Almost four years after mayor Carlos López devised his plan to build Ojo de Agua, the first municipal hotel in downtown Rincón, the town still struggles to secure new funding, public or private, to finish its construction, but asserts it will do so before summer 2020. Meanwhile, detractors question the need for another hotel in town and suggest repurposing its structure.
In September 2015, the mayor of Rincón, Carlos López, laid the first stone of what was to become his government’s response to the rising demand for rooms in the tourism industry, the Ojo de Agua boutique hotel, right in the heart of town. With a budget of $3.2 million, most of which came via a municipal loan by the Government Development Bank (GDB), López tasked GA + NF, an architectural firm from Coamo, to breathe new life into the downtown economy with a modern building.
Once completed, this new landmark hotel would have 16 rooms, a restaurant, an event hall, stores, and a pool. Even before it was finished, the Tourism Company of Puerto Rico (TCPR) had added the hostelry to its "Posadas," an initiative aimed at diversifying national tourism offerings. However, almost four years later, the hotel is only an abandoned and deteriorated concrete skeleton, which many in town consider an eyesore.
According to a recent municipal ordinance, the first phase of construction ended one year and $1.12 million after López set down the first stone. Everything seemed to be in order when its second and final phase started in October 2016 but came to an abrupt stop when the contractor shut down the project due to lack of payment from the municipality in March 2017.
By then, the GDB, once the primary fiscal agency of the Commonwealth, had lost its ability to pay out these loans and was in desperate need of restructuring its own debt after failing to identify new sources of solvency, according to its restructuring act signed into law a few months after it had left Rincón’s new hotel hanging in the balance.
Since then, Rincón has tried, unsuccessfully, to find alternative sources of financing to complete the hotel. According to its municipal administrator Francisco Mercado, who commented on the matter during the Municipal Legislature’s March ordinary session, the state government, individual investors, and even savings and credit cooperatives, including COOP Rincón with its headquarters a block away from the proposed hotel, have turned down the investment opportunity.
Juan Carlos Pérez, the mayor’s spokesperson, told A Rinconvenient Truth that, in the past, the municipal administration had sought a loan to finance the project through to completion, but the private banking sector was reluctant to put up the money. Now, under the recently approved measure, the mayor is focused on finding a potential investor who would redesign the hotel, if necessary, finish building it, and lease the facilities for a 30- to 40-year term, he added.
Ordinance #15, signed by the mayor in March, enabled his office to request new development proposals for Ojo de Agua via request for proposal (RFP), which Mercado hoped could help Rincón attract new investors willing to finish building the hotel and lease its operation for the long term.
However, more than three months after its approval, the RFP has not been issued yet.
The mayor’s office claims it is in talks with several investors, but turned down repeated requests to learn the new terms, if any, that the administration thinks would attract investors now, as opposed to the ones that have previously turned down the project.
“There are already several interested parties with experience in the hotel industry, and, from the beginning, the project was aimed at being a public-private entity. We are currently evaluating proposals and discussing negotiations, we hope for the project to be back on construction within a year from now," Pérez assured.
When pressed for details about these alleged negotiations, the mayor’s spokesperson claimed not to know the names of prospective investors either.
Other community leaders do not see the need for a municipal hotel
Back in 2015, when the mayor decided to pursue a municipal venture in tourism, he did so based on suggestions made by the Tourism Company in 2015. This last one, his spokesman argued, had performed a study, based on visitor signatures, between 2006 and 2007, that proved that Rincón needed an estimated 500 additional rooms to appease the demand for accommodation in the upcoming decade (2010-2020).
This outlet reached out to Waleska Pérez, the director’s assistant at Rincón’s Office of Tourism, who was not aware of the alleged study. However, she said that her office conducts periodic visual inspections and has estimated that Rincón’s lodging infrastructure fluctuates between 70 to 80 hotel-like facilities, excluding an increasing number of emerging Airbnbs.
“It would be nearly impossible for me to assert on a specific number of rooms available. When there is a big event like an important surfing contest or for a major holiday, its natural for places to get completely booked. Yet, aside from that, it is my understanding that here in Rincón we do have enough lodging to accommodate visitors at any given time,” Pérez explained about the increasing inventory of tourism infrastructure in Rincón over the last four years.
Similarly, Sandra Caro, the owner of Villa Cofresí, one of the oldest hotels in town, recently questioned the need for yet another hotel in the area. “Now for the 4th of July, we are at capacity, but then, after the weekend, we go through a slower period. It is important to consider that people come to Rincón for different reasons and individual interests. In regards to the Ojo de Agua Hotel, it saddens me to see that ugly unfinished structure covering what once was a historic natural water spring. I am pro-tourism, but cannot say another hotel is necessary,” she added.
For municipal legislator Bethzaida Bonet, the project’s struggle to find new investment is a tell-tale sign that the hotel’s future is highly uncertain and that its inception was amiss.
"Here (pointing towards her cell phone) we have approximately 1,000 local listings for Airbnb. A new hotel would only be taking guests away from existing hotels. All the money invested could have been used on other projects of greater need," the legislator added.
Concerning projects that might require more attention, Manuel González, a community leader and founder of the organization Rincón x Rincón, brought up the possibility to repurpose the structure to attend to the needs of the elderly, which constitute almost a quarter of the town’s population (24.4%, residents aged 65 or over), according to the latest estimates from the US Census Bureau. “Being so close to a hospital, instead of a hotel, a nursing home could have been developed," González suggested.
A Rinconvenient Truth requested interviews with the mayor for over a month to discuss this issue, but did not receive confirmation before this story was published.