A local restaurant group is cashing in on EB-5 investors.
Tapco Restaurant Group, which owns and operates Tap 42, closed on the final portion of a $4.5 million EB-5 loan as it plans a South Florida expansion.
Tap 42 Craft Beer Bar & Kitchen has locations in Fort Lauderdale and Boca Raton and will open its Coral Gables gastropub Wednesday at 301 Giralda Avenue. The majority of the $4.5 million loan financed the construction of the Boca Raton location, which opened at 5050 Town Center Circle in July, with the rest going toward the Coral Gables restaurant.
Roger Bernstein, co-founder of American Life Investments, a South Florida-based regional EB-5 center, arranged the financing for Tapco. It breaks down to portions of $1 million, $500,000, $2 million, $500,000, and the last $500,000 at the end of April. Bernstein, who is also an immigration attorney, told The Real Deal that the restaurant industry is “perfect for EB-5” because of the number of direct and indirect jobs it creates.
The EB-5 visa program grants permanent U.S. residency to investors (as well as their immediate family members) who create at least 10 domestic jobs and invest at least $500,000 to $1 million in a U.S. business venture. The popular program has seen significant pent-up demand: investors filed 10,928 EB-5 applications with the U.S. government in fiscal year 2014, up from 6,346 a year prior and just 1,258 in 2008.
Bernstein said his regional center has worked with investors in Latin America and Europe. In addition to the $4.5 million, his firm is in the midst of raising $10 million for four more Tap 42 restaurants in South Beach, Midtown Miami, Aventura and West Palm Beach. West Palm Beach will likely be the first.
Bernstein expects more restaurant groups to tap into EB-5 funding. In South Florida, EB-5 funded projects include a Doral office condo, which opened in April, and a charter school west of Tamiami.
“Foreign investors understand the concept of investing in restaurants, which are great job creators, and restaurant owners benefit from relatively less expensive capital,” he said.
CEO Doug Rudolph said in a press release that the loan’s 6 percent interest rate, as well as the loan timeframe of up to six years, was appealing. Rudolph, who could not immediately be reached for comment, has also developed Wendy’s and Rudy’s locations in Miami, according to the release.