An image of a pitcher pouring liquid into a glass that represents Puerto Rico after Hurricane Maria appeared on the screen as K.C. Conway, CCIM Institute Chief Economist, started his presentation. Instead of debating whether the glass was half full or half empty, Conway introduced another option.
“We are going to talk about the pitcher because the pitcher is what controls the fluid... Let’s focus on the things that can fill the glass back up,” the Director of Research and Corporate Engagement of the Alabama Center for Real Estate suggested at the beginning of his conference at the 15th Anniversary of the Puerto Rico Chapter of the CCIM Institute celebrated at La Concha Hotel in San Juan.
For Conway, the emptied part of the pitcher represents the items that hinder the island’s economic development like the electric grid, the Jones Act and FEMA’s massive denial of assistance to families that needed to rebuild their homes. On the side of the pitcher with liquid reaching the brim, he sees a path to recovery by adopting a diverse array of initiatives such as the adaptive reuse of obsolete properties, an expansion of the distilled spirits industry, the promotion of the Opportunity Zones tax incentives, the inception into the logistics and renewable energy market, among others.
Speaking to realtors, lawyers, economists, appraisers and financial analysts, Conway candidly tackled complicated subjects like the adverse impact of the Jones Act on the island’s economy, Donald Trump’s negative portrayal of the island, the generalized ignorance surrounding the topic of Puerto Rico in the states, the ongoing trade war between the U.S. and China and the unreliability of Census data.
In his keynote address “Trends in Commercial Real State: Adaptive Reuse and Other Issues Affecting the Industry”, the economist also stressed the importance of creating partnerships with lobbying groups like the CCIM -a network of commercial real state groups- to amplify Puerto Rico’s voice, creating alliances with other state governments and furthering the island’s economic agenda in Congress.
From the start, Conway pointed out that the OZ and the adaptive reuse of old and unused structures could lead to a much-needed investment push that could help the U.S. territory find its way out of recession.
“I think logistics is a key one. You have the ports. You can use the rum spirits industry as a building block into other areas,” the expert on ports and industrial real state responded of his top proposals to ignite the island’s economy. “When you look at ports in the U.S. like Charleston, Savanah, and Miami, they can do things you cannot do because of the Jones Act. Fixing that one wrinkle in that department could accelerate things.”
How can we get rid of the Jones Act?, THE WEEKLY JOURNAL asked.
“Congress does not understand half of what they are passing legislation on, and that is why I think it is going to need the help of the industry groups to say ‘look if you want to see Puerto Rico back on its feet there are very outdated things that have to be addressed.’ I think industry groups are going to be your most powerful vehicle to get the knowledge and understanding of the things that have to get done transferred,” Conway, a frequent speaker for the Federal Reserve, explained.
It’s not only the Jones Act. Federal laws governing banks are stricter on the island.
“You have a huge opportunity for adaptive reuse here. How does the capital get here? On the banking side, there are things I think are more punitive to Puerto Rican banks than U.S. banks, from the capital rules, regulations, supervision, title transfers... There are a lot of things that can be done. It’s ignorance. It is out of sight, out of mind,” Conway argued.