Cleary acts in concession deal closing for cruise terminals in PR
Cleary Gottlieb acted as counsel to the Puerto Rico Public-Private Partnerships Authority (P3 Authority) in the closing of a landmark concession agreement for the cruise terminals in San Juan Bay (San Juan Bay Cruise Terminals).
The consultancy involved the successful closing and delivery of a 30-year concession for the operation, maintenance, repair, improvement and replacement of the cruise terminals and related facilities in San Juan Bay.
San Juan’s iconic cruise port is the gateway to one of the most visited tourist destinations in the Caribbean: it is located on the waterfront in the historic Old San Juan district and welcomes more than one million passengers a year. Bringing this transaction to fruition represents a major milestone in addressing the current infrastructure deficiencies and operational shortcomings of the San Juan Bay Cruise Terminals. The concession agreement, which was signed in August 2022 by the Puerto Rico Port Authority (PRPA) and San Juan Cruise Port (SJCP), a subsidiary of Global Ports Holding Plc (Global Ports), closed on 14 February 2024.
The concession is expected to enhance San Juan’s position as a must-visit cruise port in the Caribbean following years of underinvestment in cruise terminal infrastructure, the destruction wrought by Hurricanes Irma and Maria in 2017, and the devastating impact of the COVID-19 pandemic on the cruise industry, and Puerto Rico in general.
The concession agreement with SJCP requires, among other things, SJCP to make capital investments for repairs, rehabilitation and expansion works, which are expected to upgrade PRPA’s facilities to meet the needs of the modern cruise industry and become more resilient against future natural disasters. This project is also expected to boost the island’s economic growth by stimulating private investment in infrastructure, serving as a catalyst for the creation of new jobs and boosting tourism spending on the island as a result of increased passenger traffic.
As part of the transaction financing, SJCP and a government entity raised approximately USD 187.1 million in municipal bonds. As a condition precedent to closing, PRPA settled its debt with the Government Development Bank Debt Recovery Authority in the amount of approximately $320 million, which allowed for the release of existing mortgages on the cruise port terminals.
Cleary’s team was led by partners Rich Cooper (pictured left) and Chantal Kordula (pictured right), and included associates Belén Pironi and Rodrigo Lopez Lapena. All lawyers are based in New York.
