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Still No Financing For Condado Duo

Massive Project Might Not Be Ready In 2004


September 11, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

Condado residents will have to be patient a little longer. The government had hoped to celebrate the soft opening of the $183.3 million Condado Duo, formerly known as the Condado Trio, in October 2004, but the developers have been unable to secure financing in this troubled economy.

International Hospitality Enterprises (IHE), headed by hotelier Hugh Andrews, expected the Condado Vanderbilt and La Concha hotels to be refurbished completely by next October. To accomplish that, however, the renovation work should have begun this month.

"We are battling for the massive project’s financing. There are various private banks interested, but it’s risky," said Jose Suarez, executive director of the Puerto Rico Tourism Co. "It’s a difficult project but not an impossible one."

Local banks seem hesitant to part with the funds for the project because they fear construction could be paralyzed by difficulties in obtaining the required permits.

"A mortgage on a property is worth the amount loaned when the project is completed," Roberto Cordova, executive vice president & director of corporate banking at Banco Santander, told CARIBBEAN BUSINESS in an earlier interview. "If problems occur beforehand, the bank has an asset behind a loan that is worth less than its collateral."

IHE’s proposal requires the government to issue $44 million in Afica bonds via the Tourism Development Fund and to grant the developer $8.8 million in tax credits. It also requires the government to rent the land to the developer for the next 99 years for an annual fee of 3.5% of the net sale of the proposed rooms or $1 million, whichever is greater.

Last week, the Tourism Co. began accelerating the Condado Duo’s refurbishment by investing $3.8 million, which IHE must reimburse, to demolish the Vanderbilt hotel’s west wing and some areas of La Concha hotel.

"The project might take a little longer than expected, but it will get done," Suarez said. "All the parties involved agree on the principal, but the financial structure, which requires a detailed analysis, is extending the process."

The Vanderbilt will be a five-star hotel with 93 rooms, 160 condo-hotel units, 10,000 square feet of commercial space, a restaurant with capacity for 80 guests, 30,000 square feet of meeting & conference facilities, and 445 parking spaces.

La Concha will be redesigned as a moderately priced family hotel with a casino. The hotel will have 226 rooms, 200 condo-hotel units, 4,700 square feet of commercial space, 15,000 square feet of meeting & conference rooms, and 502 parking spaces.

This Caribbean Business article appears courtesy of Casiano Communications.
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