Congress reauthorized key Cleveland financing program

A program that has played a pivotal role in bringing $220 million in investments to the region - helping to make possible $1.5 billion of Cleveland’s construction renaissance downtown and elsewhere - was reauthorized by Congress as part of the Omnibus spending bill. 

Cleveland International Fund (CiF) has used investments from foreigners to help finance job creating projects ranging from the revival of the Flats East Bank to the revitalization of the former Crowne Plaza Hotel into the new Westin Hotel located adjacent to the Cleveland Convention Center. 

“This reauthorization from Congress will allow us to continue to help facilitate Cleveland’s ongoing, multi-billion dollar resurgence, as well as play a similar role in an expanded service area that includes Columbus, Cincinnati, Akron, Youngstown and Pittsburgh, PA.” said Stephen Strnisha, Chief Executive Officer of CiF. “Our program has pumped more than $220 million of foreign capital into numerous Cleveland projects that have created jobs and reinvigorated large sections of the city. These projects would not have gone forward or been as financially viable without EB-5 financing.” 

Click here to read the Press Release

EB-5 Reauthorization and Key Reforms

As the holiday season approaches, Congress is running up against its December 11th deadline to reauthorize the EB-5 Immigrant Investor program. 

The EB-5 program has allowed CiF and hundreds of other Regional Centers across the country to use foreign direct investment from overseas investors to finance new development projects and create / retain jobs for US workers.  However the EB-5 program is slated to expire on December 11th and if Congress does not act to reauthorize, this powerful tool for economic development will not be available to drive job creation in 2016. 

Summary of Industry-Supported Reforms to the EB-5 Program

The EB-5 immigrant investor program administered by the USCIS is – for the second time this year – in need of congressional reauthorization in order to continue to operate. Over the past 5 years, CiF has used the EB-5 program to raise $220 million for job creating, catalytic investment projects in the Greater Cleveland area. However, if Congress does not renew the program on or before December 11, 2015, the EB-5 program will lapse and CiF will no longer be able to attract foreign investment capital to the area using EB-5.

The Uptown Expansion EB-5 Project

The Uptown Expansion Project is CiF’s fourth EB-5 project and the second development in Cleveland’s University Circle neighborhood to receive EB-5 funding (CiF also issued an EB-5 loan to University Hospitals that partially financed construction of the Seidman Cancer Center in University Circle.) Developed by local real estate company MRN Ltd., the Uptown Expansion is a mixed-use project located on corner of Euclid Avenue and Ford Drive and builds off of the initial Uptown development.

The first Uptown development saw the construction of two three-story buildings, each divided into market-rate apartments on the top floors and retail space on the ground floor. The Uptown expansion mimics this layout, placing living space on the upper floors and retail space on the ground floor of a single, six-story building. The expansion is located just south of the original Uptown project site, situated across Euclid Avenue from Cleveland’s new Museum of Contemporary Art (MoCA) and a block southeast of the Cleveland Institute of Art (CIA) main campus.

The Westin Downtown Cleveland: Why EB-5?

The newly opened Westin Downtown Cleveland was built via a collaboration between private developers and CiF using capital from EB-5 investors. CiF was pleased to have been a lender to the project since, without EB-5 financing, the project would not have moved forward.

In its previous life, the building on the northeast corner of East 6th Street and St. Clair Avenue operated as a Crowne Plaza hotel. But years of neglect and mismanagement left the building in dire need of rehabilitation; windows and plumbing leaked, air conditioning was not reliable, and some guest rooms were simply locked shut and forgotten about as the cost of repair was deemed too high. Ultimately, the Crowne Plaza closed and it seemed the most likely future for the building was to become another empty tower in Cleveland. To make matters worse, the dilapidated former hotel was in a very visible section of downtown, only a block away from the construction site of the new Cleveland Convention Center.

The Westin and Cleveland’s Downtown Revitalization

Downtown Cleveland’s economic resurgence has been made possible by entities from different sectors working together to bring new development to neglected corners of the city. CiF is one such organization; working with developers and local government entities to provide low-cost EB-5 financing to job creating projects. The Westin Downtown Cleveland is a great example of one of CiF’s successful collaborations, as the project helped revitalize a very visible section of downtown and has created positive economic impacts that ripple across the local and regional economy.

The Westin Downtown Cleveland EB-5 Project

CiF’s third EB-5 project was the transformation of the former Crowne Plaza hotel at the corner of East 6th Street and Saint Clair Avenue in downtown Cleveland into a new Westin Hotel. The Crowne Plaza had long been in disrepair and was in desperate need of renovation, reflagging the hotel as a Westin – complete with new amenities and significant upgrades – was an excellent way to prevent the building from sliding into further dilapidation and disuse.

The need to preserve the hotel at the corner of East 6th and Saint Clair was only made more pressing by the construction of the Cleveland Convention Center and attached Global Center for Health Innovation, which was underway just a block to the east of the property.

Working with the property’s owner, CiF raised $36 million in EB-5 funds from foreign nationals, for use in converting the Crowne Plaza into a state of the art Westin hotel. Construction of the Westin project tracked the construction of the Convention Center (and attached Global Center) with the Westin opening for business less than a year after the opening of the Convention Center began operations.

The 22-floor Westin has been operating for more than a year and its 484 rooms provide lodging for business travelers, convention-goers, and tourists alike. The hotel offers signature Westin amenities and has ballrooms and meeting space available for private use. The Westin also boasts one of Cleveland’s finest steakhouses, The Urban Farmer, which specializes in locally sourced ingredients drawn from sustainable sources. Further, Cleveland’s own LAND Studio worked with hotel management to fill the lobby, guest rooms, and other hotel spaces with more than 1,500 pieces of artwork, many created by local Cleveland artists.

CiF was glad to have been able to partner with the developers to see the completion of the new Westin Downtown Cleveland. The project has helped revitalize a very visible part of downtown Cleveland and the Westin provides quality lodging options to guests of all kinds, helping to further the mission of the Convention Center.

Next: The Westin and Cleveland’s Downtown Revitalization
Previous: University Hospitals Project: Why EB-5

University Hospitals Project: Why EB-5

University Hospital’s (UH) ‘Vision 2010’ expansion campaign saw the construction of several new hospital facilities and upgrades to existing facilities, that significantly increased UH’s ability to serve patients. Thanks to imaginative leadership the community and UH, the expansion plan committed to hiring an unprecedented number of local union contractors and vendors for the construction and procurement operations of these new and upgraded facilities. All of which greatly expanded the already significant positive economic impact of Vision 2010’s new investment. 

University Hospitals EB-5 Project: Anchor Institutions & Economic Growth

The story of Cleveland's economic rebound has been made possible by a myriad of different entities, all working together toward the common goal of increasing growth in the city. Some of the key players that have made this ongoing economic development possible are the city's anchor institutions.

In Cleveland, large hospital systems and universities are among the most visible entities to be considered anchor institutions since they employ thousands of people, require considerable support services from vendors, have large annual budget expenditures, and have deep roots within the region.

The University Hospitals EB-5 Project

After the success of the Flats East Bank EB-5 Project, CiF was eager to find another catalytic development project in Cleveland. As the city has developed into a hub for advanced healthcare research and technology (two of the world’s leading healthcare systems – the Cleveland Clinic and the University Hospitals Health System (UH) – are based in the city), we at CiF were interested in finding a way to use EB-5 to support Cleveland’s growing healthcare industry.

It quickly became apparent that University Hospitals’ “Vision 2010” system-wide expansion plan would be an excellent fit for EB-5. UH’s multi-year plan to update existing and construct new healthcare facilities not only satisfied government standards for the EB-5 program in terms of job creation and supporting economic development but also appealed to the interests of EB-5 Investors.

Flats Phase I: Why EB-5?

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. 

CiF Regional Center Update: New Approvals!

CiF is pleased to announce that we have received new approvals from the USCIS for two of our EB-5 projects!

EB-5 Investors who helped finance Phase II of the Uptown project in University Circle are now receiving I-526 approvals! The Uptown expansion consisted of the construction of a new mixed-use retail and residential building, which houses The Corner Alley and student apartments for the Cleveland Institute of Art.  A group of foreign investors, working through CiF, is placing $5 million USD into the project, helping to complete the overall project financing.

Further, the Flats East Bank Phase II EB-5 project has received I-924 approval from the USCIS, meaning that the agency has accepted the project’s business plan as well as the economic methodology that will later determine the project’s total job creation.

This is an important milestone for any EB-5 project, since creating new jobs is one of the key criteria an EB-5 investor must meet in order for the investment to result in permanent US residency. 

CiF is pleased that we have been able to deliver positive outcomes for our investor clients while using their capital to help boost economic development and job creation in Greater Cleveland.

Flats East Bank and Cleveland’s Continued Economic Resurgence

The past 10 years has seen a remarkable turn around for downtown Cleveland. The city’s downtown core and inner ring suburbs have been home to an impressive alliance of public and private entities that has successfully encouraged new development in locations that were previously overlooked as viable investment options.

CiF’s Stephen Strnisha @ GCP Insights

The Greater Cleveland Partnership’s interview series “GCP Insights” sits down with CiF CEO Stephen Strnisha to talk about the EB-5 program and how CiF has used the program to pump hundreds of millions of dollars in foreign capital into Greater Cleveland development projects.

The Flats East Bank Project: An Overview

The Flats East Bank project began with the idea to rebuild and revitalize a largely empty section of downtown Cleveland, located along the east bank of the Cuyahoga River. New development was devised and a plan to build a vibrant and livable urban district complete with housing, entertainment & retail destinations, and office space emerged. The combined effect of these new elements near the downtown core that would not only draw tenants to new buildings but help reinvigorate a part of Cleveland suffering from economic stagnation.

The idea to capitalize on Cleveland’s underdeveloped waterfront is not new per se and the initial plans for the Flats East Bank appeared more than a decade ago. However because of various limiting factors (most notably the 2008 Financial Crisis that destroyed many developers’ access to traditional credit sources) the Flats East Bank seemed destined to remain an intriguing concept of new downtown Cleveland development.

EB-5 is Working for Cleveland

Welcome to Cleveland International Fund’s first in a series of blog posts that provide an insider’s view of how the USCIS’ EB-5 Program is helping finance economic development across Greater Cleveland.

For those new to our blog EB-5 is the US Government’s Immigrant Investor program that allows foreign nationals who invest a significant amount of vetted capital into a job-creating US project or business to then be eligible for US residency. CiF is a USCIS Regional Center, which is a private company authorized by the USCIS to create and market these kinds of investments.

With more than $200 million in EB-5 funds under management, CiF has consistently recruited foreign investors and used their investment capital to create jobs and fill critical gaps in financing, allowing for the completion of several major Cleveland developments.