A foreign investor is financing the development of a 48-bed assisted living facility in League City through a federal program that gives eligible immigrants a path to green cards by financing U.S. ventures that create jobs.
In February, the city issued a permit for the proposed French Oaks Memory Care at 600 Enterprise Drive, adjacent to Regal Estates senior living facility.
To pay for the $11.5 million project, Oregon-based Jacobsen Development Group, which also developed Regal Estates, will get some financial backing from an unidentified foreign investor, city staff said.
The development will create 50 jobs once it is complete and could create about 125 other jobs related to construction and related work, Jacobsen Development Group said.
The project is shovel-ready, the developer said, but League City officials want the project’s exterior design to include more bricks or stones.
Galveston County Judge Mark Henry asked the city in July for its official OK on a federal EB-5 application to the Department of Homeland Security related to the development. The city gave the OK on Aug. 22.
The developer would pay for construction using a federal program that allows foreign investors to obtain visas through what officials refer to as the EB-5 program.
The Department of Homeland Security oversees the EB-5 program that was part of the Immigration Act of 1990. The program gives a method for eligible immigrant investors to become lawful residents of the United States by investing at least $1 million in a U.S. business that will employ at least 10 U.S. workers, or invest $500,000 in a targeted employment area.
Although EB-5 has been around for a few decades, it was sparsely used until the Great Recession, when it became popular, particularly in real estate, after developers saw their traditional funding sources dry up. Proponents say the program, by creating jobs, works well to spur economic development. Critics say the program essentially sells citizenship to wealthy immigrants.
A targeted employment area is defined as one with higher than average unemployment. Based on ZIP code data, the proposed site near South Shore Boulevard fits the definition, officials said.
The targeted employment area is completely within Galveston County, but not completely within League City limits, which meant County Judge Mark Henry had to certify the paperwork.
EB-5 applications are not common in Galveston County, Henry said.
This particular application didn’t ask for any incentives from the city or the county, according to League City documents.
The project will remain a private, taxpaying entity in perpetuity, the developer said.
City council approve the item Aug. 22 subject to some stipulations.
First, the project will remain for-profit, but if for some reason it becomes a nonprofit venture that doesn’t pay the same property taxes, the city and owner would negotiate a payment in lieu of taxes.
Second, before construction begins, the developer will agree to enhance the exterior design of the building to reflect the city’s masonry standards.
Paul Menzies, the city’s former director of planning who is taking a job as the assistant city manager of Wichita Falls, is behind the masonry stipulation. Menzies and his staff crafted the masonry standard that the council approved in 2016.
Jacobsen wants to begin construction before January, city staff said.