Wallack Holdings will try to raise $175 million this year for its Skyplex entertainment complex on International Drive from Chinese investors and the U.S. government's EB-5 loan program, with the project's cost now pegged at $460 million, the developer's EB-5 advisor told GrowthSpotter.
The Miami Beach-based developer is in the midst of a multi-stage project over the next two years to turn more than 14 acres at one of Orange County's busiest intersections into the "dining and nightlife district" of I-Drive.
Set for the north side of Sand Lake Road between I-Drive and Canada Avenue, Skyplex will combine more than 11 acres of currently occupied lots. Plans include a 10,000-square-foot Perkins restaurant, the Skyscraper roller-coaster, the Skyfall drop attraction, as well as dining and retail establishments.
Initially projected at $200 million, the Skyplex budget rose steadily last year to $300 million with each new announcement by Joshua Wallack, COO of Wallack Holdings.
More land and a potential hotel have boosted the budget estimate to $460 million, said David Finkelstein, general manager of American Immigration Group, a Miami-based advisor for EB-5 investments.
"We were initially looking at an EB-5 raise of $85 million, but since November we've had to reevaluate the proposal because the scope of the project has grown and it now looks like an EB-5 raise of $175 million," Finkelstein said. "It will be a world-class project with a lot of interest in China."
The recent budget increase stems from Wallack's purchase in December 2014 of Perkins restaurant at the intersection. As the top grossing unit nationwide for the Perkins chain, it cost Wallack $29 million to acquire through a package deal with seven other Perkins sites in Florida.
American Immigration Group, one of 28 firms in Florida certified to raise EB-5 funds for public and private development projects, expects to finalize Skyplex's EB-5 application by late May and begin global fund-raising in June.
Individual foreign investors will apply through the U.S. State Department's EB-5 program to invest $500,000 in the Skyplex project, and if approved will get a conditional two-year green card for the investor and their immediate family.
AIG will probably need a year to draw 350 investors to the pool for Skyplex, Finkelstein said.
"For the developer, this is a fixed-rate loan for five years, and the interest rate on a loan of this size is typically 5.5 percent to 6.5 percent," he said. "You could compare this to a (commercial real estate) mezzanine loan, which would usually carry a 12 percent to 16 percent interest rate."
Wallack Holdings will put up 20 percent for the project as owner-operator, Wallack said. Of the remaining value, around 55 percent will likely come from EB-5 loans and 45 percent from commercial loans.
"The EB-5 program is wonderful because you are bringing in millionaires to the U.S. that are creating jobs on projects that our State Department has deemed long-term job creators," Wallack said.
Skyplex is involved in a rezoning application that calls for seven individual parcels to be unified as one for a Planned Development (PD). Submitted in late March, the rezoning and building permits should be complete in the next six months, with construction expected to begin in the fourth quarter this year and Skyplex to open in late 2017, Wallack said.
Orange County Government has a public meeting set for Wednesday to discuss the proposed rezoning of Wallack's 11-plus acres from General Commercial (C-2) to a Planned Development (PD). Along with amusement, retail and restaurant space uses already announced, a hotel with up to 350 rooms is now in the PD plan request. The meeting is at noon, at 6014 Destination Parkway, Orlando.
Progress On Mango's Cafe, Parking Garage
Directly across the intersection from Perkins and the Skyplex site, construction teams are working around the clock on the new restaurant-bar-nightclub Mango's Tropical Café Orlando.
At 49,000 square feet, it sits on the former TGI Friday's Front Row property acquired by Wallack Holdings in 2012 for $10.4 million, and should open in early Fall.
The former Walgreen's lot next door, acquired for $5.3 million, will see construction start this month on a 111-foot-tall private parking garage with 625 spaces, which could be open by late December. Altogether, the two sites will cost more than $55 million in acquisition and development.
"Mango's is the game-changer here," Wallack said. "Skyplex will be on another world, but Mango's will be the largest Latin club in the country and introduce the downtown nightlife atmosphere to I-Drive."