Latest EB5 News
The most recent development that dramatically has changed the emigration industry in China is that the Canadian program reached its allocated quota in 2011 and is now "closed for renovation" leaving most China's emigration agents with less profitable products they can choose to offer to their clients. The Canadian emigration authority is suggesting that the government it may develop the current program into an entrepreneur-investment program which would be requiring the acquisition of a business in Canada. Making it even worse for the Chinese emigration business, the Quebec immigration program reached its allocated quota of 2,700 on April 12, 2012 after 9 working days after it opened for petitions. Quebec program is now closed, it also closes the door to thousands of Chinese investors and have disappointed China's agents since they don't have anything to offer to their clients until March, 2013 when the program reopens again. Now many Chinese emigration brokers are looking into theU.S. EB-5 program which is becoming an important business option for them. Based on a April 20 survey by Gallup, 20 million Chinese population is interested in emigrating to the US and other countries.
The 2nd Annual EB-5 Investment Summit: Dealmakers Conference April 27, 2012 in New York City will update the latest developments in the EB-5 investors program. The event has drawn a lot attention from US capital seekers and commercial real estate developers. Brian Su of Artisan Business Group, Inc. has been organizing EB-5 events in both China and the US.
The all-day conference will feature EB-5 industry experts and VIP guests, including H. Ronald Klasko, Partner of Klasko, Rulon, Stock & Seltzer, LLP, and the EB-5 Chairman of the American Immigration Lawyers Association (AILA), Jeffrey B. Carr, President and Economist of Economic & Policy Resources, Inc., Mr. Boyd Campbell, Immigration Attorney of Immigration Law Center, LLC, Mr. Brian Su, CEO of Artisan Business Group, Inc., Joseph P. Whalen, Former USCIS Adjudicator, Mr. Ronald Fieldstone, Attorney & Partner, Arnstein & Lehr LLP, Ms. Hong Yu, US Project Manager of Wailian Overseas Consulting Group in China, and Mr. John Jiang, CEO of Micon International, Kevin Wright, President of Wright Johnson LLC, Dr. Scott Barnhart, Barnhart Economics Services, Ms. Jo Ann Clark, Founder of EB-5 Resource Center LLC. A 50-member executive delegation from China will also participate in the event.
This year's event is being hosted and sponsored by Artisan Business Group, Inc., Wailian Overseas Consulting Group, Wright Johnson LLC, Extell Regional Center, and Amazing Journey Investment Consulting Co. The Hilton New York will serve as the venue for the conference. Those attending the event also have the opportunity to meet the prior day with Artisan Business Group's CEO, Mr. Brian Su, for a 1-hour private consultation.
The developers also were cited for failing to file required reports.
The action comes as Congress is being asked to renew the legal authorization for regional centers across the country.
The current authorization expires Sept. 30. Several projects have been proposed for the Nashville region, including an assisted-living facility, Vantage Pointe Village in Ashland City, planned by a rival investor visa firm, America's Center for Foreign Investment.
Locally, the extension of the program has won support from some business leaders.
Peter Medlyn, the head of the Tennessee Regional Center, said in a brief interview that his company was in the process of preparing a response and rebuttal to the revocation notice. The appeal must be filed by May 25.
The regional center was originally approved on Aug. 11, 2010.
'Several significant flaws'
In addition to noting the foreclosure action, the revocation notice questions the viability of the project, its job projections and whether the legal structure meets program requirements.
Under the investor visa law, a minimum number of 10 jobs must be created for each of the foreign investors.
Big Elk had projected that the development would produce 1,058 direct full-time jobs, plus 3,291 indirect but related full-time jobs.
The project, the notice states, "constitutes a passive investment rather than an investment in an on-going commercial enterprise."
As a result, the Big Elk project "cannot reasonably be expected to (achieve) the requisite permanent full-time job creation, nor will a substantial positive economic (impact) ensue," the report continues.
The notice concludes that while the economic analysis utilized by the developers "seems reasonable, the execution of that approach appears to contain several significant flaws."
Concluding that the development "is not a viable capital investment project," the notice concludes that the initial decision to approve the regional center "was in error."
The thrust of the federal EB-5 visa program " first created by Congress in the early 1990s " is to bring well-to-do immigrant entrepreneurs to the United States to create jobs and boost the U.S. economy.
The program has had frequent blemishes around the nation, though, and it has been inconsistent in creating jobs throughout its history.
The reason a state official - in this case an economic development specialist in the Department of Economic Development (part of the Agency of Commerce and Community Development) - is keeping tabs on a private business is that most of the money for Jay Peak's recent expansion has come from foreigners, via what is known as EB-5, a federal investment program run by the United States citizenship and Immigration Services.
Part of Candido's job is to make sure the various requirements of the law are being followed.
In return for investing at least $500,000, the foreigners get "green cards" for themselves and their immediate families, allowing them to live in the United States. To critics, the program amounts to selling U.S. resident status to the wealthy while the not-so-wealthy are stuck on waiting lists. To advocates, led by Sen. Patrick Leahy, the program provides investments and jobs to capital-short areas such as the Northeast Kingdom.
Both descriptions might be accurate. Either way, what the little flappette about Jay Peak reveals is that, like many financial schemes, the EB-5 program has created its own subculture - a collection of agents, lawyers, financers, consultants, kibitzers (for a fee), and hangers-on, most of whom seem to know one another, at least by reputation, and almost all of them eager to cash in on what appears to be an endless flow of cash from well-heeled folks from all over the world willing to put up big bucks to get themselves and their families into the United States.
One reason Hulme's angry (and vague) blast at Jay Peak gained some traction after he emailed it to perhaps 100 immigration lawyers was that one of the better-known figures of this subculture, a New York blogger named Michael Gibson, gave it wider circulation and tried to figure out what had caused the break between Jay Peak and Hulme's firm, Rapid USA Visa, Inc.
The firm helped make the connections between the resort and potential foreign investors.
Gibson, who did not identify the "analysts," was reported to be out of the country and unreachable. According to some observers who follow the EB-5 world (but who did not want to speak on the record), Gibson is reliable because his success depends on selling his information, creating an incentive for accuracy. But others, who also did not want to be quoted, pointed out that neither Jay Peak nor Rapid USA Visa had bought his information, perhaps rendering him less likely to be favorably disposed toward them.
The EB-5 program is complex, fast-growing, and therefore open to abuse. In December, the New York Times reported evidence that "suggests that in New York, developers and state officials are stretching the rules "often relying on gerrymandering techniques to create development zones that are supposedly in areas of high unemployment - and thus eligible for special concessions - but actually are in prosperous ones."
But even EB-5's critics acknowledge that the Vermont's EB-5 projects - there are three others in addition to Jay Peak, and Candido said three more were in the works - follow the regulations and seem to be meeting their goals.
One difference is that only in Vermont is the regional center - the federally authorized investment pool that markets the projects - public. The state is the regional center. The other 199 regional centers in the country are private, meaning the for-profit projects are being monitored by another for-profit entity.
Jay Peak has more than 400 EB-5 investors, Stenger said, and their investments have helped transform the property from a ski lodge into an all-weather, four-season resort with an indoor skating arena, a water slide, and golf courses. Stenger said it was those indoor winter activities - the skating arena and the water slide - that helped the resort prosper despite the snow-sparse winter.
Considering the lack of specifics in the suggestion that Jay Peak is in some financial trouble, the discussion of Hulme's email is not likely to do the resort any harm. Nor is it likely to weaken support for the EB-5 program from Leahy or its other champions.
But the program, or at least the part of it that applies to Jay Peak, has to be reauthorized before the end of the year, and some of the other revelations of abuses might convince Congress to make some changes in the way it is monitored and regulated.
Hurdles and opposition
But not everybody in the surrounding community wants the project to succeed. The DC Regional Center's promotional video appeared online last July, the same month a Baltimore circuit court denied the state's motion to dismiss the suit against State Center."The entire project is a house of cards built upon enormous public subsidies" an attorney for the plaintiffs told local press. "With over 2.2 million square feet of vacant office space in downtown Baltimore, it makes no sense to build another 1.5 million square feet less than a mile away from the downtown district subsidized by the taxpayers."
Following the circuit court's denial to dismiss, the State of Maryland filed a countersuit against the plaintiffs. That suit, which seeks $100 million in damages, states that the plaintiffs' claims are wholly without merit and exist for no other reason than to delay the project. Despite complaints that the government failed to adhere to a truly competitive bidding process, the state notes that the plaintiffs are not developers themselves and would not be eligible to compete for the State Center contracts.
Although two of the four plaintiffs, including the lead plaintiff, settled with the state last month, the project remains in litigation.
For more details, please see complete article
Choosing the Right EB5 Regional Center
The success of obtaining an EB-5 investor visa depends very much on the selection of the regional center. Here are some of them:
Case evaluation involves an assessment of the eligibility criteria, possible causes for inadmissibility, ability to demonstrate the lawful source of the investment, and so on.
Preliminary assessment of regional centers so that the choices are narrowed down to several best suited solutions for your situation.
Analysis of the offering documents such as subscription agreement or partnership agreement as per the requirements of selected regional centers.
Review of financial statements of the regional centers such as cash flow or net worth statements.
Interview of principles of selected centers with the purpose of clarifying any ambiguous issues, understanding and evaluating the character of the principal, and challenging marketing claims.
Final selection of regional center
Petition Preparation Service
Again, it is not enough to choose a regional center and it is not enough to have the money to be invested.
How you should handle the investment procedures, only an EB5 lawyer can advise you. An EB-5 investor visa is not as easy to obtain as it may seem and petition preparation services play an instrumental role towards achieving it. Here are the precise solutions that your EB5 specialist should offer:
Adjustment of status is about choosing the solution to either bring the investor in the US or adjust his or her status if he or she already lives in the US.
Constant updating and monitoring of the selected regional center
Preparing and submitting the I-829 petition. Initially the EB5 investment visa is a temporary or conditional residence, limited to two years. In order to make it a permanent solution, the I-828 petition must be prepared and submitted, 3 months before the receipt of the 2-year green card
Applying for naturalization is the final step and it is not such a complex procedure. The EB5 lawyer needs to prepare the N-400 form, advice on study materials to pass the US Naturalization Test, and counsel related to the swearing ceremony.
The appeals office pointed out several fatal flaws in the EB-5 center here, including apparent contradictions between information provided by Councilman Mike Rothschild and the city's attorneys, conflicts in the timeline of when the city loaned funds versus when it told USCIS they were needed and more.
However, the primary reason for upholding the termination was because Victorville couldn't prove it had met the EB-5 program's strict job requirements.
At issue is whether the alien investors can be credited with job creation when, in actuality, they are merely preserving jobs, the letter states, pointing out that Victorville said it never spent the loan money but its wastewater plant is already operating.
The city built its wastewater treatment plant primarily using interfund loans, pledging to pay them back in part with EB-5 funds. Now the city has refunded all $9.5 million in loans it had collected and is hoping the regional Victor Valley Wastewater Reclamation Authority will buy its plant so it can replenish reserves.
The City Council will discuss whether to move forward with its lawsuit against the federal government during closed session beginning 5 p.m. Jan. 17 in City Hall. The meeting on Jan. 3 has been canceled due to the holidays.
Brooke Edwards Staggs may be reached at (760) 955-5358 or at bedwards@VVDailyPress.com.
Chicago Project (continue)
Not all agents and agencies in China operate this way, however, and several agents who we've spoken with are extremely concerned about projects of this size and the claims being made in order to convince so many Chinese citizens to invest in potentially risky projects without full disclosure of the fees being paid to them by promoters in the U.S. These large offerings have a secondary effect of squeezing out smaller scale projects which may have a higher probability of success when it comes to job creation and return principal but cannot compete with the resources of larger, better funded regional centers that pay higher fees in the overseas market for investors.
This trend is conditioning the overseas market to promote only larger projects in order to justify the expense and effort necessary to promote offerings of this size and to collect the larger finder's fees. Large projects do not necessarily have a higher rate of failure if they're well capitalized, managed, and structured, but the issue is that potential investors may not be presented with the smaller scale investment opportunities if the EB-5 regional centers with smaller projects cannot justify the large upfront expenses and high investor acquisition costs necessary to raise capital overseas for their smaller offerings.
The proposed project, to be known as the Chicago Convention Center, will be the first Zero Carbon Platinum LEED accredited and 100% allergen-free convention center complex in the world. All guest rooms will be improved with state-of-the-art technology.
The center will include five upper/up-scale hotel brands in three towers. The first tower is a 17-story Starwood Element, which will contain 321 guest suites plus 15 conference suites for a total of 336 rooms. The second tower is comprised of a 19-story, 209-room IHG Hotel Indigo and 154-suite Staybridge Suites. The 14-story third tower will contain a Hyatt Place with 148 rooms and a Hyatt Summerfield Suites with 148 rooms.
The property will include four floors of convention space with a total of 290,000 square feet, all of which will be connected across the lower levels of all three towers. A total of 55,000 square feet will be allocated for restaurants, lounges, and bars throughout the complex. A 1,720-space automatic robotic parking structure will lie below the convention center/hotel complex aligned beneath the second tower. The development will also feature the largest guest accessible hotel green-roof complex in the country, containing almost an acre allocated for a spa, a yoga studio, a bar/lounge area, and a miniature golf course. A total of 995 rooms are proposed, of which 786 will be suites.
Completion of the project is scheduled for January 2014 and ownership forecasts that stabilized occupancy valuation will occur as of January 1, 2018.
Continue
Buying Green Card? (continue)
With careful guidance, adequate due-diligence and by making a decision based upon facts, you can and should expect to get your $500,000 back in a definitive time. In addition, you certainly should expect to not only get conditional green card but to have the conditions removed after about two years; meaning you get to keep your green card and are not forced to leave the USA because the regional center project you chose did not create the required number of jobs.
Let's be clear here; with so many regional center projects fighting to get their hands on your $500,000 you need to be careful. You need to rely on some expertise from outside sources including established, independent EB5 consultants, and an experienced EB5 attorney BUT, you also need to keep a clear head yourself and take responsibility for the final decision about who you are going to trust with your $500,000. Not all EB5 projects are created equal, not all EB5 projects will make sense to you. Expect to go through some level of confusion as you look at project documents.
The EB5 pilot program is a job creation program for the USA. The US government would not have invested so much time and effort recently into making this program a success if it were simply a cash for green cards program. No one can guarantee you anything about the EB5 visa program (guarantees are specifically forbidden in the EB5 program) but I can assure you that the USA government, the ethical EB5 regional center operators and we at Which EB5 all want you to get and keep your green card AND get your $500,000 back within a reasonable time frame.
I am a first generation immigrant to the USA myself; I understand so many of the thoughts and motivations that go through your head once you have made a decision to make the USA your home. I made mistakes, I trusted advice from fellow countrymen (I can explain why that can be a very dangerous thing to do) and I have been through the USCIS immigration process; I can help you and will be glad to talk about things you should be paying attention to as you prepare for and make the move to the USA.
Sizzle (continue)
At the end of the day all things being equal, the investor will choose the project that gives them bragging rights. At a card game, dinner party or mahjong table, the investment that shines the brightest also shines most brightly on its investor. Really?
And I thought that the goal of an EB5 investor was a permanent green card and getting their money back at some defined point in the future. Investing in an EB5 visa with sizzle will not be what you want to brag about when your I-829 is rejected and/or you have lost your $500,000.
The trouble is: All things are not equal. The one with the bragging rights is the one with the green card and a reasonable chance of getting the $500,000 back.
With over 200 regional centers available to a potential EB5 visa applicant to choose from, some selling sizzle rather than the genuine opportunity for permanent residence in the USA, it becomes almost impossible, without genuine independent help, to separate those who have a goal of getting you invested in their project without any regard for your future from those professional regional center operators with a long-term view of this business and a true wish to see their clients get, and keep, their green card.
Get advice from an experienced EB5 attorney and consultant BEFORE you choose a regional center, it just might save you $500,000.
The success of obtaining an EB-5 investor visa depends very much on the selection of the regional center. Here are some of them:
- Case evaluation involves an assessment of the eligibility criteria, possible causes for inadmissibility, ability to demonstrate the lawful source of the investment, and so on.
- Preliminary assessment of regional centers so that the choices are narrowed down to several best suited solutions for your situation.
- Analysis of the offering documents such as subscription agreement or partnership agreement as per the requirements of selected regional centers.
- Review of financial statements of the regional centers such as cash flow or net worth statements.
- Interview of principles of selected centers with the purpose of clarifying any ambiguous issues, understanding and evaluating the character of the principal, and challenging marketing claims.
- Final selection of regional center
Petition Preparation Service
Again, it is not enough to choose a regional center and it is not enough to have the money to be invested.
How you should handle the investment procedures, only an EB5 lawyer can advise you. An EB-5 investor visa is not as easy to obtain as it may seem and petition preparation services play an instrumental role towards achieving it. Here are the precise solutions that your EB5 specialist should offer:
- Adjustment of status is about choosing the solution to either bring the investor in the US or adjust his or her status if he or she already lives in the US.
- Constant updating and monitoring of the selected regional center
- Preparing and submitting the I-829 petition. Initially the EB5 investment visa is a temporary or conditional residence, limited to two years. In order to make it a permanent solution, the I-828 petition must be prepared and submitted, 3 months before the receipt of the 2-year green card
- Applying for naturalization is the final step and it is not such a complex procedure. The EB5 lawyer needs to prepare the N-400 form, advice on study materials to pass the US Naturalization Test, and counsel related to the swearing ceremony.
The appeals office pointed out several fatal flaws in the EB-5 center here, including apparent contradictions between information provided by Councilman Mike Rothschild and the city's attorneys, conflicts in the timeline of when the city loaned funds versus when it told USCIS they were needed and more.
However, the primary reason for upholding the termination was because Victorville couldn't prove it had met the EB-5 program's strict job requirements.
At issue is whether the alien investors can be credited with job creation when, in actuality, they are merely preserving jobs, the letter states, pointing out that Victorville said it never spent the loan money but its wastewater plant is already operating.
The city built its wastewater treatment plant primarily using interfund loans, pledging to pay them back in part with EB-5 funds. Now the city has refunded all $9.5 million in loans it had collected and is hoping the regional Victor Valley Wastewater Reclamation Authority will buy its plant so it can replenish reserves.
The City Council will discuss whether to move forward with its lawsuit against the federal government during closed session beginning 5 p.m. Jan. 17 in City Hall. The meeting on Jan. 3 has been canceled due to the holidays.
Brooke Edwards Staggs may be reached at (760) 955-5358 or at bedwards@VVDailyPress.com.
Chicago Project (continue)
Not all agents and agencies in China operate this way, however, and several agents who we've spoken with are extremely concerned about projects of this size and the claims being made in order to convince so many Chinese citizens to invest in potentially risky projects without full disclosure of the fees being paid to them by promoters in the U.S. These large offerings have a secondary effect of squeezing out smaller scale projects which may have a higher probability of success when it comes to job creation and return principal but cannot compete with the resources of larger, better funded regional centers that pay higher fees in the overseas market for investors.
This trend is conditioning the overseas market to promote only larger projects in order to justify the expense and effort necessary to promote offerings of this size and to collect the larger finder's fees. Large projects do not necessarily have a higher rate of failure if they're well capitalized, managed, and structured, but the issue is that potential investors may not be presented with the smaller scale investment opportunities if the EB-5 regional centers with smaller projects cannot justify the large upfront expenses and high investor acquisition costs necessary to raise capital overseas for their smaller offerings.
The proposed project, to be known as the Chicago Convention Center, will be the first Zero Carbon Platinum LEED accredited and 100% allergen-free convention center complex in the world. All guest rooms will be improved with state-of-the-art technology.
The center will include five upper/up-scale hotel brands in three towers. The first tower is a 17-story Starwood Element, which will contain 321 guest suites plus 15 conference suites for a total of 336 rooms. The second tower is comprised of a 19-story, 209-room IHG Hotel Indigo and 154-suite Staybridge Suites. The 14-story third tower will contain a Hyatt Place with 148 rooms and a Hyatt Summerfield Suites with 148 rooms.
The property will include four floors of convention space with a total of 290,000 square feet, all of which will be connected across the lower levels of all three towers. A total of 55,000 square feet will be allocated for restaurants, lounges, and bars throughout the complex. A 1,720-space automatic robotic parking structure will lie below the convention center/hotel complex aligned beneath the second tower. The development will also feature the largest guest accessible hotel green-roof complex in the country, containing almost an acre allocated for a spa, a yoga studio, a bar/lounge area, and a miniature golf course. A total of 995 rooms are proposed, of which 786 will be suites.
Completion of the project is scheduled for January 2014 and ownership forecasts that stabilized occupancy valuation will occur as of January 1, 2018.
Continue
Buying Green Card? (continue)
With careful guidance, adequate due-diligence and by making a decision based upon facts, you can and should expect to get your $500,000 back in a definitive time. In addition, you certainly should expect to not only get conditional green card but to have the conditions removed after about two years; meaning you get to keep your green card and are not forced to leave the USA because the regional center project you chose did not create the required number of jobs.
Let's be clear here; with so many regional center projects fighting to get their hands on your $500,000 you need to be careful. You need to rely on some expertise from outside sources including established, independent EB5 consultants, and an experienced EB5 attorney BUT, you also need to keep a clear head yourself and take responsibility for the final decision about who you are going to trust with your $500,000. Not all EB5 projects are created equal, not all EB5 projects will make sense to you. Expect to go through some level of confusion as you look at project documents.
The EB5 pilot program is a job creation program for the USA. The US government would not have invested so much time and effort recently into making this program a success if it were simply a cash for green cards program. No one can guarantee you anything about the EB5 visa program (guarantees are specifically forbidden in the EB5 program) but I can assure you that the USA government, the ethical EB5 regional center operators and we at Which EB5 all want you to get and keep your green card AND get your $500,000 back within a reasonable time frame.
I am a first generation immigrant to the USA myself; I understand so many of the thoughts and motivations that go through your head once you have made a decision to make the USA your home. I made mistakes, I trusted advice from fellow countrymen (I can explain why that can be a very dangerous thing to do) and I have been through the USCIS immigration process; I can help you and will be glad to talk about things you should be paying attention to as you prepare for and make the move to the USA.
Sizzle (continue)
At the end of the day all things being equal, the investor will choose the project that gives them bragging rights. At a card game, dinner party or mahjong table, the investment that shines the brightest also shines most brightly on its investor. Really?
And I thought that the goal of an EB5 investor was a permanent green card and getting their money back at some defined point in the future. Investing in an EB5 visa with sizzle will not be what you want to brag about when your I-829 is rejected and/or you have lost your $500,000.
The trouble is: All things are not equal. The one with the bragging rights is the one with the green card and a reasonable chance of getting the $500,000 back.
With over 200 regional centers available to a potential EB5 visa applicant to choose from, some selling sizzle rather than the genuine opportunity for permanent residence in the USA, it becomes almost impossible, without genuine independent help, to separate those who have a goal of getting you invested in their project without any regard for your future from those professional regional center operators with a long-term view of this business and a true wish to see their clients get, and keep, their green card.
Get advice from an experienced EB5 attorney and consultant BEFORE you choose a regional center, it just might save you $500,000.