Puerto Rico authorizes $2 billion coastal luxury development that activists oppose

SAN JUAN, Puerto Rico (AP) — Puerto Rico’s government has authorized construction of a $2 billion luxury development in the island’s southwest region that environmentalists have decried, warning it would strain the U.S. territory’s resources and threaten wildlife.

The project known as Esencia would be built on 2,000 acres in the coastal town of Cabo Rojo. It would include 500 luxury hotel rooms, 1,200 private residences, two golf courses, an equestrian center, a school from kindergarten to 12th grade and a 24/7 medical center, among other things.

Global investment firm Reuben Brothers and real estate development company Three Rules Capital said in a statement Friday that more than 75% of the project would be dedicated to conservation and green space, including restoring roughly 33 acres of wetlands and rehabilitating coastal dunes and mangrove ecosystems.

They also said the development would be entirely powered by renewable energy and would have its own water and energy infrastructure.

Hotel brands joining the project so far are Mandarin Oriental and Rosewood Hotels & Resorts.

Environmentalists decried the approval, which Puerto Rico’s Adjunct Board of the Permit Management Office issued late Thursday. The approval was shared with The Associated Press on Friday.

The Defend Cabo Rojo Coalition, which opposes the project, said the people of Cabo Rojo and experts should have had the opportunity to be heard.

“Citizen participation is not a favor granted by an agency; it is a fundamental principle of due process and an indispensable guarantee when our natural resources, water, communities, and the future of the municipality are at stake,” it said in a statement to the AP.

Among those opposing the project is Braulio Quintero, executive director of the Puerto Rico-based Institute for Socio-Ecological Research.

“We are going to fight this in every forum possible,” he said. “These are serious threats to our sustainability as a people.”

Roberto Ruiz Vargas, chief operating officer and partner of Three Rules Capital, told the AP on Friday that one of the first priorities will be to provide public beach access and build the development’s own water system and power generation and distribution.

He said three-fourths of the water will come from reused sources including rainwater and wastewater, and that groundwater will provide one-fourth for potable water.

“The first thing we have to be clear about is that we are not tapping into the public infrastructure,” he said. “We will not hook up to those fragile water systems.”

On Friday night, Puerto Rico’s governor announced a state of emergency regarding water use and activated the National Guard. A drought creeping across the island is deepening, and unrelated chronic water shortages persist.

Ruiz said that the development would not put a strain on a nearby agricultural valley nor tap into its water sources: “Far from taking from those systems, we will be contributing to those systems.”

He noted that given the development’s exemption from municipal taxes, it has pledged $40 million overall to public improvement projects to be decided by the local government.

The developers have stressed that they will protect the environment and uphold public access to the beach. They noted that the project is expected to generate more than 17,000 jobs and asserted it would set a benchmark for “environmentally conscious luxury development.”

“We understand that there are people that don’t agree with it,” he said. “We’ve addressed even the concerns that some of the opposition have voiced. We’ve always listened.”

Developers said sales would start later this year and anticipated welcoming the first residents and guests in late 2029.