By Sally Gillie, Monitor
New business opportunities may be on the horizon as the Monroe City Council takes a look at a program that would partner local businesses with investors from China. If the partnership happens, the expansion of First Air Field is one of several projects that could benefit the city, according to Monroe Economic Development Manager Jeff Sax.
The proposal now before the council is to become one of a growing number of municipalities around the country participating in the federal government’s EB-5 program. EB-5, or Employment Based Preference 5, is an immigrant investor program created by Congress in 1990 to stimulate the economy.
Through the program, foreign investors can receive expedited visas if they invest up to $1 million in at-risk capital in new or troubled businesses in this country. Each business must create at least 10 jobs.
In rural areas like Monroe, an investment of $500,000 can establish an “EB-5 Regional Center,” where businesses located in a specific geographical area can apply for the foreign venture capital through the program. A Monroe regional center, said Sax, would likely include the city of Monroe and the surrounding urban growth area.
“I can’t say how optimistic I am about this program, what it can mean to the city of Monroe relating to jobs and businesses,” said Mayor Robert Zimmerman. “Originally, we looked at the EB-5 for the airport,” he said, “but realized we have so many other opportunities here we would go for a regional center.”
Moving ahead with a plan to form an EB-5 regional center means the city will have to approve $225,000 in this year’s budget to cover the costs of moving forward with an application, legal costs and marketing the program. That money, said Sax, should be recouped through future businesses that will want to participate in the program.
There have been 14 EB-5 projects in Washington State to date, said Sax. That includes the second phase of the new office complex going up in Seattle’s Sodo area near Safeco Field, and a portion of the construction now underway on the 520 floating bridge in Seattle. There is also an EB-5 regional center in Everett. Businesses in the states of California and Florida have been the most active participants in the EB-5 program, with 61 and 31 projects to date, respectively.
Sax said the advantages of forming an EB-5 regional center in Monroe came about last year in discussions with Jesse Tam, managing director of Mega Pacific Investments, Ltd., a financial strategic development firm near Bellevue that is experienced in pairing Chinese investors with U.S. businesses.
Tam, who has 35 years of experience in the banking industry, has facilitated eight EB-5 programs over the past 15 years. A native of Hong Kong, he has lived in the United States most of his life, graduating from Boise State University in Idaho and becoming a U.S. citizen in the 1970s. He said he knows first-hand what it is like to “come off that plane” into the U.S. with resident status. Tam, who visits China about 10 times a year, said there are many investors in China waiting for that moment.
Monroe has real potential for an EB-5 regional center, Tam believes, something that occurred to him after he visited here several months ago and began driving around the community. Tam said he was initially impressed with the small-town feel of Monroe, and it came as a surprise to realize the city is only 20 minutes away from Bellevue and the Microsoft campus, and an easy commute to Boeing in Everett. “Monroe is a hidden treasure,” he said.
Tam gave a PowerPoint presentation to the city council at its Jan. 15 meeting, and also showed a short video describing one of his EB-5 projects, the launching of Gateway Bank in Oakland, Calif. That video emphasized community involvement, something Tam said he sees here in Monroe, noting the friendly reception he received here from city staff and elected officials.
Tam said the EB-5 program, managed by the U.S. Citizenship and Immigration Service, has been underutilized. “That represents billions of dollars on the table that aren’t being used,” he said. Tam outlined the steps necessary to go forward with forming an EB-5 regional center in Monroe.
To create an EB-5 regional center, the city of Monroe would first file an application to the U.S. Citizens and Immigration Service. Approval of an EB-5 regional center could come as early as October.
A regional center owned by the city, Sax told the council, lends greater credibility to projects and would therefore be viewed more favorably by investors. The role of the city, he said, is to work with local businesses to move forward with the program, and then step back.
Ahmad Farrokhi, owner of Light Gauge Structures in Bellevue, was at the Jan. 15 council presentation to hear more about the EB-5 program and the opportunities it could provide for his construction company that also manufactures metal framing units. If Monroe’s EB-5 regional center comes through, Farrokhi said he may consider expanding his operations here because of Monroe’s proximity to the eastside.
Evergreen Speedway owners Doug and Tracy Hobbs also attended the council presentation to learn more about how the EB-5 program would work here.
Tam said there are many investors in China with $100,000 or more to who would like the opportunity to emigrate here. Running a business and raising a family has challenges in China, he said, citing the country’s one-party political system, population density and air pollution as some of the significant reasons. “They want to come to this country, and even when I tell them their money is at risk, they still say ‘yes, they want to invest,’” he said.
In return for their dollars, investors and their immediate families, including children under the age of 21, are given expedited visas, which gives them residence status and the ability to eventually apply for citizenship.
The city council directed city staff to move forward and prepare a more formalized plan in anticipation of moving forward with an EB-5.
Cable Park conditional use permit okayed by council
The council voted 6-1 to approve the shoreline conditional use permit for the proposed Lake Tye wakeboard park, and to forward the application to the Washington State Department of Ecology for final review. That permit is subject to conditions set by the city hearing examiner, which require that the developer of the project, H3O, install diverters along the cable lines and supporting guy wires to reduce the risk of bird collisions.
That shoreline use permit had been challenged by a local resident, but Monroe Hearing Examiner Carl Cox ruled in favor of the permit, subject to conditions, on Dec. 11 of last year.
Council member Patsy Cudaback cast the dissenting vote, consistent with her previous objections regarding how the cable park would impact public use of the shoreline.
Once the shoreline conditional use permit is approved by the DOE, then the cable park developers can begin applying for the necessary building permits for the project.
Monroe City Municipal Court moves forward
The council voted unanimously to terminate its contract with the Snohomish County District Court-Evergreen Division and move toward establishing its own court to process traffic infractions and criminal misdemeanors.
Council appointments to boards and committees
Mayor Robert Zimmerman made the following city council appointments for the 2013 year.
Mayor Pro Tem – Tom Williams
French Creek Flood Control District Joint Board – Tom Williams
Review and sign bills – Jim Kamp and Ed Davis
Snohomish County Tomorrow – Jim Kamp.
Finance and Human Resources Committee – Tom Williams
Transportation and Planning Committee – Patsy Cudaback, Jim Kamp and Ed Davis.
Legislative Affairs Committee – Kurt Goering, Kevin Hanford and Ed Davis.