It looks like a normal hotel, but beneath the brick facade, the new Homewood Suites in East Point near the Atlanta airport represents opportunity, both for local workers and the international investors who made it possible.
The extended-stay hotel opened its doors recently and held a grand opening today punctuated by a speech from East Point Mayor Jannquell Peters, who cut the ribbon in a ceremony in front of the hotel.
Flanking her were investors from Dubai and Nigeria who put down $500,000 toward the project with the expectation of more than just a financial return. They also qualify for a U.S. green card through the EB-5 immigrant investor program.
Born in India, Mohit Bhatia has worked with his father in the energy business in Dubai since graduating from the University of Texas with degrees in finance and information systems years ago. But he “fell in love” with America as a college student and knew he wanted to live here long-term.
“I really like how the system works in the United States. Everything is so organized,” he said. A green-card holder as of Sept. 30, he now foresees a smoother route to opening a business in Texas and traveling back and forth to Dubai.
Mr. Bhatia had heard about the EB-5 program and began searching for opportunities online. He found American Life Inc., a real-estate developer that operates a network of EB-5 regional centers around the U.S. The centers are federally approved vehicles for handling the visa application process for investors. Many seek projects in what the U.S. Citizenship and Immigration Services calls target employment areas,or TEAs, regions with high unemployment where the $1 million EB-5 investment threshold is cut in half.
Nigerian businessman John Kester, who hails from the capital city of Abuja but has a home in Atlanta, was drawn more by the investment itself than the prospect of U.S. permanent residency. He was approached by Sachin Patel, director of American Life’s Atlanta EB-5 Regional Center, with an opportunity to invest in the $18 million property, which ended up raising $15 million from 30 EB-5 investors.
“I said to him, ‘I’m more interested in the business part, and when the business works, I may consider a green card,’” Mr. Kester told Global Atlanta at the grand opening. “It enticed me because it had a stable return on investment in a manner that is long-term, and any time you want to pull out, you will always get your money back plus the cost of the investment to that point.”
Married to a French citizen, Mr. Kester doesn’t face many U.S. travel restrictions, so he hasn’t yet applied for the green card, but he might in the future if he decides to spend more time in the U.S., where he hopes to eventually add “pastor” to his many titles. He’s looking to do another investment with American Life in Seattle, where the developer is based.
American Life differentiates itself by actually building its projects and holding them until they stabilize, which founder Henry Liebman says is different from other regional centers that are little more than middlemen collecting money from investors and loaning it out to developers.
“We’re not trying to reaise more money than anyone. We look for projects that we want to own and will help the portfolio. If I can’t find anything, I won’t raise anything,” he said while visiting the hotel for the launch.
As with the Homewood Suites, American Life often builds any debt, shielding projects from loan defaults that Mr. Liebman believes could be on the rise in the industry. With hotels, it usually takes around three years for the investment to stabilize, and American Life EB-5 investors get 4-5 percent on their money while also qualifying for permanent residency, he said.
“Our investor wants a good investment and a green card. Most EB-5s, they don’t care about the investment, they just want the green card and their money back in a fixed period of time, and that’s the kind of stuff that someday is going to rear its ugly head,” he said. This year, the quota for EB-5 investors was reached for the first time in its 24-year history.
The community of East Point itself is invested in the long-term success of the Homewood Suites, Ms. Peters, the mayor, told Global Atlanta. Surrounded by other hotels, it represents another investment in the city’s hospitality district, which takes advantage of its proximity to the airport.
She would like to see more joint development planning in the tri-cities area encompassing Hapeville, East Point and College Park. She welcomes the prosper of a Community Improvement District near the airport and believes more can be done to ensure that the entertainment and hospitality sectors grow to the benefit of local residents.
“There’s a level of trust that you have to cultivate with regard to ensuring that locals are getting a portion of the jobs that are created by these projects,” she said.
To qualify for a green card, each investment must create 10 jobs. Through construction and operation, the Homewood Suites is projected to create a total of 503 jobs using a formula that takes into account indirect jobs.