Artists Row: Studio 3807 and The Artisan

Reports

Artists Row: Studio 3807 and The Artisan: Contact Information

Contact Person

Michael Kolodner

Phone

631-423-4290

Email

mkolodner@gcmafunds.com

Web Site

www.eb5dc.com

Project Management

Artists Row: Studio 3807 and The Artisan: Investments

Reg. D?

Yes

Rule 506

506 (b)

Reg. S?

Yes

Investment type

Loan

Total amount of estimated funding required for all phases of development(in Millions)?

$67.162

Number of planned phases (projects) in development?

2

Expected time to complete this project or phase of overall development?

more than 12 months

Is this a new commercial enterprise or purchase of an existing troubled business?

New commercial enterprise

What ratio of equity to debt would best classify the source of overall funding for the project / development?

25% equity : 75% debt

What percentage of overall funding has been raised to date?

more than 75%

Does the investor need to be accredited to invest?

Yes

What are the expected financial returns for this project?

Class A EB-5 investors entitled to preferred return of 2% P.A. plus 60% of net remaining profits after Fund expenses (Pre-tax)

On what premise are those projections made?

Loan from CARc Job Fund- The Artists Row Project Loan Series LLC (the "Fund") to developer of the Artists Row Project bears interest @ 5.0% P.A. Interest payable quarterly in advance from developer funded interest reserve held in segregated account of the Fund. Initial Loan closing occurred 2/17/2017. Phase 1 construction began Q3 2016. Phase 1 fully financed with equity from developer and Prince George's County, Eagle Bank 1st mortgage loan and bridge financing. Phase 2 construction expected, subject to completion of construction financing, to begin Q2 2017. Additional Loan advances for Phase 1 to be made by the Fund to developer as additional EB-5 subscriptions received. Maximum Fund Loan for Phase 1 is $18.0 million and up to $25.5 million if both phases constructed, with no minimum amount required.

Are returns paid on the investment prior to maturity?

Yes

If Yes, when are they paid?

Annually

Can you describe in more detail how returns are paid, and under what conditions? For instance, are they only paid if the project is positive cash flow or profitable. What expenses must be accounted for and paid prior to distributions are paid to investors?

The Fund is investing in the Artists Row Project Loan, the advances on which accrue interest at 5.0% P.A. with principal due and payable upon maturity (2/14/2022). Upon the initial and each subsequent Loan advance, the developer is required to fund an interest reserve sufficient to pay interest on the outstanding balance of the Loan through the 4th anniversary of the initial Loan closing (dated as of 2/14/17) and thereafter, as necessary, to maintain the interest reserve in an amount sufficient to pay interest through maturity of the Loan. The Fund is entitled under the Loan Agreement to transfer from the interest reserve, quarterly in advance, the amount equal to the full amount of the quarterly interest on the outstanding Loan balance thereafter accruing. The Interest income received by the Fund will first be used to pay Fund Expenses, as defined in the Limited Liability Company Operating Agreement of the Fund, which include the fees and disbursements of the independent Fund Administrator, fees incurred by the Fund, if any, for legal, tax and accounting services, the Management Fee payable to the Manager of the Fund (@.5% quarterly), and other permissible Fund Expenses. Class A Members of the Fund, including all EB-5 Investor Members, are thereafter entitled to a 2.0% P.A. preferred return, payable from the realized income of the Fund net of such Fund Expenses, plus 60% of the income, if any, remaining after such payment (or provision for payment) of Fund Expenses and the 2.0% preferred return, and prior to the payment of any return to the Class B Member. The Class B Member of the Fund is an affiliate of the Fund Manager and is entitled to 40% of such income, if any, remaining after such payment (or provision for payment) of Fund Expenses and the 2.0% preferred return earned by the Class A Members of the Fund. The Fund expects to make distributions to its Members at least annually. The amount of Fund income available to make any such distributions is primarily dependent upon the size of the Fund and the amount of the Loan investments made by the Fund, which will vary as a result of the number of EB-5 investors in the Fund, particularly during the first three years.

Can you please describe the expected exit strategy and what source(s) of debt or equity are expected to be used to repay the investor’s capital investment?

The Loan from the Fund is expected to be repaid from the proceeds of the refinancing of the Artists Row Project by the developer, which is anticipated to occur sometime between 3 and 5 years, after the rent-up period and stabilization of the Project. The Loan is not prepayable prior to maturity by the developer. The original maturity date of the Loan is 2/14/2022, but is subject to extension, at the option of the developer upon 90 days prior notice to the Fund and the payment to the Fund of an extension fee and the replenishment of the interest reserve through the extended maturity date, twice for successive 1-year extension periods.

Can you please describe the procedure for allowing the investor to sell his interest in the investment and who the buyer might be?

EB-5 investors are required to maintain their investment in at least the amount of the Minimum EB-5 Capital Requirement ($500,000), through the 5th anniversary of their investment. However, a Class A Member in the Fund who is no longer an EB-5 Member may notify the Fund and request that their Class A Units in the Fund be redeemed by the Fund on the first available date thereafter in accordance with the redemption provisions of the Fund. Any such redemption requests will be processed on a first come, first served, basis and will be subject to the availability of Available Cash and the other restrictions and conditions specified in the Operating Agreement of the Fund.

What is the expected term of the investment?

5 Years

Can you describe what procedures are in place If the investor needs to liquidate his position before the contracted maturity date of the agreement, and what penalties may be imposed?

See above procedure for requesting early redemption of Class A Units.

How is the value of the investment, once the investment has been made, measured?

In accordance with the Operating Agreement of the Fund, the Manager is responsible to determine annually the amount of Class A Fund Equity. Each Class A Member of the Fund will own Class A Units in the Fund equal to $100 per Class A Unit, or fractional portion thereof. For example, each Class A Member who is an EB-5 Investor will have a Capital Account in the Fund that will initially be credited with 5,000 Units ( $500,000 Capital Contribution divided by $100/Class A Unit). Thereafter, the number of Class A Units in a Member's' Capital Account in the Fund will increase or decrease to reflect his or her allocable share of the Fund's subsequent Net Income or Loss.

Have these strategies been used by the Regional Center principals, or project managers in the past and what was the outcome?

Yes. Since inception. This is the same fund valuation structure that has been used by one of the principal owners of the Regional Center for many years in private real estate funds managed by such principal as a registered investment advisor. It is the same methodology in the basic limited liability company operating agreement of CARc Job Fund-I LLC, which has been approved by USCIS multiple times since its inception.

Have all of the permits and permissions for project development been obtained?

Yes

Is there any patented intellectual property essential to this project?

No

Artists Row: Studio 3807 and The Artisan: Fees

What is the fee for subscribing to the investment (Subscription Fee)?

50,000

Do potential investors need to pay a fee to obtain the operating documents, PPM or other subscription documents?

Yes

If Yes, Is that refundable in the event the investor decides not to invest?

No

If so, what is that Document fee?

$15,000 if Direct (No Agent), otherwise $50,000. Non-Refundable

Could you please describe the procedure for the return of any fees, or fees that are withheld?

N/A

Could you please describe the procedure for return of escrow in the event of denial of the I-526 by USCIS?

There is no escrow for the current Artists Row Project Loan offering. All subscriptions and payment of the full $515,000 (direct/ $550,000 if through Agent) go directly to the Fund and will thereafter be used to fund additional Loan advances to the developer.

Does that include the processing of the I-526, I-829 or any other legal fees associated with the immigration application?

No

What is required for escrow payment at the time of submission of the I-526?

There is no escrow for the current offering

What is the policy for reimbursing the escrow payment in the event of denial?

N/A.

What fees do you pay to 'finders' or agents?

Registered foreign agents and US registered B/D's Only- Up to $40,000 per investor

If there is no finder or agent, would you reimburse that fee to the investor?

Yes

What would be the procedure for reimbursing this fee?

Reduced Subscription Price from $550,000 to $515,000

Do you pay finder’s fees to attorneys?

No

Do you pay fees to unlicensed broker’s or agents?

No

Artists Row: Studio 3807 and The Artisan: Risks

Risk Factors

Can you please describe what conditions could occur in the market that would negatively affect profitability and commercial operations or job creation?

As described in the Supplement & Private Placement memorandum relating to the offering of Class A units of limited liability company interest in CARc Job Fund- The Artists Row Project Loan Series, LLC

What strategies are you employing to mitigate those risks?

As described in the Supplement & Private Placement memorandum relating to the offering of Class A units of limited liability company interest in CARc Job Fund- The Artists Row Project Loan Series, LLC

Can you please describe what conditions could occur that would negatively affect the ability to repay the investors?

As described in the Supplement & Private Placement memorandum relating to the offering of Class A units of limited liability company interest in CARc Job Fund- The Artists Row Project Loan Series, LLC

What strategies are you employing to mitigate those risks?

As described in the Supplement & Private Placement memorandum relating to the offering of Class A units of limited liability company interest in CARc Job Fund- The Artists Row Project Loan Series, LLC

Artists Row: Studio 3807 and The Artisan: Structure

Has the Principal invested their own equity in the project?

Yes

Can you identify the terms and conditions of the offering, including the interest and repayment details?

Best efforts Reg D private placement offering of Class A units of limited liability company interests in CARc Job Fund- The Artists Row Project Loan Series LLC (the "Series Fund"). Proceeds of the offering, net of Fund Expenses, are used, pursuant to the terms and conditions of the limited liability company operating agreement of the Fund (the "Operating Agreement") to invest in a Loan to LDX Brentwood, LLC (the "Borrower"), a special purpose affiliate of the developer (Landex Development- www.landex.org- "Landex") and owner of a 71% controlling interest in MM Brentwood LLC, the managing member of Brentwood Development LLC, the owner of the property located at 3807 Rhode Island Avenue, Brentwood, Maryland, the site of Phase 1 of the Project being developed thereon (the "Owner"). Through LDX Brentwood and another of its controlled affiliates, Sea Eagle 3807 LLC, Landex owns the controlling interests in both the equity Owner of the Project and its managing member, and similarly owns or will own the controlling interests in Phase 2 of the Artists Row Project. Peter S. Siegel, the CEO of Landex, is the sole member of both LDX Brentwood, LLC and Sea Eagle 3807 LLC. Brentwood Development LLC is a public/private partnership between Landex and Prince Georges County Maryland which has made a cash investment in the Owner. The Borrower is required to invest the Loan proceeds received from the Fund in the development of the Artists Row Project, as more fully provided in the Loan Agreement, Promissory Notes, and Pledge and Security Agreement, between the Fund and the Borrower, all dated as of 2/14/2017 (collectively, the "Loan"). Under the terms of the Loan, the Borrower is required to borrow any and all amounts received by the Fund from EB-5 investors, up to the maximum Loan amounts of $18.0 million if only Phase 1 of the Project is developed in accordance with the business plan, and up to a total of $25.5 million, if both Phase 1 and Phase 2 are developed as contemplated in the business plan. The Loan bears interest at 5.0% per annum from the date of each Loan advance until the date of repayment thereof; is scheduled to mature (unless extended) on 3/1/2022. The Borrower has two one year extension options, as provided in the Loan, to extend the original maturity date for successive one year periods. The Loan is not subject to prepayment at the Borrower's option any time prior to the original maturity date. The Loan obligation is evidenced by Promissory Notes of the Borrower, in the amount of up to $18 million with respect to Phase 1 of the Project, and up to $7.5 million with respect to Loan advances, if any, over $18 million, and are further secured by a first priority lien and security interest in, and assignment to the Lender of, all of the Borrowers right, title and interest to Member distributions from the limited liability companies that own (or will own) both Phases of the Artists Row Project, and all proceeds from the disposition of the Borrower's membership Interests, however realized. Should there be an Event of Default, as defined under the Loan, the interest rate thereafter would accrue at 18% per annum until such time as the Event of Default is cured.

What will the funds be used for (ie. infrastructure development of existing military base, development of a film studio, etc)?

Development of the Artists Row Project as described in the business plan and in accordance with the terms and conditions of the Loan Agreement between the Fund and the Borrower.

Are financial statements or records available from the borrower?

Yes

Is collateral on the investment or loan provided?

Yes

If Yes, can you specify what the collateral is?

The Notes are secured by a first priority lien and security interest in, and assignment to the Lender of, all of the Borrowers right, title and interest to Member distributions from the limited liability companies that own (or will own) both Phases of the Artists Row Project, and all proceeds from the disposition of the Borrower's membership Interests, however realized.

What would best describe the investment structure of the project?

Limited Liability Corporation (LLC)

What percentage of the investment will be made by the General Partners, Regional Center or Project Principals?

10%-25%

What would best describe the Principal's oversight of the project?

Day to Day, direct oversight

If other, or a combination, can you provide details on who is overseeing the capital investment, job creation and ongoing operations?

Global Capital Markets Advisors, LLC, is the Manager of the Fund and is responsible for the origination of the Loan on its behalf and for the marketing, management of the Fund and oversight of the Borrower and its affiliates in connection with the Loan and the development of the Artists Row Project . Woodfield Fund Administration, LLC, 3601 Algonquin Rd., Rolling Meadows, IL 60008 (www.woodfieldllc.com), is an independent third party fund administrator and has day-to-day responsibility for overseeing the custody of Fund assets, including the capital contributions received from Fund investors, interest earning and other Fund Revenue received with respect to the Loan or otherwise, and for overseeing that all such Fund assets are administered strictly in accordance with the terms and provisions of the limited liability company operating agreement of the Fund.

Capital Stack Table

Artists Row: Studio 3807 and The Artisan: EB-5

Is this a loan?

Yes

If the investment into the project is a loan, is the borrower a:

Commercial third party (not related to Regional Center principals)

Can you best describe your operating procedure for the filing of the I-526?

The foreign national is free to choose their own attorney with no review from you

Does this project have approved I-526's?

No

Does this project have approved I-829's?

No

Does this Regional Center have approved I-526's?

Yes

Does this Regional Center have approved I-829's?

No

Is any of the subscription fee refundable in the event of a denial of the I-526 by USCIS?

No

Amount of EB-5 investors anticipated for this phase?

Up to 36 for Phase 1. No minimum number required.

What percentage of overall funding is expected to be sourced from EB-5 investors?

translation missing: en.percentage_funding_from_investors.25_50

Are non EB-5 investor’s allowed to participate?

Yes

If so, what is the expected ratio of EB-5 to non EB-5 investors expected to be?

3:1 or greater

Can you please explain if EB-5 and non EB-5 investors treated equally in the distribution of dividends and profits?

Yes. All investors in CARc Job Fund- The Artists Row project Loan Series LLC are Class A investors in the fund and treated equally as to dividends and profits.

Under what circumstance(s) would EB-5 investors be expected to contribute additional capital to the partnership or the project?

None. There is no obligation to provide additional capital after making the required initial capital contribution.

Project Exemplar Approval

Does this Project have Exemplar Approval?

Yes

2017-11-22

Date of Exemplar Approval:

Requests for Evidence

Does this Project have Exemplar Approval?

No

Please describe the issues brought up in the RFE and response to the Request

N/A

I-526

I-526 Approved:

0

Date of first I-526 Submission:

2013-02-01

Date of first I-526 Approval:

2014-02-10

I-526 Revoked:

0

I-829

I-829 Denial:

0

I-829 Revoked:

0

This data was last updated on:December 14, 2017 12:26 PM

Artists Row: Studio 3807 and The Artisan: EB-5

Has this project been the subject of a USCIS/SEC/FBI/DOJ/AAO Review, Notice, Investigation or Action

No

The result of the review, investigation and action

I-924 was submitted to USCIS on 9/30/2016 requesting pre-approval of the Artists Row Project. No response from USCIS as of 3/1/2017.

This data was last updated on:December 14, 2017 12:26 PM

Artists Row: Studio 3807 and The Artisan: Job Creation

Is Regional Center located within a Targeted Employment Area (TEA)?

Yes

Is this a Public / Private partnership?

Yes

Job creation methodology

RIMS II

Does the job creation rely on direct jobs, capital expenditure, or a combination?

Combination

How many jobs are expected to be created in total? (Direct)

316.3

How many jobs are expected to be created in total? (Indirect & Induced)

268.8

How many jobs are expected to be created in per investor? (Direct)

6.2

How many jobs are expected to be created in per investor? (Indirect & Induced)

5.27

How are jobs allocated to the pool of investors?

in order of Fund subscription date on a 1st come, 1st allocated basis. All numbers above based on maximum $25.5 million Loan with 51 EB-5 investors in the Fund. Lower number of Fund subscriptions and EB-5 investors will increase jobs created per investor ratio.

Can you describe the job creation model? For instance, is it based on capital injection, or on a direct job creation and indirect job multiplier, or other?

Report, dated May 2016, by Dr. Paul Sommers, Ph.D., based on total development costs and projected operating revenues for the Project, as described in the business plan for the Artists Row Project, using appropriate RIMs II multipliers and adjustments.

Can you please describe what role a Public sector entity or government body has, if any, in overseeing has in overseeing the commercial operation, the accounting or tracking of the job creation, funding, issuing bonds, or any other investment or audit role that they might perform?

After soliciting and reviewing competitive proposals from private developers, Prince Georges County, Maryland, acting through it Revenue Authority and its Redevelopment Authority (collectively, PG County"), chose the development plan submitted by Landex Development LLC for the redevelopment of the two Artists Row project sites, 3807 and 4100 Rhode Island Avenue, and thereafter made substantial cash equity contributions to Brentwood Development, LLC, the Owner of Phase 1 of the Artists Row Project, as part of its ongoing plan to invigorate the Brentwood Arts District in which the Project is located. PG County is thus an equity partner, together with Landex controlled affiliates, in the Artists Row Project.

Artists Row: Studio 3807 and The Artisan: Reporting

Do you offer periodic reports to investors on the status of the investment?

Yes

If so, what is the frequency of these reports?

Annually

Are these reports produced by you, or by an independent third party such as a auditing or accounting firm?

Yes

If performed by a third party firm, can you please provide details of the scope of the audit and what the report released entails?

Annual reports on Form K-1 will be distributed by the independent Fund Administrator, Woodfield, to all Fund investors, which will be prepared by an independent accountant. Periodic reports and/or notices relating to the progress of the development of the project and any material events affecting the Project or the Fund, will be distributed to all Class A investors, as and when necessary or appropriate.

Do you have a third party firm that performs employee payroll & HR record keeping services for the project?

No

Do you have a third party firm that performs I-9 verification?

No

If No, do you perform I-9 verification of the employees?

Yes

Would you have any objection to an accounting or law firm performing an audit on the payroll, employment or financial records of the project?

No

If No, could you please describe what notice you would require as well as any procedures that would need to be followed for performing the audit?

The Loan documents require the Project developer to provide such information to the Fund as it deems reasonably necessary to meet the evidentiary requirements of the EB-5 program on behalf of its EB-5 investors.

If you lease space in your facility to third party firms, are they willing to allow an audit of their employment records for the purposes of verifying employment?

Yes

If Yes, could you describe what notice you or they would require as well as any procedures that would need to be followed for performing the audit?

The Loan documents require the Project developer to provide such information to the Fund as it deems reasonably necessary to meet the evidentiary requirements of the EB-5 program on behalf of its EB-5 investors.

Artists Row: Studio 3807 and The Artisan: Media

Files & Documents

• Download: Artists_Row_TEA_Census_Tract_Map.pdf

  Artists Row TEA Census Tract Map

  Showing census tracts referred to in the Artists Row TEA designation letter from the State of Maryland.

  Created: March 02, 2017 01:08 PM
• Download: TEAVerificationGCMA_5-11-16.pdf

  Artists Row TEA Designation Letter

  Letter from the state of Maryland officially designating the Artists Row Project sites as within a Targeted Employment Area.

  Created: March 02, 2017 01:08 PM

Artists Row: Studio 3807 and The Artisan : Escrow

Escrow: No

Project: Videos

Artists Row Project Presentation at EB-5 Capital Raising Workshop

March 02, 2017

Project Introduction

March 02, 2017