In the case of CAM, MR CTC Caguas acquired the title to the property in 2015. The limited liability company is connected to Morgan Reed PR, according to the State Department’s corporate registry. The property sat abandoned for 7 years, until, in 2022, the corporation threatened to evict Comedores Sociales, according to Robles Gutierrez. “Either you rent it or I’ll have you out in 30 days,” was the ultimatum. The community, which had invested $120,000 in the property, replied that the space belonged to them and began to negotiate.
Morgan Reed is a real estate investment company that has been expanding its operations in Puerto Rico. One of its executives, Brian Tenenbaum, applied for and received the tax decree for foreign investors in December 2014, according to the Department of Economic Development and Commerce’s (DDEC for its Spanish acronym) public database. Tenebaum did not agree to be interviewed.
Since the administration of former Governor Luis Fortuño created Law 22 of 2012 (now under Law 60), there is a continuous annual increase in the granting of these tax privileges that benefit foreign investors moving to Puerto Rico. With this tax exemption, they pay 0% in capital gains taxes, compared to tax rates of 9 to 33%, paid by residents.
In addition, the government is offering up to 40% in tax credits for those investing in tourism development. Another federal law, approved in 2017, created the Opportunity Zone Program, which grants a full tax exemption on profits produced in low-income communities, if the investment is sustained for 10 years, according to DDEC. The United States Department of the Treasury and the Federal Internal Revenue Service (IRS) declared 98 percent of Puerto Rico an “opportunity zone.”