Gorman & Company secured more downtown hotel financing during last week's China trip, but enticing investors with a cash-for-green card program the developer plans to use is taking longer than expected.
According to Gorman & Company President Gary Gorman, only about one third, or $8.3 million, of the company's $25 million target for foreign investment has been secured.
Gorman and Rockford Mayor Larry Morrissey flew to Shanghai on Oct. 22 to meet with potential investors for Gorman's $67 million project to turn the Amerock building downtown into a 160-room Embassy Suites hotel and conference center. In addition to $25 million in foreign investment, Gorman plans to use state and federal historic tax credits to finance the project.
“The trip went very well," Morrissey said. "We made a lot of progress and committed a lot of investors to the project. Gorman has active agents in China that are marketing the project to investors. This process, when we go over there, is to just supplement and add some additional opportunities to support those agents."
It's the second trip the two have taken since July to finance the hotel, which Morrissey views as a key part of downtown redevelopment.
The federal immigration program Gorman wants to use to entice Chinese investment is known as EB-5, and grants wealthy foreigners green cards to live in the U.S. if they invest $550,000 in a project that creates 10 jobs.
Securing funds through the EB-5 program is "a process," Gorman said. Once investors commit to the program, they must file income statements and various other forms with U.S. immigration authorities, which can take time. Gorman also needs Congress to renew the EB-5 program, which was temporarily extended in September. Gorman said he expects the program to get the official OK in December.
Morrissey said potential investors are concerned about the future of EB-5 and whether they'll have time to submit the necessary paperwork before Congress makes a decision on the program.
"It’s a very specific concern about Congress taking action on the future of the program," Morrissey said. "That’s kind of why there was somewhat of a sense of urgency in our marketing of the project."
Gorman & Company wants to increase the amount of money it's allowed to take in through EB-5 from $25 million to $46 million and has filed with the U.S. Citizenship and Immigration Services to amend the project's business plan.
Gorman said they were met with "a very positive reaction" from potential investors throughout the trip.
"There's a lot of enthusiasm for the offering right now," Gorman said. "We had one person sign up right in front of us. Another series of folks gave verbal commitments."