According to Immigration Policy.org, the Immigrant Investor Program, commonly known as the EB-5 Visa program, spurred the creation of more than 33,000 jobs, generated at least 346 million in federal tax revenue and contributed more than 2.6 billion dollars to U.S. GDP – all between 2010 and 2011. The program is further said to have created an additional 31,000 jobs and spurred 1.6 billion dollars in direct investment in 2013 and yet it remains a relatively unknown funding tool among finance professionals. It is even less known to the general public despite several recent articles on the program in media such as the Wall Street Journal and Forbes over the last 5 years and more surprisingly the mere fact that the program has been in existence since 1990!
The program is however by no means a secret to some of the nation’s most influential real estate developers. Although some people think of the program as a source of funding for small projects that find it difficult to source domestic funding it turns out that some of the largest real estate projects in the nation have in fact been tapping this capital source. The projects below are five high profile developments in New York and San Francisco. These projects have all raised more than $100 million in foreign investor capital through the program and in one case (the Barclays Center) has raised as much as $600 million!
Project: Hudson Yards, New York
EB-5 Funds: $800M
Developer: Related Coz
This entertainment and sporting center in Brooklyn, NY raised more than $800 million in EB-5 funds (3/4 of which came from Chinese investors) towards meeting its $20 billion price tag. When one takes into account the fact that only 10,000 visas are allotted to this category on an annual basis and that only a portion of those represent funds invested (visas are allocated per family not per investment) then it is possible this project absorbed up to a third of investments made in the EB-5 market in a given year.
Pacific Park, New York
EB-5 Funds: $577M
Developer: Forest City Ratner
Pacific Park, another project in the city that never sleeps, is a mixed-use development that includes a public school and retail elements among other tenants is believed to have raised 577 million dollars through the Immigrant Investor Program. The project’s relationship with Shanghai-based Greenland Holdings, a 70% owns a stakeholder, may have been beneficial in securing foreign investors.
Four Seasons Hotel at 30 Park Place, New York
EB-5 Funds: $250M
Developer: Silverstein Properties
This luxury brand, expected to open in 2017, has tapped the program to build out a stylish offering for guests that includes a heated indoor swimming pool, a yoga studio, a fitness facility, and even a screening room – a definite upgrade to the Manhattan hotel scene.
Hunters Point Shipyard, San Francisco
EB-5 Funds: $250M
Developer: Lennar Urban
A project of immense proportion, this 8 billion dollar development will house over 12,000 homes, an outdoor mall, and 3 million square feet of office space. Over fifteen years in the making, Hunters Point has accepted venture capital from almost 500 foreign investors and promises a brighter future for Bay Area residents. In fact, this EB-5 program is part of a “generation-long effort to transform the toxic former naval base, which is next to the low-income Bayview neighborhood.” By utilizing the Immigrant Investor Program, the Bay Area has been able to revamp its infrastructure and improve the community at large. The EB-5 Program houses truly unlimited potential for injecting downtrodden areas with fresh capital and new hope.
701 Seventh Ave, New York
EB-5 Funds: $200M
Developer: The Witkoff Group, Winthrop Realty Trust, Lorber’s New Valley LLC, and Mark Simmons Maefield Development
701 Seventh Avenue will be a grand statement in Times Square – the heart of New York City. Standing at a prominent 39 stories and harboring the City’s second EDITION hotel (and third in the country), this stunning site will be a welcome perch from which to view the New Year’s Eve ball drop for many years to come.
As EB-5 projects are private transactions we may not be aware of the full impact on our economy however for more examples of large projects supported by this program the attached article lists twelve of the largest projects known to the author. The projects noted tend to be hotels and luxury concepts that may lead you to think this program only furthers the socio-economic standing of those who are already better off but there is one very large project that supports the infrastructure of the country as a whole that has not received a lot of attention: the expansion of the Louisiana Gulf Transfer Terminal.
The Louisiana Gulf Transfer Terminal (LIGTT) is a critical infrastructure project designed to improve the transportation of goods into and out of the country and to make America more competitive globally. Currently, only two percent of cargo in the United States is transported by water, meaning the vast majority of cargo is actually transported by highway. This inefficiency then leads to a tremendous amount of wear and tear on not just our highways, but on our environment as well through the form of carbon emissions. The LIGTT would rectify this issue by reducing wear on highways and by reducing the number of vehicles on the road, thus ultimately reducing carbon emissions as well. Not to mention, transportation by water costs less than transportation by road. So not only is it healthier for the environment for us to utilize waterways as transport avenues, but consumers will ultimately pay less since it took less money to bring the goods to market. In addition to the infrastructure solutions the LIGTT poses, the project also helps to relieve economic disparity.
More specifically, the project intends to fill at least 25% of its available positions with army veterans. Ideally, this will help to alleviate the rampant unemployment rates currently plaguing many former officers. Ultimately, the project should create 180,000 direct and indirect jobs, thus producing billions of dollars in revenue across 32 states by even the most conservative of economic projections. With the development of the Louisiana Gulf Transfer Terminal, we will be aiding out-of-work veterans, cutting down on carbon emissions, reducing wear and tear on our highway infrastructure, and generating literally tens of billions of dollars for an economically challenged community.
The EB-5 Program has made a vital contribution to our economy and several key sectors are buzzing with activity like never before. I, as part of The Opes Group, would like to help entrepreneurs to take advantage of it. Should you be interested in learning more, please do not hesitate to reach out via my contact page or The Opes Group website. We look forward to hearing from you!