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Local Mall Execs Flaunt Islands Competitive Advantages
Puerto Rico shines at ICSC in Las Vegas, but permits are problematic
BY TAINA ROSA
May 30, 2002
Despite the ups & downs in the economy, local mall executives are still selling the island as a retail paradise, citing the advantages of doing business here to prospective tenants at the International Council of Shopping Centers (ICSC) convention in Las Vegas.
Among the positive aspects are the islands close ties with the U.S., the great performance seen in the local stores of national chains, and the islands fertile grounds for more retail competition.
But behind the scenes, execs also worry about the obstacles to doing business in Puerto Rico, mainly, government bureaucracy.
"Puerto Ricos close ties to the mainland U.S. are something we always point out when speaking to potential tenants," said Jaime Fonalledas, president of Empresas Fonalledas, owner of both Plaza Las Americas and Plaza del Caribe.
Fernando Toro, real estate broker of Property Concepts, agreed. "We dont want anyone to see Puerto Rico as foreign to the U.S. Selling Puerto Rico as part of the U.S. gives a sense of security."
The performance of the local stores of national chains is also a surefire selling point, according to local mall executives. "We let people know that sales per square foot in Puerto Rico are twice the U.S. average. It used to be a bit higher before Sept. 11, but were hanging in there," said Jorge Fournier, director of the ICSC for Puerto Rico and the U.S. Virgin Islands.
Mike Nolla, president and COO of Manley Berenson Puerto Rico, pointed to Foot Locker, J.C. Penney, and Sears Roebuck as examples of national chains with top performing stores on the island.
Fournier offered another selling point. "Believe it or not, Puerto Rico is virgin territory for many types of retail businesses. For example, take Pizza Hut. Its the only pizza restaurant [without a full bar] on the island where customers can sit down and be served. It could use some competition from, say, Donatos, a similar concept owned by McDonalds."
He added that there is also space for more big-box retailers on the island. "Home Depot could use some competition from other chains such as Lowes."
But many local and stateside retailers to whom CARIBBEAN BUSINESS spoke also stressed that the islands permitting process is a serious impediment to investing here. "Dealing with the government is a major hassle. It says it wants to attract investment to the island, but then the permitting agency [ARPE] puts all sorts of obstacles in your way when you want to set up stores. Just getting the Puerto Rico Electric Power Authority (Prepa) to power up a building takes forever, and no one wants to do business in these conditions. It seems that the governments solution to eliminating permitting problems is to simply not give out any permits. Thank goodness that sales are great in Puerto Rico," said one stateside executive, as locals nodded in agreement.
This Caribbean Business article appears courtesy of Casiano Communications.