Port St. Lucie considering buying long-undeveloped City Center land
City officials are in talks over buying the City Center property owned by enigmatic developer Lily Zhong, according to a bombshell legal filing last week.
The filing — part of the Securities and Exchange Commission investment-fraud case against Zhong — reveals that a receiver over Zhong's frozen assets has been "in constant contact with the city of Port St. Lucie" since Nov. 12 about possibly selling the land to Port St. Lucie.
"The receiver and Port St. Lucie are currently exploring the potential sale of the City Center parcels to the city," according to the Jan. 29 preliminary report from receiver Michael Goldberg.
Assistant City Manager Daniel Holbrook on Monday declined to provide details on the discussions.
The City Council will be briefed at its winter retreat, March 3 and 4, Holbrook said. "Until then, I don't have a lot of updates."
Asked if the city is interested in buying the 22 parcels at Walton Road and U.S. 1, Holbrook said: "At this point, I can't give you a position."
Zhong purchased the 22 parcels that encompass City Center two years ago for $500,000 through her company US Investment LLC. She set up a regional EB-5 center, a federal program that requires foreign investors to put down at least $500,000 each and create 10 American jobs per investor in exchange for green cards. Zhong proposed building a $380 million downtown at City Center.
Renderings — in one of the rare instances when she contacted the city — showed residential, retail, dining and office space; an international trade center; and a high-end hotel.
Zhong faces six counts of violating the Securities Act and Exchange Act, and could face an unspecified civil fine if she's convicted. The SEC alleges she used money from Chinese investors, intended for Port St. Lucie's City Center and residential projects in Palm Bay, to purchase luxury cars and a boat.
The SEC claims Zhong, a citizen of New Zealand, fraudulently raised at least $8.5 million from at least 17 investors between March 2011 and August 2014 through the EB-5 Immigrant Investor Program, and diverted nearly $1 million to buy the pricey items.
Zhong owes approximately $18.5 million in back taxes on the City Center land. It's unclear how the debt would be handled by the county if the city decides to buy.
"At this time, it's our statutory duty to collect the taxes on the roll," county tax collector spokeswoman Jayne Johnson said Tuesday.
The county on Tuesday was unable to calculate the amount of taxes owed to the county and other taxing authorities and what's owed to the city in special assessments. The land is located in the Community Redevelopment Area.
Subscribe for News
Join Professionals on EB5Projects.com →
This website is for informational purposes only and does not constitute an offer or solicitation to sell shares or securities. Any such offer or solicitation will be made only by means of an investment's confidential Offering Memorandum and in accordance with the terms of all applicable securities and other laws. This website does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in any connection with, any contract or commitment whatsoever. EB5Projects.com LLC and its affiliates expressly disclaim any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained in the website, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting therefrom.