AUBURN — Chinese investors told an Auburn crowd Friday morning that they expect 5,000 wealthy Chinese citizens to stay at a new luxury medical tourism facility planned for The Barn in its first year.
They expect greater numbers after that.
“Through our own network, as well as that of our partners, we have access to a huge client base in China,” said Michelle Xu, director of overseas investment for the Beijing-based Shengtong Group. “This will be a shared client base with our facility here in Auburn.”
Members of the group joined Auburn officials and representatives from the state, Central Maine Healthcare and a Chinese medical referral group for a news conference at Auburn Hall.
The Shengtong Group from Beijing plans to spend up to $40 million to convert The Barn, also known as the former Lunn and Sweet shoe factory building, at 67 Minot Ave., and surrounding property, into a state-of-the-art health and wellness hotel aligned with Central Maine Medical Center in Lewiston.
More than 75 city and state officials, hospital leaders and community members crowded into Auburn Hall on Friday to hear about the plans.
The group completed the purchase of the 67 and 81 Minot Ave. buildings earlier this month through Miracle Enterprises, its Maine company.
During the news conference, Shi Qi, chairwoman of the Shengtong Group and Miracle Enterprises, and Chongwei Li, chairman of a Chinese medical group called Age Doctor International, signed an agreement to work together. Age Doctor will refer patients to the facility in Auburn.
“If someone had asked me four years ago if I envisioned mediating a press conference where two Chinese companies would come to Auburn city hall to executive a formal business arrangement, I probably would have said I’d love for that to happen,” Mayor Jonathan LaBonte said. “This is exciting for those in the room, a really historic moment and something that makes it really clear to folks in Auburn and in Lewiston-Auburn that the world really is flat and we’re open for business.”
He said Age Doctor has one other partnership in the U.S., involving plastic surgery in Los Angeles.
Local officials are excited about The Barn project. Peter Chalke, CEO of Central Maine Healthcare, pledged his health system’s support Friday.
“We believe that we’re going to learn a lot with this relationship, we hope that the Chinese learn something, and together we’re both going to be better at what we do,” he said.
Chalke said the facility would broaden the hospital’s pool of customers.
“We have a fixed number of citizens in this area,” he said. “This brings new patients to our hospital and will grow our volumes so we can provide more services, not only for the Chinese but for our own citizens right here.”
LaBonte said environmental cleanup at the building has begun and should take about two months. Xu said the Chinese group would leave Maine next week and return in October with a group of potential investors and guests. They hope to have the operation open in two years.
Maine residents Fei Miao and his sister, Li-ping Miao, a Bates College professor, talked about how the project began. Fei Miao moved to Sabattus in 1997 after being treated for cancer at CMMC and falling in love with the area.
“He sold his house and moved to Maine, and his business partners visited and they fell in love,” Li-ping Miao said.
Fei Miao, a builder in China, wanted to find a way to bring Chinese patients to Maine and asked his sister to keep a lookout for potential buildings. Li-ping Miao said she looked for more than a year before considering the Lunn and Sweet building.
“Of course, it was a matter of finding the right partners,” she said.
At issue are EB-5 visas, the heart of a little-known but quickly growing U.S. program that grants foreign investors green cards and sets them on the path to U.S. citizenship, in exchange for a significant business investment on U.S. soil.
A foreign investor sinks $500,000 or $1 million into a project in America. If that project saves or creates at least 10 jobs, the investor gets a green card, as does that person’s spouse and unmarried children under 21.
The Chinese investment group behind The Barn plans to use EB-5 to draw money for the project.
Investors need only contribute $500,000 if the project helps a rural or high unemployment area — designated a “targeted employment area” by the state but following rules set forth by the federal government. Investors must contribute $1 million if their money does not help one of those areas.
Because an EB-5 visa can be had for a $500,000 investment, it can be difficult to draw people willing to invest twice that.
George Gervais, commissioner for the Department of Economic and Community Development, said Friday that the state will form a regional center to help potential investors navigate the EB-5 process.
Gervais said EB-5 investment likely will be set at the higher $1 million level, but the state will consider pairing Auburn with an area that meets the targeted-employment-area criteria so the threshold can be lowered to $500,000 and the project made more attractive to investors.
“We will be looking at that,” Gervais said.
Although common, the practice has been criticized.
The EB-5 program is up for reauthorization this fall. In June, U.S. Sen. Patrick Leahy, D-Vermont, and U.S. Sen. Chuck Grassley, R-Iowa, introduced a bill that would make some significant changes to the program, including amending the definition of a “targeted employment area” to make it harder to fold in outside communities. Current projects may be able to apply for exemptions.
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