The developers of Proyecto Esencia delivered their most extensive defense to date of the $2 billion tourism-residential complex proposed for Cabo Rojo, portraying the project as a globally backed, environmentally rigorous, off-grid destination engineered to operate independently from Puerto Rico’s strained public utilities.
The testimony, submitted Aug. 31 to the Senate Committee on Innovation, Reform and Appointments, came four days after a first hearing in which the Aqueduct and Sewer Authority (PRASA), the Puerto Rico Electric Power Authority (PREPA) and the Tourism Company all told senators they lack the capacity to serve the project, a position CRLA now disputes as beside the point. Esencia, the developers argue, was never designed to depend on any of them.
Edmée Zeidan Cuebas, assistant secretary of the Permits Management Office (OGPe), said the approval of a site consultation permit does not in itself allow the execution of the project, which still needs to comply with conditions and other permits. Esencia would sit on 1,549 cuerdas, about 1,504 acres, and would include a 530-room hotel and 1,134 residences.
In testimony before the committee, Cabo Rojo Land Acquisition LLC (CRLA) representative Roberto Ruiz Vargas argued that Esencia is “a mature, sustainable planning model designed with absolute intentionality for the Puerto Rico of the 21st century,” supported by more than 8,500 pages of environmental analysis and one of the most exhaustive public-participation processes in recent memory.
“The DIA (Environmental Impact Statement) consolidated a monumental record of more than 8,500 pages,” the developer said, citing the scientific depth of the review.
Esencia is backed by Reuben Brothers and Three Rules Capital, global investment groups with a record of developing high-end, environmentally sensitive destinations. The developers cited a stake in the 840 MW Manzanillo Gas & Power facility under construction in the Dominican Republic, along with solar power plants and luxury hotels that integrate private water systems, conservation corridors and branded residences, a model they say closely parallels Esencia’s approach to infrastructure independence.
They have also led luxury redevelopments in New York, Scotland and Europe, often in partnership with operators such as Aman, Rosewood and Mandarin Oriental. Esencia, they argue, is the Caribbean evolution of that development philosophy, but with an unprecedented emphasis on autonomous utilities.
Wells, desalination and an independent microgrid
A central argument in the developers’ testimony is that Puerto Rico’s challenge is not water scarcity, but infrastructure failure. They cited federal U.S. Geological Survey data and their own hydrogeological studies to argue that the Lajas Valley aquifer has abundant supply.
“Puerto Rico and Cabo Rojo have more than enough water. What they have is a severe infrastructure deficiency,” they said.
The developers estimate the aquifer’s sustainable yield exceeds 10 million gallons per day, well above Esencia’s projected potable water demand of 1.25 million gallons per day.
Ruiz Vargas walked senators through the technical record behind that claim. He explained that the USGS has documented both an intergranular confined aquifer and a deeper aquifer beneath the site, and that the project’s test wells, TW1 through TW5, were drilled to identify the most productive extraction points. Several wells were initially discarded for shallow yields, but TW1 was later authorized by the Department of Natural and Environmental Resources (DRNA) for deeper exploration to characterize the lower aquifer.
The first phase of drilling, he said, was designed not to extract the full 1.25 million gallons per day the project requires, but to confirm the aquifer’s position and characteristics. “The objective was to identify the ideal point on the property, and [the study] confirmed the aquifer’s characteristics and exhausted the capacity of the equipment,” he said, noting that the pump used in TW2 reached its mechanical limit rather than the aquifer’s.
He added that four independent hydrogeology firms estimated the aquifer’s capacity at between 14 and 20 million gallons per day, and that no agency has refuted those findings.
A second phase of testing, now underway under DRNA supervision, will determine the precise engineering design for the wells that will supply Esencia’s potable water. Ruiz Vargas stressed that the project will only extract water in compliance with DRNA’s requirements for sustainable yield, piezometric monitoring and saltwater intrusion prevention.
If the agency ultimately determines the aquifer cannot supply the full demand, Esencia will activate a contingency plan: a seawater desalination system using reverse osmosis, part of the project’s environmental filings from the outset. Ruiz Vargas said the technology was chosen because it can treat both groundwater and seawater and meets emerging EPA standards for PFAS and microplastics.
“A reverse-osmosis plant is a plant to desalinate water. It is exactly the same,” he told senators, describing the choice as one made to ensure regulatory compliance under any future scenario.
DRNA Secretary Waldemar Quiles said in a statement that any future extraction franchise concession is conditioned on a mitigation plan for saline intrusion.
“PREPA recognizes independence”
Esencia’s water strategy also includes a closed-loop system for non-potable uses. Landscaping, golf courses and recreational areas would rely entirely on tertiary-treated recycled water produced on site and stormwater harvested and stored in a lagoon system with a 75 million gallon capacity.
The developers emphasized that Esencia will not connect to PRASA or PREPA under any circumstance, including emergencies. PREPA acknowledged as much in a Nov. 10, 2025 letter included in the DIA: “The Esencia Project will not use water from PREPA or PRASA. PREPA recognizes that the proponent has established its independence from public infrastructure through the use of private wells and groundwater sources.”
While water dominated the first hearing, the developers stressed that Esencia’s energy system is equally independent, a point they say has been misunderstood in public debate. The project includes a 68 MW renewable-energy microgrid designed to power hotels, residences, medical facilities, schools and common areas through solar generation and industrial-scale battery storage, operating as a fully autonomous system with distributed arrays feeding a centralized storage backbone engineered to maintain operations during hurricanes and grid outages.
Ruiz Vargas said Esencia’s energy design was reviewed by multiple agencies and that the project never sought and never received any commitment from PREPA or LUMA.
“We do not rely on them for anything. We have never relied on them,” he said, adding that the microgrid is designed to meet or exceed Puerto Rico’s renewable-energy mandates and includes redundancy layers that allow the system to isolate, store and distribute power under catastrophic conditions. The developers argue the model demonstrates how large-scale development can coexist with, and even relieve pressure on, public infrastructure.
The argument lands at a moment when both of those systems are visibly strained. Puerto Rico’s Aqueduct and Sewer Authority began rotating 48-hour water rationing on Aug. 7 across San Juan and six neighboring municipalities, affecting more than 180,000 customers, after nearly 68 percent of the island fell into drought and San Juan recorded its driest July on record.
On the grid side, LUMA has told the Energy Bureau that 121 substations and 145 circuits are operating above 90 percent of load. Esencia’s pitch, in effect, is that a project built to need nothing from either system is the wrong target for either crisis.
Financing, credits and a clash of testimony
CRLA noted that Esencia is financed entirely with private institutional capital, with no fiscal exposure for the government. Ruiz Vargas disputed the widely cited figure of nearly $498 million in tourism tax credits as money the project has already received. The current decree, he said, does not allow developers to draw credits upfront.
“Our decree only allows us to obtain the benefits once the investment has been made, the jobs have been created, and the assets are in operation,” he said, adding that the company has received zero dollars in credits to date, and that any credits apply only to the tourism components, not the residential units.
The $498 million figure itself has a paper trail. The Tourism Company originally authorized a $193.9 million credit in 2020, tied to an earlier version of the project called Cabo Rojo Resort and Spa. When the concession was amended and renamed Esencia in December 2024, the estimated cost basis rose to $1.24 billion and the authorized credit rose with it, to $497.7 million, an increase of roughly $304 million that senators have separately questioned as premature given the project still lacks final water and energy permits.
The developers framed Esencia as a catalyst for regional economic development, arguing its autonomous infrastructure model could relieve pressure on public utilities while demonstrating the viability of newer water-management policy such as the Rainwater Harvesting Act (Law 91-2024).
The project’s economic study estimates more than $7 billion in long-term economic activity and up to 17,000 direct, indirect and induced jobs. Ruiz Vargas cited Cabo Rojo’s poverty rate, estimated by the U.S. Census Bureau at roughly 38 percent, as evidence of the municipality’s need for investment, and said Esencia’s workforce needs would extend to surrounding municipalities including San Germán, Mayagüez, Rincón and Hormigueros.
He cited examples from similar projects abroad, including a 24-key hotel in the Dominican Republic that generated 400 jobs with salaries four times higher than the surrounding community.
The hearing also exposed tensions between oral testimony and the administrative record. CRLA criticized what it described as inconsistencies between statements made by PREPA representatives at the Aug. 27 hearing and the agency’s own written filings. PREPA had told senators it lacked formal knowledge of Esencia’s off-grid design, a position CRLA said is contradicted by its own November 2025 letter and by OGPe’s July land-use approval. CRLA argued that the administrative record is “correct, clear and transparent,” attributing the discrepancy to “a serious lack of alignment and institutional memory” among agency personnel.
The developers closed by presenting Esencia as a precedent-setting project that integrates environmental science, private infrastructure and global hospitality standards, one they argue demonstrates how large-scale development can be executed without burdening public utilities.
“This is not a reactive response,” the statement concludes, “but a rigorously planned engineering model designed to assume full responsibility for its operational footprint.”
