A small group of Cincinnati developers just returned from China, where they pitched wealthy Chinese people on investing in a long-stalled redevelopment of Short Vine in Corryville.
For the Chinese investors, the incentive is not only a financial stake in the project but something that may be more valuable - a permanent pass to live in the United States.
The Short Vine developers are using a little-known federal program to encourage foreign investment in the U.S. In exchange for investing $1 million, foreigners can get preferred treatment to enter and live in the country.
The so-called "million-dollar visa" means investors can get a coveted green card to live in the United States in a matter of months, something that normally can take years.
The plan is also the latest hope for a city block near the University of Cincinnati considered key to revitalizing the so-called Uptown area and its neighborhoods of Corryville, Clifton and Clifton Heights. Once a nightlife destination, the block has declined over the years. Plans to redevelop it have stalled out as the economy faltered and financing dried up. The block is the main entrance to the Short Vine district and home to Bogart's nightclub, a mainstay of the street and the Cincinnati club scene since the '70s.
On a 10-day, five-city trip to China at the end of July, the developers pitched their plan for Short Vine to about 200 wealthy investors in a series of small, face-to-face meetings. The investors stand to profit if the project is successful, but the real attraction is the chance to live in the United States.
"It's the American lifestyle," said Terry Chan. "That's much more attractive than the investment."
Chan is the point person for the program in Greater Cincinnati and Northern Kentucky and was one of three who traveled to China to woo potential investors on a plan to redevelop that part of Short Vine. With traditional bank loans still hard to come by for real estate development, the U.S. economy limping along and governments desperate to create jobs, interest is picking up in this obscure federal program that has never been tried in Greater Cincinnati.
The program, called EB-5 for employment-based immigration, gives foreigners who invest at least $500,000 a quick pass to live in the United States. Much of the focus is on China, home of one of the world's fastest-growing economies and a new class of upwardly mobile, moneyed people.
"China has a lot of capital," Chan said. "These are very wealthy, very savvy individuals."
What they're considering investing in is a block of real estate 7,000 miles away that has seen better times. A proposed expansion of Bogart's into a vacant lot next door hasn't progressed and several storefronts on both sides of the street are empty. Others are occupied with a tattoo parlor, bars, an adult novelty store and the other stalwart of the district, The Cupboard, which has sold pipes, rolling papers, t-shirts and other paraphernalia since 1966.
But there's multimillion-dollar projects happening on both ends of the street, which bookend the 2600 block. At the north end, a Hampton Inn and Suites hotel, a $24 million project, opened earlier this year. At the south end, a Covington-based developer is planning to replace a Walgreens store with a new one and double the size of a Kroger store.
Chan and his father-in-law, Martin "Mop" Angiulli, traveled to China to pitch their plan: a $20 million investment to begin to transform the 2600 block. Angiulli owns Martino's, an Italian restaurant and sports bar that sits squarely in the center of the block. He and his family also own most of the properties on the east side of the street, and a large vacant building next to Bogart's across the street, making them one of the street's largest single property owners.
Their vision is to upgrade the retail spaces on the ground floors and turn the upper floors into loft-style offices. Part of the upper floors would be devoted to an incubator for budding restaurateurs. They also plan to create a fund to invest in fledgling restaurant companies.
"We want to turn Short Vine into an entrepreneurial area," Chan said.
Joining them was Jeff Jacobs, a Cincinnati developer who was involved in the Hampton Inn project.
They traveled to five cities, including China's two largest, Shanghai and Beijing, working with a team of about 20 consultants in China who helped them set up meetings and presentations with corporate executives, business owners, entrepreneurs and government officials. Most of them were interested because they want to live here or they want their children to attend school here.
One family wanted to know about the quality of health care in Cincinnati for an elderly grandparent. "It's kind of a new beginning for a lot of these families," Chan said.
Despite the debt-ceiling debate, credit downgrade, volatile stock market and gridlock politics, America is still a desirable and wealthy place to live. Green card holders can live, work, and retire permanently anywhere in the U.S. They are eligible to apply for U.S. citizenship after five years and travel to other countries. They can help relatives get green cards, apply for federal financial aid for college and pay in-state tuition at public universities.
But getting approval is complicated and can take years. The EB-5 program promises to get it done in a matter of months. Federal officials, eager for foreign investment in the U.S., want to streamline it even further. The U.S. Customs and Immigration Service this month announced plans to speed processing of EB-5 applications.
"Congress created the EB-5 program to attract investors and entrepreneurs from around the globe to create jobs in America," said Alejandro Mayorkas, director of the USCIS. "We're dedicated to ensuring that the potential of our immigration laws are realized."
The government allows for 10,000 visas a year to be awarded through the EB-5 program, but fewer than 1,400 were issued nationwide in 2010.
And there are critics.
"I think the whole concept is kind of ridiculous," said Mark Krikorian, executive director of the Washington, D.C-based Center for Immigration Studies. "If we're going to sell visas, we should at least charge more for them. And we should demand results."
If the project fails and no jobs are created, the green card status can be revoked after two years. But Krikorian said 10 jobs is a low threshold that can be easily met because they can be direct jobs, held by people who work directly for the project, or so-called indirect jobs, created elsewhere as a result of the investment.
The China gambit is happening without formal help from the Uptown Consortium, the office created by the largest employers in the UC-Clifton-Uptown area to spur development in those neighborhoods, including Short Vine. Beth Robinson, CEO of the Consortium, said she's watching the effort.
"I'm familiar with the EB-5 program in general," she said. "I know it's been successful in some areas."
As for the 2600 block of Short Vine, she said, "We would like to see it return to a vibrant, mixed-use district. Our vision would be to see those buildings rehabbed."
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