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Mayor, Gorman head to China to raise $25M for Rockford hotel

Mayor, Gorman head to China to raise $25M for Rockford hotel

The Amerock building in downtown Rockford. 

Gary Gorman and Larry Morrissey are Shanghai-bound Wednesday to raise $25 million for Gorman & Company's $67 million plan to turn the Amerock building into a downtown hotel.

They're headed to China with Powerpoint slides and sales pitches to court wealthy investors, who saw financial markets plunge 28 percent last week before government intervention led to a strong rally.

They're going places where Rockford is as obscure to the locals as Changzhou is to Rockfordians.

And they're trying to tap a pool of investors through EB-5, a once obscure program that provides a visa to foreigners who invest $500,000 in a project that creates 10 jobs.

Gorman raised $15 million from 30 Chinese investors through EB-5 for a hotel in the former Pabst Brewery three years ago. But EB-5 is so popular now that investors are in a visa-approval line that's 14 months long, and developers like Gorman must take out bridge loans as they wait for investor money to be released for their projects.

"There's strong demand for visas, but there is also a lot of competition," Gorman said. "The problem is EB-5 is no longer a secret. There are a lot of projects that are seeking capital in China."

Competition is a reason that Gorman wanted the three-term mayor to accompany him to China. It's the fifth time Morrissey has gone to China since he took office in 2005.

"It is a momentum creator for this offering," Gorman said. "It's important that the mayor is willing to come."

Morrissey's role is that of political dignitary, a Rockford ambassador in a country that reveres government officials.

"It's a cultural thing," said Carrie Zethmayr, executive director of trade and investment and China expert at Rockford Area Economic Development Council. "Government has a strong presence in everything that takes place there. Projects without government support are difficult to make happen over there."

Morrissey will be an important face in a crowd that is more likely to know Los Angeles or New York, than a city in the Midwest. "Chicago, they may have heard of it but they probably can't point at it on a map," Morrissey said. "That's why me being there personally is helpful for the sale."

Gorman also has enlisted a big name — Warren Buffett's investment company, Berkshire Hathaway — as an equity investor in the project. That will play well in China, Gorman said, given that Buffet and his company are worldwide brands.

While in China, Morrissey and Gorman each will make presentations lasting up to three hours through interpreters to dozens of investors at meetings organized by companies specializing in matching EB-5 investors with U.S. projects. They typically make more than one presentation a day.

"It's not a relaxing time," Gorman said. "We pack our schedule."



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