Lucid Motors, PhoenixMart and Dreamport Villages — all still need an infusion of cash to move forward.

CASA GRANDE — Casa Grande Dispatch is reporting planning commissioners got an update on the “Big Three” proposed development projects in Casa Grande recently.

The update was that there is nothing to update.

Casa Grande Planning and Development Director Paul Tice told the city Planning and Zoning Commission that the city’s biggest three potential projects — Lucid Motors, PhoenixMart and Dreamport Villages — all still need an infusion of cash to move forward.

For PhoenixMart, Tice said the owners are seeking to raise capital to make infrastructure improvements, including extending sewer and water mains to the site, which is on the very eastern edge of the city limits. Additionally, an electric substation will be required for the site. Tice said staff has reviewed plans and will be ready to issue building permits when the company is ready to move forward beyond the shell of a building, which exists at the site.

“Lucid’s in the same boat,” Tice said. “They’re still finalizing partners and raising capital.”

Tice said the electric car manufacturer still has options to purchase 475 acres near Thornton and Peters roads. Lucid hasn’t come before the planning commission and the city hasn’t “approved any property improvements,” Tice noted.

Dreamport Villages, including a Disney-like theme park on 2,000 acres, has its zoning in place but is also trying to raise money, Tice said.

“They’re still trying to raise capital. I don’t think they’ve closed on any land,” he told commissioners.

Both Dreamport Villages and Lucid Motors announced in early 2017 their plans for building in Casa Grande. Lucid has said it plans to employ up to 2,000 workers at a car manufacturing facility on the west side. Dreamport has plans to completely revamp the southern portion of Casa Grande with a theme park, conference center, extreme motorsports complex and a mix of residential and commercial buildings.

PhoenixMart, which started in 2008, is to be a commercial center offering products of many manufacturers wholesale. It’s made the most progress of the three, with the foundation and framing of the building complete. The company’s invested about $40 million into the project, according to spokesman Troy Corder.

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By KEVIN REAGAN, Staff Writer | Casa Grande Dispatch

CASA GRANDE — AZ Sourcing, parent company of PhoenixMart, expects construction on the project to take place rapidly over the next two months after the city of Casa Grande granted a building permit in June.

In an email statement sent from AZ Sourcing Chief Operating Officer Marshall Stahl, the company projected the wholesale center’s main building core to be up by the end of the year.

The accelerated rate of construction was attributed by Stahl to additional funding supplied by the company’s board members. PhoenixMart was expected to be funded through the EB-5 federal immigrant investor program, which hands out U.S. visas to foreigners that invest at least $500,000 in an American project, but that plan ran into problems.

The FBI reportedly was investigating one of PhoenixMart’s former investors during a raid of the company’s offices last November. The agency did not release details at that time on the reason for the investigation.

The Casa Grande Dispatch submitted a public records request to the FBI earlier this year, asking for information about the investigation. The FBI declined to release anything, citing an exemption that allows the agency to withhold records related to pending law enforcement proceedings.

AZ Sourcing appears to be moving forward from last year’s FBI investigation. The company mentioned that it has secured deals with various contractors to complete underground plumbing and electrical work.

The utility work is reportedly expected to be completed ahead of schedule, according to AZ Sourcing, with 15 percent of plumbing work already done.

Triad Steel Services, based in Phoenix, was hired this month by the company to provide thousands of tons of steel for PhoenixMart. Contracts with more subcontractors are expected to be finalized and announced soon.

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CASA GRANDE, AZ (CBS5) – The Rose Law Firm is reporting The US Attorney’s office, FBI, Securities and Exchange Commission, and the US Customs and Immigration Service are investigating possible abuses by officials from PhoenixMart, for its involvement in a program that trades foreign investment for US “Green Cards.”

In November, the FBI raided the PhoenixMart headquarters. Most of the investigation is under seal, but documents filed in case PhoenixMart officials brought against the US government in an effort to retrieve confiscated computers sheds some light on the government’s accusations against the company.

PhoenixMart is a development in Casa Grande, which is billed as a product sourcing center, where manufacturers, wholesalers, and retailers will be able to connect to buyers. The development is advertised as creating between 8,000 and 10,000 jobs.

The developers are funding the project with money from from foreign investors who are taking part in the government’s EB5 Visa program. Under EB5 guidelines, foreign nationals can invest $500-thousand in a program that creates a certain number of jobs in the US, in exchange for up to 10 “green cards.”

According to the court documents CBS 5 Investigates obtained from US District Court, PhoenixMart’s parent company, AZ Sourcing, LLC, collected $150-million from 303 foreign investors. The developers are said to have already spent more than 25-percent of that money.

The documents allege, “Other than a ground-breaking ceremony in 2013, clearing of open land, construction of a minor entryway in 2014, and recent pouring of multiple concrete footers, virtually no significant construction has taken place. In other words, despite receiving nearly $40-million between 2010 and 2014, the movants (developers) have made no significant progress in constructing the Phoenix Mart project which was originally slated to be completed in 2013.”

The documents reference an SEC subpoena for financial documents, as well as a US Customs and Immigration Service “Notice of Intent to Terminate” PhoenixMart’s involvement in the EB5 program, which was filed under seal.

The documents indicate the developers are believed to have “altered many of the seized documents” in violation of federal law.

PhoenixMart and AZ Sourcing officials declined several interview requests, but released the following statement tom CBS 5 Investigates:

“PhoenixMart is working closely with all governmental agencies that have an interest in the project. PhoenixMart is an important project for Pinal County and Arizona. Construction spending alone has, to date, led to the creation of 220 jobs on our 21st century global commerce center. PhoenixMart has the continued support of local and regional governmental leaders who all understand the significant economic impact the project has had and will continue to have on the local and regional economy. Late last year, the City of Casa Grande approved permits for our 585-acre project to begin pouring slab-on-grade foundation for the main building and moving forward on the underground utility work. We continue to work diligently to bring this landmark development to completion.”

A spokesperson for PhoenixMart also forwarded a detailed list of expenses that the development has incurred.

Phoenix Mart, LLC Investment in Economy (as of October 31, 2015):

Total EB-5 Funds placed into Phoenix Mart LLC
$40,500,000

Capital Contributions from AZ Sourcing
$2,313,935

Escrow and Security Deposits
$1,916,000

Inter Company Advances (AZS and CAzRC)
$1,080,924

Account payable and other payables
$1,057,703

Phoenix Mart Total Sources of Funds
$46,868,562

Project Vendor Payments
$13,790,744

All other Capitalized Project Costs (including Land)
$9,502,047

All other Assets
$5,942,425

Operating Expenses Prior Years (2009-2014)
$11,733,227

Operating Expenses Current Year to 10-31-15 *
$5,900,119

Phoenix Mart Total-Use of Funds
$46,868,562

During a US Senate panel hearing last week, Senators heard testimony about problems with the EB5 program, which has become a popular method for developers to gain access to capital for building projects. The program is up for renewal later this year.

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