MacFarlane Partners, the development giant behind a plan to bring two residential buildings to a 2.3-acre parking lot directly across from Pershing Square, is seeking $60 million in EB-5 financing to fund the project, The Real Deal has learned.
EB-5 is a federal program that grants foreign investors green cards in exchange for a minimum investment of $500,000 in job-creating projects in the U.S. It’s become one of the most popular — and most controversial — fundraising vehicles for developers in New York, L.A. and Miami.
The $60 million in capital would make up an 18 percent share of the capital stack, according to marketing materials circulated to prospective investors from China. The total project cost is $337 million. MacFarlane plans to raise approximately $200 million from traditional senior lenders, the materials show.
A spokesperson for MacFarlane was not immediately available for comment.
The project, known as the Park Fifth, is located at at Fifth Avenue and South Olive Street and calls for 347 apartments in a 24-story high-rise building and 313 additional apartments in a seven-story mid-rise building. The project is also slated to comprise nearly 12,000 square feet of retail as well as 695 parking space, according to the marketing materials. There will also be a swimming pool, a terrace, a hot tub, a barbecue area and outdoor fitness facilities.
MacFarlane bought the 99,000-square-foot site from Africa-Israel USA in 2014 for $37.5 million, records show.
“We are delighted to be back in Los Angeles and are excited about developing a project on this underutilized site that meets the city’s vision for a denser, more efficient Downtown,” Victor MacFarlane, managing principal and chairman of the firm, said at the time.
Construction of the property was initially slated to begin in mid-2015 but was delayed.
“Our design will create a spectacular ‘central park’ of more than half an acre of open space and amenities on the podium deck between the two buildings,” Jeff Berris, managing director, development of MacFarlane, said in 2014.