With coaxing from Gov. Rendell, the Convention Center Authority approved a resolution yesterday that enables the center's expansion to be partly financed with a $100 million loan that is backed by 200 wealthy investors from China, and elsewhere, who want to move to the United States.
The loan is part of a federally sponsored program in which immigrant investors, under certain rules, can become eligible to receive "green cards" for permanent residency. In exchange, they pledge $500,000 apiece toward various local development projects, such as the expansion.
While yesterday's unanimous vote by the authority's board would allow the center to use the loan program, the deal is not final. The board must still sign off on the precise terms of the proposed loan, which board members were told would carry an interest rate near 2.5 percent, and a five-year term.
The governor's office estimated that the loan would reduce the cost of the expansion - which is being covered by the state - by $15 million to $20 million.
"It's a marvelous program," said Buck Riley, chairman of the 15-member authority, emphasizing that it was also "federally vetted" since it was created by Congress.
The board's embrace of the program represents a turnaround from the summer, when board members expressed discomfort with the program partly because of an unwillingness to involve the center in any deal tied to the nation's immigration policy.
Also at that time, significant questions remained about the financing of the Convention Center expansion project, now estimated to cost $787 million.
But it was important to Rendell for the Convention Center board to approve the program. He hopes to use it to fund other projects throughout the state. A rejection by the Convention Center board could damage the program in the eyes of the mostly Chinese immigrant investors.
The governor pleaded his case last Friday in phone calls to several authority board members.
Riley said yesterday that the board's previous reluctance stemmed from the short term of the loan and the fact that the board was still uncertain of the project's final cost.
"We didn't know what our costs were going to be then. We were waiting for bids," Riley said, referring to the summer. Pointing to the economic crisis on Wall Street, he said, "Within the last six to eight weeks, the cost of borrowing has significantly increased for the state."
Riley added: "We want to dispel any concept that there was any type of stigma to this program."
The program is administered jointly by the Philadelphia Industrial Development Corp. and CanAm Enterprises, a New York firm.
To date, the program has helped finance about 27 projects in the Philadelphia area, including those built by Comcast Corp., August Aerospace Corp., and Temple University Health System.
Others might soon be on the way.
"We've had serious expressions of interest in the Welcome Fund from more than a dozen private projects," Kevin Feeley, a spokesman for CanAm, said.