A $67 million downtown hotel and convention center is $7 million closer to construction.
That's how much money was raised during a fundraising trip to China last month by Mayor Larry Morrissey, Gary Gorman, president of hotel developer Gorman & Company, and Rachel Snethen, director of Gorman's EB-5 Regional Center in Oregon, Wisconsin. EB-5 is a federal immigration program that grants U.S. residency to foreign nationals who invest $500,000 in projects that create at least 10 jobs in economically distressed areas. Gorman, Morrissey and Snethen obtained commitments from 14 investors over three days in mid-March.
"We are sitting with 21 investors ($10.5 million) committed to the project and another 24 ($12 million) in leads that we are working on," Snethen said in an email.
Financing from the EB-5 program will help pay to turn a 13-floor abandoned factory in the 400 block of South Main Street into a 160-room Embassy Suites hotel. Crews last year performed environmental cleanup and other work to prepare the building for construction.
The hotel site is across the Rock River from UW Health Sports Factory, a $24 million indoor athletic complex that is expected to draw thousands of players and fans downtown. The Sports Factory is to open in June.
Gorman and Morrissey have traveled to China three times to find investors for the hotel, but the last trip was the most fruitful. Gorman, who paid Morrissey's expenses, and the mayor traveled to Beijing, Shanghai and Shenzhen. Snethen met investors in Guangzhou.
Gorman originally planned on raising $25 million from 50 investors. U.S. Citizenship and Immigration Services subsequently agreed to Gorman's request to increase the amount to $33.5 million from 67 investors, Gorman said.
The building, last occupied by Amerock Corp., is on the National Register of Historic Places. The project qualifies for 20 percent federal and 25 percent state River Edge Redevelopment Zone tax credits.
The River Edge tax credits expire Dec. 31, but Gorman can use them to help finance part of the project if construction begins this year.
"I'd be very surprised if we're not under construction by late summer or early fall," Gorman said