Interest in Hollywood from foreign investors is expected to grow under a U.S. Citizenship and Immigration Services program that offers real estate development opportunities in exchange for a special visa that can shave years off an immigrant’s wait for permanent U.S. residency.
The EB-5 Investor Visa Program, which was authorized by Congress under the Immigration Act of 1990, offers green cards to foreign nationals and their immediate family members with an investment of $1 million, or $500,000 in target areas with a high unemployment rate, that also creates a minimum of 10 American jobs.
EB-5 (Employment Based 5th Preference) investments in the American economy can be made directly into a business or through a federally approved regional center that promotes economic growth by encouraging and managing investments in the U.S. from abroad and helps expedite the receipt of a green card for immigrant investors.
Florida currently has 10 regional centers, the newest being Gold Coast Florida Regional Center (GCFRC), which opened in Coral Gables in July, and focuses on key real estate investment and development opportunities for foreign investors in the tri-county area.
Its first project will be the 25-story Hollywood Circle mixed-use development on Young Circle in the heart of Downtown Hollywood, which will consist of 397 residential apartments; 20,000 square feet of ground-floor shops; a 48,000-square-foot Publix Super Market; a restaurant; and The Circ, an upscale boutique hotel by Desires Hotels.
Veteran developer Charles “Chip” Abele, GCFRC’s chairman and one of four founding partners, called EB-5 regional centers a “win-win situation.” The investor program benefits not only foreign nationals seeking to realize the American Dream but also the local community as well, as an infusion of foreign capital creates new employment opportunities and boosts the economy.
“As an officially designated regional center, we will solicit international investments for select South Florida projects that fuel jobs and economic growth,” said Abele, who recently spent close to three weeks soliciting investors in Hong Kong, Shanghai, South Africa and London. “Projects can be funded without bank loans or debt, enhancing potential for profitability.”
Abele anticipates that GCFRC will generate more than $850 million and create more than 18,000 jobs in South Florida during the next five years. The Hollywood Circle development is expected to pump $160 million into the local economy and create approximately 3,000 new jobs. Construction is scheduled to begin next summer.
“Hollywood Circle will enhance one of Hollywood’s most important sites and attract the consumers and residents needed to create a sustainable downtown environment,” Abele said. “Its benefits will include nearly 400 new upper-income residential families, millions in annual tax revenues and a $500,000 public improvements contribution to Hollywood’s ArtsPark.”
Hollywood Circle is the first EB-5 development in Broward County to be fully approved by U.S. Citizenship and Immigration Services and only the second one in South Florida. GCFRC also plans to fund a second project in Hollywood, the Great Southern Hotel redevelopment, as well as the Cypress Office Park project in Fort Lauderdale.
Another Hollywood project that is courting international investors is the $126 million Margaritaville resort planned for Johnson Street and State Road A1A on a 6-acre, city-owned parcel that other developers have unsuccessfully tried to develop over the past several years.
Financing for the 17-story hotel/restaurant project will consist of about $75 million from foreign investors, $10 million in developer equity and a $10 million loan from the City’s Community Redevelopment Agency to be repaid in 10 years at 5 percent interest. Developer Lon Tabatchnick will pay the City $20,000 a month during construction, which is scheduled to begin Oct. 1, 2011. The City will be paid $500,000 a year, with a 3 percent increase annually, once the project is finished. It is expected to create 3,000 jobs.
Because the Hollywood projects are located in a Targeted Employment Area (TEA) where unemployment is at least 150 percent of the national average, each participant will invest a minimum of $500,000, as opposed to the $1 million capital investment that’s typically required for projects outside TEAs.
Qualified EB-5 investors, spouses and children younger than 21 years old initially receive conditional visas and are granted permanent green cards once they demonstrate that two years of U.S. residency have passed, the original investment requirements have been met and maintained, the investment has been continuous, and the required number of American jobs have been produced.
The EB-5 Regional Center Program, which sets aside 3,000 green cards each year for foreigners who invest in designated regional centers such as GCFRC, is considered one of the most flexible immigrant investor initiatives available, with no requirements with regard to language, education, business or management experience, or U.S. sponsorship. There are no quota backlogs that are typical with many employment and family-based green card categories. In addition, investment capital can come from any lawful activity or source, including a gift or inheritance, and investors are not required to manage their investment on a daily basis, which allows them to pursue other professional and personal ventures.
“The EB-5 Program provides a unique financing mechanism for a number of important projects in South Florida, and in particular, two significant development projects in Hollywood,” Alan Koslow, a partner with the law firm of Becker & Poliakoff, P.A. and president of the Greater Hollywood Chamber of Commerce, added. “This financing tool also provides immigrants from Canada, Latin America and South American and Eastern Europe to invest in these development projects and obtain a permanent green card. Since there are already thousands of tourists and residents in the Hollywood area from these areas of the World, the EB-5 Program has a significant chance of success.”
For additional information on Gold Coast Florida Regional Center and foreign investor opportunities and services, visit www.gcfrc.com.
