“People come for the tax breaks, but they stay for the island life,” said Grossman. He moved his wife and four children to the island and is now co-owner of a professional basketball team, the Guaynabo Mets, along with Watts and Farrell.
Watts, whose maternal grandmother was Puerto Rican, said he knew about the tax breaks long before he decided to make the move. “I got tired of spending half my life on an airplane,” the Texan said. “If I have to go back for a hearing, I’ll do it, but I’d rather just sit on my porch and practice law.”
It’s not a bad perch. The four-bedroom, three-bath oceanfront condominium Watts bought when he sold his San Antonio mansion is in Dorado, about 23 miles (37 kilometers) from San Juan. It adjoins the Ritz Carlton Reserve, a lush 50-acre property developed by the Rockefeller family.
Living there gives Watts access to four courses developed by acclaimed golf-course architect Robert Trent Jones Sr., an 8,000-square foot fitness center and the Watermill, a $12-million aquatic park for when his grandchildren visit.
Watts recently stood in his backyard by the infinity pool and watched snorkelers in the ocean ogling brightly colored parrot fish, seahorses and manta rays. In the palm trees, small black birds cooed their songs as a light breeze ruffled leaves. “I’m not much of a beach guy, but my wife sure loves it,” the lawyer said. “And it’s not too bad to sit out here and work.”
Watts won’t say what he paid for his island digs, but real-estate listings for condos in the Dorado area range from about $4 million to about $10 million. Homes go from $9 million to $16 million, according to Sotheby’s Puerto Rican website. Shkolnik and Napoli live in the same development as Watts.
Instead of joining colleagues who snapped up buildings in San Juan, Watts centered his offices in the suburb of Guaynabo and how has more than 70 employees, including 11 lawyers.
Watts, Grossman and Farrell said they didn’t need to bring armies of staff with them when they moved to Puerto Rico. The lawyers say they’ve hired locals for lawyer and paralegal positions and been pleased with the quality of their work.
There’s no shortage of legal talent on the island, thanks to Puerto Rico’s three law schools that have produced a total of about 10,000 attorneys over the years, according to Watts.
Not everybody is happy that big-shot lawyers have come to the territory. Home prices across the island have jumped more than 20% since 2020, according to the Federal Housing Finance Agency. Critics lay the increase directly at the feet of immigrants from the mainland.
The influx of wealthy professionals is “pricing out the middle class in some areas,” said Raul Santiago Bartolomei, a professor of planning at the University of Puerto Rico. He’s skeptical that jobs being created by the law firms arrive will do much to affect the island’s widespread poverty.
Locals are particularly upset that they don’t get to claim the tax incentives, Bartolomei said. “There’s a sense that rich lawyers are getting breaks and those who live here have been left with little,” he noted. “There’s a sense of unfairness.”
Puerto Rican economic development officials credit the incentives with creating some 36,000 jobs and driving investment of more than $2.5 billion in the island.
But the Center for a New Economy, an island-based think tank where Bartolomei is a research fellow, recommended in an April report that some of the island’s 424 tax breaks be eliminated. The center said the package costs Puerto Rico about $21 billion a year, undermines competitiveness, and hinders entrepreneurial activity.
Despite the opposition, the lawyers keep coming.
Chris Coffin, a New Orleans-based class-action lawyer, set up shop in San Juan in February and moved his family to the island. “We visited Puerto Rico and were very impressed with the lifestyle,” Coffin said in an interview. “We don’t see a downside to this move.”
This article was provided by Bloomberg News.