The ruling was the final hurdle in a months-long process, initiated after the company's founder was indicted on charges related to a credit union collapse.
View full sizeAdam Blackman, Kristen Laughlin and Steve Strnisha, from left to right, lead the Cleveland International Fund in Pepper Pike. A federal regulator just approved ownership and management changes at the fund, which pairs wealthy foreign investors with Cuyahoga County real estate projects.CLEVELAND, Ohio -- The Cleveland International Fund can resume raising money for real estate projects, now that a federal regulator has approved changes to the company's ownership and management structure.
U.S. Citizenship and Immigration Services, which oversees a federal immigrant investor program, signed off late last week on restructuring at the fund. The ruling was the final hurdle in a months-long clean-up effort, initiated after the company's founder was indicted in connection with the collapse of a Croatian credit union in Eastlake.
The fund, based in Pepper Pike, was never part of that case. An independent review found no evidence of misconduct at the company, which matches foreign investors with Cuyahoga County real estate projects.
But the company's new leaders needed a regulatory nod before they could recruit new investors for the redevelopment of the former Crowne Plaza hotel in downtown Cleveland and construction at the new American Greetings Corp. headquarters and Crocker Park shopping center in Westlake.
Approval from USCIS came through late Thursday, said Steve Strnisha, the fund's chief executive officer and co-owner.
"It really does make official our good standing," he said, "and nobody can question our ability to do what we say we're going to do going forward."
Part of an increasingly popular federal visa program, the Cleveland International Fund offers foreign investors and their families a shot at U.S. residency if they put money into job-creating projects. Since 2010, the fund has amassed $105 million for real estate deals including the Flats East Bank hotel and office tower on the Cuyahoga River.
The private company provides construction loans assembled from dozens of investors, most of them in China. In Cuyahoga County, each investor must put up $500,000 and create at least 10 full-time U.S. jobs to qualify for residency. The money fills lending gaps for hard-to-fund projects and offers lower-cost financing that helps developers stretch their dollars further.
In February, federal authorities accused fund founder A. Eddy Zai of playing a key role in the 2010 collapse of the St. Paul Croatian Federal Credit Union. After resigning from the fund, he pled not guilty to 34 counts of bank fraud and other crimes. The case is set for trial in the fall.
Strnisha and Adam Blackman, the fund's chief operating officer, restructured the ownership, cutting ties to Zai and his family. In late May, the U.S. Attorney's office struck a deal with the executives, preserving the flow of cash into the fund while claiming to any money owed to Zai. A federal judge signed off on the deal.
Cleveland Development Advisors, an affiliate of the nonprofit Greater Cleveland Partnership, could take a 20 percent stake in the fund. The group, which invests in real estate projects, expects to decide this month.
Joe Roman, a member of the fund's advisory board and chief executive at the Greater Cleveland Partnership, applauded the regulatory decision. The fund, he said in a written statement, "is a significant and solid financing source for big-ticket, job-creating projects in our community."
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