3. Antonio Moreno had
two visions regarding
the project
1- Wanted the
development of a
sustainable design
along with
construction
2- Wanted adoption by
communities of a
consultative impact of a
real estate development on
the people and on
environment
First Bank of Puerto Rico
also supported Moreno’s
views and financed the
project for $200 million
It was a state-chartered
commercial bank with
operations in Puerto
Rico, the Virgin
Islands and Florida
4. Govt. intervened and
halted the process of
construction for 60 days
to revisit the permits that
were granted earlier
The planning board
approved the project
before govt. agencies
finished their proper
evaluations
Supreme court took the
decision to uplift the
stoppage of Paseo Caribe
construction
After deepening into the
investigation,
irregularities emerged
Tito Kayak from
AMIGO DE MARs
climbs the cranes and
stop operations
People’s court evaluated
the evidence presented by
diverse stakeholders
wishing to stop the
development
6. Private Sector
Arturo Madero
Investors
Construction Workers
First Bank PR
Professionals working
in the Paseo Caribe
Public Sector
ARPE(Regulation& Permit
Administration)
Governor of PR (2004-2008)
Institute of PR culture Planning
Board
Supreme Court
Commission of Federal Affairs of
PR senate
Secretary of Justice
Civil Society
Tito Kayak
AMIGOS DE MAR
PUERTO RICO
Architects & Landscape
Associates
The People’s Court
7. The community that
generates employment
to its people
The public lawyers
that were fighting for
the rights of
community and
environment
Government
Ricardo Alegría from
ICP complains about
the Paseo Caribe
Project
8. Q-2: How could Madero have won these
stakeholders and have them support project?
9. Relation with the shareholders wasn’t effectively
maintained from the start
Controversy because involved parties had different opinions,
interests and values and no communication with each other
Madero should have expressed advantages of the
project to the common public
These advantages included rise in employment within the region (which would
also benefit the economy of the region) due to ongoing construction and
subsequent increase in tourists
10. The Puerto Rican Economy was poor and its GDP had been negative for past 4
years. Its unemployment rate was 15%. The project was helping solve all these
issues
He should have focused on sustainable development to ensure
future growth rather than focusing on profits
he could have explained that since the project had been first
granted by ARPE, he was not at fault
He should have guaranteed finishing the project without
affecting the different natural resources and the historical Fort to
the public
Instead of interfering in the public domain land, he could have just
built the project on the area initially allotted to him
11. He could have justified that if govt. permits were revoked for his project, they
could have been cancelled for any other ongoing development project on the
island which would have further hurt the economy/employment rate
Sales of other present and future projects would have been massively affected
if this project got cancelled
He could have initiated a platform on which stakeholders could voice out
their concerns to show he cared
He could have financed the fort restoration project himself or helped get funding
for it to be seen in a better light in the eyes of the public
12. Not stopping the project can be justified by how it could have brought
negative image, negative opinion of investment sector, lowered private
investment flows & increased unemployment
Investors and buyers would be skeptical about all
projects going on if this one did not work out
In the long run, local consumers would have less access to mortgages and
credibility of processes of Puerto Rico would have declined if the project got
cancelled
13. Q-3: The project controversy could be
characterized an ethical issue, a political failure,
or lack of corporate responsibility? Justify your
answer
14. • The project controversy could be characterized as all
three i.e. an ethical issue, a political failure, and a lack
of corporate responsibility
15. An Ethical Issue
There was a threat to the San Jeronimo Fort, a historical place and public access
to it and surrounding areas would be restricted
Project was close to residential buildings and was affecting residents’ quality
of life by blocking beach view, increasing air/noise pollution and increase
visitor density
Construction along the coastline was dangerous due to natural phenomenon
yet the workers’ safety wasn’t taken into account
The historical Fort could not be restored since the land it was on needed to be
public area for the fort to get funding. The project was causing a historical site to
deteriorate
16. Protest against the project had led to bad publicity and
negatively affected investor’s willingness to invest. Workers
at the construction site had lost money when protests had
hindered construction
Despite heavy protests by the public, their side of the story
was never seriously heard by the government
17. A Political Failure
Key objective 2 of Puerto Rica’s economic development plans i.e. clearly delineate the land maritime zone wasn’t
considered while granting access to build on maritime zone
Despite ZMT zones being public property, it had been sold to Madero
A number of studies and permits were still pending even though the Land Use Consultation had been authorized
Water & Sewage Authority’s request to delay permit till major water supply was built was not accepted
Despite ARPE granting the project, a stoppage order was later give and not lifted till Madero provided evidence
18. Secretary of Justice’s appeal after the decision to lift stoppage order was declined due
to insufficient evidence and he wasn’t allowed to present new evidence
Conflicts of interests in the Supreme Court had led to decision to lift stoppage
order; Court had accepted bribe from Madero
No internal investigation of the project’s permits was carried out despite the
permit having been wrongly given
Many architects were not included in the island’s
development committees
19. Lack of Corporate Responsibility
Madero was taken to court 4 times and yet always won and didn’t
take responsibility for his actions
There were doubts about the accuracy of original appraisal of
the land
A maritime land zone (ZMT) had been purchased by Madero
without regard for the sensitive zone
The Planning Board s approval of the Paseo Caribe Land Use Consultation had
the net effect of redefining the parameters for land use, rezoning all the
surrounding land and thus overriding Regulation 23
20. Q-4: What could investors, citizens, developers
and governments do to avoid such conflicts in
future?
21. Government should
consider all factors
(such as public
reaction, impact on
state image etc.) before
re-zoning
The permit granting
process should be more
clear and final. No one
was clear about the
validity of the permits
causing the huge
debate
Developers should
consider all laws and
regulations before
deciding for such big
construction plan
Developers should have
told the common public
about all advantages of the
project such as rise in
employment within the
region and the tourists
coming etc.
Citizens should be
informed and taken
into confidence before
starting any such
projects. Their
concerns should be
addressed
The investors
should have
analyzed the
feasibility before
putting in money
for the project
22. • Involved parties had different opinions, interests and values.
• There was a lack of collaboration, transparency and communication
• This delayed the project from the start
• Individual groups were fighting for theirs personal interests
• To avoid conflicts, govt. should take to avoid these from happening
24. Initial investigation by
Planning commission
should be more
transparent and discrete
Should take into account
all permits from various
departments before
giving the green signal
for any project
Re-zoning of land
should be accounted for
(as it is dangerous to
construct any
infrastructure on the
coastline)
Everyone should
follow the rules,
they should not
have bought the
illegal land
The local people’s
concern should be
taken into account
Measures should be
adopted to gain back
confidence in the Justice
System as well as any
government agency
granting any kind of
permits
Benefits of project
should be clarified to
stakeholders (investors
and public) such as
increase in employment,
boost in economy
through tourism etc.
