China's money troubles have the potential to shortchange South Florida's building boom, if its large pool of investors seeking U.S. visas shrinks.
More than 80 percent of applicants for the citizenship-for-money program, known as the EB-5 investor program, are Chinese. Massive mixed-use projects like Skyrise Miami and Tibor Hollo's Panorama Tower are competing for their investments to fund a percentage of their development costs, and those two projects alone aim to raise more than $400 million through the EB-5 process.
Many smaller South Florida projects, such as hotels and restaurants for instance, are also competing for EB-5 funds.
"There will be a drop in investments," said Mikki Canton, managing director of the Miami EB-5 Regional Center. She predicts that investments will not flow as freely from China, and smaller projects looking for EB-5 funds will feel the strain. "I don't think it will affect the worthy projects."
There are more than 900 regional centers across the U.S. and each are potentially managing multiple projects competing for EB-5 investments. There are about 75 regional centers in Florida.
Each year, the EB-5 program awards 10,000 visas to wealthy foreigners who put down either $500,000 or $1 million in U.S. projects that create jobs. Canton's regional center oversees the $800 million Panorama Tower project, which is seeking $160 million in EB-5 dollars. She says projects expecting to fund most of its costs through EB-5 will face issues.
Other EB-5 experts believe China's financial woes will encourage the wealthy to take their money out of the country quickly, and they say it could mean more cash for EB-5 projects across the U.S., not less.
"There is no doubt that the interest will be there," said Lauren Cohen, founder of Boca Raton-based EB-5 strategies and visa business plan firm e-Council Inc., in an email. "The South Florida market and the multitude of quality EB-5 projects being developed here will stand to benefit from this renewed interest."
Nicholas A. Mastroianni II, president and CEO of U.S. Immigration Fund, an EB-5 regional center program with projects in Florida, New York and New Jersey, said Chinese investors are more likely to put their money into the U.S. EB-5 program than China's shaky stock market.
"Now is a prime time for U.S. firms to seek Chinese funding for domestic projects," he said.
Less than a year after the International Monetary Fund declared that the economy of China overtook the United States' as the largest in the world, its slumping economy and currency manipulation set off a global chain reaction Monday as stock markets across the world fell amid concerns of a sustained economic slowdown. On "Black Monday" the Dow Jones Industrial Average ended the day down 588.47 points, or 3.6 percent. All 30 members of the Dow finished the day in negative territory.
"The devaluation of the currency in China has created 'flight capital' out of China and has had a major positive impact on the pace at which investors are flocking to the U.S," Mastroianni II said.
For companies that want to learn more about how to secure funds from the EB-5 program, the City of Miami EB-5 Regional Center is holding a workshop on Sept. 23 from 8:30 a.m. to 12:30 p.m. at Miami's City Hall Commission Chambers at 3500 Pan American Drive in Miami.