|By Elaine Walker, The Miami
HeraldMcClatchy-Tribune Regional News
July 08, 2010--Finding traditional bank financing for a mixed-use project in Downtown Hollywood was highly unlikely in the midst of today's credit crunch.
That's one reason developer Charles "Chip" Abele turned to an investor visa program as an alternative financing vehicle.
Abele and his partners in the Gold Coast Florida Regional Center are launching efforts to attract foreign nationals to invest in South Florida real estate projects, as a way to secure a green card.
"The capital markets have basically shriveled up and the banking industry has pulled back from real estate," said Abele, chairman and chief executive of the Gold Coast Florida Regional Center, which is based in Coral Gables. "We've got a lot of projects in the pipeline and we decided we needed to get into the capital business ourselves."
And Gold Coast is not alone. There are 10 regional centers in Florida, approved by the U.S. Citizenship and Immigration Services.
Depending on the location of the project, the minimum investment is either $500,000 or $1 million. The visa applicants must also show that their investment generates 10 jobs.
While the EB-5 investor visa program was created by Congress in 1990 for new business development and job creation, industry experts say that during the past year it's increasingly becoming a popular financing tool for the real estate industry.
"The program has been totally underutilized until recently," said Ronald Fieldstone, a corporate tax attorney with Arnstein & Lehr in Miami, who has worked on eight EB-5 project approvals across the country, including Gold Coast.
"All of a sudden it's become a cause celeb and more people are trying to take advantage of the opportunity," he said. "It's a cheaper source of capital to undertake a project that would not otherwise be feasible in this economy."
Gold Coast just launched plans to begin seeking investors, setting up marketing offices in Venezuela, Mexico, South Africa, Great Britain and China.
The first project it is seeking investors for is Hollywood Circle, a mixed-use development on Young Circle in Downtown Hollywood. The project will include The Circ, a 104-room boutique hotel by Desires Hotels, 397 apartments, a Publix supermarket and additional restaurant and retail space.
For an investment of $500,000 in the Hollywood Circle project, an investor can get permanent resident visas for themselves and their entire family.
There are three other approved regional centers in Miami. Some of the other projects they are seeking financing for include a commercial development on the ground floor of the Marina Blue condominium at 888 Biscayne Boulevard, as well as the University of Miami's Life Science and Technology Park.
Others have talked about securing approval, including Miami developer Sergio Pino and developers of a proposed Margaritaville resort on Hollywood Beach.
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