A Rare Happy Ending in Puerto Rico: Piñones Versus the Developers

As tourism continues to grow into one of the most profitable sectors of Puerto Rico’s economy, many small communities have found themselves threatened by development companies. The small coastal village of Piñones, just outside the town of Loíza, has managed to defend itself from the designs of PFZ Properties, which belongs to a Puerto Rican developer named Joel Katz, an entrepreneur known to be close to the inner circles of the Partido Popular Democrático. “If there are still natural resources in Piñones, it’s because of the community,” says Milagros Quiñones, a local activist.

Cándida Cotto

As tourism continues to grow into one of the most profitable sectors of Puerto Rico’s economy, many small communities have found themselves threatened by development companies. The small coastal village of Piñones, just outside the town of Loíza, has managed to defend itself from the designs of PFZ Properties, which belongs to a Puerto Rican developer named Joel Katz, an entrepreneur known to be close to the inner circles of the Partido Popular Democrático. “If there are still natural resources in Piñones, it’s because of the community,” says Milagros Quiñones, a local activist.

During the past decade, the community has waged a determined fight to stop PFZ from building a huge residential complex on its territory. Home to about 2,000 people, Piñones stretches across 10,000 acres near the tourist site of Isla Verde. It was settled in the early 19th century, when the lands the Spanish crown had ceded to the Order of Dominican Friars were gradually transformed into a refuge for free blacks and escaped slaves. With the passage of time, Piñones became one of Puerto Rico’s traditional black communities and a bulwark against the dissolution of the country’s Afro-Caribbean culture. Today, local families live in modest homes, making a living selling comida típica from kiosks along the beach.

The proposed development, to have been called Costa Serena, would have transformed Piñones into a gated community of at least 880 condo-hotel units, 42 residential units, 1,394 parking spaces, a casino, several tennis courts, a swimming pool, a beach club, six entrances with access control, and 52,818 square feet of commercial space. It would have represented the largest building complex in Puerto Rico, extending about a mile and a half along the coast of Vacía Talega. Not only would it have radically transformed the character of the community’s natural and cultural environment, but it would have displaced its traditional inhabitants and effectively privatized the length of the coast it occupied.

The area is considered one of the most biologically diverse in Puerto Rico. Two lagoons, the island’s largest mangrove, and a small peninsula called El Pescador are all part of the area’s natural treasure. Mostly untouched, Piñones’s 10,000 acres constitute a natural reservoir and dam against floods in the adjoining metropolitan area.

In 1996, after a lower court decision to allow a certain amount of development to take place, PFZ, apparently thinking nobody was paying attention, began the first excavations for the project. A community coalition succeeded in persuading a higher court to order PFZ to stop all activity until the company prepared and signed a declaration of environmental impact. By law, such a declaration must examine the environmental, social, and economic consequences of any large-scale investment project.

PFZ’s inability to swiftly prepare such a declaration swayed public opinion against the project. It was only in November 2000, four years after PFZ broke ground on the project, that its declaration was released and the public found out just how massive the proposed complex would be. What’s more, the courts determined that the 2000 declaration was insufficient to meet legal requirements, lacking information on the cumulative impacts of environmental disturbances. Opponents also questioned whether the project would do irreparable harm to the protected area of the Puerto Rican seashore, and whether the negative impacts of the plan’s proposed widening of the only highway in the area from two to four lanes would be greater than the benefits.

PFZ was then ordered to prepare a new, updated declaration, which it completed in 2004. But the new document contained no updated maps of the area, leaving the impression that the company’s analysis was still based on obsolete information and therefore on false premises. At a public hearing in April 2004, PFZ’s chief engineer admitted that to construct the project, a lot of property would have to be expropriated, but “not by us,” since it is the state planning board that does the expropriating.

In the discussion process, it also came out that the Costa Serena project was being developed within an area susceptible to flooding and severe storms. In July 2005, the secretary of the Department of Natural and Environmental Resources (DRNA) restated the danger to Costa Serena, noting that the development’s location would force the state to evacuate residents every time there was a flood, endangering the lives of rescuers.

The role of Governor Aníbal Acevedo Vilá, elected in 2005, has been ambiguous, to say the least. This was made evident in November 2006, when the governor said in a meeting with the community that he did not know how the project’s approval was progressing through the relevant agencies. Yet soon after the meeting, it was discovered that the Environmental Quality Board had already approved PFZ’s final environmental declaration two weeks earlier, and that the governor knew about it before meeting with the Piñones community. It also became known that he had met informally with PFZ’s Katz on several occasions in the governor’s mansion.

Public planner José Rivera Santana, the former director of the Planning Division of the official Tourism Company, confirmed to the weekly paper Claridad that at least since April 2005, the heads of various agencies had all been pressured by the Executive Mansion to approve Costa Serena, making it very difficult to halt the project. Only Rivera Santana announced his opposition to the project, and he was relieved of his job shortly thereafter. Rivera Santana added that the government’s backing of Costa Serena violated the procedures of the Environmental Public Policy Law with respect to the use of land, the protection of seashore areas, and the mandate to develop sustainable tourism.

While community groups prepared to relaunch the struggle against Costa Serena, Governor Acevedo surprised the country by announcing—just a few days after the Piñones meeting—that the project would not go forward and that the government would purchase the land from the Katz family. But the explanation for this was not very convincing, leaving people guessing about the real motives. The governor said he had run into Joel Katz “on a sidewalk in San Juan,” and that the developer had told him he wanted to withdraw the project “for the good of Puerto Rico.” Clearly, the governor wanted to convey the idea that Katz had acted in good faith.

This closeness between PFZ and the insular government goes all the way back to the company’s origins in 1959, when its founder, a Cuban named Luís Puro (Katz’s grandfather), arrived in Puerto Rico after fleeing the revolution. According to the historian Luís A. López Rojas in La mafia en Puerto Rico: las caras ocultas del desarrollo (San Juan, Puerto Rico: Isla Negra Editores, 2004), Puro linked up with the North American mafia, becoming the owner of various hotel-casinos in eastern Puerto Rico. While offering a historical analysis of the connection between the island’s hotel and gambling industries and the colonial model of the Puerto Rican commonwealth, the author mentions Puro as one of the mafia figures who maintained close contacts with the era’s government entities.

Today, the controversy has not ended. Why, it was asked, would the state buy land from PFZ that it considers to be in the public domain? The current expectation is that the Department of Natural and Environmental Resources will undertake a study of the area’s land ownership and of the protected seashore’s boundaries in order to truly confirm which lands belong to the Katz family and which are public. It would thereby determine how much, if anything, should be paid to the Katz family for the public lands.

In any case, environmentalists as well as community members still have reason to worry. Despite the governor’s announced decision to halt the project, the Committee for Environmental Quality is still bringing the process before the courts, and the Planning Board considers the process “suspended” but not canceled. Environmentalists fear that both agencies are trying to leave the door open for other, similar projects.

In fact, five other projects are on the books, projects that, if carried through, would leave the citizens of Piñones strangers in their own land. These projects, in total, would build about 2,400 new tourist units, 575 residential villas, 130 cabanas, 300 residential apartments, and two golf courses that would be constructed on what is now 225 acres of mangrove. In Puerto Rico, as throughout the Americas, community and environmental well-being remain on the defensive.

But the fact that the Piñones community, together with environmentalists, has prevailed over a major developer provides an inspiration to other communities. While the end of this story has not yet been written, the Piñones coalition acted prudently, seeking help from the Environmental Law Clinic at the University of Puerto Rico; bringing public attention to the case by picketing the offices of PFZ Properties and the Puerto Rican government’s Committee for Environmental Quality; and taking both entities to court.

There is no traditional coastal community that is not threatened by the plans of some developer. Besides Piñones, there has been a serious and intense public debate over the future of the “northeastern corridor,” coastal lands between the towns of Luquillo and Fajardo. The privatization of beaches, environmental degradation, and the dislocation of centuries-old communities also threaten Humacao, Vega Baja, Dorado, Rincón, and Isabela, just to name a few.

The tourist industry remains profitable, powerful, and in line with officially held ideas about economic growth and development. More often than not it emerges victorious in its continuing struggles with the communities that stand in its way. But the struggle in Piñones has ended happily—at least for the time being.


Cándida Cotto is a reporter for Claridad (www.claridad puertorico.com). She teaches part-time at the University of Puerto Rico, Carolina.
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