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Person Of The Year: Public Sector

Hector O’Neill, Mayor of Guaynabo


December 20, 2001
Copyright © 2001 CARIBBEAN BUSINESS. All Rights Reserved.

Mayor business: Driven by a private sector entrepreneurial spirit, successful third-term Mayor Hector O’Neill taps private businesses to help him accomplish his long-range vision to remake Guaynabo into a world-class city

Since Hector O’Neill became mayor of Guaynabo in 1993, he has been reshaping the physical and economic landscape of one of Puerto Rico’s most prosperous and fiscally sound municipalities.

During fiscal years (FY) 1993 to 2002–under O’Neill’s leadership–Guaynabo’s consolidated budget increased 257%, property tax revenue is estimated to go up 197%, and revenue from municipal business tax licenses is projected to jump 311.8%. At the same time, O’Neill has invested millions to improve the quality of life for Guaynabo residents.

What’s more, at the closing of each fiscal year (FY) since 1993, the city has ended with a budget surplus, which in FY 2001 amounted to $5.1 million and $38.7 million in public works. Guaynabo is one of a handful of municipalities that is investing significantly in infrastructure projects without incurring debt.

And O’Neill makes sure that surplus is reinvested into the community, with better services and facilities. Services provided by the city get consistently high ratings.

O’Neill takes pride in the fact that no central government money is used for any of Guaynabo’s infrastructure projects.

For the past three years in a row, Guaynabo has been recognized by the Comptroller’s Office for meeting 100% of its established requirements for good use of public funds.

Now in his third term as mayor, O’Neill has quite a bit of public works projects in progress. Construction has begun on the first phase of the $115.5 million master-planned, multi-project development called the Performing Arts District, which will transform Guaynabo’s downtown as older sections of the city are restored and integrated within the new project.

Most importantly, O’Neill is using the most tried and true strategies and skills of private-sector entrepreneurship to make these ambitious projects a reality.

O’Neill’s current and past achievements have earned him the distinction of being voted CARIBBEAN BUSINESS Public Sector Person of the Year for 2001.

"Since becoming mayor, I have refused to be the kind that just picks up the garbage and paves the streets," O’Neill told CARIBBEAN BUSINESS. "A mayor is the elected official closest to the people, therefore has a great responsibility."

And that responsibility entails improving the quality of life of every single resident of the municipality.

In 2001, the city’s Public Works Department laid 4,000 linear feet of water lines, 3,000 linear feet of security fence, and poured 800 metric yards of concrete for sidewalk and curb construction around the city.

The city also obtained financing for the construction of Guaynabo Medical Mall’s Ambulatory Surgery Room for $2.6 million, and will soon begin construction of Balcones de San Pedro, a 100-unit housing complex for municipal employees that make too much money to qualify for social interest housing but not enough to buy a home in the average private sector housing developments.

"With Balcones de San Pedro, we’ll help repopulate Guaynabo’s downtown area," said O’Neill. "The project will be developed by the private sector. The city just provides the land."

Once the project is completed and sold, the developer will pay the city the price for the land at market value, thus avoiding any speculation that could inflate the project’s cost to buyers, O’Neill explained.

O’Neill has also provided safer cement homes to low-income households, eliminating slums and relocating residents to other areas. This precludes the city from having to continuously invest in rebuilding unsafe, wooden structures, while the new homes increase the city’s property values.

Loyal to the city’s slogan as the island’s sports capital, Guaynabo City remodeled, built, and/or expanded several recreational facilities such as Alturas de Torrimar, Rafy Muñiz, Los Filtros, and Estancias de Torrimar among others. Guaynabo has 19 baseball parks, 14 multiple-use covered courts, 36 tennis courts, seven jogging tracks, 85 multiple-use open air courts, and 40 recreational parks.

A $16 million restoration work of downtown Guaynabo’s main streets was completed this year, which included laying underground utility cables, installing new light fixtures, improving roads and sidewalks, painting structures, and placing the now-famous street signs in English.

Performing Arts District

Construction of the city’s new $17.7 million, nine-story government center building began this year, along with a five story, 350-vehicle parking structure, two town squares, and access roads–an $11 million investment–all part of phase one of the ambitious Performing Arts District master- planned project. This first phase is expected to be completed in early 2002.

Now in the design stage, the $70 million second phase of the project will include a state-of-the-art, 3,000-seat Performing Arts Auditorium to be built next to the city’s Performing Arts Center; a Performing Arts School with two theaters; three buildings with commercial and office space; an additional seven story, 796-vehicle parking structure; a new building to house municipal offices, an electronic library, and a rotating restaurant on top; and a 200-foot, inverted u-shape structure–Third Millennium Gateway–that will house a two-story restaurant.

Construction of the second phase of the Performing Arts District is scheduled to begin in two years, and should be completed in early 2006.

Art will be the unifying theme of the Performing Arts District project. A series of 10 new town squares will be built around the new structures, each featuring a sculpture from a renowned local artist. The old city hall will be converted into a children’s museum, and the main building of the Ramon Baldorioty de Castro public school will be restored and converted into an art museum as well.

Private Sector Mindset

What makes all these projects possible–and O’Neill such a successful and respected mayor–is his private entrepreneurship approach as a facilitator.

From the direct way he deals with banks and businesses to develop projects, the way he finances them, or by the tax incentives Guaynabo provides to attract business into the city, O’Neill runs city hall like a business.

"The reason we are building 270,000 square feet of new office and commercial space is because we are looking for more commercial activity," said O’Neill. "By leasing [space in] these, we will save the city $38,000 a month."

These commercial and office spaces are to be built in partnership with the private sector, O’Neill said, adding that these will pass to city hands in 25 years.

"We provide the land, the private sector builds it [the structures], and we make money from the rent. In 25 years the ownership of the structures is transferred to the city," said O’Neill. "That way, the city will recover part of the cost."

Financing of the entire Performing Arts District Project is through government Afica bonds.

To obtain the financing for all these projects, O’Neill used the estimated revenue the new commercial and office space will generate–in addition to the value of municipal property–as a guarantee.

According to O’Neill, the city is investing more than it is borrowing.

"Guaynabo is currently the only municipality in Puerto Rico that is classified in the bond market," O’Neill said proudly. "Only two municipalities have ever been classified. The other one was San Juan, but lost its classification due to unhealthy finances by a past administration [Hector Luis Acevedo]."

O’Neill said that a mayor can get financing for a project without affecting a city’s borrowing limit.

A mayor, said O’Neill, must always think ahead, working now to anticipate future problems. At the same time, one must know how residents feel and involve them in the process to build confidence.

O’Neill knows that the city’s needs for services and facilities–and the maintenance and upkeep costs for these–will continue to grow over time. Proof of that is how the city’s consolidated budget has grown from $38.4 million in FY 1993 to $102.6 million in FY 2002.

"As the population grows, so do operational costs and needs," said O’Neill. "Maintenance of recreational areas, as well as services to the community increase with time. A mayor must find ways to avoid having more expenses than revenue."

To attract more businesses to the city–especially those relating to the sale of jewelry, handcrafts, and textiles–Guaynabo is offering these a total tax exemption. And to spur the construction of distribution warehouses, the city is providing companies a 40% tax exemption. Already Amigo and Bacardi decided to take advantage of this offer, while two other big companies are in negotiations with the city.

But O’Neill’s plans for Guaynabo don’t stop with the Performing Arts District project.

In the works is a $32 million housing, commercial, and farmers market complex called Portal de Guaynabo (Guaynabo Gateway), which will begin construction in February and should be completed in two years.

Additionally, the city has purchased 580 acres at La Marquesa Forrest–bordering Guaynabo River–for future ecotourism development.

Across from the old city hall, a $1.5 million two-story restaurant will be built, its completion slated for 2003. The restaurant facility will be available for rent, to be run by the private sector.

Located in front of the restaurant and next to the old city hall will be an open-air amphitheater (concha acustica).

"The idea behind building the restaurant, amphitheater, and turning the old city hall into a children’s museum is to bring more people to the city’s downtown," said O’Neill.

O’Neill–who has no plans to step down as mayor–hopes projects forming the Performing Arts District and others in the pipeline will act as economic stimulus to the city, which in turn will have an international impact, as these projects would help place Guaynabo as a world-class city.

This Caribbean Business article appears courtesy of Casiano Communications.
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