The recession that forced real estate developers to find a new way has a devotee in Allen Heise.
Allen Heise was stuck in developer's hell late last year, when he desperately tried to wring out financing for a large-scale marina project in Charlotte County.
No surprise, the list of nationwide investors willing to pony up funds for a project with real estate and boats was puny. “I was schlepping this thing around to hedge funds and venture capital funds,” says Heise. “Anyone who still had money.”
Then Heise received a call from Kay Tracy with the Charlotte County Economic Development Office. Tracy asked Heise, a veteran developer who has built commercial buildings in Chicago and condos in Naples, if he knew the spot for his planned marina was a Targeted Employment Area and a federally approved EB-5 visa site.
Heise told Tracy he never heard of an EB-5 site or a Targeted Employment Area. But it turns out both programs represented a golden opportunity for Heise and his family to salvage the high-end marina project — and the $8 million Heise, his wife and his father invested in it going back to 2004.
The EB-5 visa program, which stands for Employment Based-Category Five, offers foreign nationals an opportunity to obtain a green card, and potential U.S. citizenship, if they invest at least $1 million in an American-based project that creates at least 10 jobs. It was part of the Federal Immigration Act of 1990.
The Targeted Employment Area side, meanwhile, provides a break for regions across the country with unemployment 150% or greater than the national average. Charlotte County meets TEA stipulations, so foreign invesotors only have to meet a $500,000 threshold.
Heise initially shuddered at the thought of teaming up with the ultimate bureaucracy, i.e., the federal government. Says Heise: “I wasn't really crazy about the idea of having a federal agency look over my shoulder.”
But Heise quickly realized the EB-5 plan was his best ticket to success. And the U.S. Citizenship and Immigration Services office approved the project's EB-5 status late last month, after a yearlong process.
The project, Heise says, can now be backed by up to 68 foreign investors. That will cover $34 million at $500,000 apiece.
Plans for the project, the Charlotte Harbor Regional Center, are a hybrid of government and private enterprise. The plan includes:
• New offices for the Charlotte County Economic Development and Tourism departments;
• A clearinghouse for current and future potential EB-5 investors;
• A full-service marina with 645 boat slips, plus a restaurant, bar and swimming pool;
• A rooftop heliport.
The marina side will be run under a fractional ownership model, says Heise. The model is akin to NetJets, where clients can buy into use of a private jet through monthly and hourly fees.
But Heise's focus is currently on recruiting foreign investors, not the marina. He recently met with immigration attorneys and foreign officials, both in Florida and New York. He hasn't closed on any investments, yet, but he says he's received interest from a variety of countries, from China to Germany.
Still, at a minimum, the EB-5 program granted Heise's project new life. Says Heise: “We're thankful Charlotte County brought this to our attention.”