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Costa Serena: Green bucks

The new $223.5 million environmentally friendly Costa Serena project in Piñones near San Juan’s tourism sector will generate 4,282 jobs, $62.6 million in annual payroll, and generate $22.6 million in annual state & municipal taxes


April 18, 2002
Copyright © 2002 CARIBBEAN BUSINESS. All Rights Reserved.

A new paradigm of sustainable development: Costa Serena promises to bring much needed economic development to socially & environmentally sensitive Vacia Talega’s Piñones area by bringing the community & government to work hand in hand with the private sector

For the first time in more than 30 years, a group of residents of Vacia Talega’s Piñones sector in Loiza are supporting a project that would involve the private sector, the community, and government into bringing economic development opportunities to a community that has been largely untouched by progress.

Since the 1960’s, residents and environmentalists have been opposed to any type of development proposed for the 10,000-acre area, as it is considered one of the most pristine and environmentally sensitive regions on the island.

Costa Serena, the much talked about $223.5 million tourism project development proposed by developer Joel Katz and his company PFZ Properties Inc. for the Piñones sector, has changed all that.

The project

"Costa Serena is a tourism, socio-cultural, and environmentally sensitive project that will be developed in the area of Piñones following the strict guidelines and strategies set by the Land Use Plan for the Special Planning Area of Piñones," Katz told CARIBBEAN BUSINESS.

Approved by the Planning Board in 1995, the plan, (APEP by its Spanish acronym) is a strict and highly detailed blueprint that sets the parameters for the area’s limited development. It contemplates the establishment of tourism-residential projects on land classified as Selective Tourism Development (DTS by its Spanish acronym) by the Planning Board.

"This project will create a new paradigm of how to develop projects that are socially and environmentally sensitive," said Katz.

The property is located just a few minutes away from the Luis Muñoz Marin airport and the nearby Isla Verde tourist area.

The Costa Serena project will be located on 51 acres, part of a parcel of 1,270 acres owned by PFZ on Monte Grande sector, between kilometers 11 and 13 on the south side of PR-187. The 51 acres represent 4% of the total parcel owned by PFZ.

PFZ’s parcel has other pockets of land classified as DTS, but because these are in either a flood-prone area or contain mangroves, cannot be developed, Katz explained, adding that of the total 10,000 acres that make up Vacia Talega, some 400 acres have been identified and classified for development by the Planning Board.

"Costa Serena will consist of 646 suites, equivalent to 1,292 hotel rooms, aimed at the self-catering, family or group-oriented tourism interested in enjoying the natural and cultural attractions in the Piñones-Loiza area," explained Katz.

Contrary to the "all-inclusive" vacation concept in which everything is included—air transportation, room, food, drinks, daily & nightly activities, and tips within the hotel—the self-catering concept only provides the dwelling with a fully equipped kitchen. Persons bring & prepare their own food or dine out. Additionally, those staying plan their own itinerary of activities in or out of the hotel.

The self-catering concept is one of the fastest growing tourism markets in the U.S., Katz said, adding that the people interested in this type of tourism are looking for an experience with nature, the environment, and usually bring their family along.

"In Puerto Rico we don’t have a product to serve this type of tourism," said Katz. "With 12,000 hotel rooms, we don’t have the necessary room inventory to remain competitive with the rest of the Caribbean. Costa Serena is part of that solution."

If the Planning Board gives it a green light, Costa Serena could begin construction in early 2003 and the project’s fist phase could open by summer 2004.

"This type of project will stimulate the development of micro businesses dedicated to satisfy the interests and tastes of Costa Serena guests," said Katz. "The average stay of this type of family and group oriented tourism is six to nine days, and usually they’re repeat visitors."

Eating establishments, arts & crafts kiosks, car, bicycle, and non-motorized aquatic sports rentals are some of the businesses that could be set up by area residents, noted Katz.

The project will also include 64 residential units that, like the hotel, will be esthetically sensitive to the area’s environment and culture, Katz indicated. The project also plans for a 1,450 square meter tourism-commercial area plus 1,749 parking spaces underneath the proposed structures.

Placing the parking spaces ground level but underneath the structures will allow green areas to be less impacted. According to Katz, the project’s footprint will only impact 15.6% of the surface area while preserving the existing vegetation in the remaining 83.5%. That 15.6% of 51 acres is a mere 0.66% of the entire 1,270-acre parcel, noted Katz.

Economic impact

"Costa Serena will contribute to the economy of the Piñones-Loiza area, creating a pole of economic activity in a context of respect toward the existing communities and sensitivity to the cultural characteristics of the region," said Katz.

Area residents will have priority during the recruitment of personnel for the construction as well as for its operational phase as a hotel. This is to ensure the hotel remain a part of the surrounding community, Katz indicated.

The project’s impact on employment will be significant, since the Piñones-Loiza area is one of the island’s poorest regions, said Katz.

Data from the 2000 census indicates that the municipality of Loiza’s population was 32,537 with an average employment of 1,602. A significant 67% of the population lives below the poverty line. Unemployment rate is one of the region’s highest, averaging between 15% and 18%.

According to Katz, the development of Costa Serena will create 3,985 direct and indirect construction jobs during the six years it will take to be completed.

The rule of thumb in tourism is that one job is created per hotel room, and in Costa Serena’s case, the number of jobs created when fully operational will be over 4,000, Katz explained.

"During its first year of operations, the project will create 714 direct and indirect full-time jobs," said Katz. "When fully operational, it will create 4,282 direct and indirect jobs, with a total annual payroll of $62.6 million."

Construction of the project will generate $17.6 million a year in municipal and state taxes and $22.6 million a year when fully operational, Katz indicated.

The $223.5 million project investment will be completely financed with private funds and will be operated using the financial method of condo-hotel, which allows for the financing of operations through the sale of units.

Gov. Sila Calderon recently announced the construction of a vocational school in Loiza, which will provide hospitality-related courses among other things, helping area residents prepare for jobs the project would generate.

Infrastructure improvements

"Costa Serena will bring improvements to existing electric power, water, sewer services, and access roads in the Piñones sector," said Katz. "The infrastructure improvements will increase the region’s land values, thus benefiting area residents."

The electric power for the project will be supplied in its entirety by existing Puerto Rico Electric Power Authority (Prepa) power lines in the area. Under Prepa requirements, a 22,000 kilowatts amp (KWA) capacity sub station will be built, although it is estimated the project will only require 7,000 KWA when fully operational. The existing 13.2 KW feeder will supply the power demand for the project’s first phase, estimated to be 1,500 KWA.

Costa Serena has been evaluated and endorsed by Prepa, the Puerto Rico Aqueduct & Sewer Authority, and the Highway & Transportation Authority, said Katz.

Water consumption at the project when fully operational is estimated at 429,050 gallons per day.

PFZ will reduce water consumption by installing water storage tanks on roof structures, which will collect rainwater that will be used to irrigate green areas.

The developer will also build a water sewer system that will connect to the existing water treatment plant in Carolina, and its use will be available for the Piñones community, said Katz.

Road improvements

Field studies indicate that Costa Serena will not have a significant impact on the region’s traffic flow, Cedeño noted.

Cedeño said that based on the studies, the volume of vehicles using PR-187 will remain below its flow capacity when the project is completed.

The project’s design incorporates improvements to the area’s traffic signs and the addition of turning lanes.

The Department of Transportation & Public works will be implementing a $9.5 million, three-phase road improvement plan for the Piñones area, with the first phase beginning construction by yearend. These improvements are intended to improve the area’s traffic flow and reduce congestion.

The first phase involves improvements to the existing road from the intersection of PR-188 to the south detour intersection, at a $1 million investment.

The second phase, which includes the construction of a road section from the south detour up to Mediania Baja sector for approximately $4.8 million, will go to bids in March 2003.

The third phase involves the widening of PR-187 from Mediania Baja up to the Herrera River Bridge for approximately $3 million. This section will go to bids in August 2003.

Sustainable development

According to Katz, what makes this project different from previously rejected ones is the improvements made to the proposal, a result of all the environmental analysis and research as well as community interaction, that make Costa Serena a truly sustainable development.

"What does sustainable development entail? Community participation & involvement and the project’s environmental & economic viability. These are extremely important," said Katz. "We have been able to achieve that by integrating and empowering the community and making them a support to the area’s tourism development."

PFZ’s parcel—where the project will be located—has three residential lots of land that belong to area residents. Although these lots are within 10 to 20 meters of the project, they will be an integral part of Costa Serena and viceversa, Katz pointed out, adding that no residential or commercial property will be expropriated or displaced.

"Costa Serena will adopt the socio-cultural characteristics of the Piñones area and will enhance the sector’s cultural value in its installations," said Katz. "We will incorporate culinary elements of the sector, as well as area musical groups."

The project will include a visitor’s information center with maps, exhibits, and information on the area’s natural surroundings and attractions, as well as on places to eat, artisan’s centers, and art workshops. The center will be accessible to guests and the general public.

Project’s design

Architect Otto Reyes, responsible for projects such as the Puerto Rico Museum of Art, Labra School rehabilitation, Hacienda Gripiñas, and historical restoration of the Tapia Theater to name a few—and a recipient of numerous awards—designed Costa Serena with what he describes as an environmentally sensitive architecture that blends the project with the area’s natural and cultural surroundings.

"Costa Serena’s design is very tropical, with open spaces and tiered inclined zinc roofs with green tiles. Its visual view line will blend with the palm trees and mangroves in the region," said Reyes. "The use of wood & zinc, wide balconies and open spaces will guarantee the project’s integration to the particular socio-cultural surroundings of Piñones."

The project will have a linear development, with tropically designed structures of two, four, and six levels, located 100 meters from the beach and between 50 and 100 meters south of PR-187 to minimize its visibility from the road and the coast line. Additionally, a row of trees typical of the region—to be planted parallel to the southern section of the road—will serve as a light barrier to the coast, limiting the project’s visibility from the road, Reyes explained.

Environmentally sensitive

The project integrates the area’s vegetation as well as a reforestation program using the maximum number of plants and trees allowed for the region, said Reyes.

"Costa Serena will take advantage of the land’s existing topographical contours, which means soil movement will be minimal," said Reyes. "Paved areas will only be used for trails, recreational areas, internal traffic, and access roads as allowed by APEP."

Additionally, the project does not involve the extraction of sand, will not require the relocation of residents or businesses, nor will affect the public’s access to the beach or to Vacia Talega Point, and will leave archeological areas intact, noted environmental consultant & biologist Jose Cedeño.

"According to the Wetlands Delineation-Determination by the U.S. Army Corps of Engineers, Costa Serena will not affect wetland areas or mangroves," said Cedeño.

Nonetheless, the project will designate 371 acres as a mangroves preservation area, which will guarantee their preservation and of the wildlife available in the area for future generations.

Based on recommendations made by the Natural & Environmental Resources Department, Costa Serena will incorporate a permanent, 10-metter buffer zone between the mangroves area and the beginning of the project to protect these.

This strip of land will protect the mangroves from any possible impact during construction phase as well as during the operational phase of the facilities, explained Cedeño, adding that the buffer zone will be part of the land to be reforested with native species of trees found in the region. These will serve as a transition to the natural forest behind the project.

The project will not affect surface or underground bodies of water nor will it be built on flood prone land, Cedeño noted. Costa Serena will include a drainage and sewer system for water collection, as well as grease traps in parking facilities to avoid chemicals from reaching the mangroves area or the subsoil.

Following U.S. Fish and Wildlife Service recommendations, Costa Serena will implement measures that will control nighttime illumination to diminish the impact that these might have on potential sea turtle nesting sites located on the beach and outside the project’s perimeter.

Additionally, per PFZ’s initiative, a permanent surveillance center will be set in place at the disposal of the community as well as state & federal government agencies for the effective conservation and management of the area’s natural resources.

Group of residents supports project

A group of leaders, residents, community & business organizations from the Piñones-Loiza sector recently formed the Alliance of Loiza Leaders for the Sustainable Development of Loiza-Piñones with the purpose to bring equality and development to their communities, as well as express their support for Costa Serena.

Former Loiza Mayor Gabriel Santos, Mayor Ferdin Carrasquillo and environmentalist & community leader Rafin Ortiz also support the project.

"The Alliance favors the environmental conservation in Loiza-Piñones. For many years, its members have been opposed to numerous projects for their magnitude and because these would displace residents and harm our environment," said Alliance spokeswoman Maria Escalera, also president of the Corporation for the Well Being of Monte Grande Sector. "The Alliance supports the proposal for Costa Serena, because it offers community participation and an opportunity for us to work hand in hand with the private sector and the government in bringing economic development to the area."

Escalera makes it clear the Alliance has not backed down from the community’s strong environmental stance, but in a way, that environmental stance has been a double-edged sword.

"We have seen development and progress pass us by," said Alliance member and Piñones resident & business owner Miguelina Paulino. "We wonder how much longer will we have to remain stuck economically, socially, and educationally."

Piñones’ Monte Grande sector resident & business owner Chago Quiñones believes the timing is right for Costa Serena.

"The Piñones-Loiza area has been affected by economic and social isolation for too long," said Quiñones. "Costa Serena allows for community participation, is sensitive to our natural resources, and complies with current regulations."

Escalera considers the project a victory for the community, as it has evolved, adopting the demands and needs of area residents, she said.

"In that sense we have won. The alternative we have in front of us provides us a real, viable, and concrete opportunity to spur development while protecting our natural resources and integrating the community," said Escalera. "The Alliance supports Costa Serena because it will promote development with conservation, with respect for our natural resources while meeting with current regulations. Additionally, it will improve infrastructure, something the community needs urgently."

Escalera pointed out that the Alliance’s endorsement is not a blank check. Costa Serena and Katz must continue the dialogue they initiated with the community several months ago.

"They must continue to demonstrate that Costa Serena will belong to Loiza-Piñones and will tend to our concerns, incorporate our demands, and make our aspirations a reality," said Escalera.

On the same token, Escalera made it clear that the Alliance’s endorsement of Costa Serena does not mean they will endorse all the other projects proposed for the area that might be under consideration by the different government entities.

"Anyone that intends to develop a project in Piñones must respect the environment and listen to the community’s call," said Escalera.

The land in Piñones where the Costa Serena tourism project is proposed to be built—owned by PFZ Properties Inc. since 1960—is classified as Selective Tourism Development by the Planning Board’s Land use Plan for the Special Planning Area of Piñones (APEP by its Spanish acronym).

According to Developer Joel Katz, the project complies 100%—and in some cases exceeds—APEP’s strict guidelines:

  • 87% of the project will be destined for tourism use. APEP requires a minimum of 80%
  • The project’s maximum population density per acre will be 11.6. APEP allows a maximum of 12
  • 83.5% of the project’s acreage will be free from structures and any kind of construction. APEP requires a minimum of 50%
  • The project’s structures will occupy less than 1% (0.66%) of the total parcel of land
Costa Serena’s permits process dateline

November 13, 1997 – Original site consultation is submitted to the Planning Board

November 29, 2000 – Planning Board holds public hearing on project’s site consultation

February 13, 2002 – First Environmental Quality Board public hearing held

February 21, 2002 – Second Environmental Quality Board public hearing held

March 28, 2002 – Last day to submit comments to the Environmental Quality Board in regards to the project’s preliminary environmental impact statement

Next 60 to 90 days – Environmental Quality Board (EQB) examiner must present report on whether the project complies or not with current environmental regulations and may provide suggestions for compliance.

EQB does not reject or approve a project; it merely issues a statement as to whether the project complies with current environmental regulations or not.

If EQB issues a compliance statement for Costa Serena, then the project goes to the Planning Board for its approval. Planning Board should have a definite decision on the project’s fate before year’s end.

If the Planning Board gives the green light, construction of Costa Serena could begin in early 2003. The project’s first phase could open by summer 2004.


This Caribbean Business article appears courtesy of Casiano Communications.
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