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Chinese Investors Sign Up to Help Finance Pennsylvania Turnpike
2014-12-03
Brief:Agents for the Pennsylvania Turnpike Commission have begun signing up Chinese investors who are promised permanent residency under a U.S. law in exchange for loaning money to help finance a major project to connect between the turnpike and Interstate 95 in suburban Philadelphia.
Chinese investors have begun signing up to spend $500,000 each to help pay for a long-awaited connection between the Pennsylvania Turnpike and I-95.

In exchange, the investors hope to get permanent residency in the United States for themselves and their families.

Agents for the novel financing plan have been pitching the proposal in China since September, touting the project's financial stability and showcasing photos of Gov. Tom Corbett and Turnpike Commission officials breaking ground for the construction in Bucks County.

More than 100 investors have applied so far to invest in the I-95/Turnpike connection. The Turnpike Commission is counting on 400 wealthy foreign investors, mostly from China, to provide $200 million for the $420 million project.

The rest of the money will come from federal and Turnpike funds.

The heavily indebted Turnpike Commission is borrowing the $200 million from foreign investors under the federal Immigrant Investor Program that grants "EB-5" immigration visas to foreigners who provide at least $500,000 to U.S. projects that create 10 or more American jobs.

The deal offers something for everyone:

The Turnpike will get cheap money, saving about $35 million over traditional borrowing costs over five years. The Turnpike will pay a 2 percent annual interest rate, about half the current rate for municipal-bond borrowing.

The foreign investors and their families will get a quick path to legal residence in the United States, though they may lose money on their investment.

The brokers and lawyers will collect millions in commissions and fees, with each of the 400 investors paying $50,000 to the dealmakers and $15,000 to the lawyers. The first $50 million installment from the foreign investors is due to be paid to the Turnpike Commission by April.

Similar EB-5 foreign-investor deals have provided funding for the Convention Center, the Temple University Health System and the Comcast Center.

Construction began in October on the long-awaited direct connection between I-95 and the Turnpike.

PKF-Mark III Inc. of Newtown, Bucks County, won the contract to build the first section of the $420 million Stage 1 of the new interchange, which will finally provide an unbroken I-95 between Maine and Florida.

mcall.com
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