Thursday, June 21, 2018

Another EB-5 Scandal in California's San Gabriel Valley

An attorney retained me at the request of skeptical investors in this EB-5 project sponsored by the America FX Regional Center, LLC, an EB-5 regional center approved by USCIS in 2016. The goal of the offering was to develop a 318-room FX Boutix hotel across from the City of Hope, which is a 217-bed cancer hospital in the middle-class Los Angeles suburb of Duarte, California. The total project floor and parking area of this hotel project was stated to be 445,000 square feet, rather enormous in scale compared to a 217-bed hospital. So far, America FX has received more than $53 million from 96 Chinese investors without the necessary development approvals for this project.

The most outrageous inaccuracy in the Offering Memorandum, stated on page 2, is the claim that the hotel would be built across the street from the City of Hope Medical Center, which already has 40 extra rooms for visiting family members. The planned hotel is actually more than one mile away, and the only thing across the street from the City of Hope is the light rail line taking people to closer hotels in Arcadia.

The principals of this EB-5 regional center are Sherry Ho and Alvin Tzuen-chung Ho, former chairman of the unsuccessful Chinese hotel firm FX Hotels Group.  One Asian stock analyst joked that FX’s only success was taking Taiwanese money and dumping it into bottomless pits in China.

The City of Hope is actually located 1.2 miles from the location of the hotel project, as measured in the Google Map below. The gold and red colors along the route indicate traffic bottlenecks due mainly to shoppers patronizing Wal-Mart and Home Depot in the immediate area.

Visiting investors may have instead been shown the closed Santa Teresita hospital (photo above) across the street behind the discount retail center anchored by “Dollar Tree” and “Smart and Final” stores. Santa Teresita surrendered its surgical/acute care license in 2004, and the 5-story building in the background is composed of offices and vacant space, but there is also an adjacent 131-room senior care home.

The architect's drawing seem to have no compatibility with the L-shaped site, as seen below:

In terms of locational advantages, this project is also a miss because it is not located on the Gold Line light rail system serving the San Gabriel Valley, including a stop for the City of Hope. The nearest western stop on the Gold Line, Arcadia Station, includes several all-suite hotels such as Springhill Suites, Hilton Garden, 2 Extended Stay Americas, Residence Inn and Doubletree, all with a better restaurant selection than Duarte offers. Visiting families do not need to rent a car or deal with the Duarte traffic jams associated with Walmart and Home Depot. The subject hotel project, on the other hand, is not located on the light rail line.

So, there should be 96 Chinese investors asking, “Where’s our money?”

The actual City of Hope

The attorney writing the complaint for the cheated investors is Jing Wang, Esq., Kingswood Law, Diamond Bar, California. She also successfully litigated against the California Investment Immigration Fund, also previously reported on this blog.

1 comment:

bonnie said...

Interesting post! The power and knowledge that Google maps gives us is astounding. You'd think investors would at least do some internet research before (collectively) giving up $53 million.