The Pflugerville Community Development Corporation on Nov. 6 discussed a project to potentially bring $15 million in Chinese investor money to Pflugerville to help kick-start construction of office buildings at 130 Commerce Center, a burgeoning Pflugerville business park.

If all goes to plan, Pflugerville could get two new class-A office buildings, the PCDC could get a financial windfall and more than two dozen Chinese investors and their immediate families could receive green cards, PCDC Executive Director Floyd Akers said.

The deal, called “Project Great Wall,” hinges on the PCDC’s use of EB-5 investor money, which is money coming from an immigrant investor; in this case, it is a group of Chinese investors.

Akers traveled to China in September as part of a Texas economic development mission headed by Gov. Rick Perry.

The U.S. government created the EB-5 investment program in the early 1990s to spur foreign investment and stimulate the economy. EB-5 investors must satisfy a number of government requirements such as creating at least 10 jobs and risking a certain amount of money, according to U.S. Citizenship and Immigration Services.

Richard Gump, a Dallas-based attorney specializing in immigration and nationality law, said EB-5 investment has ballooned in recent years. Much of the investment, he said, is coming from China.

“By the middle of next year the entire program might get backlogged,” Gump said.

Each EB-5 investor must risk $1 million, or if the investment is being used in a “targeted employment area,” the investment can be $500,000. A TEA is a rural or high-unemployment area, according to the USCIS. Akers said the 130 Commerce Center has been designated a TEA, and the PCDC will be working to expand Pflugerville’s TEA along SH 130.

Akers said 30 Chinese EB-5 investors are investing $500,000 each—a total of $15 million—to help construct two 60,000 square foot office towers at 130 Commerce Center.

The PCDC was previously working with developer Russell Interests on the construction of the two office buildings, originally called Project Olympus, but Russell Interests is no longer involved in the project, Akers said.

“The EB-5 investors essentially end up getting a visa. They get 1 percent return on their money every year and at the end of the process they get a visa for them and their families to come to the United States and live as permanent residents,” Akers said at a PCDC meeting. “What we get is two [60,000] square-foot office buildings right here.”

Bob Honts runs regional center Texas Lone Star Enterprises LLC, which is a partner in the deal. A regional center is like a broker that is licensed to engage in EB-5 deals, Akers said. He said it also hires immigration attorneys, conducts economic impact studies, vets investors and helps with immigration paperwork, among other duties.

Honts said the 30 Chinese investors and their $15 million investment would be gathered into an entity called Texas Lone Star Enterprises Pflugerville, which would invest the $15 million in the joint venture created between TLSE and the PCDC.

The $15 million would be held in escrow while the federal government does security checks to ensure the funds are legitimate, legal and can be used in America, said Honts, a former Travis County commissioner.

The PCDC would be required to put up $1 million, Akers said. Of the EB-5 investors’ $15 million investment, $5 million would go to the PCDC as reimbursement for the infrastructure such as roads and pipes the PCDC has already built. Akers said the PCDC would use the $5 million to help bring tenants into the office buildings. Rent paid by the tenants would be used to repay the investors. As part of the deal, the PCDC has agreed to prelease 85 percent of the office space in the buildings, Akers said.

The remaining $10 million would be used to construct the office buildings.

“It has been judged by EB-5 attorneys that it is one of the safest ventures they’ve seen for EB-5, for the EB-5 investors,” Honts said.

The EB-5 investors would receive a 1 percent annual return on the $15 million investment, and the PCDC would repay the $15 million. Once the towers are built and leased out, the PCDC could potentially sell them, Akers said.

Akers said the office buildings, if filled with tenants, could be worth about $28 million.

Under the joint partnership, TLSE would own two-thirds of the buildings and property and the PCDC would own one-third of it, Honts said.

If the buildings were sold, the EB-5 investors would be repaid $15 million and 1 percent annual interest. The PCDC would keep the difference, which, Akers said, could be more than $8 million. If a financial windfall were to happen, the joint venture would receive it, not the EB-5 investors. The PCDC could use the proceeds to bring more businesses to town, Akers said.

“The worse case scenario to me is we don’t’ make the extra $10 million or $8 million at the sale, we break even on the sale,” Akers said. “But we have buildings and jobs, which is what we do.”

The PCDC will revisit the project at its next meeting and potentially approve it at that time.

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