Investor visas helping fuel new restaurants in Central Florida
The controversial "green card through investment" visas that helped fund Orlando City's Soccer Stadium, and many other projects in the United States, are catching fire to finance new restaurants in Central Florida.
Some developers are skipping banks and looking to China, Brazil and other countries for investors willing to plunk down $500,000 or more for new franchise locations in exchange for temporary residency for themselves, a spouse and children.
A new Twin Peaks restaurant near Walt Disney World Resorts is set to open in early October using the EB-5 visa program, while upstart chain Spoleto My Italian Kitchen is bringing in foreign investors to expand. Orlando-based Twistee Treat is using the program to find owners for its ice cream-cone shaped stands.
A new Twin Peaks restaurant in Lake Buena Vista is set to open next month using the EB-5 visa program.
The EB-5 program, which started in 1990, allows foreigners get a quick green card by investing at least a half million dollars in a new American project that will produce at least 10 jobs per investor.
The program has critics in Congress, who say it was intended to help poor and rural areas but is mainly being used in places such as New York, California and Florida
Some, such as U.S. Sen. Diane Feinstein, D-Calif., have criticized EB-5s for favoring the wealthy over those that wait in line for residency.
While its long been popular for hotel, condominium and time share projects, Central Florida's restaurant industry is attracting investors because eateries quickly fulfill one of the main requirements of the program, creating local jobs.
Chain restaurants draw the most attention because they are proven concepts, said Scott Barnhart, a finance professor at Florida Atlantic University.
"The demand is from the developers who want money for their projects," he said. "Restaurants are becoming more popular for investors because they require a lot of workers and not a lot of money to get started."
EB-5 applicants aren't exactly part owners of projects, but provide a loan with a small amount of interest over two to five years.
The real attraction, say those in the industry, is the temporary residency.
Investors usually don't have any involvement in the restaurants beyond the loan, and they usually don't locate near their projects either, said Roger Bernstein, an immigration lawyer in South Florida who works on EB-5 deals.
After EB-5 investors pass a two-year provisional period where the business is active and hitting employment goals, they can apply for permanent residency and eventually citizenship.
The foreign applicants are vetted by U.S. Citizenship and Immigration Services for both criminal ties and to make sure their money is accounted for.
Congressional leaders are talking about making some changes to the program, such as raising the investment minimum to $800,000.
EB-5 visas are helping pay for as much as half of the new $156 million Orlando City Soccer Club Stadium. Miami developer Joshua Wallack is courting EB-5 money to partially fund the Skyplex entertainment, retail and restaurant venue proposed on International Drive.
But restaurants are gaining traction, especially in Orlando's fast growing food industry, said Dennis Slater, who is helping arrange deals for Spoleto.
"Investors have their choice of projects out there now and they want to pick the most secure ones," said Slater, owner of an EB-5 coordinating firm in Tampa. "Restaurants are emerging as good investments."
The Orlando region now has almost 12,000 restaurants and other dining establishments, according to the Florida Department of Business and Professional Regulation. That's a 21 percent increase from five years ago.
Foreigners from Brazil and Asia are also familiar with Orlando and Florida from their own travels, he said.
Congress has limited EB-5 visas to 10,000 a year. 2015 was the first year it hit the cap and it's on track to hit the limit again in 2016, according to Invest in the USA, a trade group for EB-5 interests.
Miami restaurateur David Tornek is recruiting EB-5 investors to expand his Miami-based Meat Market steakhouse to Orlando. He recently bought land in Tampa to build an eatery and is looking for property near the Orange County Convention Center for his steakhouse.
"When it comes to restaurants, the reputation going to a bank and lending is not great," Tornek said. "So you are always looking at alternative ways of financing."
Twin Peaks franchisee Fred Burgess has a full-time office in China to attract EB-5 investors. He's funded three restaurants in the Miami area and is readying to open a restaurant at 12353 Winter Garden Vineland Road Oct. 3. He's also planning to open a Candlewood Suites hotel on an adjoining property.
He said there are 40 investors on the combined project.
"The residency for most people, that's their number one goal," Burgess said. "They would like to get their money back and maybe make a little money, but they want to live in the United States."
- ORLANDO CITY SOCCER PROJECT
- Twin Peaks Restaurants - II
- Roger Bernstein
- U.S. Citizenship and Immigration Services
- The Skyscraper at Skyplex
- Association to Invest In the USA (IIUSA)
- Candlewood Suites
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