Thursday, June 21, 2012

Miami Herald: Margaritaville Beach Resort EB-5 Project Faces July 1 Default

If there has been a recurring issue in my practice of structuring and marketing EB-5 projects this past year, it has to do with the reconciliation of the true EB-5 process timelines with the fabrications of EB-5 structure "brokers" who promise developers completely unrealistic timelines.  As is often the case in many things EB-5, many involved in the process are far more concerned about the lucrative EB-5 Project Structuring assignment than they are with giving the developer a real-world projection of WHEN they will actually SEE EB-5 money breaking escrow.

I don't know the details behind Margaritaville Beach Resort's problems, but I know this much:
  • The Margaritaville brand has been developed by none other than my favorite crooner/entrepreneur Jimmy Buffett, and it is as good as it gets and 
  • The project's developer, Lon Tabatchnick, has a sterling reputation in South Florida
The need to understand EB-5 structuring, marketing, and funding timelines is the single-most misunderstood aspect of project formation, and it is disappointing to see good projects affected by what were, most likely, unrealistic assessment of EB-5 funding timelines.  Today's EB-5 projects need to understand that for the foreseeable future, EB-5 financing should be seen as supplemental, inexpensive foreign venture capital which is there to enhance conventional developer, US venture capital, and bank financing.  If the project's feasibility hinges on the rapid deployment of funding via EB-5, there will be problems.

We sincerely wish Margaritaville Beach Resort continued success as it meets these new challenges and look forward to a frosty beer on Hollywood Beach in the near future.

See the full article in the Miami Herald:

Margaritaville developer still searching for funding - Hollywood - MiamiHerald.com

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