Economic Impact related to opposition of Plaza Las Amricas to commercial projects In Puerto Rico

Square Project Sambil Shopping Mall The Mall o San !"an #olise"m o $"erto %i&o #on'ention #enter (istri&t )*po #enter at #olise"m %oberto #lemente %e&onstr"&tion o Se+e&o , %ey %-o .ayam/n $la0a Shop1 Mall $la0a $"erto %i&o at (ora+o Sam2s at $on&e 3nab/n Shopping Mall at $on&e Sembler Shop1 Mall at #arolina Totals Feet 882,000 640,000 530,000 580,000 90,550 28,000 236,872 1,596,00 0 100,000 206,930 173,000 "#$%&#&" ' Time Spent 3 years, 6 months 10 years 1 year, 8 months 6 years, 6 months 7 years, 2 months 1 year, 6 months 2 years 2 years, 7 months 6 years, 3 months 3 years, 4 months 1 year, 5 months (% !ears Investment in onstruction $ 400,000,000 $ 300,000,000 $ 243,800,000 $ 266,800,000 $ 10,000,000 $ 12,880,000 $ 108,961,000 $ 734,160,000 $ 46,000,000 $ 95,188,000 $ 79,580,000 ) '#'*+#&%*#$$$ Total Emplo!me nt 7,335 5,000 4,267 4,669 175 225 1,907 12,848 805 1,666 1,393 ($#'*$ Pipeline osts $ 5,000,000 $ 15,000,000 $ 3,047,500 $ 3,335,000 $ 125,000 $ 161,000 $ 1,362,000 $ 9,177,000 $ 575,000 $ 1,190,000 $ 994,750 ) &*#*%+#'"$ Fiscal Impact $ 146,000,000 $ 109,500,000 $ 89,000,000 $ 97,382,000 $ 3,650,000 $ 4,701,200 $ 39,771,000 $ 267,968,400 $ 16,790,000 $ 34,743,620 $ 29,046,700 ) ,&,#""'#*'$ Inter-Sectorial Impact $ $ $ 493,800,000 370,350,000 300,971,100 Total Impact $ 1,044,800,000 $ $ $ $ $ $ 794,850,000 636,818,600 696,881,600 26,120,000 33,642,560 284,606,350

$ 329,364,600 $ 12,345,000 $ 15,900,360 $ 134,512,350

$ 906,320,520 $ 56,787,000 $ 117,509,580 $ 98,241,510 ) '#,&%#-$'#$'$

$ 1,917,625,920 $ $ $ 120,152,000 248,631,200 207,862,960

) %#$--#**-#-*$

Technical explanation of calculations:

11 Most of the eleven commercial projects detailed above were in the pipeline process at the beginning of this century,

though some initiated the planning process during the 1990 s! "ata on s#uare feet in each case were gathered from the

$uerto %ico $lanning &oard '$&( records! The sum of total s#uare feet to be built 'delayed by $la)a *as +m,ricas( was -,0./,/-0!
21 1o far, total time spent by developers, mostly due to $la)a s opposition or intervention at state agencies and court trials

has been 2. years!

31 Total direct investment in capital structures 'permanent construction buildings( was estimated at nearly 30!/ billion! The

method employed in the calculation of total investment was as follows: construction investment by 1ambil and The Mall of 1an 4uan was divided by total s#uare feet estimated for both projects! The #uotient obtained was !2.! This factor was applied to total s#uare feet of each project in order to get an approximate 'and updated( figure of total direct investment! The only exception was 5oliseum %oberto 5lemente s 6xpo 5enter, a project that did not re#uire additional fixed capital structures!
41 Total employment of 20,090 was calculated based on total direct and indirect jobs estimated for 1ambil 1hopping Mall

and the Mall of 1an 4uan, the most recent and modern projects proposed! The relevant average factor or proportion is 1!7-! 1o, for each of the remaining projects listed total direct investment was multiplied by 1!7-, thus getting the relevant figure!
51 $ipeline or procedural costs are, indeed, #uite difficult to estimate, as each project has faced different opposition

strategies from $la)a and, thus, incurred diverse incidental costs! 8n the other hand, these costs depend heavily on the particular characteristics of each project! 8ur estimate was based on the time spent so far by 1ambil 1hopping Mall,

which is almost one third of the time already spent by proponents of the Mall of 1an 4uan! +ssuming that the latter has invested around 31- million throughout the last decade, it seems reasonable to presume that pipeline costs for the former are roughly 3- million! This figure implies that for every million dollar of capital investment there is a 1!0-9 addition in pipeline costs! 1o, 1!0- is the factor employed in the relevant column of the table! The estimated amount is almost 320 million!
61 :iscal impact figures were obtained from 1ambil 1hopping Mall estimates, as this project incorporates the most recent

tax rates for both, state and municipal governments! The 312. million fiscal impact estimated for 1ambil represents /.!-9 of total direct investment, a figure that seems very close to reality! +s a proportion of total investment the /.!-9 figure may vary for each project; however, as a general indicator is extremely helpful for our purposes! Therefore, $la)a delayed or partially obstructed a flow of almost 3</<!. million to municipal and state finances!
71 =nter>sectorial impact was calculated based on the income multiplier provided by the $lanning &oard! :or instance,

1ambil 1hopping Mall investment of 3200 million will generate a flow of 3<9/!< million in the $uerto %ican economy! ?owever, in order to avoid double>counting, we subtract the original 3200 million, an exercise that left a @net impactA of 329/!< million in other industrial sectors 'government, finance, trade, etc!(! The implicit factor or multiplier is, then, 1!0/2'obtained from the division of 329/!< million by 3200 million(! That proportion is multiplied by direct investment provided by each project! Total inter>sectorial impact exceeds 30!< billion, an amount that was also delayed by $la)a s opposition to the projects listed!

81 Total impact of each project was obtained by adding hori)ontally each of the figures explained in the above enumeration

'excluding jobs(! Thus, the sum of individual impacts over $6 billionis the relevant figure that approximates the cost of the opposition of Plaza Las Am ricas to the Puerto !ican econom" !