New twist on the China trade
A Wilmington real-estate project that was undeveloped and unfunded is suddenly under construction and flush with Chinese cash, thanks to a foreign-investor program offered by U.S. Citizen and Immigration Services. In 2008, developer Chuck Schoninger bought more than 30 acres along the Cape Fear River in downtown, planning to build a marina and hotel. But when the recession hit he was unable to secure the roughly $40 million in financing he needed to finish the project. Spurred by business contacts he made through a Taiwanese acquaintance, his USA InvestCo LLC opened an office in Guangzhou — a large city northwest of Hong Kong — about a year ago. He then attracted backers by dangling the Immigrant Investor Program in front of them.
The program, created during the George H.W. Bush administration, grants foreigners visas if they invest $1 million in a U.S. company. (Investors in Wilmington-based USA InvestCo only have to pony up $500,000 because the city’s high unemployment rate — 10.6% in December — qualifies it as a targeted employment area.) The project also must create 144 jobs and 650 indirect jobs. Since opening the office in China, USA InvestCo has sold 41 of the project’s 55 investment units to Chinese investors, generating more than $10 million and allowing Schoninger to begin construction on the 204-slip marina in February. He plans to start on the $20 million hotel later this year. “The program really seemed to be the only way that I could think of that allowed us to complete the project,” he says.
The anticipated return is only 1% annually over the first five years, but investors, their spouses and children younger than 21 get permanent U.S. resident status if they stay in compliance with their visas during a two-year trial, after which they can apply for citizenship. The program issued more than 4,200 visas in 2009, a 210% increase from the year before.
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