BREVARD COUNTY, Fla. — The crisis in leadership in Puerto Rico is affecting one Brevard County business.
- Company sees delays in investments
- Accessing money became more difficult after Rossello resignation
- Professor: "More than half of island's economy is going to be invested into infrastructure"
Kim Fernandez and Omar Caraballo, CEOs of Arch Real Estate Holdings, needed $85 million for their project to help solve the housing problem on the island by renovating foreclosed homes to rent out at an affordable price.
They said after Ricardo Rossello's resignation as governor, accessing the money became more difficult.
"We have seen delays, just complete pauses in investments towards our company," Fernandez said.
"It's a pause of around $20 to $40 million in regards to capital just being held up," he continued.
The businessmen said they wanted to soothe their investors' concerns, so they spoke with Dr. Jose Caraballo-Cueto, an economics professor at the University of Puerto Rico, to learn about the future of island's economy.
Dr. Caraballo-Cueto said while politically the island is going through a crisis the private sector is business as usual. He said focus should be on island’s the economy remaining and slowly growing.
He said to expect another boost to the island’s economy in the next four to five years once slight move upwards to help with disaster recovery.
That dollar amount is more than half of the island's gross national product (GNP).
"In other words, more than half of the island's economy is going to be invested into infrastructure," Dr. Caraballo-Cueto said.
"The macro-economy depends on the flow of funds, and this is only going to provide a positive outlook on the flow of funds," Omar said.
Dr. Caraballo also said new businesses on the island and the aerospace industry will also contribute to the island’s future economic growth. He said wages are lower in Puerto Rico than on the mainland giving the island a relative advantage in recruiting businesses. He said the Universities of Puerto Rico graduates at least 10,000 students every year giving the island an extra boost in the workforce.
"On the short-term it's hurt us, long-term it's the best thing that could've happened," Fernandez said.
Fernandez said while they suffered a slow down recently he expects that to change as other investors are showing interest in investing in their project and in the island.
The island is recovering from a recession that began in 2006 and was further devastated following 2008 Great Recession and Hurricane Maria.
Earlier this month, the Trump administration announced it would delay about $9 billion in disaster prevention funds towards Puerto Rico and the U.S. Virgin Islands after concerns of corruption and the government's handling of money.