Where previous posts outlined the components of Flats East Bank Project and its economic benefits, this post looks at the critical question of “Why use EB-5 investment capital?”
The idea of the Flats East Bank was conceived as a true catalyst for change in the struggling city of Cleveland, and the developer and other leaders had been trying to get the Project started for years, but to no avail. Once the credit crisis hit and the economy worsened, access to critical capital to move the Project forward became even more difficult. Yet even in the face of frozen credit markets, the development team was determined to get this important Project started.
Since the Project was the first new large-scale development in Downtown Cleveland in decades and had significant potential for positive economic spillover effects (such as job creation, revitalization of a vacant section of riverfront, and increasing the attractiveness of Downtown as a destination), a number of entities joined together to help put together financing that would compliment the existing private investment. Even with the combined assistance of the more than 25 different public and private entities that joined together to finance the Project, it still was not enough. It seemed that, unless some other option presented itself, the development team had exhausted all financing options and the Flats Project would have to remain on the drawing board.
Fortunately, EB-5 financing from CiF was able to fill the critical gaps in the Project’s financing, allowing the Project in its entirety to move forward. The EB-5 investment capital, provided by ninety foreign investors and accounting for about 15% of the total first phase, was able to complete the Project’s financing and the East Bank of the Flats is now home to the bustling E&Y office tower and Aloft hotel.
We at CiF are proud to have been an integral part of the construction of the Flats East Bank. The Project has delivered positive outcomes to Cleveland since coming online in the summer of 2013 and, were it not for CiF’s EB-5 Investors, might not have been built at all.