and Mei Li Tsai Rivera. “There is no better indicator of an economy that is ready to grow that when a bank reopens its construction division”, quoted?Alfredo Martínez-álvarez, Jr.,?Chairman of the Puerto Rico Builders Association.

Equally promising,?Luis Alema?y?President and CEO at the Economic Development Bank of Puerto Rico, was asked about the much awaited CDBG-DR funding. Mr. Alema?y explained that?the?Economic Development Bank of Puerto Rico has already started allocating over $225 Million dollars to small entrepreneurs. The group was especially receptive to the fact that the grants are being disbursed in $50,000 tranches and does not require repayment.??

Since 2008, Puerto Rico has gone from twelve financial institutions to less than four.?Eric Delgado?Business Banking Relationship Manager at Acrecent Financial Corporation, sees a new role for niche lenders filling that gap in Puerto Rico.??He specifically discussed how Acrecent can play a role in funding new construction projects. “We are able to get to funding much faster than traditional banks and also have the capacity for higher loan to cost ratios.??Both Firstbank and Acrecent mentioned that capital is seeking anywhere from 25%-35% of project equity.?

“As Puerto Rico gets ready to build thousands of much needed homes, critical infrastructure and other key projects, it will be up to both private and public institutions to step up and provide the much needed capital and leadership”, quoted Adam Greenfader of AG&T.??All of the panelist were in agreement that the island is ready for strong growth. They specifically mentioned that in addition to the more than 8 billion dollars of Federal Grants, Puerto Rico has one of the most robust tax incentives and credit programs in the world. The hospitality incentive with a 40% tax credit was specifically highlighted as a very strong component of any capital stack today.??

Helping to plan a better future for the island, The Puerto Rico Builders Association in collaboration with the Urban Land Institute (SE Florida/Caribbean) are organizing a Puerto Rico Symposium in Miami.??The Puerto Rico Symposium will be held on March 15, 2022 at the Conrad Hotel in Brickell. The event will bring together the best and brightest in finance, development, and planning to discuss the island’s long term economic growth.???ULI’s current president,?Scott MacLaren was recently quoted, “we strongly value our long standing partnership with The Puerto Rico Builders Association and admire the leaders who go above and beyond, especially when faced with such tremendous obstacles.”

Speaking and sponsorship opportunities are available and you may contact Adam Greenfader at [email protected] For more information see link below.?

https://seflorida.uli.org/uli-southeast-florida-caribbean-upcoming-events/detail/62ED214E-88BC-474F-B95D-A57E0CDBDF40/