Fiscal board authorizes Housing Dept. to issue $14 million loan for Miramar hotel

By THE STAR STAFF

The Financial Oversight and Management Board for Puerto Rico has approved, with observations, a $14 million loan agreement to help finance the construction of a new 10-story, 103‑room hotel in the Miramar sector of San Juan.

The loan, to be issued under the Department of Housing’s Economic Development Investment Portfolio for Growth Program (IPG Program), will support a project led by Drift‑Wind Inc., IFJ Corp., and ORC Miramar Corporation. The total development cost is estimated at $50.2 million.

In a June 1 letter to Housing Secretary Luis A. Martínez Román, the oversight board confirmed that the contract complies with the Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA, which requires that government contracts promote market competition and align with certified fiscal plans. The board emphasized that its review is limited to fiscal compliance and does not constitute a legal or procurement review.

According to the Housing Department, the loan will be fully funded with federal Community Development Block Grant-Disaster Recovery (CDBG‑DR) dollars allocated to two budget accounts totaling $14 million. The IPG Program, overseen by the U.S. Department of Housing and Urban Development, was created to stimulate large‑scale economic development in the aftermath of hurricanes Irma and Maria.

The loan will mature 20 years after its conversion date, which occurs upon the final disbursement -- no later than 36 months after closing.

While approving the contract, the oversight board issued one key observation: the Housing Department did not provide a complete record of the 114 applications submitted during the IPG Program’s 2021 intake period.

The board recommended that the agency ensure full retention of all applications and maintain documentation demonstrating that the evaluation and selection process complied with federal requirements and program guidelines.

The oversight board noted that any material changes to the contract must be resubmitted for review and that the Housing Department must notify the board of any budgetary discrepancies that arise during the life of the agreement.

The hotel project is one of the largest CDBG‑DR‑funded hospitality developments proposed in San Juan and is expected to contribute to the ongoing economic recovery efforts tied to post‑hurricane reconstruction.