21-Story Streeterville Hotel Project Using Controversial EB-5 Program to Cover Development Costs

The hotel market in downtown Chicago is growing, and earlier this month, ground was broken on the newest hotel project to hit the Streeterville neighborhood at 226-228 E. Ontario. Being developed by Scott Greenberg, this particular hotel project is unique, however, because it’s being financed using the controversial EB-5 program, which allows international investors to become U.S. residents if they invest in qualified business ventures, like large-scale real estate developments for example.

As first reported by Crain’s, the new Streeterville hotel project combines 40 international investors who all put up $500,000 each for the development, which will eventually become a branch of Marriott International’s Autograph Collection once finished.

Also according to reports, about 75% of the 40 investors are Chinese, with the remaining portion from Canada, India, and Dubai.

What specifically makes the EB-5 program unique, and often attractive to developers, is that most investors who participate are more concerned with acquiring a green card rather than a healthy return, making it much easier to raise capital.

Regardless of the controversy behind the program, however, the new Streeterville hotel seems to be well on its way to joining a number of new hotel projects to have hit the Windy City over the past two years or that are still in the works, reminding everyone there’s always risk involved with major real estate development regardless of how it’s financed.

As of now, the hotel is expected to open in the spring of 2017.