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Miami's 'Eiffel Tower': Tourist Lure or Ticket to Citizenship?

/ Source: CNBC.com

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It will rise higher than any structure in Miami, standing at the center of Biscayne Bay. Like the Statue of Liberty, SkyRise tower will be the gateway to U.S. citizenship—not for the tired, poor, huddled masses, but for foreign investors who have at least a half a million dollars to pay.

"A significant portion of our funding will come from the EB5 federal immigration investor program," said developer Jeff Berkowitz, standing on the parking lot from which the tower will eventually rise. "It becomes a very short cut approach for a potential immigration investor to get their green card. All they have to do is get their source of funds vetted by homeland security."

The EB5 program, passed by Congress in 1990 to encourage foreign investment in the U.S. economy, requires each individual investor to commit at least $500,000 to a project that creates a minimum of 10 full-time jobs. SkyRise Miami has already obtained approval under EB5 and international fundraising is in full swing. Berkowitz obtained $9 million from Miami-Dade County and is seeking more from the state of Florida, but primarily the money for the tower will come from overseas.

Berkowitz, who has been developing commercial real estate in Miami for four decades, admits there is, for him, "a certain legacy aspect to this project." He is in the process of committing $30 million of his own money to SkyRise.

$430 million price tag

The 1,000-foot high amusement tower is expected to have a final price tag of $430 million, but Berkowitz said he has no doubt it will pay that back, and more. The tower, rising like something of a hairpin over the Miami skyline, will be erected using three times the steel of the Eiffel Tower and be able to withstand wind speeds of 186 miles per hour, according to its website.

SkyRise will include a restaurant, night club, ballroom and private entertainment facility. It will have a several viewing platforms and a so-called "SkyRise Drop" ride where 12 people at a time can drop 650 feet at a speed of 95 miles per hour. Individuals can also take a "Sky Plunge" on their own, something like base-jumping from the tower. There will also be a "Flying Theater," where 72 riders can strap in and hang above the city.

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"We have what I consider to be a tourist attraction deficit," said Berkowitz. "We talk about elevating Miami to new heights."

The amusement aspect of the tower will help investors from both China and Dubai relate to the project, at least according to attorneys Shai Zamanian and Preeya Malik with Step America, an immigration-focused venture capital firm in Dubai.

The greatest return for these investors is their ability to get a green card, and get it very quickly."

"They're used to seeing grand architecture, architectural structures that have profited tremendously for them here," said Zamanian, who admits that the investment is just a ticket to U.S. citizenship.

"This investment is not going to give a huge return for the investor in terms of any sort of huge monetary gains or margins or anything like that. The greatest return for these investors is their ability to get a green card, and get it very quickly," added Zamanian.

Critics, however, question whether the tower will generate enough tourism dollars to be profitable. Some even claim it could end up costing taxpayers.

"I looked at the numbers and they just don't make sense. I've been building my whole life," said Charles Corda, a Miami-area architect who sued the city over the project, challenging the public referendum on the tower, which is being built on public land.

More visitors than the Eiffel Tower

Corda argued that Berkowitz is projecting more visitors per capita than both the Eiffel Tower and the Empire State Building.

"By putting a high risk project on public land, you jeopardize the city's finances. This city is always on the edge. Its finances are always in peril," he said.

Berkowitz, who expects at least 3.2 million visitors to SkyRise a year, said he will get the numbers the tower needs to be profitable. He expects to be able to refinance the building in five years and pay investors back with interest.

"The economics appear to be extremely promising," he retorted.

Even those selling the project to investors, however, do not deny the risk.

"The whole thing, the success of the building, the success of the investment and everything about the investors getting their money back and their capital back after five years is dependent on tourism and on the developers ability to capitalize on the tourism in Miami," said Dubai attorney Malik.

The bulk of the EB5 investors will likely come from China, as that country has claimed the vast majority of this program over the past few years. Whether they get any monetary return, Malik said, is secondary to citizenship.

Drilling has not yet begun, as water and electrical infrastructure is still being moved, but the tower is expected to take about four years to construct. The unique design has gained almost as much notoriety as the funding. Some say it looks like an R, some say it looks like a phallic symbol.

Berkowitz, who pointed out the SkyMia license plate on his Maserati, said, "I think it looks like a money clip."

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