Prime Opportunity to Redevelop Tacoma’s Old City Hall, Get Some Green Cards
Seattle is not the only Northwest city reaping the benefits of foreign investment. Tacoma, our neighbor to the south, is notably receiving foreign capital from Asia. Perhaps Tacoma’s Old City Hall is ripe for similar foreign investment.
For example, an entity related to Vietnam-based Hoang Quan Group will soon break ground on a $40 million apartment project with approximately 160 units on the corner of Tacoma Avenue South and Earnest S. Brazill Street. The project is Hoang Quan Group’s first in the United States after successfully developing tens of thousands of apartments throughout Vietnam over the last fifteen years. Hoang Quan Group was also close to purchasing the Washington Building in downtown Tacoma, but abandoned the deal to pursue the current apartment project.
In addition, Yareton Investment and Management LLC, a developer based in China, recently began construction on the much-anticipated 22-story Marriott Hotel adjacent to the Tacoma Convention and Trade Center. Utilizing the EB-5 program, a program created to stimulate the economy by creating jobs and opportunities for investment by foreign investors, Yareton Investment funded approximately 40% of the $85 million project. Based on the typical EB-5 investment, nearly 100 foreign investors made the EB-5 program’s minimum investment of $500,000 each in exchange for a return on their investment and a green card when the project meets the program’s job creation standards. Hotels are appealing to EB-5 investors because hotel development, unlike apartments, is more likely to generate jobs. In addition to hotel employees, City officials expect the 300-room hotel to generate additional events at the convention center and stimulate surrounding businesses.
Hoang Quan Group and Yareton Investment could be just the beginning of foreign investments in downtown Tacoma. The Old City Hall is prime for redevelopment and the city is searching for a new suitor after McMenamins decided to withdraw its plans for a boutique hotel at the historic site.
Foreign investors should follow McMenamins’ lead by redeveloping the Old City Hall into a boutique hotel as a low-risk EB-5 investment opportunity, akin to Yareton’s Marriott hotel project. Tacoma can benefit too. Cities often market the EB-5 program to rejuvenate an underperforming public asset. Recently, for example, the city of Tampa successfully used EB-5 financing to transform a historic courthouse into the Le Méridien Hotel. Tacoma could and should follow suit.
The City of Tacoma and developers should act quickly to take advantage of the EB-5 program. Congress has extended the program through December 8, 2017, while congressional leaders continue to negotiate reforming the program. Due to the negative publicity of a few bad apples, some in Congress want to end the EB-5 program, while others want additional program oversight to prevent abuse.
EB-5 reform is inevitable and the future marketplace for such investment is uncertain. Thus, stakeholders should consider acting quickly if they do not want to miss the opportunity to renovate Tacoma’s Old City Hall.