Florida Foreign Investment Has New Opportunity: EB5 Investment into Florida Charter School Projects - But Does This Hurt Other Florida Real Estate Markets? Maybe

by Rosa Eckstein Schechter
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Traditionally, international investment in Florida meant that foreign investors were putting their investment money into commercial real estate -- things like office buildings, luxury hotels and resorts, maybe shopping centers or malls.  Some global investment came into the Florida economy through residential investment as well: foreigners buying condos and townhouses here, and other residential real estate either for second homes or for rental properties.

Now, commercial real estate and residential markets have a growing competitor for those foreign dollars: the charter school.

That's right: charter schools, those primary or secondary school alternatives that are offered all over the state have become very interesting to foreign investors seeking a place to invest in Florida.  It's a big deal in 2012.

Why the interest?  For one reason, the EB5 Visa program.  (Details about that in another post.)  For another, the tax credit currently provided for charter school construction projects.

Federal Tax Credit for Financing Charter School Construction: Education Profiteering

Right now, there is a sweet thirty-nine percent (39%) federal tax credit available for financing the construction of charter schools.  That's nice, especially when one considers that the charter schools are privately funded projects which means that the charter schools can be capitalized.  They can be profitable investments.

Of course, this has become controversial, as some consider "education profiteering" to be bad news.  There's talk that the charters schools are going to get closer governmental scrutiny.   Organizations have formed to advocate against charter schools as profit-making ventures.

Connecting Foreign Investors With Charter Schools: EB5 and ROI

Other organizations have been formed with the specific goal of assisting foreign investment in American charter schools, like the Education Fund of America. 

Investment advisors Greg Wing and Mike Morley formed the Education Fund of America specifically to network international investors with charter school projects here in the United States.  Part of the EFA's task: to help coordinate EB-5 Visa funding for foreigners with charter school projects in various states. 

EFA has been created specifically to help investors from other countries who are interested in obtaining EB5 Visas (where visas are available to foreigners who invest a certain amount in the United States) through investment in charter school projects.  From their site:

Our founders are dedicated to creating the best public charter schools in the United States while providing EB-5 investors with a fast and secure path to U.S. citizenship. In addition the collaboration has resulted in outstanding investor results, averaging less than 2-1/2 years return on investment for education projects.

International Investment in Florida Charter Schools Is a Big Deal Now

Given the opportunity to make a nice return on their investment while simultaneously nailing down a U.S. Visa, many foreign investors are excited about the charter school as an investment vehicle.  Here's one example for you: Enterprise Florida has just announced that a group of investors from China have committed to investing $30 million into the Florida charter school program and these Chinese investors are not done: they are planning to invest $90 million into Florida charter schools next year.

That's great for Florida's economy.  The big question, though: are charter schools taking investment dollars away from other commercial real estate projects that might otherwise get this funding?

 

Written by:

Rosa Eckstein Schechter
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