Orlando City Soccer Club(OCSC) could pay close to $1 million more than previously estimated in January to buy city land under its downtown stadium now being built, based on a boundary survey its contractor turned over to City of Orlando last week that shows the property was larger than first thought.
The club is also months into recruiting as many as 99 foreign investors to fulfill a $49.5 million offering for EB-5 permanent visas, with the majority coming from soccer-enthused South Americans who recognize OCSC's Brazilian majority owner and star player Kaká, a Miami-based EB-5 advisor coordinating the campaign told GrowthSpotter.
The boundary survey was conducted by WBQ Design & Engineering, Inc., of Orlando, on April 20, according to a copy provided to the city's real estate division.
The surveyor concluded the city-owned property for the stadium site totals 542,431 square feet, or 12.453 acres. The city and OCSC agreed to sell the land at $35 per square foot, resulting now in an estimated purchase price of $18.985 million.
The city's land was first estimated at 11.8 acres (514,008 square feet) in a sale contract made public on Jan. 20, producing an initial $18 million estimate. City staff said the boundary survey could show the land exceeded 12 acres, which it now has.
The city has no set timeline to sell the property, and is currently doing due diligence to complete its review of the survey, a city spokeswoman said Tuesday.
EB-5 financing is now known to be an active part of that, but is expected to contribute less than 20 percent of the capital stack needed for the stadium construction budget, said Gonzalo Lopez Jordan, managing partner with American Regional Center Group out of Miami.
The stadium investment may now be above $200 million, based on the percentage of capital stack estimated for EB-5.
The soccer stadium land lies within a certified Targeted Employment Area for EB-5 financing (allowing $500,000 investors instead of $1 million), and qualifies for the New Markets Tax Credit program, according to census tract incentives data at ReinID.com.
Lopez Jordan's team and OCSC began marketing the EB-5 investment offering last September for up to $49.5 million, and has had a "substantial percentage" of that value committed so far, despite the process being interrupted from December through mid-February by Brazil's extended holiday and Carnaval season, and by China's New Year through late February, Lopez Jordan said.
"So far our efforts have been concentrated in South and Central America, and we had our first sit-down with Chinese investors in March," he said. "We started first in South America because of the notariety of the club's owner and top player as Brazilians, and the fact soccer is generally appreciated more as a business down there. In addition to Brazilians, we have investors committed from Argentina, Colombia, Mexico, Guatemala and S. Korea."
Lopez Jordan's firm is also working with local regional center Florida EB5 Investments LLC to help line up foreign investors for the project.
Amidst a sea of development projects across the United States competing for foreign EB-5 investors, OCSC's soccer stadium is uniquely attractive because the club has already proven through two seasons that it has a strong, steady revenue stream.
Foreign investors face risk when committing their $500,000 via EB-5 applications to a commercial retail project or new hotel, for example, because the client base and long-term success of that business hasn't been proven.
But OCSC's stadium will rely heavily on attendance for revenue with 25,500 seats, and the club has already proven it can draw an average of 33,000 per game to the Citrus Bowl.
"So investors know they'll fill this (stadium) business venture consistently, and that's not even counting the new female soccer team's additional 10 games per year," Lopez Jordan said. "That was a very pleasant surprise for us, when that was announced."
In addition, the fact that OCSC has already started building the stadium with its owners funding construction up front is unique among EB-5 investment opportunities, because there's greater certainty for new investors that the project will be finished, he said.
The club's agreement with Major League Soccer to have the stadium ready for 2017 adds credibility to their construction schedule, Lopez Jordan added.
OCSC officials did not respond on Tuesday to requests for comment.