SAN JUAN, Puerto Rico -- The Dupont Plaza Hotel, where 97 people died in a New Year's Eve arson fire two years ago, has been denied an operating permit because of a fight over installation of sprinklers, officials said Monday.
The dispute between the Puerto Rican government, the Dupont Plaza and its insurance company, American International Insurance Co. of Puerto Rico, has delayed the hotel's scheduled late January reopening at the height of the tourist season.
The Commonwealth Regulations and Permits Administration, known by the Spanish acronym ARPE, has refused to issue the hotel an operating permit unless it meets regulations mandating sprinklers on every floor, said Pablo Collazo, an ARPE spokesman.
'It's completely sure that we're not going to give it to them until they comply' with the regulations, Collazo said. The hotel's reopening date 'is indefinite until they comply,' he said.
The 20-story hotel, which plans to reopen under the name Palm Hotel and Casino, now has sprinklers on its first three floors, where the most damage from the Dec. 31, 1986, fire took place.
The blaze killed 97 people and was the second-worst hotel fire in U.S. history. The worst was the 1946 Winecoff Hotel fire in Atlanta, which killed 146 people.
Three members of the hotel's Teamsters union local pleaded guilty to setting the fire amid bitter contract talks and have been sentenced to long prison terms. Three other union members have been charged in the case.
American International, in charge of rebuilding the hotel, contends it has returned the building to its pre-fire condition, said Eugene Wollan, a lawyer with the New York firm of Mound, Cotton and Wollan, which represents the insurance company.
The $8 million to $9 million cost of reconstruction includes installation of sprinklers on the first three floors, and reimbursement for that work also is in dispute, Wollan said in a telephone interview from New York.
Ruben Nigaglioni, a Dupont Plaza lawyer, said the hotel had a government permit before the fire and American Insurance must return it to Commonwealth standards before it reopened.
'We contend that they have to turn over a building with a use permit, and if (government officials) require sprinklers they have to pay for it,' Nigaglioni said.
The Dupont Plaza is owned by San Juan Dupont Plaza Corp., a subsidiary of California's Holders Capital Corp.
Under a 1987 amendment to the Commonwealth Building Code prompted by the Dupont Plaza fire, hotels have until December 1989 to install full sprinkler systems and other fire prevention devices.
But ARPE officials contend they have the right to force the Dupont Plaza to install the sprinklers before the 1989 deadline. The exact cost is unknown, but Wollan put it at 'several hundred thousand dollars.'
The San Juan Star newspaper has said local officials were reluctant to let the hotel reopen without full sprinklers, especially since the government has lent it $6.7 million and is weighing an additional request for $2.4 million.