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Person Of The Year: Public Sector
Hector ONeill, Mayor of Guaynabo
BY JOSE L. CARMONA
December 20, 2001
Mayor business: Driven by a private sector entrepreneurial spirit, successful third-term Mayor Hector ONeill taps private businesses to help him accomplish his long-range vision to remake Guaynabo into a world-class city
Since Hector ONeill became mayor of Guaynabo in 1993, he has been reshaping the physical and economic landscape of one of Puerto Ricos most prosperous and fiscally sound municipalities.
During fiscal years (FY) 1993 to 2002under ONeills leadershipGuaynabos 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, ONeill has invested millions to improve the quality of life for Guaynabo residents.
Whats 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 ONeill makes sure that surplus is reinvested into the community, with better services and facilities. Services provided by the city get consistently high ratings.
ONeill takes pride in the fact that no central government money is used for any of Guaynabos infrastructure projects.
For the past three years in a row, Guaynabo has been recognized by the Comptrollers Office for meeting 100% of its established requirements for good use of public funds.
Now in his third term as mayor, ONeill 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 Guaynabos downtown as older sections of the city are restored and integrated within the new project.
Most importantly, ONeill is using the most tried and true strategies and skills of private-sector entrepreneurship to make these ambitious projects a reality.
ONeills 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," ONeill 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 citys 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 Malls 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, well help repopulate Guaynabos downtown area," said ONeill. "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 projects cost to buyers, ONeill explained.
ONeill 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 citys property values.
Loyal to the citys slogan as the islands 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 Guaynabos 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 citys 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 roadsan $11 million investmentall 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 citys 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 structureThird Millennium Gatewaythat 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 childrens 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 possibleand ONeill such a successful and respected mayoris 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, ONeill 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 ONeill. "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, ONeill 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 ONeill. "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, ONeill used the estimated revenue the new commercial and office space will generatein addition to the value of municipal propertyas a guarantee.
According to ONeill, 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," ONeill 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]."
ONeill said that a mayor can get financing for a project without affecting a citys borrowing limit.
A mayor, said ONeill, 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.
ONeill knows that the citys needs for services and facilitiesand the maintenance and upkeep costs for thesewill continue to grow over time. Proof of that is how the citys 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 ONeill. "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 cityespecially those relating to the sale of jewelry, handcrafts, and textilesGuaynabo 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 ONeills plans for Guaynabo dont 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 Forrestbordering Guaynabo Riverfor 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 childrens museum is to bring more people to the citys downtown," said ONeill.
ONeillwho has no plans to step down as mayorhopes 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.