D.C. Mayor Vincent C. Gray is looking for foreign investors for a streetcar system. (Ricky Carioti/The Washington Post)

D.C. officials once borrowed freely to help finance development projects like the International Spy Museum, the Mandarin Oriental Hotel and Gallery Place.

Those days are gone, stifled by a self-imposed cap on borrowing that has left a slew of projects in need of financing. D.C. Mayor Vincent C. Gray (D) spent much of a week long trip to China looking for foreign investment to fill the gap.

Gray announced a new Shanghai trade office, pitched the Export-Import Bank of China on investing in the city’s planned streetcar system and accompanied local developers in their search for investors.

Before Gray stepped on the plane, international investment in District real estate was already surging. Middle Eastern sovereign wealth funds are primary investors in the city’s two mammoth downtown projects, CityCenterDC (Qatar) and the Marriott Marquis Convention Center Hotel (Abu Dhabi).

In addition to traditional investments, wealthy immigrants could make an immediate impact on Washington’s real estate market via a federal program that grants visas to foreign individuals who make investments of at least $500,000 that produce at least 10 American jobs.

Called EB-5, the program has already led more than 80 individuals to collectively put $45 million in foreign investment into the O Street Market, a 1 million-square-foot mixed-use project in Shaw. Another $5 million went into the Marriott Marquis.

Most of the visa investments came through Angel Brunner, an entrepreneur who said hundreds of millions more could be had to fill financing gaps. “There’s so much demand from China because D.C. is such a strong market, and we have projects with fully funded capital stacks,” she said.

Also traveling to China was Monty Hoffman, whose PN Hoffman is partnering with Madison Marquette on the Southwest Waterfront and is at work raising $750 million in capital. “We’re looking for long-term ownership in the waterfront and we’re looking for owners that want long-term ownership with us,” he said.

A large portion of that could come from abroad, he said, and a slice could come from EB-5.

To finance the streetcar system, Gray sees another possible way around the debt cap, which prevents the city’s bond payments from exceeding 12 percent of overall spending: creating an organization akin to the D.C. Water and Sewer Authority, whose capital borrowing does not count against the city’s debt cap.

Gray had planned to create entities to oversee development of the east campus of St. Elizabeths and the former Walter Reed Army Medical Center, before ditching the idea. But he said after a discussion with Export-Import Bank of China officials, a Water and Sewer Authority-like organization may be needed to oversee the financing and creation of a streetcar system.

“The way they put it to me was that money is not the problem,” Gray said, explaining that the issue was the structure of the current debt cap.