As part of ‘$120 million transaction,’ work begins on Hyatt Regency Coco Beach Resort in Puerto Rico
10‑year plan considered to have 6 hotels on Coco Beach peninsula
SAN JUAN — While in New York on Tuesday, Puerto Rico Gov. Ricardo Rosselló announced that the former Gran Meliá Puerto Rico Hotel was acquired by Monarch Alternative Capital, in partnership with Royal Palm Cos. and Aimbridge Hospitality, which will re-launch the hotel as the Hyatt Regency Coco Beach Resort.
The hotel will be situated on a 1,000-acre peninsula within a private development known as Coco Beach on the northeast coast of Puerto Rico that includes a 36-hole championship golf course. It will include some 37,000 square feet of meeting and event space, a club lounge and restaurants.
The governor also announced that the developers are considering a 10‑year master plan that will locate six hotels on the Coco Beach peninsula. Three of these six hotels are expected to open by 2022.
“It is with great enthusiasm that we share this information in the most important forum of hotel investment. Transactions like these that are taking place today validate that our commitment to tourism is a wise one and that there is a positive environment for investment,” Rosselló said while at the NYU International Hospitality Industry Investment Conference.
The governor stressed that “the Government of Puerto Rico is open for business. We have managed to streamline processes for granting tax benefits and granting permits, which demonstrates that this administration sustains a war against bureaucracy, so that the private sector can have better investment opportunities.”
The Hyatt Regency Coco Beach Resort will have five new dining options and is estimated to create more than 200 new jobs. The average hotel-night rate is expected to be around $300.
During his presentation, Rosselló unveiled images and plans of how the property is expected to look.
The Coco Beach Resort is part of a $120 million transaction that was made possible through an agreement with the Puerto Rico Tourism Co. (PRTC), “in which tax credits were granted in accordance with the benefits available under Act 74,” according to a release by the governor’s office, La Fortaleza.
The governor gave details about the transaction in a panel moderated by Arthur Adler, president of Americas, Hotels and Hospitality Group, JLL Hotels & Hospitality. Tyler Morse, chief executive officer and managing partner of MCR, also participated and spoke about the newly opened TWA Hotel at John F. Kennedy Airport.
The PRTC has been working on this transaction together with the group of investors for several months, La Fortaleza said, adding that after Hurricane Maria struck the island in 2017, “Monarch Alternative Capital, a company that had interests in the peninsula already, saw the opportunity to acquire the former Gran Meliá Hotel with 486 rooms, 135 one-bedroom units, and an additional 14 acres of land.”
To proceed with the transaction, Monarch carried out a joint venture with Royal Palm Companies and Aimbridge Hospitality.
“We have been working during the past months so that this transaction, that enables the reopening of the hotel, is achieved in the short term and to direct the development of the long-term master plan, which will add to the hotel inventory some 2,500 rooms, with a projection of 1,500 new jobs. This will result in a total investment of around $1.5 billion when the six hotels materialize,” the executive director of the PRTC, Carla Campos, said.
During the hospitality conference, the Puerto Rican representatives touted the island’s tax benefits and “the competitive advantage of being an almost entirely eligible territory” in terms of Opportunity Zone benfits.”
“There remain several opportunities for developers, investors, lenders and brands to get involved with Coco Beach,” La Fortaleza’s release reads. “Those interested in learning more should reach out to the Puerto Rico Tourism Company to hear about the level of governmental support available for this project.”
“I want you to envision Puerto Rico as a blank canvas,” Rosselló was quoted by Meetings & Conventions as telling the media.
“We will harden our infrastructure and make sure we have a better, stronger energy grid,” adding, “We have established some of the most competitive incentives, with tourism tax credits that now range from 30 to 40 percent, whereas in the past it was only 10 percent.”
“We see the opportunity to double the impact of tourism on our island. Our goal is to double our inventory to 30,000 rooms on the island,” he said.
The new hotel is expected to open in July as a Hyatt affiliated hotel and then become Hyatt Regency Coco Beach Resort after an extensive renovation is completed this fall, Hyatt Hotels Corp. said in its news release.
The 486-room hotel with 93 upgraded suites with in-room whirlpool tubs and kitchenettes will be managed by Aimbridge Hospitality and “will be the brand’s only full-service property in Puerto Rico.” The hotel will operate as The Resort at Coco Beach, a Hyatt affiliated hotel until the renovation is completed.
In Puerto Rico, Hyatt already has the Hyatt House San Juan, Hyatt Place Manatí, Hyatt Place San Juan Bayamón and Hyatt Place San Juan City Center.
“The expansive redevelopment of this premiere beachfront property is a testament to the confidence among owners and developers in the destination of Puerto Rico and the Hyatt brand,” said Camilo Bolaños, vice president of development and real estate – Latin America and Caribbean, Hyatt.