The 40-story Potala Tower, funded largely by would-be immigrant investors under the EB-5 visa program, has been stalled since last summer. Plans for new investors to pump in $30 million were approved by the federal judge overseeing the case.
A judge has given the go-ahead for a new group of developers to try restarting a stalled Belltown hotel and apartment tower after the original builder was accused of diverting Chinese investors’ funds for his own personal use.
The 40-story Potala Tower, now a 60-foot-deep hole in the ground on 4th Avenue between Blanchard and Lenora streets in Seattle, could resume construction if a final agreement is signed by the end of August. The $190 million project broke ground in 2014 but was halted last summer.
U.S. District Court Judge James Robart ruled late Friday in favor of a plan from a court-appointed receiver that called for a $30 million investment from Binjiang Tower Corp of China and Molasky Group of Las Vegas. The two firms are also pledged to help foreign investors who committed $83 million to the project in hopes of receiving EB-5 visas for U.S. immigration once the tower is completed. Those investors, whose EB-5 status was left in doubt when the project was suspended, must also approve the restructuring plan.
Original developer Lobsang Dargey, who has denied the civil fraud charges levied against him by the Securities and Exchange Commission, agreed to the plan in exchange for the new developers paying $1.8 million toward his attorneys’ fees.
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The ruling was not unexpected, although other groups that had vied to take over the project appeared at a hearing Thursday to protest.
Brad Sher, Molasky’s chief financial officer, said in an email that he was “excited” by the ruling and looks forward to the project, though the firm would not provide a timeline or other details.
Attorneys for the receiver and the SEC declined to comment. Other attorneys involved in the case did not immediately respond to requests for comment.