What happens when a company buys an existing EB-5 regional center?
Does it have to stick with that regional center's previously approved projects? What if it has other ambitions? And what if investors are already involved?
In the case of the Colorado Intercontinental Regional Center (CIRC), which was recently purchased by InvestAmerica EB5, LLC, the regional center's new owners won't have to move forward with any of the projects USCIS initially approved. They'll actually be pursuing completely different investments.
CIRC's first projects
Last year, we published a profile of CIRC. The regional center had a menagerie of projects in the cards, one of which involved shipping downed Colorado timber to Georgia, where it would then be converted into cellulosic biofuel. Other investments included renovation of historic properties in downtown Leadville, Colorado.
But now that the regional center has new owners, those projects are no longer active.
"We wanted to see our regional center reach its potential, and we firmly believed that it had a better chance in InvestAmerica EB5, LLC?s hands than in our own," said Jeff Edwards, a former principal at CIRC. "[InvestAmerica] had imminent projects and investor contacts that would enhance the likelihood of CIRC developing into a successful regional center in the near term," he said.
And it looks like those "imminent" projects may be the ones getting the most attention after the transition.
"We have three or four projects that we're looking at doing right now," said Andy Klein, a principal at Westside Investment Partners, Inc. in Greenwood Village, Colorado and the new owner of InvestAmerica EB5.
Two of the regional center's projects are for new hotels. Another is a senior living center in Southeast Denver. The original CIRC projects, however, don't seem to be on the new owners' radar.
"We didn't buy the regional center to invest in those projects," said Klein.
And the investors?
Had CIRC already acquired any EB-5 immigrant investors for its projects, the entire InvestAmerica acquisition scenario might be completely different.
But according to Klein, CIRC never raised money for those projects. Not having any EB-5 investors whose investments it needed to honor has allowed InvestAmerica to not only acquire the regional center, but to pursue projects that are more in line with Westside Investment Partners' line of work ? real estate.
"That's why we're pursuing completely different investments," explained Klein.
Although EB-5 investors won't be helping Colorado turn its trees into ethanol any time soon, Edwards says he's comfortable with where Klein will take the regional center. "We put what was best for the regional center and what was best for Colorado ahead of our own personal interests," he said.
With its acquisition of CIRC, InvestAmerica could be in a good position. By late 2010, CIRC had expanded to all of Colorado. And with the state's international renown as a skiing destination, Klein's group could have a leg up when it comes to selling his projects ? and the state ? to EB-5 visa investors.
He'll have his work cut out for him, though. Besides ski resorts, hotel projects are still among the most popular investments on the EB-5 scene.
Image credit: Bradley Newman