Thursday, August 22, 2019

Puerto Rico lawmakers inquire about abandoned commercial property

By on May 28, 2019

(CyberNews)

House committee chairman questions Economic Development department and bank; requests inventory

SAN JUAN — The Puerto Rico House of Representatives’ Economic Development, Planning, Telecommunications, Public-Private Partnerships and Energy Committee, which is chaired by the Rep. Víctor Parés Otero, began Tuesday the study of House Resolution 414, to learn what has led to the closure, abandonment and deterioration of commercial property on the island.

The measure, authored by Parés, also seeks to consider establishing legislation that benefits this sector through the creation of incentives, subsidies, economic stimuli or tax extensions with the objective of helping business people reopen their respective concerns and create jobs.

The legal adviser of the Economic Development Commerce Department (DDEC by its Spanish acronym), Carlos Ríos Pierluisi, suggested waiting until “the implementation of the recently approved legislation matures and the existing incentives” because the “closing, abandonment and deterioration of commercial spaces will decrease,” arguing that the recently approved Opportunity Zones measure directly affects abandoned commercial structures.

Ríos highlighted various economic stimuli, such as those found in the Incentives Code and Opportunities Zones incentives as well as the U.S. Department of Housing and Urban Development funds from the Community Development Block Grant – Disaster Recovery (CDBG-DR) program.

Regarding CDBG-DR funds, which are divided into two programs, Small Businesses Financing (SBF) and Construction and Commercial Revolving Loan (CCRL), he said, “DDEC has $300 million in CDBG-DR funds for both programs, divided into $200 million for SBF and $100 million for CCRL,” explaining that the “funds available are mainly used to help small existing businesses, new businesses or businesses that are restarting operations, which suffered damages or interruptions due to hurricanes Irma and María.”

The manager of the Economic Development Bank’s (EDB) Legal Affairs Department, Rafael Lugo Guzmán, also testified, telling the committee that the entity has financing tools to support small and midsize entrepreneurs interested in leasing or acquiring property to start operations.

Replying to Parés’, who inquired about the EDB’s available financing, Lugo said that, “at the bank, we are helping business people create new businesses,” adding that the financing cap “is between $250,000 to half a million dollars.”

Rep. Guillermo Miranda Rivera pointed out the need for a sustainable economic development study.

“We need to know the businesses that are viable by zone—what kind of business has a future,” he said.

DDEC’s legal adviser said he would look into the matter but that there are market studies that analyze investment risks.

Before finalizing the hearing, the Chairman Parés asked the DDEC official for an inventory of the abandoned structures, broken down by municipality, and announced he will be citing both the Association and Federation of Mayors, as well as several private sector representatives.

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