Dreams of Asia center resurface. Will $61 million from public and foreigners follow?

The Asia Pacific Cultural Center’s latest rendering for its proposed $94 million Point Ruston facility shows space for 47 exposition suites, Asian-inspired gardens, a grocery store, 200 housing units, a theater and a food court. Courtesy of the Asia Pacific Cultural Center

For years, the folks at the Asia Pacific Cultural Center have dreamed of having a permanent home in Tacoma, somewhere to celebrate each of the 47 nations it represents.

“From the get-go we wanted our own house to invite people to,” said founder and center President Patsy Surh O’Connell.

Five times since it opened in 1996, the center has launched efforts to secure a long-term residence. None made it past the fund-raising stage.

Now its leaders are trying again.

They are set on a $94 million facility that includes exposition suites, Asian-inspired gardens, a grocery store, 200 housing units, a theater and a food court.

The proposal recently took what its supporters believe is a significant step forward when the developers of Point Ruston agreed to donate about five acres of land for the project.

“This is what we needed to kick off everything,” said Faaluaina Pritchard, the executive director of the APCC.

But the land donation is contingent on several things, including that the APCC not build anything that competes with the offerings of other Point Ruston tenants, according to the LLC’s managing director, Loren Cohen.

So the the center’s housing units and grocery story currently are off the table, but Cohen said he is open to discussing a possible partnership for housing.

The new price tag: $61 million for the APCC.

That’s still a tall order for a group that has struggled for more than 20 years to convince governments and the public to pony up cash, including a 2011 campaign to raise money for a $118 million facility.

“If you can bring in $1 million, you can bring in $10 million,” Pritchard told the City Council in 2011. “If you can bring in $10 million, you can bring in more.”

They never got to $1 million.

And current financial plans are speculative at this point.

Organizers say they hope to receive at least $40 million — almost two-thirds of the cost — from a federal program designed to attract foreign investment into job-creating projects in return for a fast-tracked visa.

It’s unclear if that program, known as EB-5, is a viable option for nonprofit organizations such as the APCC because many investors look for an exit strategy or way of getting their money back before they commit to investing.

The center’s leaders said they hope to raise the rest through government grants and public donations. Right now, they have about $400,000 in cash or pledges, Pritchard said.

Despite the apparent challenges, the center’s supporters are optimistic.

If all goes as planned, the APCC would raise the money it needs over the next two years, break ground in 2019 and open for business in 2021, Pritchard said.

THE BEGINNINGS

The Asia Pacific Cultural Center started out sharing space in a building with O’Connell’s Tacoma-based travel agency in 1996. It’s been looking for its own home ever since.

In 2003, after three failed efforts to land a long-term residence, the center thought it found its home in the former Tacoma Art Museum building.

After getting a $1.26 million loan to buy it in 2003 and two years of deficit spending, the APCC sold the building in 2005.

The center went through two more downtown locations before landing at its South Tacoma Way location, which it leases from Metro Parks Tacoma, in 2012.

In 2011, the center approached the City Council with a $118 million idea and empty pockets. Center organizers wanted the city to donate a 3.66-acre lot downtown for the project.

The council declined, citing millions of dollars in debt on the lot, and the APCC never put the money together to buy it, nor did it immediately find land to build elsewhere.

Still wanting more space for its 7,000 monthly visitors and events from cooking workshops and art demonstrations, in 2014 Pritchard turned to an acquaintance she had met years earlier.

THE COHEN CONNECTION

The link between the center and Point Ruston began several years ago when Pritchard met the residential and retail development’s managing director, Loren Cohen, at a fund raiser.

Cohen told The News Tribune he was impressed with Pritchard’s passion and the potential of the center as an asset to the city and his own project.

“It was like it was written in the stars,” Cohen said.

After he heard Pritchard’s “visionary business pitch,” he was “hooked,” he said.

For the last three years, center organizers have negotiated with Point Ruston’s developers to buy a parcel worth about $5 million.

The center’s original development plans, which are still on its website, were for an $87 million, 390,000-square-foot complex on the Commencement Bay waterfront. A theater, food court, grocery store, 200 housing units and 600-square-foot suites for each of the 47 nations were included.

But since 2015, the center has raised only a fraction of what it needed to buy a parcel outright, and a few months ago, Cohen said he was asked “point blank” if he’d donate it.

Pritchard, he said, is not afraid to ask for anything.

On June 9, Cohen officially said yes, providing the center met Point Ruston’s terms.

In an interview with The News Tribune, Cohen said he is aware of the center’s past struggles but said part of the motivation for donating the land was to jump-start the latest project.

The new center would be another public gathering space at Point Ruston to go along with its Spraypark, playground and walking trails.

“It’s a park for all intents and purposes,” said Cohen, adding it could be one of the “cooler” ones around.

Still, Cohen has conditions.

The center cannot compete directly with projects or businesses established or envisioned at Point Ruston, he said. That means the center’s plans for a grocery store and housing might be off the table, which would hurt the center’s ability to pay back potential investors.

The five acres it would sit on have yet to be chosen either, according to Cohen.

Point Ruston will watch the center’s fund-raising progress closely, he said. If it succeeds, then the pledge for land will be converted to a gift with deadlines for funding and other project necessities.

THE FUNDING

Pritchard said the money in the center’s building fund breaks down like this:

● $200,000 from the state’s 2016 capital budget, although the APCC has yet to receive the funds because it hasn’t provided the state the necessary paperwork.

● $75,000 from Pierce County since 2015.

● $50,000 from Comcast Corp.

● $25,000 from the MultiCare Health System.

Center organizers have targeted a number of other sources to raise the remaining money:

● $40 million from the EB-5 immigrant investor program.

● $15 million through Collins Group, a Seattle nonprofit fund-raising firm, which would include $10 million from foundations and corporations and $5 million from community fund raising.

● $5 million from the state Legislature.

● $1 million from the state Department of Commerce.

The APCC has made it onto the state’s capital budget each of the last two years, has not received nearly the funding it asked for.

It was earmarked for $200,000 of the $1.5 million requested last year, and although the center made it into the governor’s budget this year for $2 million, the Legislature has the center down for $200,000 again.

Pritchard said the APCC also would look to reimbursement-style grants funded by the state’s capital budget as a source of revenue. Such grants are available for acquiring, constructing or renovating nonresidential facilities for community or social service centers; performing arts, art museum and cultural organizations; and youth recreational facilities.

The biggest pool of potential funding would come via the EB-5 program.

Under that federal program, more than 10,000 visas are set aside nationally each year for people from other countries who invest $500,000 to $1 million in new commercial enterprises and can prove their investment created 10 jobs.

Over the last three years, 75 percent of those visas have gone to Chinese investors, according to U.S. Citizenship and Immigration Services data.

Beyond the APCC’s 400 projected construction jobs — which don’t count toward EB-5 job creation — the center plans to employ 1,000 workers each year to staff its amenities.

For comparison, the University of Puget Sound employed 693 people in 2016, and the University of Washington Tacoma employed 635.

It’s also not clear what success nonprofits have had getting EB-5 funding in the past.

The center is a 501(c)(3) nonprofit, and The News Tribune was unable to find any precedent for EB-5 investment in nonprofits beyond public remarks by Lori MacKenzie, division chief for the Immigrant Investor Program Office of Policy and Performance.

MacKenzie addressed the issue in a March 2017 letter to U.S. Citizenship and Immigration Services stakeholders.

“A nonprofit job-creating entity may receive EB-5 capital from a for-profit new commercial enterprise to indirectly create jobs for EB-5 investors (assuming all other eligibility criteria are met),” she wrote.

The investment process often is structured like a loan to be repaid over several years in cases similar to the APCC. Because the investment must be “at risk,” the funding can’t be gifted to the center and the return of investors’ funds can’t to be guaranteed by the borrower.

Whether investing in the APCC is a sound business decision is an open question.

In 2015, the center finished the year $336,807 to the good, but that came after finishing more than $40,000 in the red in both 2013 and 2014, according to the organization’s tax returns.

Again, Pritchard remains optimistic.

She has projected the APCC’s annual visitors to quadruple to 400,000 at a new center. She also has predicted the center would earn $8.8 million annually from paid programming and space rentals, according to the APCC’s latest projections obtained by The News Tribune.

The center has no projections for annual expenses, Pritchard said.

“This project is a business operation,” she wrote in a 2015 request for funding to the Legislature.

A previous attempt to finance expansion plans similarly didn’t end well.

Under different leadership in 2003, the center sought to buy the former Tacoma Art Museum building even though a third-party feasibility study warned that the $1.3 million price tag was too high.

“ … we can say with confidence that a campaign to raise as little as $2 million would not succeed, and that a failed campaign is certain to cause irreparable damage to the APCC’s credibility, reputation and possibly its continued viability,” the study’s authors wrote.

The APCC pressed on, the campaign failed and the center just managed to put up the $100,000 reserve for a $1.26 million loan (after a deadline extension).

Plan B was to repay the debt and renovation costs with a restaurant to be built on the top floor. Instead, the APCC ended 2004 with a $225,000 deficit and sold the building for some profit in 2005, according to the organization’s tax returns.

Deadlines for fund raising for the current project have yet to be set, but Cohen has said Point Ruston will aid the APCC where it can to ensure the project is successful.

OTHER COMPLICATIONS

Three locations at Point Ruston are being considered for the new center:

• Promontory Hill.

• The eastern end of the Tacoma side of the development.

• The western end near the Silver Cloud Hotel.

Promontory Hill is an uncapped landfill made up of arsenic-contaminated soil from the former Asarco smelter site. The city of Ruston has zoned the lot for a park because the federal Environmental Protection Agency once mandated that no structures be built on the site.

Still, building there is possible, as long as the soil is not disturbed, said Kristine Koch, an EPA project manager.

Once the landfill cap — layers of soil that stop water from entering — is in place, geotechnical engineers would need to make sure the soil is structurally sound, she said. That soil could never be penetrated as doing so would destroy the integrity of the cap.

To erect a building on the site, steel beams would have to be inserted outside the area of contamination. Then, the center and its accessory buildings would be built on a platform “almost like building on a bridge,” Koch said.

That could add millions more to project costs.

“They need to understand what they’re purchasing,” Koch said.

Pritchard said she was aware of the costs associated with this lot in particular and building there wouldn’t change the center’s plans.

Nearly every site on Point Ruston has environmental cleanup costs associated with it, but Cohen said in many cases standard pieces of a development, such as pavement or a foundation, also act as EPA mandated environmental remedies.

Point Ruston is preparing a new environmental impact statement regarding its development which will include the APCC project, according to Cohen.

As for the APCC, its next step is hiring an architect, Pritchard said.

“The county will never be the same once we’re down there,” she said.

http://www.thenewstribune.com/news/local/article162831083.html

States

• Washington