McALLEN, RGV – The City of McAllen has completed its first successful EB5 Visa Program project.
Investors from Mexico are pumping more than a million dollars into an upscale hotel that is being built next to the McAllen Convention Center. In return, under the federal EB5 Program, the investors can apply to become U.S. citizens.
The EB-5 visa provides a method of obtaining a green card for foreign nationals who invest money in the United States. It was created by the Immigration Act of 1990.
The hotel in question, Cambria McAllen, is owned by Choice Hotels International, one of the world’s largest hotel companies. O’Reilly Hospitality Management, LLC, will operate the hotel. The City of McAllen, along with Choice, O’Reilly, and construction firms Hankin Enterprises and Fulcrum Management hosted a groundbreaking ceremony for the new hotel on Tuesday. The 121-room Cambria McAllen will serve as the brand’s third property in Texas and is set to officially open in late 2016.
At the groundbreaking ceremony, McAllen City Manager Roy Rodriguez spoke to the Rio Grande Guardian about the EB5 Visa Program and how the Cambria project came about.
“EB5 is a section of federal law that allows foreign investors to come to the United States, invest money in a project, create a certain amount of jobs and be eligible for citizenship. It does not guarantee anything but it does allow the investor eligibility to apply to become a U.S. citizen,” Rodriguez said.
“We have a few of those investors here today. This is the first for the McAllen Regional Center, to have a successful EB5 project. That alone is a huge deal for us. That is why you saw so many people here celebrating.”
Rodriguez is president of the McAllen Regional Center, which was set up by McAllen City Commission to oversee EB5 Visa Program projects.
“We have two or three investors that have been approved by the federal government and we have others waiting. In fact, in the case of two of them the money has already, what we call, dropped into the project,” Rodriguez said.
Asked what the success of an EB5 Visa Program project will do for McAllen, Rodriguez said: “We think that the mere fact that we are turning dirt and we are going to go vertical, it does two things. One it excites other investors to join the project and two I think it speeds up the process in D.C. because they know it is a real, viable, living project. They have a job to do and they are not going to give citizenship to people if they are not sure that a project is going to happen. It is a great circle.”
Asked if the McAllen Regional Center will now start pursuing other EB5 Visa Program projects, Rodriguez said: “I think we are going to take a deep breath and see where it leads us. We want to see vertical construction go up. We want to show potential investors this is what we do. Once they see that I think this is going to facilitate more projects here.”
The McAllen Convention Center, on the corner of Expressway 2 and Ware Road, has been up and running for eight years now. For much of that time it stood alone, with no development around it. Retail stores were constructed along the frontage of Expressway 2 but for the longest time there were no hotels to augment the convention center. Now, however, there are three under construction – Embassy Suites, La Quinta and Cambria.
Asked if the convention center could support three hotels, Rodriguez said: “We know there are many, many conventions that would not consider us because we did not have hotels on the campus. That is a fact. When I became city manager 20 months ago there were several things the City Commission wanted us to refocus on. This was one of them. It was a daunting task because this facility was here for eight years without a hotel. To the untrained eye you would say there is something wrong. There is something going on here and hotels do not want to come. I do not know what that was. The truth of the matter is we hit it hard. I think we became a little more creative.”
Being a little more creative meant Rodriguez gave the owners of the land an ultimatum, build hotels or the City will buy the land back. It did the trick.
“We quickly changed our strategy on how we dealt with folks that already owned property here, including those two (Embassy Suites and La Quinta). We said, these are our expectations These are our timelines, you need to tell us if you fit into these timelines. And if not, I need to go look somewhere else. We were going to buy them out and start over. I think they felt the energy this City Commission had about this. I call it our gem, because it is. This is the heart of the community when it comes to development and visitors,” Rodriguez said.
“They saw that energy. Embassy Suites, I have to give them a lot of credit because they immediately said, okay, we are ready to go. La Quinta followed. In fairness to these folks (Choice), they had been working for a long time to try to get this thing done. For a lot of reasons, including some of the things we did internally that we could probably done differently, it just was not moving forward. And about eight or nine months ago the energy changed, we got these partners in, O’Reilly and Choice Hotels. Chad and Chris put their best feet forward. The City Commission said let’s get this thing done and here we are.”
The “Chad” Rodriguez referred to is Chad Hankin of Hankin Enterprises. The “Chris” Rodriguez referred to is Christopher Haridopolos of Fulcrum Management Corporation. Both were at the groundbreaking ceremony.
The Embassy Suites Hotel will have 150-plus rooms and suites. La Quinta will have about 120 rooms and Cambria will have 121 suites. Rodriguez said having the three hotels go up will bring a whole new vibe to the area.
“The landscape looks different now. When you go down Ware Road now, it looks different around here. This vertical construction looks awesome and we are not finished. I would say in the next 24 months this place is going to look completely different. It is going to be one of the areas of town, much like McAllen Sports Park, much like Westside, that has a life to it, its own life. We have retail, we have restaurants, we have the Convention Center, we have the Performing Arts Center. Now we have what we needed. What I told someone earlier was, the Convention Center needs the hotels and hotels need the Convention Center. So, it is a true marriage. We are real happy.”
When complete, the four-level Performing Arts Center will total 93,471 square feet and seat approximately 1,800 spectators. The venue is designed to accommodate full-scale Broadway productions. Rodriguez said the Performing Arts Center is due to open in late summer, 2016. “We are looking at the end of August. We had been in an October timeline. The contractor has worked real hard to shorten that time and so we are hoping August so that by the end of September, October, we have a grand opening. We are already working on opening acts, a celebration that will be weeks long,” Rodriguez said.
Rodriguez concluded the interview by saying he was surprised that the hotel executives present were surprised he made an appearance at the groundbreaking ceremony. Normally, Rodriguez stays out of the limelight and lets Mayor Jim Darling and city commissioners take center stage.
“I was a little surprised that they were surprised I was here. There was no way I was going to miss this. We worked a long, long time to make this reality. A lot of people deserve a lot of credit for this happening, starting with our City Commission. They have shown a lot of courage. They have been patient and we have had to navigate this process because we have not done this before.”
Rodriguez also thanked those involved in the hotel project.
“I would like to thank Choice – Cambria is a Choice hotel flag. I would like to thank O’Reilly Hospitality Management. They say they came in right at the tail end but it has been six or eight months since they said, we want in. Their role is the hospitality side of the hotel. They are going to be managing it. The developers, Fulcrom Management and Hankin Enterprises, they started this project and really held onto it. It was a hard process. This EB5 program was a learning experience for us. They hung in there. They were relentless. They just never gave up. They convinced me and the City Commission that this was a project that not only could be done but should be done. We are all very proud of what we have achieved here.”