City of Ypsilanti

Posted on: September 12, 2017

PUBLIC NOTICE: Water Street 120 Day Update

120 Day Update.Final.9.12.2017_Page_4

120 Day Update

Water Street

On May 23, 2017, City Council accepted a Letter of Intent from International Village, LLC., for the due diligence of a development of a mixed use community on the 36 undeveloped acres of Water Street.   Since that time, International Village, LLC., led by Amy Xue Foster, has worked diligently to prepare a development proposal that will be brought to City Council on September 19, 2017.

Much was reported on the initial letter of intent and development concept by the local media, regional media and even international media (World News Daily, May 28, 2017.)

Development Team:

The development team is lead by the principal and managing partner of International Village, LLC., Amy Xue Foster. Amy Foster’s experience started in the mortgage industry and progressed to international investment and has peaked with international development investment.  Although no direct development experience, Ms. Foster is a Chinese ex-patriate and a parent of a Chinese foreign exchange student who studied at Eastern Michigan University.  Ms. Foster has been involved in the international financing of development projects for several years, levying billions in foreign/domestic investment.

Mr. Allen Green has joined the International Village team for the purposes domestic partnerships and advising the financial portion of the project. Mr. Green is a former executive of the Ford Motor Company, rising to the level of Vice President and Director of Personnel of GM Canada.

Spence Brothers Construction is the domestic construction and project management company.  The team is led by Wayne Hofmann.  Spence Brothers, a 100+ year old, family owned and operated corporation based out of Saginaw, has offices throughout the state and locally in Ann Arbor.  Spence Brothers is well known in the region for several on-going construction projects, including at The University of Michigan and on large student housing projects in the City of Ann Arbor.  Wayne Hofmann, project manager, is skilled in economic incentives, evaluating project pro-formas, and working with multiple stakeholders on transformative community projects.

Kerr Russell Attorneys and Counselors have been retained for the legal representation of the development team.  Mr. James Cambridge will be the lead attorney for the project.

A Chinese real estate firm, Vanke (pronounced Wan-ku), or China Vanke Co., Ltd., is providing development guidance for the project. Vanke was established in 1984 and has become a leading real-estate company in China. The Group was listed on Fortune Global 500. Vanke entered the US market in 2011, and has completed projects in New York and San Francisco.

The architectural team consists of internal professionals from Vanke, which has developed the project concept drawings to date. International Village, LLC has chosen Little Diversified Architectural Consulting out of Charlotte, North Carolina to provide design development for the project.

G-2 Consulting Group have been contracted to provide geotechnical engineering and environmental review for the project. Their crews have been on site in the past six weeks and have completed their geotechnical report.

Key components of the project team include various marketing agencies based in China that provide placement for students in the United States and market foreign real estate. This effort will be led by Shanghai Tongtian Real Estate, or Tospur, which is a leading Chinese real estate service provider. Formed in 1998, Tospur offers real estate marketing and sales agency service, financial services, commercial property operation service, and consulting services.

A local marketing and consulting firm has not yet been selected but will be added to the project team.

Technical Updates:

The development team has been provided the recently completed Phase II studies of the Water Street development area completed by AKT Peerless. Additionally, the draft Document of Due Care and Compliance (The DDCC) that is pending completion of the Water Street trail remediation project has been provided to the team.  The DDCC is the document that outlines the remediation procedures and processes that will be required for the safe redevelopment of the property.  This document is based on Michigan Department of Environmental Quality (MDEQ) standards and requirements and is approved by the MDEQ.  Any development on the Water Street development parcel will need to seek a certificate of compliance from MDEQ prior to the City accepting the project.

The development team completed geotechnical soil borings throughout the development site to determine the feasibility of development concepts based on the soil competency.  The composition of the soil and the water table is a determining factor in the height of buildings, the costs associated with depths of foundations and/or the need and depth of piers under the foundation, and the overall construction costs.

The development team has conducted site visits and completed market research concerning the feasibility of the site for the development concept. More on this information will be provided by the development team to City Council on 9/19/17.  

Development Concept:

The development concept that was presented to City Council in May was a mixed-use development consisting of student-housing, market-rate housing, and a commercial corridor. The development plan has continued to evolve over the past 120 days but has remained consistent to the theme presented to Council.

The development concept has been refined based on input from investors, market research of the property, and demographics. The major objective is to create an open international community experience that integrates living, shopping, offices, and public centers. Student housing focusing on international students attending local educational institutions is a main component with waterfront living opportunities, public services, and integrated technologies. The development concept seeks to maintain green area and public spaces and incorporates design elements from the Eastern cultures.  Multi-modal transportation is a key to the project being successful, both on site and throughout the community. International Village has started discussions with the AAATA about creating a transit oriented development that utilizes the existing transit system in Ypsilanti and beyond.   The development team is seeking to provide superior landscape design.

The development team had stressed that the property has a 10 minute living circle to meet basic life needs, education, medical, ecological, municipal, and leisure services. Additionally, the property is located centrally between Ann Arbor and Detroit which opens up key opportunities to the live-work aspect of the development.

Below is a preliminary concept plan that illustrates a layout of the project without commitment to the scale and boundaries of the project. The below plan is not to scale.

The Michigan Avenue street frontage would be commercial street level urban design.  The density would build to the middle of the property and then decrease toward the river frontage to maintain views and access to the water frontage. A main boulevard entry would line up with River Road and provide the natural connection of the commercial corridors.  The high-density portion of the project would be the student housing apartments, the lower density apartments would be designed and marketed to a more transitional student or young professional, and the residential nearest the waterfront would be permanent housing options.  Although the design and location encourage less reliance on personal vehicles, the internal circulation of the project allows for convenient transit options.  Parking and access are major considerations and may lead to structure or underground solutions.  The boulevard concept keeps the property open and accessible and creates new pedestrian experiences within the downtown corridor.

There are several aspects of the preliminary site plan that need refinement based on local planning standards and restrictions to the property.  These aspects will continue to be defined and refined throughout the purchase and development process.

The anticipated project may include phased construction with student housing being prioritized. The total schedule for the project is estimated to be 45 months, with cost estimates for full construction exceeding $300 million.  

Development advisories:

The development team has been fully advised of the environmental issues on the property and the City’s desire to have a certificate of completion from MDEQ. 

Considerations disclosed include:

  • The importance of the Water Street Trail remaining open and accessible to the public, as well as the 100 foot recreation easement from the center line of the Huron River into the development that was recorded as part of the grant to fund the trail. 
  • There is concern that part of the property may have been used for Indian burial ground.  Although the Council of Tribes have not asked for special investigation and have not responded to letters allowing for objection to development, the development team understands that if any artifact is unearthed, construction would stop immediately for an investigation.
  • The development team has been informed, understands, and agrees that this would be an open development and that a closed cultural subdivision or development would not be consistent with the goals of the City of Ypsilanti.
  • The desire of the City of Ypsilanti to have, create, and promote local employment as part of any development.  The development team will seek to ensure local jobs are created and maintained as part of the development.
  • The importance of sustainable and environmental design, as well as the City’s position of leader is solar energy production.  The development team understands it is highly desirable to incorporate solar energy into the development and to pursue other sustainable and environmental design and construction elements.
  • The desire and importance of the construction of a rail platform in Depot Town to provide additional access and connections within the region and outside of the region.
  • The development team is aware that the site plan and development process will require a public process with public input and communication.


This project will only move forward with guaranteed investment.  The primary source of investment for the project is foreign direct investment, the secondary form of investment would be through the EB-5 Regional Center (approximately 40 percent of project). Other forms of investment may include new market tax credits, Michigan Economic Development Corporation programs such as Community Revitalization Program or Business Development program, Transformational Brownfield, traditional domestic loans programs and other programs that may be available. 

The project will not move forward with less than $150 million of guaranteed investment.

The development team is seeking to keep the purchase price low demonstrating the public private partnership in developing a project of this magnitude.  As previously discussed, the development team is seeking the purchase price as an incentive since the development team will not be seeking brownfield TIF reimbursement for removal of contaminated soil.

Many questions and concerns about the use of EB-5 financing have been expressed.  Below is some research on the EB-5 program.

EB-5 Research:

Congress created the EB-5 Program in 1990 to benefit the U.S. economy by attracting investments from qualified foreign investors. Under the Program, each investor is required to demonstrate that at least 10 new jobs were created or saved as a result of the EB-5 investment, which must be a minimum of $1 million, or $500,000 if the funds are invested in certain high-unemployment or rural areas.

In 1992, Congress enhanced the economic impact of the EB-5 program by permitting the designation of Regional Centers to pool EB-5 capital from multiple foreign investors for investment in economic development projects approved by U.S. Citizenship and Immigration Services (USCIS) within a defined geographic region. Today, 95% of all EB-5 capital is raised and invested by Regional Centers.

Since the 2008 financial crisis, access to capital has been constricted and municipal budgets continue to face significant shortfalls. EB-5 investments have filled the funding gap, providing a new, vital source of capital for local economic development projects that revitalize communities, create and support jobs, infrastructure and services.

A comprehensive peer-reviewed economic study found that during fiscal year 2013, investments made through the EB-5 program contributed $3.58 billion to U.S. GDP and supported over 41,000 U.S. jobs.

Additionally, the Congressional Budget Office (CBO) scored the program as revenue neutral, with administrative costs paid for by applicant fees.

More than 25 countries, including Australia and the United Kingdom, use similar programs to attract foreign investments. The American program is more stringent than many others, requiring substantial risk for investors in terms of both their financial investment and immigration status.

Investments made through the U.S. EB-5 program must be “at risk” in the same way that investments in stocks or equity funds carry an inherent risk. There is no guaranteed financial return. The USCIS allows a lower investment threshold for projects developed in a “Targeted Employment Area (TEA).” Ypsilanti is considered a TEA.

If their application is approved by USCIS, EB-5 investors receive a conditional visa that is valid for two years. In order to receive a permanent visa, these investors must demonstrate that the legally required economic benefits flowing from their investments have been achieved.

Annually, the EB-5 Program accounts for less than 1% of the visas issued by the U.S. Throughout the process, EB-5 investors are subject to the same background checks and national security screenings as applicants in any other visa category, and their ability to eventually apply for citizenship is subject to the same criteria as other visa holders. Additionally, EB-5 investors must be able to demonstrate a lawful source and path of the funds to be invested, adding a layer of security that is not required by any other category of visa petitioners. Like any other investment vehicle, EB-5 investment funds are subject to U.S. securities and anti-fraud laws and regulations.

Best practices are available as a guideline for EB-5 regional centers and developments.

Examples of EB-5 investment:

According to Invest In USA (IIUSA), a clearing-house for EB-5 research, the EB-5 investment between 2015 and 2016 in the United States was $8 billion.  There are currently 4 projects in Michigan, 17 projects is Wisconsin, 11 projects in Ohio and 13 projects in Illinois.

Most people are aware there have been some fraudulent projects and a most noteworthy one was the failed project associated with President’s Trump inner-circle. However, most projects are below the radar and have successfully capitalized investment to benefit communities.

Auburn Hills, Michigan – Alternative technical transportation company used EB-5 investment funds to retrofit commercial truck fleets of a major automotive manufacturer.

Milwaukee, Wisconsin – Conversion of an old brewery to a 90-room extended stay hotel.

Cleveland, Ohio – Built two new state of the art health care facilities including a full service hospital and cancer center.

Cleveland, Ohio – Cleveland Riverfront commercial revitalization project created over 2,000 new jobs and activated unused space.

Philadelphia, Pennsylvania - $122 million of EB-5 investment was used to fund the expansion of the Pennsylvania convention center. 

Covington, Kentucky - acquisition and rehabilitation of empty parking lots created redevelopment projects within commercial district in City core.

What is the urgency?

The EB-5 investment program does not have guaranteed certainty past September 30, 2017.  If the investors can't escrow their investment money before September 30 if the EB5 program expires, they may invest in some other EB5 project, in some other city. The development team fear that the direct investment that is lined up will likely disappear as well.


A purchase agreement will establish International Village’s ability to apply through the EB-5 Regional Center prior to September 30th.  If the purchase agreement is approved, the project can continue with formation.  If the regional center is not created and escrow is not established, the project will not continue in the process.  A purchase agreement would be equated to a land contract with conditions.  The purchase agreement provides the development team a certainty that development is possible.  The purchase agreement would be entirely contingent upon negotiating and entering into a development agreement. 

A development agreement would have to be in place by December 31st or the project would not move forward.  The EB-5 portion of the development would have to be completed within 25 months of approval or the escrow would be in jeopardy.

Next Steps:

The development team will present a purchase agreement to City Council on September 19th.  Should the City Council accept the Purchase Agreement, the development team will be able to establish the Regional Center and start escrow accounts for the EB-5 program.  The acceptance of the purchase agreement would also open up the negotiation period for the creation of a development agreement.

A purchase agreement would establish a time frame to enter into a development agreement. The purchase agreement essentially is a contract expressing the City desire to continue to move forward and bind the land for a set period of time while a development agreement is being created. The development agreement is the document that would specify each parties requirements going forward with the development.  A development agreement is a voluntary contract between a local jurisdiction and a person who owns or controls property within the jurisdiction, detailing the obligations of both parties and specifying the standards and conditions that will govern development of the property.

A future development agreement would require a preliminary site plan, infrastructure plan, and development terms of the property.  The development agreement would be brought to a special meeting of City Council as the specifics of the agreement will need to be discussed in detail. 

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