CanAm’s 43rd Project Funds, Marking Continued Investment of EB-5 Capital to Redevelop the Philadelphia Navy Yard
On June 22nd, 2015, CanAm’s 43rd EB-5 Project was funded to Rhoads Industries, Inc., a specialty metals manufacturing company based at The Navy Yard in Southeast Philadelphia. Rhoads, which contracts with the U.S. Navy, Lockheed Martin, and Rolls Royce, among others, to supply everything from nuclear submarine engines to turbines, is one of many marine industrial tenants located in the Shipyard portion of the former U.S. Navy base. The funding of EB-5 capital to Rhoads follows closely on the heels of a $60 million EB-5 loan to Aker Philadelphia Shipyard, on March 17, 2015. Together, these companies are reviving the shipbuilding industry in the United States and creating thousands of jobs for the City of Philadelphia.
The Philadelphia Naval Shipyard operated as a naval base for 120 years until it was decommissioned in 1996. Employing more than 40,000 people during its peak production period in World War II, the Shipyard produced 53 warships and repaired an additional 1,218 during this time. The dedicated workers employed at the Shipyard throughout its storied history embodied the best of American manufacturing, ingenuity, and perseverance. Each worker, like the ships they helped build or repair, are an indelible part of the history of the City of Philadelphia and our nation at large.
The old shipyard “was an important employment center and a historic connection between the U.S. Navy and the City of Philadelphia,” said PIDC President John Grady. “When the Navy announced the closure in the mid-1990s, it was a significant economic blow to the city. It came at a time when the city was on the edge of bankruptcy and experiencing a lot of job loss.”
Ten years into the implementation of a Master Plan to revive and redevelop the Philadelphia Naval Shipyard, this former naval base is now striving as “The Navy Yard”. Through the efforts of the City of Philadelphia, the Navy Yard has undergone in excess of $150 million in publicly funded infrastructure improvements, which have additionally leveraged more than $750 million in new private investment. These investments have helped transform the naval base into a bustling, 1,200-acre business campus where 145 companies employ more than 11,500 people across 7 million square-feet of office, industrial/manufacturing, and research and development space.
Despite its robust transformation into a commercial epicenter, The Navy Yard has nevertheless preserved its industrial and manufacturing lineage, with companies like Aker and Rhoads continuing to build ships and support the shipbuilding industry through a variety of public and private initiatives.
The EB-5 loans funded to Aker earlier this year and to Rhoads today represent only a portion of the $133.5 million in total EB-5 capital raised for projects at The Navy Yard through CanAm’s regional center, which is operated in partnership with the PIDC, the City of Philadelphia’s economic development agency. Collectively, the EB-5 capital raised through CanAm’s regional center has created more than 1,450 jobs in Philadelphia to date, and is projected to create more than 2,000 additional jobs in the next few years.
￼￼“When PIDC approached CanAm about raising EB-5 capital for use at The Navy Yard, we thought it would be a great fit,” said Tom Rosenfeld, President and CEO of CanAm. “The City’s master plan for the Navy Yard was ambitious but would have a tremendous impact on how the City would be in ten, even twenty years. Now that those first ten years have passed, we’re proud that our EB-5 capital could support the City’s redevelopment efforts for such a key part of its public/private infrastructure.” .
The EB-5 capital raised by CanAm also funded several early projects at The Navy Yard, which had laid the foundation for drawing diverse companies to the site. These projects ranged from basic infrastructure improvements, to historic building renovation and new construction.
The first of CanAm’s EB-5 projects at The Navy Yard, in 2004, involved the renovation of an office building, which led Urban Outfitters to sign a 12-year lease to occupy the building, as well as six other properties at The Navy Yard.
Since then, CanAm has raised EB-5 capital for seven additional projects, which have funded roadway and other infrastructure improvements, leasehold improvements of historic naval buildings, and the expansion of industrial businesses located at The Navy Yard.
Aker, for example, has used EB-5 capital raised by CanAm to redevelop a 40,400 square-foot warehouse into an open floor plan administrative, planning, and engineering space, as well as to construct a new paint facility that has enabled the company to fulfill long-term contracts. The EB-5 loan funded earlier this year will be used to finance the production of Aker’s most recent fleet of ocean-going tankers. The jobs created through Aker’s projects are especially critical to a city with such deep industrial and manufacturing roots as Philadelphia. Throughout its various EB-5-funded expansion initiatives, Aker has remained committed to hiring, training, and retaining high-skilled local labor, rather than outsourcing positions abroad like many of its counterparts.
“CanAm was with us when we first needed to grow our business back in 2007, when we were manufacturing oceangoing tankers but working out of trailers. Its EB-5 funds helped us build a state-of-the-art headquarters here at The Navy Yard. And it was there for us again as we partnered in a new joint-venture to construct Hulls 21-24. The EB-5 funds we have deployed into our business supports the substantial employment at the shipyard and the company's ongoing growth. We strongly recommend CanAm for the quality of execution and their personalized service that they provide,” said Jeffrey Theisen, Chief Financial Officer, Aker Philadelphia Shipyard, Inc.
Similar to Aker, Rhoads has used EB-5 capital raised by CanAm to renovate two existing buildings at The Navy Yard in order to expand the company’s precision coating services, an integral component in the shipbuilding process. Rhoads’ facilities service both governmental and private industrial clients.
“CanAm’s EB-5 funds played a key role when we first located to The Navy Yard back in 2006, and they are doing so again as we expand our production capacity to complete work under several important projects for components that will be used by the Department of Defense and other major private companies, allowing us to hire and train hundreds of new employees. As a business owner myself, I know what it means for clients to trust their business to you, and all these years, I’ve known I could trust my business with CanAm.” Dan Rhoads, President & Chief Executive Officer, Rhoads Industries, Inc.
Development efforts at The Navy Yard are far from over, and millions more in EB-5 capital is being counted on to fund future projects.
“Investors know that we are going to be here, not just for 5 years or 10 years or 15 years, that we are going to be here for the long-term,” Grady said.
Added Rosenfeld, “the use of EB-5 investments to finance the redevelopment of The Navy Yard has worked out well thus far, and we are excited for the opportunity to help fund the next period of the growth.”
- CanAm Enterprises, LLC
- Philadelphia Industrial Development Corporation (PIDC) Regional Center
- PHILADELPHIA NAVY YARD
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