Foreign Funding Key to Project

(Source: Northwest Herald, August 1, 2010)
LAKEWOOD, Illinois – Even with the preliminary approval from the Lakewood Village Board early Wednesday and the ability to use $18 million in federal stimulus bonds, money for the planned Mc­Henry County Sportsplex needs to be raised. Most of the money for a planned sports complex in Lakewood will come from foreign investors, who in return would receive permanent residency in the U.S., developers for the 165-acre McHenry County Sportsplex have said. The planners of the $40 million McHenry County Sportsplex have a commitment of up to $36 million from the Chicagoland Foreign Investment Group. The rest of the cash for the project will come through private equity, grants the village hopes to attain, and revenue sharing from tax dollars created by the development.
The CFIG will use the employment-based fifth preference, or EB-5, financing program to sell investments into the complex. Each investment will be $500,000 for an ownership piece of the complex, said Lou Tenore, the managing partner and CEO of the sports complex. Lakewood Village Board’s approval of the annexation agreement with McHenry County Sportsplex LLC allows the Chicagoland Foreign Investment Group to start collecting money for the project, said Jack Porter, the project manager. Because developers chose this financing route, the development doesn’t plan to have any debt to banks. “When we don’t have a debt, it makes it a lot easier to run,” Porter said. “It makes the chances for survivability and profitability [greater].” The CFIG won’t start formally raising the investment cash for the project until Aug. 15, said Taher Kameli, the executive director of the Chicagoland Foreign Investment Group. He said he hoped to have the money raised for the project by the end of next year. Plans for the two-phase project include playing fields for team sports such as soccer, baseball, lacrosse, basketball and volleyball. There will be a restaurant, retail space and indoor sports facilities. It is being designed with an outdoor championship arena able to accommodate local, national and international athletic teams. Kameli said he had about 45 people who had showed initial interest about investing in the 165-acre sports complex and didn’t have any doubts that his firm could raise the money needed for the project. He said the group recently raised $8.5 million for the Aurora Memory Care Center assisted living facility in Aurora in three months. “Based on my experience, I don’t see any issues to raising these funds,” Kameli said. Each investor has to put in $500,000, which has to support 10 jobs for at least two years. In return for the foreign investment, the investor goes through an expedited visa-application process for himself, a spouse and their children. Many of the investors have the money to invest from their own successful businesses or inheritance, Kameli said.
Marilu Cabrera, a spokeswoman for the U.S. Citizenship and Immigration Service, said many of the people who invested through this program didn’t have any ties to the country either through an employer or family member who can sponsor them to come to the United States. The investors wouldn’t have any other way into the country.
“The program is aimed at stimulating the economic activity and creating jobs for U.S. workers and legal permanent residents,” Cabrera said. The program started in 1992 and has grown in the last five years. The federal government conducts background checks on those investing and checks to make sure the source of the money is legitimate. If investors meet the immigration qualifications and their project qualifies, they will receive a two-year conditional permanent residency immediately. The conditions drop after two years if the development is successful and continues to provide jobs.
Given recent immigration debates, project developers and planners are quick to defend the EB-5 program. “Not many of the investors will live in McHenry County. They may live somewhere else in the U.S.,” Kameli said. “But their money creates jobs in McHenry County. That’s what residents should care about.” Managing partner for the complex Tenore said it was a way for potential new citizens to speed their progress. “It doesn’t guarantee citizenship,” Tenore said. “They just don’t have to sit in line.” The sports complex, which will be on the west side of Route 47, south of the northwest leg of Route 176, has received permission to sell $18 million in recovery zone bonds to help jumpstart the project and purchase the land, which should take place by mid-October, Porter said. Initially the sports complex developers wanted to go to the traditional bond market to help fund the entire project, Tenore said. “When the bond market fell [in 2008] ... we started looking for alternate financing,” he said.