If David Hart gets his way, South Beach’s 42-room Astor Hotel will be on a hiring spree this year as it adds concierge service, a roof-top pool, an all-night diner, spa and private-car service available 24 hours a day.
New hires will be crucial to Hart’s business plan, since foreign investors have agreed to pay about $50,000 for each job created by the Art Deco boutique.
The Miami immigration lawyer specializes in arranging visas for wealthy foreign citizens under a special program that trades green cards for investment dollars. Businesses get the money and must use it to boost payroll. The minimum investment is $500,000 to add at least 10 jobs to the economy. That puts the pressure on Hart and his partners at the Astor to beef up payroll dramatically, with plans to take a hotel with roughly 20 employees to one with as many as 100 workers.
“My primary responsibility is to make something happen here over the next two years that will create the jobs we need,’’ Hart said a few steps away from a nearly empty restaurant on a recent weekday morning. “It’s all going to be transformed.”
Though established in the 1990s, the “EB5” visas soared in popularity during the recession as developers sought foreign cash to replace dried-up credit markets in the United States.
Chinese investors dominate the transactions, accounting for about 65 percent of the nearly 9,000 EB5 visas granted since 2006. South Korea finishes a distant second at 12 percent and the United Kingdom holds the third-place slot at 3 percent. If Latin America and the Caribbean were one country, they would rank No. 4 on the list, with 231 EB5 visas granted, or about 3 percent of the total.
Competition has gotten stiffer for the deep-pocketed foreign investors willing to pay for green cards. The University of Miami’s bio-science research park near the Jackson hospital system raised $20 million from 40 foreign investors under the EB5 program, most of them from Asia. The money went into the park’s first building; visa brokers are waiting to see if the second building will proceed so they can offer a new pool of potential green-card sales.
In Hollywood, the stalled $131 million Margaritaville resort had hoped to raise about $75 million from EB5 investors before ditching that plan last year to pursue more traditional financing. A retail complex by developer Jeff Berkowitz in Coral Gables also launched a program to raise $50 million in EB5 money for the project, Gables Station. Hart worked with other EB5 investors to back pizza restaurants in Miami and South Beach. A limestone mine in Martin County also was backed by EB5 dollars.
This year, the city of Miami itself is expected to get into the business by setting up an EB5 program to raise foreign cash for a range of city businesses and developments. The first would be the tallest building in the city — developer Tibor Hollo’s planned 85-story apartment tower, the Panorama, in downtown Miami.
With a construction cost of about $700 million, Miami’s debut EB5 venture hopes to raise about $100 million from foreign investors, said Laura Reiff, the Greenberg Traurig lawyer in Virginia working with Miami on the EB5 effort. “This is a marquis project,’’ she said.
The arrangement is a novel one for Miami, with the city planning to help a private developer raise funds overseas for a new high-rise. And it would allow Hollo and future participants to tout the city of Miami’s endorsement when competing with other Miami-area projects for EB5 dollars. “We will have the benefit of the brand of the city of Miami,’’ said Mikki Canton, the $6,000-a-month city consultant heading Miami’s EB5 effort. “A lot of these others are privately owned and they won’t have that brand.”