PUERTO RICO Law and Practice Contributed by: Antonio Santos, Donald Hull and Paola Canino, Pietrantoni Mendez & Alvarez LLC
4. Planning and Zoning 4.1 Planning and Zoning Framework
project, the environmental impact review requirement may be satisfied through an environmental assess - ment recommendation (REA) and environmental assessment determination (DEA), through an envi - ronmental impact statement (EIS), or by obtaining a determination of no-significant environmental impact (Categorical Exclusion). After fulfilling the environmen - tal impact review requirement, a proponent may seek additional permits, such as a land use consultation or construction permit, including comments and recom - mendations from the agencies with jurisdiction. Dur - ing this permit review process, third parties or those claiming to be affected by the proposed project may appeal and/or object to the development. Regarding the enforcement of planning and zoning restrictions, the Joint Permits Regulation establishes the uses allowed as of right in the various zoning dis - tricts. During the permit application process, if the proposed use is not allowed as of right in such zoning district, the proponent must seek additional approvals – ie, Land Use Consultation. This Land Use Consulta - tion process is also subject to public review, during which a third party may object. 5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets The most common forms of ownership vehicle for commercial real estate assets in Puerto Rico are the corporation and the limited liability company. Puerto Rico does have legislation that allows for the estab - lishment of REITs (see 5.3 REITs ). 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity Corporations and limited liability companies are con - stituted by registering their organisational documents with the Department of State of Puerto Rico. Regis - tration fees are USD150 in the case of corporations and USD250 in the case of limited liability companies. Forms for obtaining an employer identification num - ber and election of the tax treatment for such enti - ties are typically filed with the corresponding taxing authorities simultaneously with their formation. Other governmental filings may be necessary, depending on
In Puerto Rico, land use, development, design and construction are regulated at both the legislative and regulatory levels. At the legislative level, these matters are regulated primarily by Act 161-2009, as amended, known as the Puerto Rico Permitting Reform Act (“Act 161”). In general, Act 161 establishes Puerto Rico’s policy and general processes for the review and issu - ance of development permits. Act 161 also created the Puerto Rico Permits Management Office (OGPe, per its Spanish acronym), ascribed to the Puerto Rico Department of Economic Development and Com - merce (DDEC, per its Spanish acronym). OGPe is the government agency in charge of evaluating and issuing development permits. In that regard, OGPe implements Regulation No 9473: Joint Regulation for the Evaluation and Issuance of Permits related to the Development, Land Use and Operation of Businesses (“Joint Permits Regulation”) adopted by the Puerto Rico Planning Board on 16 June 2023. The Joint Permits Regulation is the primary regula - tion regarding land use, development, design and construction as it contains the specific permits, processes, applicability of permits, allowed uses in the various zoning districts, design parameters, and requirements in order to obtain the corresponding permits. Note that certain Puerto Rico municipalities may have autonomy in connection with the issuance of permits and may have independent, municipal per - mit offices to that effect. 4.2 Development Process, Challenges and Enforcement Obtaining development rights in Puerto Rico is a high - ly regulated, multi-step process. In general, project development is subject to obtaining a series of per - mits, licences and authorisations. Naturally, depend - ing on several factors (including the type, magnitude, location and design of the project, and environmental conditions at the site), the development may require additional approvals. Prior to approving a project, the corresponding gov - ernment agencies (including OGPe) must review its environmental impacts. Depending on the proposed
515 CHAMBERS.COM
Powered by FlippingBook