Category Archives: Uncategorized

EB-5, Still Alive

The U.S. Congress is good for at least one thing: Not making a decision. Congress punted again to keep the program alive until April 28th, 2017. There is a bill on the table to bring about some changes, but we gone see.

Congress extended the EB-5 program until April 28, marking yet another short-term renewal of the controversial visa program.

The program, which grants foreign investors green cards after they invest at least $500,000 in job-producing ventures, was set to expire on Friday. EB-5 was included in the continuing resolution Congress passed.

Read Katherine Kallergis’s The Real Deal’s article here:

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EB-5 Scam Alleged in Palm Beach

The biggest question individual investors have about investing in the EB-5 Visa program is how safe is their investment. The unfortunate truth is, it depends. It is always best to work with people who have a track record in the EB-5 program before putting all that money at risk for a shot at the American Dream.

More than 50 Chinese and Iranian investors filed a lawsuit against the developers of the Palm House condo-hotel project, alleging they were defrauded out of $50 million.

The foreign nationals invested $500,000, each, into the Palm House development at 160 Royal Palm Way, the minimum amount required to be eligible for a visa through the EB-5 investor program. They are suing 33 defendants, including developer Robert Matthews and his wife Mia Matthews, brother Gerry Matthews, Ryan Black, Joseph Walsh and Joseph Walsh Jr.

Read Katherine Kallergis’s The Real Deal’s article here:

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China Does Big Projects in Remote Regions

Every day you open the newspaper, it seems that you hear of some, new, audacious project which the Chinese are undertaking. Whether it be a canal across Nicaragua, and glass bottomed bridge across their Grand Canyon, or in this case, and entire city in the country of Georgia. Do not let it be said that the Chinese don’t think big.

It was a patch of modern urban China transplanted upon the Georgian countryside. Rolling, verdant hills abruptly gave way to the tight phalanx of identical ten story apartment blocks that sat on a perfectly aligned street grid, with a sturdy gate surrounding the perimeter. The exteriors of the buildings were decorated with heavily pronounced occidental facades — faux maroon bricks, ornately framed windows, and dozens of little rectangular balconies. It was the same scene I’ve looked upon thousands of times while wandering through the hinterlands of China’s cities, which wasn’t at all a coincidence: this new city in Georgia is 100% Chinese.

Hualing Tbilisi Sea New City is the name of this place. It is to be an all-inclusive, macro-planned intentional city in the previously undeveloped north of Georgia’s capital, right on the banks of the city’s massive reservoir. This new city is to have its own hospitals, schools, shopping malls, hotels, and the largest wholesale and retail trading center in the Caucasus, as well as row upon row of typical modern Chinese housing.

At the center of this emerging new urban expanse is the Hotels and Preference hotel — a giant five-star, blue glass monolith which features 250 of the best rooms in Tbilisi and the largest ballroom in the country. I met Tatia Sioridze and Giorgi Botchorishvili beneath the giant crystal chandelier that hovers above the hotel’s gargantuan lobby. They both work for the Hualing Group, the private Chinese enterprise that’s making this new city happen.

But why would a company from dusty Urumqi, in China’s far western Xinjiang province, have any interest in building a city in Tbilisi, 3,459 kilometers away?

The story goes that Mi Enhua, the founder and president of Hualing Group, fell in love with Georgia after visiting in 2007 to the extent that he wanted to help rebuild the country as it emerges from decades of post-Soviet turmoil.

“He just liked Georgia because of its scenery and good political and business environment,” Sioridze said. “So they decided to start developing their business here.”

Whether the reason behind Hualing’s origins in Georgia are perhaps a little more pragmatic than this is irrelevant, as the company is now the single largest investor in the country. Hualing has already pumped half a billion dollars into Georgia already, with an array of large-scale projects which include the Kutaisi Free Industrial Zone, various luxury hotels, a major wood harvesting operation, a booming wine export enterprise, a massive tea cultivation program, and 90% ownership of the once domestic Basisbank, in addition to the new city.

However, Hualing’s international operations are not exclusive to Georgia. Running flush with China’s “Going Out” policy, which encourages domestic companies to invest internationally, Hualing has extended its reach far beyond its native country, and now has an international portfolio which includes projects in the EU and the USA, in addition to Georgia.

The origins of Tbilisi Sea New City resulted from an interesting deal that the Georgian government made with Hualing. Needing additional infrastructure to host the 2015 Youth Olympics but not having the adequate funds to build it themselves, Georgia turned to Hualing. In exchange for building a “village” for the athletes to live in during the games, the Chinese company would be granted rights to sell the properties later on as well as develop 420 hectares of surrounding land for a new city. According to the Hualing representatives that I spoke with, it was a straight trade — no money was exchanged.

What was local reaction to a Chinese company building a new city in Georgia?

“At the start some people came with demonstrations, saying that China was invading Georgia,” Botchorishvili explained. “At first they were saying that a half million Chinese people would come to live here, but it was not correct information.”

According to the MOU that Hualing signed with the Georgian government, which covers all of their projects in the country, no less than 70% of their long-term workforce must be sourced locally. Currently, the company has exceeded this requirement, and over 80% of their workers are from Georgia — including much-sought middle and upper-level management positions, such as those held by Sioridze and Botchorishvili, who are both local Georgians.

Read Forbes article here:

Miami International Business Attorney

Venezuela is Part Nation/Part Disaster/All Tragedy

Obviously in Miami, I meet, know, and do business with a lot of Venezuelans. I’ve been reluctant to read anything about the country on the fear that the news will be bad. Well, even so, there are people doing business successfully in Venezuela, and Venezuelans finding opportunities outside of Venezuela. If you’d like to see how, don’t be shy about contacting us.

Venezuela’s President Maduro wants to raise oil prices to $70 – and fast. His plan, announced on Venezuelan television this week, is to somehow stabilize oil prices despite weak demand and near record production from Saudi Arabia, Russia, and Iran over the past several months. Maduro has a phone and he is using it (when the electricity works) to call every OPEC oil minister and some non-OPEC oil ministers to talk about cutting production. Not only is this strategy going to fail (the most important producing countries are not incentivized to freeze or cut production now), but Venezuela’s oil problems run much deeper.

Venezuela’s great paradox is that it holds the worlds’ largest known oil reserves yet cannot feed its own citizens or keep the lights on in its major cities. Riots around the country are laying bare the effects of corruption and decades of socialist policies. Venezuela’s oil production has been declining for years, going from 3.3 million barrels a day in 1997 to about 1.9 million barrels a day in 2016. Venezuela cannot afford to produce the oil it needs to sell. It costs approximately $18 to produce a barrel of oil in Venezuela, but not all of that cost is due to Chavez and Maduro’s policies. Most of Venezuela’s reserves consist of oil that is expensive to recover, making it less valuable (when still in the ground) and more difficult to exploit.

Venezuela became a major oil producer when easily recoverable oil was discovered in Lake Maracaibo in 1914. Venezuela knew it had heavy oil in the Orinoco Belt, but this oil is difficult and expensive to retrieve. In 2006, the national oil company started accessing it, meaning that Venezuela’s recoverable oil reserves rival Saudi Arabia’s. However, production from the Orinoco Belt is still extremely costly.

Oil production from tar sands is one of the more expensive forms of oil production today. The procedures used to extract oil from the tar sands are expensive. Moreover, once extracted, the heavy oil must be blended for most uses. When the average price of oil was in the upper $20/barrel range, Venezuela was losing money with each sale.

Read Forbes article here:

Haiti in Club Med Revival: Destination Haiti

Haiti in Club Med Revival: Destination Haiti

Lucio Garcia-Mansilla had long heard about the former Club Med property tucked along the Haitian Riviera, 123 acres lined with lush vegetation and a mile-long expanse of white sand.
But it wasn’t until decades later — when Haiti’s investment climate began to welcome international brands — that the Argentine founder of Colombia-based Decameron Hotels & Resorts would get there.

Read Jacqueline Charles’ article here:

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Colombia glitters abroad amid grumpiness at home

By any yardstick, Colombia is poised for a stellar year. It’s expected to sign a peace deal that will end the hemisphere’s oldest civil conflict, have the re-gion’s strongest economy, and play host to high-profile visits from both Pope Francis and President Barack Obama. To top it off, it’s even in the running for an Oscar.

But talk to people on the street and the mood is de-cidedly sour. Pocketbooks have been strained by the twin woes of a devalued currency and nagging infla-tion. And an El Niño-related drought is threatening water and energy shortages.

In that sense, Colombia is likely to have both a ban-ner and a bummer of a year. And whichever senti-ment tips the balance could have deep repercussions for President Juan Manuel Santos.

Read JIM WYSS Miami Herald article here:

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China not Amused by Taiwan’s 1st Female President

China not Amused by Taiwan’s 1st Female President

“Sisters are doing it for themselves”, and their broth-ers seem not to be cool with that. For example, Tai-wan elected Tsai Ing-wen as its first female presi-dent Saturday, handing her pro-independence party its first majority in the national legislature and reject-ing the China-friendly party that has led the self-governing island for eight years.

The result seems to be deeply unsettling to China, which may respond by further reducing Taipei’s al-ready limited ability to win diplomatic allies and participate in international organizations.

In a statement issued after Tsai’s win, the Chinese Cabinet’s body for handling Taiwan affairs reaf-firmed its opposition to Taiwan independence, but said it would work to maintain peace and stability between the two sides of the Taiwan Strait. It’s the Asian Century just in case you’re not paying attention.

Read ABC News Christopher Bodeen and Ralph Jennings article here:

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Artist to Litigator: Miami’s Own Brazilian Artist Romero Britto Suing Apple

In his own world, Miami Brazilian Artist Romero Britto is the “category King”.  He is known for his crayon-bright colors, black lines and bold patterns.  He is suing technology giant Apple – the international category King — and a London design firm in Miami federal court, contending that the centerpiece of Apple’s worldwide “Start Something New” ad campaign resembles his artwork.

The 29-page suit, filed April 6 on behalf of Miami Beach-based Britto Central Inc., claims that the central image in Apple’s campaign infringes on Britto’s “trade dress” and creates unfair competition.

Named in the suit: Apple, based in Cupertino, Calif., and the design firm that created the campaign, Karl Maier, Ltd., composed of Craig Redman of New York and Karl Maier of London

It’s good pop culture if nothing else.

Read Carli Teproff’s Miami Herald article here:

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Argentina debt fight

Argentina Debt Fight, Complex, But Important

It has made international news, and involves citizens from around the world.  Finally, it seems like we may be close to some resolution.  Argentina’s 13-year fight with creditors erupted in U.S. courts last week, and the results were messy.

Argentina had asked the U.S. Supreme Court to overturn a lower court’s ruling that it must pay $1.5 billion to hedge funds for bonds Argentina had defaulted on in 2001. The Supreme Court refused to hear its appeal — a victory for the hedge fund investors whom Argentina’s president, Cristina Fernandez, had called “vultures.”

Fernandez had said Argentina couldn’t afford to fully pay the hedge funds while also making payments to other lenders. But late last week, signs of a possible resolution emerged. Fernandez said she would seek a U.S. judge’s support for resolving all of Argentina’s unpaid debts in one grand bargain.

Read Matthew Craft’s Miami Herald article here:

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China Needs to ‘Habla’ “Latin American”

The problem with emerging markets is that sometimes they just don’t emerge, or if they do emerge at all, it’s often long after investors have moved on.  China is potentially learning this hard lesson in Latin America, this hard and expensive lesson.  China today is much more than South America’s second largest customer. China is the largest source of soft loans to these governments. With growth slowing, skyrocketing municipal debt may soon lead to a fiscal crisis.  A tough way to learn local markets.

Read John Price’s Latin Trade article here:

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