Business explores investing program
SEAWAY VALLEY: Money-for-visas seen as way to raise $30m
By NANCY MADSEN
TIMES STAFF WRITER
TUESDAY, APRIL 20, 2010
ARTICLE OPTIONS
A A A
The embattled Seaway Valley Capital Corp. is hoping to raise $30 million or more through a federal program that exchanges foreign investment for visas.
Seaway Valley and its subsidiaries, Harbor Brewing Co. Inc. and Hacketts Stores Inc., announced Monday in a news release that they are negotiating with ACG Consulting LLC, which specializes in the federal program.
Seaway Valley has had significant financial difficulties in the past year, including subsidiary Patrick Hackett Hardware Co. filing for Chapter 11 bankruptcy protection in November. In March, a state Supreme Court judge ruled that Seaway Valley owed two Hackett family siblings and a former chief executive officer more than $700,000 related to the sale of Hacketts.
Seaway Valley President and Chief Executive Officer Thomas W. Scozzafava said he heard about the visa program from the president of the Asian American Business Development Center, New York City.
ADVERTISEMENT
"It's a lower-cost source of capital, because presumably the investors have to risk their money, but they're not expecting a big return on the investment, because they're looking for a visa," he said.
Last spring, Mr. Scozzafava traveled to China to further the idea. Then he looked to ACG Consulting, a subsidiary of ACG Companies, Irvine, Calif., a global holding company.
ACG Consulting will help Seaway Valley attract foreign investment through the use of the employment-based EB-5 Immigrant Investor Pilot Program, run by the U.S. Citizenship and Immigration Services.
The immigration program allows foreign nationals to invest in businesses in the U.S. and, if new jobs are created and maintained through the investment, the nationals have the right to receive U.S. visas. Businesses register as regional centers to become eligible for the investment.
"ACG's expertise in this field and global capital network are key to accomplish both the formation of the Regional Center and subsequent capital raise," Mr. Scozzafava said in a news release. "Since the minimum foreign investment per individual is $500,000, a raise of $30 million would represent only 60 foreign investors."
Seaway Valley and ACG are working on a deal that would give Seaway Valley a 49 percent interest in a regional center.
If the project goes through and the center attracts investors, Seaway Valley is looking for $30 million in capital: $10 million for Hacketts Stores and $20 million for Harbor Brewing Co.'s brewing and baking operations and new restaurants. The money could be used for growth and debt reduction.
The Hacketts Stores share will be split, with $7 million going to WiseBuys Stores Inc. and $3 million to Patrick Hackett Hardware Co. WiseBuys Stores, with a software development company, will begin a new retail chain that will offer merchandise bought on consignment, so the retailer pays for the goods as they are sold.
In a news release Monday, the company said it would partner with manufacturers to obtain discounted or obsolete merchandise. A separate entity will be formed to develop the specialized software that will enable each manufacturing partner to directly monitor its inventory, sales and cash proceeds in a secured network environment.
Outlets would be opened in population centers in spaces of at least 50,000 square feet.
"We envision these stores offering an ever-changing merchandise mix at deeply discounted prices," WiseBuys President and CEO Herbert L. Becker said in the release. "This is a tremendously exciting opportunity to develop something both novel and needed, as merchandise manufacturers are becoming increasingly frustrated by the consolidating landscape of the retail industry in the United States."
The $20 million would go to a variety of projects: a $5 million new brewery for Harbor Brewing Co., $8 million for eight new brew pubs, $2 million for Alteri's Bakery and $5 million for five retail outlets for Alteri's.
"What's important is that we have people working," Mr. Scozzafava said.
ON THE NET
U.S. Citizenship and Immigration Services: www.uscis.gov
See SEAWAY A7
