The Real Deal Miami

SkyRise Miami targets EB-5 investors for funding

Developer Jeffrey Berkowitz heading for China to seek $270M

February 05, 2015 11:15AM
By Francisco Alvarado

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Rendering of 1 SkyRise Miami

A rendering of Skyrise Miami

Developer Jeffrey Berkowitz wants to raise $270 million for his SkyRise Miami tower from foreign investors seeking permanent residency in the United States.

In two weeks, Berkowitz will depart for China to seek out financiers for the project, a 1,000-foot high steel and glass structure that Berkowitz has dubbed Miami’s version of the Eiffel Tower. Once completed, SkyRise Miami will be the largest observation tower in the U.S.

“We’re recruiting 540 investors through the EB-5 visa federal immigration program,” Berkowitz told The Real Deal. “So far, we are making good progress.”

Passed by Congress in 1990 to encourage foreign investments in the U.S., the EB-5 program grants permanent U.S. residency to investors (as well as their immediate family members) who create at least 10 domestic jobs and contribute at least $500,000 to $1 million in a U.S. business venture. The program has become so popular in recent years that U.S. immigration officials warned two pro-EB-5 visa organizations that the federal government could run out of the 10,000 special visas allotted for fiscal year 2015 by mid-summer.

The U.S. Immigration and Citizens Services has approved Skyrise Miami as an EB-5 project, even though it has not recruited any foreign investors, because it is projected to create 4,000 to 6,000 direct and indirect jobs, according to Shai Zamanian, an attorney who co-founded Step America, a Dubai-based company that is searching for SkyRise investors in the Middle East. Typically, projects and investors are vetted by U.S. immigration officials at the same time.

“That means when the investor goes to apply for the visa, USIC will just ask for the investor’s profile information,” Zamanian said. “That speeds up the process.”

According to Berkowitz, the price tag for SkyRise Miami is $430 million. The balance of the project will be financed with $140 million in equity and $50 million from institutional funds, he said. Miami-Dade County approved $9 million for infrastructure improvements at the SkyRise Miami site, which is located on the waterfront at Bayside in downtown Miami.

Investors who participate in the EB-5 program usually fund traditional income producing properties such as retail shopping centers. In addition to getting a green card, investors aim to recoup their money from revenues derived from SkyRise Miami’s restaurant, night club, ballroom, and two amusement rides, Berkowitz said.

“We are hitting markets all over the world,” he said. “But the majority of our EB investors will come from China.” Chinese nationals lead the nation in EB-5 visa applications. In fiscal year 2014, more than 8,000 people from mainland China received EB-5 visas. No other country had more than 200 EB-5 visa applicants.

Berkowitz met Zamanian and his partner last year, via an introduction by Ronnie Fieldstone, a Miami attorney who specializes in EB-5 projects. “We were on our way to Beijing when we coordinated a brief detour to Dubai,” Berkowitz said.

Zamanian said Step America has set a fundraising goal of $30 million. The company is targeting investors from the United Arab Emirates, as well as investors of Pakastani and Indian descent who reside in the Middle East. “Dubai is comprised of 90 percent ex-patriots from emerging markets,” he said. “A very small percentage of the population is of local origin.”