ONE Tampa: A Compelling Urban EB-5 Project

ONE Tampa is a 42-story luxury condominium tower with 225 units, retail space, and amenities that is being developed in the center of downtown Tampa, Florida. Once completed, ONE Tampa will be the tallest building in Tampa and one of the tallest on the west coast of Florida.

In this article, we discuss how ONE Tampa is one of the most compelling urban EB-5 projects available today.

Overview of the ONE Tampa EB-5 Project

Secured Loan Structure. The ONE Tampa EB-5 offering is structured as a secured loan investment. The security for the loan is a repayment guaranty from a well-capitalized, diversified parent company of the developer.

Short Three-Year Loan Term. The term of the loan is only three years.

Strong Sales. ONE Tampa has already presold 100 of its 225 condominium units as of August 31, 2024, representing over $170 million in sales revenue.

Proven EB-5 Project Model. ONE Tampa follows six nearly identical luxury condominium urban EB-5 loan projects in Florida by EB5AN and The Kolter Group. Each of these projects was completed on time and on budget, and all condominiums were sold. Each has been repaid or is in good standing, has been approved by United States Citzenship and Immigration Services (USCIS), and has generated far more jobs than were needed for all EB-5 investors.

Excellent Developer Track Record. ONE Tampa is being developed by Kolter Urban, a division of The Kolter Group. Since 1997, Kolter has completed over 100 residential projects, delivering over 27,000 units. Kolter’s track record includes over 20 prior EB-5 projects with EB5AN. All EB-5 investments in Kolter projects have either been repaid or are in good standing.

Urban TEA Designation. The project is in a high unemployment urban targeted employment area (TEA). By investing in an urban TEA project, EB-5 investors qualify for the reduced minimum investment of $800,000 and access to special set-aside visas. These high-unemployment EB-5 visas make up 10% of the total EB-5 visa supply.

Significant Job Creation. Development of ONE Tampa is expected to generate a total of 2,966 jobs for EB-5 investors, far more than are needed for each EB-5 investor to meet the EB-5 requirement of creating 10 jobs.

Gross Maximum Price (GMP) Contract. Kolter has executed a GMP contract with the national construction management firm Moss & Associates. The GMP contract prevents construction cost overruns, which could otherwise slow or stop the project from being developed.

Third-Party Fund Administration. PRXY Fund Services will serve as the project’s third-party fund administrator, which enhances security and transparency for EB-5 investors.

Independent EB-5 Oversight. EB5AN controls both the regional center sponsor for the project and the general partner of the project’s EB-5 fund. EB5AN is 100% independent from Kolter. Independent oversight of the EB-5 project prevents a conflict of interest between the developer and the EB-5 investment parties, which helps reduce risk for the project’s EB-5 investors.

I-526E Approval Refund Guaranty. The project provides for faster repayment of an EB-5 investor’s $800,000 investment if his or her Form I-526E petition is denied by USCIS.

Job Creation Guaranty. The project has a guaranty from Kolter that all EB-5 funds will be spent on expenses that qualify for EB-5 job creation.

With these features, ONE Tampa stands out in today’s market as a best-in-class urban EB-5 project. These top features are discussed in more detail below.

Understanding EB-5 Investment Financial Risk

For EB-5 investors to be eligible for U.S. Green Cards, their funds must be classified as “at risk” by USCIS. This means that the entire $800,000 investment made by an EB-5 investor must be subject to potential loss. Thus, an EB-5 project cannot be entirely risk free and still comply with the rules of the EB-5 program.

However, the financial risk to EB-5 investors does not have to be significant to satisfy the at-risk requirement. Unfortunately, many EB-5 projects involve much more financial risk than is required to comply with this guideline. And many EB-5 investors are unaware of how risky these projects are until after they have invested. Projects with higher financial risks are more likely to result in EB-5 investors both losing their investments and failing to obtain their permanent Green Cards.

EB-5 projects ought to be transparent about the risks to EB-5 investors, but not all are. To avoid selecting projects that lack transparency and/or pose significant risk, EB-5 investors must perform comprehensive due diligence before investing. Only a few projects offer meaningful financial protections for EB-5 investors.

Following are some of the features offered by EB-5 projects with lower financial risk.

Loan Security. EB-5 loans are typically unsecured. This means that if the borrower fails to pay back the loan, EB-5 investors are unlikely to recover their funds on time or at all. Loan security adds an extra layer of protection for EB-5 investors. One of the best forms of security is a repayment guaranty from a third party. Such a guaranty protects EB-5 investors in the event the borrower defaults on the loan. However, a repayment guaranty depends on the financial strength of the company offering it. If the repayment guaranty is from a company with no real assets, it is almost worthless. But a repayment guaranty from a company with significant capital, net equity, and diverse assets greatly reduces financial risk for EB-5 investors.

 
Financial Transparency. A project should give prospective investors access to documents that show its financial claims are accurate. For example, if a project says it has sales, it should let potential investors review its sales data before they invest their money. If an EB-5 project is reluctant to provide financial statements, it may be withholding crucial facts. EB-5 investors should be skeptical of any project that is not transparent.

 
I-526E Approval Refund Guaranty. If USCIS denies an EB-5 investor’s Form I-526E petition, he or she will not be able to obtain a Green Card through the EB-5 program. However, an I-526E denial does not automatically result in the return of the investor’s $800,000. In fact, for some projects, the investor’s funds may not be returned for several years. Conversely, the best EB-5 projects provide investors with approval refund guaranties, which ensure that denied investors receive their funds back sooner than would otherwise be possible.

 
Clear Exit. One of the most important financial risk factors in any investment is the exit, which is when and how investors are repaid. For an EB-5 loan, the repayment timeline is typically determined by the loan term and any optional extensions. A project should clearly say when and how it intends to repay its investors. These statements, however, can be overly optimistic. The actual exit relies on the success of the project, which again highlights how important a developer’s track record is.

 
Every project’s specific financial risks are different, and EB-5 investors should carefully consider all project risks before investing. By understanding these risks and asking good questions, EB-5 investors are able to make informed decisions and avoid unnecessary risk.

Understanding the Urban TEA Designation

What Qualifies as a TEA?

To be designated as a TEA, an area must either be rural or have a high unemployment rate. Some public infrastructure projects may also qualify for TEA advantages.

For an area to qualify as an urban TEA, it must be in a metropolitan statistical area (MSA) or an urban region with a population of at least 20,000. Additionally, the unemployment rate in the area must be at least 150% of the national average unemployment rate.

Benefits of Selecting an Urban TEA EB-5 Project

EB-5 projects in urban TEAs offer significant advantages to EB-5 investors.

Investors in TEA projects enjoy a lower minimum investment amount of $800,000 instead of the standard amount of $1,050,000 for non-TEA projects.

Also, those who invest in urban TEA projects are eligible for set-aside EB-5 visas. These set-aside visas are not currently affected by backlogs (i.e., visa retrogression). Urban visa availability means fewer delays for investors, including those from countries where demand for EB-5 visas exceeds availability, such as China and India. As a result, foreign nationals with set-aside EB-5 visas can often immigrate to the United States much sooner than those without reserved visas.

Under the EB-5 Reform and Integrity Act of 2022, 32% of the total annual EB-5 visas are reserved, with 10% specifically set aside for urban TEA investors.

Evaluating Urban EB-5 Projects

By doing some basic research, EB-5 investors can avoid higher-risk projects and therefore make it more likely to meet their financial and immigration goals.

First, EB-5 investors should look carefully at a project’s developer. Investors should verify that the development team has past experience with similar projects and that these past projects were successful.

Investors should also investigate how much equity the developer has put into the project. If a developer has invested little of its own capital, it stands to lose less if the project fails. When a developer invests only a small amount of its own equity, it shifts more risk onto the other funding sources, including EB-5 investors.

Additionally, EB-5 investors should find out whether the developer plans to use EB-5 funds to replace or recapitalize its equity. If EB-5 funds are used to reduce the developer’s equity, the developer minimizes its own risk while increasing the risk for EB-5 investors. EB-5 investors should generally avoid projects where EB-5 funds are used to reduce developer equity.

Other critical factors include the project’s type, location, and marketability. Every project type comes with its own unique risks, so investors must research whether a project is viable in a specific market.

Investors should only consider projects backed by reputable regional center sponsors. A project’s regional center sponsor should be led by seasoned professionals with in-depth knowledge of the EB-5 program’s regulations and policies. The regional center should also be independent from the developer to avoid any conflicts of interest.

The EB-5 Reform and Integrity Act of 2022 introduced new compliance and reporting requirements. It also made changes to TEA guidelines. Since USCIS has yet to issue full guidance on these changes, EB-5 investors need the support of capable regional center operators who can navigate shifting policies. An inexperienced or poorly managed regional center presents significant risks to investors since it may not be able to properly respond to policy or regulatory changes that emerge.

ONE Tampa Is a Best-in-Class Urban EB-5 Project

ONE Tampa is a compelling urban EB-5 project with best-in-class features that limit EB-5 investors’ financial and immigration risks. The project is being developed by Kolter, a highly experienced, well-capitalized developer with a perfect EB-5 project track record. EB-5 investors enjoy a short three-year loan term and a repayment guaranty from a Kolter parent company. With strong sales, an independent regional center, significant job creation, and more, ONE Tampa is one of the highest-quality, lowest-risk urban EB-5 projects on the market.

Repayment Guaranty from a Kolter Parent Company

ONE Tampa is structured as a secured loan investment. The loan security is a repayment guaranty from a diversified Kolter parent company. This company has substantial assets and net equity that enable it to guarantee the repayment of the entire principal balance of the EB-5 loan. As a result of this guaranty, the EB-5 loan is much more likely to be repaid, offering EB-5 investors significant financial security.

Short Three-Year Loan Term

The project’s loan term of just three years is shorter than is typical for EB-5 projects. Additionally, Kolter has a strong track record of finishing projects on time and has never failed to repay its loans.

Strong Condominium Sales to Date

ONE Tampa has already presold 100 of its 225 condominiums, representing 44% of its total inventory and over $170 million in sales revenue. Buyers must pay non-refundable deposits totaling 25% of the purchase price, which means the ONE Tampa project is already generating revenue from sales.

Strong sales to date reflect Kolter’s track record of selling out its luxury condominium towers before construction is completed, and they reinforce the project’s financial security.

Proven EB-5 Loan Project Model

ONE Tampa follows six nearly identical urban EB-5 loan projects in Florida. EB5AN and Kolter have collaborated on the following luxury condominium tower developments:

• Water Club North Palm Beach (North Palm Beach, Florida)
• 100 Las Olas (Fort Lauderdale, Florida)
• Mark Sarasota (Sarasota, Florida)
• VUE Sarasota Bay (Sarasota, Florida)
• ONE St. Petersburg (St. Petersburg, Florida)
• Saltaire (St. Petersburg, Florida)

All of these prior EB-5 loan projects were completed on time and on budget, and 100% of the condominium units were sold. In nearly all cases, all units were presold before construction was completed. Kolter has either repaid the EB-5 funds or they remain in good standing.

Furthermore, all of these projects received USCIS approval, and each project created far more jobs than needed for all EB-5 investors to satisfy the EB-5 job creation requirement. Many of these projects’ EB-5 investors have already completed the entire EB-5 immigration process and have received Form I-829 approval.

Experienced Developer

Kolter is one of the largest private developers in the United States. Since its founding in 1997, Kolter has invested in real estate projects totaling over $30.0 billion in value and has developed thousands of apartment units, single-family homes, condominium units, hotel rooms, and finished land lots in Florida.

Over its 25+ year history, Kolter has borrowed billions of dollars and has never failed to repay a loan. All EB-5 investments in Kolter projects are in good standing or have been repaid.

Kolter has extensive experience developing condominium towers similar to ONE Tampa through its business unit Kolter Urban. Kolter Urban develops luxury condominiums in waterfront, water view, or urban in-fill locations. Kolter Urban’s condominium towers are strategically located and provide residents with access to the best amenities, services, and local attractions. These on-site amenities create enduring value and a sense of community, helping ensure strong sales and successful investments.

Urban TEA Designation

The project is in a high-unemployment urban TEA, which allows for the lower minimum investment of $800,000 and access to the 10% set-aside visa category for urban investments.

Significant EB-5 Job Creation

As discussed earlier, a key requirement of the EB-5 program is that each EB-5 investor’s capital must create at least 10 new full-time jobs for U.S. workers. As a regional center project, ONE Tampa can count both direct and indirect jobs created through construction spending and project revenues.

In total, the project only needs to create 1,000 jobs to support the maximum number of EB-5 investors. However, ONE Tampa is projected to create a total of approximately 2,966 qualifying jobs. In other words, investors will have more than enough jobs to meet the EB-5 job creation requirement. This surplus of jobs helps minimize immigration risk for EB-5 investors.

Executed GMP Contract with a National Construction Management Firm

Kolter has executed a GMP contract with Moss & Associates, an award-winning national construction management company. Under the GMP contract, this world-class general contractor has agreed to complete the project at or below the contracted price.

With a GMP contract in place with a reputable contractor, EB-5 investors face significantly less risk of budget overruns and related delays.

Third-Party Fund Administration from PRXY

The ONE Tampa EB-5 project uses a third-party fund administrator to enhance financial safety and transparency for EB-5 investors.

PRXY Fund Services uses a proprietary platform that tracks and records all EB-5 draws and project expenditures throughout the project lifecycle. This service provides EB-5 investors with readily available, comprehensive, real-time project metrics.

An Experienced, Independent Regional Center

EB5AN serves as the regional center sponsor for ONE Tampa. Since EB5AN is entirely independent from the developer, it can prioritize the interests of its EB-5 investors without any conflicts of interest. EB5AN is an experienced EB-5 regional center operator and has facilitated over $1 billion in investments through the EB-5 program. To date, EB5AN’s total project development costs exceed $4.1 billion.

EB5AN focuses on offering foreign nationals low-risk, high-quality investment opportunities and has helped more than 2,300 immigrant investors from over 60 countries.

I-526E Approval Refund Guaranty

ONE Tampa features an I-526E approval refund guaranty from Kolter. As described above, this guaranty helps investors more quickly recover their investment funds in the event USCIS denies their initial immigrant petitions.

Job Creation Guaranty

ONE Tampa has a guaranty from Kolter that all EB-5 funds will be spent on qualify EB-5 expenses. This guaranty helps ensure that enough jobs will be created for all EB-5 investors to meet the EB-5 program’s job creation requirement and obtain a permanent Green Card.

ONE Tampa: A Unique, Low-Risk Urban EB-5 Project

No EB-5 project can be entirely risk free. Financial and immigration risks are simply part of the EB-5 program. While some projects are higher risk than necessary, ONE Tampa offers EB-5 investors a high-quality, lower-risk option.

ONE Tampa is run by experts with proven track records in the industry and has been structured with EB-5 investors in mind, offering features that mitigate financial and immigration risks.

For more information on the ONE Tampa project or other available EB-5 projects, please schedule a one-on-one call with EB5AN.