EB-5 Visa News 2010:Year in Review

EB-5 Visa News2010: Year in Review

The complete collection of EB5info.com's monthly newsletters, including professional commentary and documents that highlight EB-5 news, issues, and events in 2010

Contents

Preface ... 4

January ... 5

February ... 19

March ... 25

April ... 30

May ... 37

June ... 47

July ... 56

August ... 67

September ... 74

October ... 84

November ... 98

December ... 112

Appendix A – USCIS-Approved EB-5 Regional Centers ... 122

Appendix B – Map of USCIS-Approved EB-5 Regional Centers ... 125

Appendix C – Top 10 Attorney Contributors ... 126

Appendix D – Top 10 Service Provider Contributors ... 127

Appendix E – Top 10 Advisor Contributors ... 128

Appendix F – Top 10 Firm Contributors ... 129

Appendix G – Top Q&A Contributors ... 130

Appendix H – Top 10 Resource Contributors ... 131

Appendix I – The Neufield Memo ... 132

Appendix J – The Startup Visa Act ... 141

Appendix K – USCIS Notice of Intent to Terminate Victorville Regional Center ... 148

Appendix L – USCIS Notice of Final Termination, Victorville Regional Center ... 157

Appendix M – Letter from Alejandro Mayorkas to Sen. Patrick Leahy ... 167

2010 saw explosive growth in the EB-5 program. The number of regional centers doubled again, and is set to double in the upcoming months as a slew of entities flooded USCIS with applications for designations before the new I-924 application fee went into effect in November. This process came as capital to fund U.S. commercial enterprises continued to be scarce in the wake of the credit crisis, causing many developers and project managers to seek alternative sources of capital and look overseas for funding.

The number of investors applying for U.S. residency under the EB-5 visa program increased dramatically as knowledge of the program spread and as other countries (principally Canada’s) program for residency became much less compelling. According to USCIS, the number of I-526 applications for residency nearly doubled from 1,028 in 2009 to 1,955, and I-829 petitions to remove the green card conditions rose from 437 to 768.

Not all news, however, was positive. Concerns over the capability of many commercial enterprises to create jobs as outlined in their operating agreements and according to USCIS regulations dominated the discussion in stakeholder committee sessions and in the media. Several EB-5 investors were denied their I-829 petitions and are facing removal from the U.S. and loss of principal in their investments. These failures were caused principally either by overly optimistic forecasts from developers who were not able to raise sufficient amounts of capital in time to complete their projects or by material changes to original business plans which may not have been disclosed to investors. The lack of a safety net by commercial banks to provide lines of credit to entities with significant negative cash flow has proved difficult for new enterprises and troubled business sectors seeking financing through the EB-5 program.

Many immigration attorneys are increasingly concerned with advising their clients on the suitability of investments should project failure occur and are seeking ways to reduce their potential liability, yet others are embracing the role of agent and finder despite the risks involved. Issuers as well do not seem to be concerned with issues of rescission due to improper solicitation, marketing, or the payment of fees despite guidance from securities attorneys and regulators, or with issues of fraud by misleading investors with their agent’s promotional activities. Investor actions against issuers, agents and promoters involved in project failure, as well as scrutiny by securities authorities was not forefront in 2010, but that may change as the number of EB-5 projects increases and several fail to achieve either their immigration or commercial objectives in 2011.

As always, EB5info.com will be the source of information for the EB-5 visa program and we would like to thank all of the professionals who contribute to our newsletters in an effort to educate investors, attorneys and service providers in the field.

Best wishes to you all for a safe and successful 2011,

Michael GibsonManaging DirectorUSAdvisors.org

January

• EB-5 Projects Receive Substantial Nationwide Media Coverage• Attorneys and EB-5 Advisors Comment on Trends in Immigration Law• Washington Post and National Public Radio Document Growth and Evolution of the

EB-5 Visa Program• Effort to Create "Startup Visa" for Foreign Entrepreneurs Gains Steam• Immigration Law Firm Miller Mayer Releases EB-5 Program Video

Media Outlets Across the U.S. Report on EB-5 Visa Projects

The month of January saw many individual EB-5 projects around the country making headlines. While several news stories considered projects that have been in the making for some time and are finally breaking ground, others provided a glimpse of potential EB-5 initiatives and regional center efforts currently in the works.

Here's a run-down of "in progress" EB-5 regional center projects that made the news this month:

1. America's Center for Foreign Investment (ACFI) – In a Montgomery, Alabama news conference that received lots of local attention, Hybrid Kinetic (HK) Motors displayed a concept car – an Italian-designed "Quaranta" – the

Giugiaro-Designed Concept Car

likes of which it plans to produce in great numbers upon completion of an EB-5-funded auto plant near the Gulf Coast.

It's possible the project could receive additional financing from the State of Alabama down the line, but that will be "an uphill battle" said Governor Bob Riley in comments to the local press. ACFI will have to show the state that it has received at least $1 billion through EB-5 or other financing before Alabama will even consider assisting HK Motors in its endeavor.

Commentary in the Montgomery Advertiser is skeptical that HK Motors, a Pasadena, California startup, will be able to churn out the millions of cars per year it is predicting. Only since the news conference has the company signed an agreement with the Italian designer Guigiaro, who actually designed and produced the Quaranta in 2008.

2. Northeast Ohio Regional Center (NORC) – An article in Ohio's Daily Record profiled Mike Steiner, a recently retired entrepreneur known locally for his success in the insurance business, who be working with NORC to get its projects off the ground. According to the Record, "Members of Woooster Growth Corp. viewed EB5 as a potential vehicle to construct buildings" for a local "research park."

It is worth noting that NORC would not qualify for the $500,000 EB-5 investment since it is not located in a Targeted Employment Area.

3. Noble Outreach – The Louisiana-based regional center made local headlines this month for its groundbreaking on commercial property that will include a restaurant, hotel, and "multipurpose conference center." In what New Orleans City Business described as the razing of a "pair of blighted buildings" in Algiers, Louisiana, construction of the new facility is now underway.

According to Regional Center Principal Bart Hungerford, Noble Outreach is "eyeing future projects in New Orleans East." The regional center currently has an exclusive contract to handle all EB-5 investments in the New Orleans area.

4. Vermont EB-5 Regional Center – Jim Douglas, Governor of Vermont and big EB-5 proponent, has "finalised a plan" with the

South Korean AnC Bio that will create the state's first EB-5 regional center. On the list of projects is a facility that would "manufacture portable dialysis machines, cell therapy machines, vaccines and other bio-medical supplies, as well as conduct cutting-edge research and development," according to the local press.

Bart Hungerford (left) and Col. Tim Milbrath of Noble Outreach

Citizens and local government officials are hopeful that the initiative will bring over 200 biotech jobs to the region. Its construction is a $50 million endeavor, and the facility is slated to open in 2011.

And here are the "potential" EB-5 projects that made press in January:

1. The Adirondack Economic Development Corporation in Saranac Lake, New York is preparing its EB-5 regional center application, and the nearby Plattsburgh-North Country Chamber of Commerce has placed formation of the North Country EB-5 Regional Center on its list of priorities for the year.

The county wants to expand a terminal at the Plattsburgh International Airport, and it believes EB-5 financing will prove a viable way to fund the expansion.

2. From the Colorado Business Journal comes a story on burgeoning EB-5 efforts in that state, in particular the latest push by the development group Waveland Ventures to acquire EB-5 regional center designation. Waveland would form the Colorado Regional Center, which would solicit financing from foreign nationals to fund construction projects in rural areas and ski towns. It looks like operator Chet Schwartz has been careful to pick these locations because they qualify for Targeted Employment Area designation and can receive the lower threshold $500,000 investment.

Also mentioned in the piece are the two regional centers in Colorado that are already USCIS-approved: the Rocky Mountain High Regional Center and the Colorado Intercontinental Regional Center.

The former is "waiting for the economy to improve" before it seeks investors. Colorado Intercontinental, on the other hand, is already working on plans to take downed timber harvested in response to the local beetle kill plague and process it into cellulosic biofuel that will join corn-based ethanol in diluting the quantity of

petroleum in the nation's fuel supply. The federal government mandates that a certain percentage of the nation's fuel supply come from non-petroleum sources.

3. The St. Louis region is attempting to receive EB-5 regional center status in an effort to fund "startups at plant and life science incubators and [send funds] into potential uses for [an] old Chrysler plant." According to the St. Louis Dispatch, which reported the story,

Many EB-5 Regional Center Projects – New and Old – Involve Ski Resorts.

EB-5 suddenly became a way to fund these endeavors as recession realities made it harder to tap traditional sources of private financing.

The paper quotes Muzaffar Chishti of the Migration Policy Institute in Washington, who responds to criticisms of the EB-5 program as a "green cards for sale" scheme by noting that 10,000 visas is not really such a large quantity. Even if the U.S. were to issue the maximum number of EB-5 visas available each year, he argues, they would still only make up a fraction of the visas awarded to immigrants annually.

4. A New York state legislator is proposing that his district seek EB-5 regional center status so that it can invest more in local tourist infrastructure – in particular a hypothetical ski resort called the Adirondack Club and Resort.

Such a project, as the EB-5 community is well aware, would not be the first time an EB-5 regional center was set up to develop a ski resort.

EB-5 the "Hottest Thing" in Immigration Law Practice?

Ever since the recession began, the market for H-1B nonimmigrant work visas has waned significantly, and many immigration law firms that once considered the H-1B their bread and butter are singing a different tune.

Demand for the EB-5 visa, which was once so obscure that few immigration attorneys had experience working with it, has increased substantially. Many major media publications – including the Washington Post and Forbes.com this month – have covered the explosive growth of EB-5 regional centers and the increasing number of applications for EB-5 visas from foreign national immigrant investors, and the explanation for those events usually goes something like this: Bank aren't lending; developers need financing for their projects; they're using the EB-5 program until the banks start lending again.

An article in this month's Legal Intelligencer, however, quotes immigration attorney Robert S. Whitehill who attributes increasing interest in the EB-5 visa to "the diminished value of the American dollar compared to the euro and the recent emergence of newly wealthy people in China, as well as in Russia and other oil-rich countries."

Ron Klasko

While there was still little to no interest in the program until about 2006, by 2008 it was becoming common to see regional centers represented at immigration conferences, the Intelligencer reports.

The piece also profiles Ron Klasko, an immigration attorney who runs what the Intelligencer describes as an "immigration boutique" – the Philidelphia law firm Klasko Rulon Stock & Seltzer – and has been traveling the globe to promote the EB-5 program to interested investors.

Klasko also works directly with CanAm Enterprises, which runs the two EB-5 regional centers in Pennsylvania as well as one in Hawaii and another in California. CanAm Enterprises recommends that their investors work through Klasko's firm, although the investors are under no obligation to do so.

Comparing the individual EB-5 process to the regional center program, the Intelligencer turns to Klasko:

Klasko said there are numerous advantages to the regional center EB-5 application process compared to the individual EB-5 process.

First and foremost, he said, individual EB-5 applicants are usually required to invest $500,000 more than regional center investors are unless the enterprise is located in a rural or high unemployment area.

Also, Klasko said, it’s often very difficult for individual EB-5 applicants to prove that their investments have directly created 10 new jobs.

"Most startup companies don’t have 10 employees," he said.

And for those individual EB-5 applicants looking to purchase an existing business and restructure it to form an eligible new enterprise, the restrictions imposed by the USCIS have "pretty much made that impossible."

"Our rules on expanding existing businesses are pretty tough to meet," Klasko said. "Investors have to show net worth will increase by at least 40 percent, as well as adding 10 employees."

While it has been apparent to interested outsiders for the past year (if not longer) that the EB-5 program has taken off and that many regional center operators are traversing the glove in search of wealthy investors, what may not be apparent is the profound effect the program's growth is having on immigration law practice. Many lawyers with no prior EB-5 experience are learning about the program.

Just a little over a year ago, the number of USCIS-approved EB-5 regional centers stood at 20. Today, a quick look at the USCIS website shows 79.

ILW.com’s EB-5 Panel of Experts: Focus Changes to the USCIS/CSC Interpretation of Indirect Job Countingby Michael Gibson, USAdvisors.org

After publishing a story about the upcoming ILW.com "Investors For Experts" panel discussion, I noticed that the agenda had changed considerably from its original format reported here in December: ILW.com hosting panel of EB-5 visa experts.

This should not come as a surprise to EB-5 practitioners because of questions raised after an IIUSA / AILA EB-5 stakeholder’s meeting with USCIS and California Service Center representatives in December concerning job creation methodologies and the use of RIMS II and other economic models in the counting of indirect and

induced jobs inside and outside of the EB-5 regional center.

For EB-5 regional centers that do not count or account for direct jobs, these comments were unsettling and many would like

clarification on USCIS and CSC interpretation of the law. This subject of counting indirect jobs has obviously taken on much more importance as can be seen from the change in focus and subject matter from the initial announcement of the series:

December 17:

The third and final phone session will be covering EB-5 Regional Centers on January 21, 2010 (registration ends on January 20):

• Due diligence in selecting a regional center• Employment methodologies• Co-counsel and other experts

January 18:

THIRD Phone Session on January 21: USCIS On EB5

• Government Perspective On EB5 Program• Follow up on Stakeholder Meeting and Dec 11 Memo

The focus has shifted from questions of due diligence and an internal discussion of job creation methodologies to getting clarity from the USCIS/CSC representative on comments made during the EB-5 stakeholders meeting in December. The question of job counting and creation is of such great importance that the agenda of the call has been completely changed.

Michael Gibson

The moderator of the discussion will be Lincoln Stone, who has chaired many such EB-5 panels before and is also instrumental in the submission of approved regional centers who rely solely on the accounting of indirect and induced jobs, sometimes also referred to as Capital Injection or Expenditure Methodology, so listeners should pay close attention as he seeks direction from the CSC officials, in particular, Sasha Haskell, whose comments in the stakeholder’s meeting caused the recent turmoil.

The economics expert on the panel will be David Andersson, EB-5 Regional Center Principal of the Whatcom Opportunities Regional Center and member of AUBER: The Association for University Business and Economic Research, and I am sure that he will offer very valuable insight into the importance of this issue as he has been a very strong proponent of the indirect only/capital expenditure model for many years.

While many may disagree with the USCIS/CSC stance, I do believe in the validity of their concern that actual jobs are created (not simply transferred from within or created far beyond the targeted area) and reasonable methodologies are used to prove their creation.

Here's my impression of their stance: The EB-5 visa exists to allow foreign nationals to invest and create a certain number of U.S. jobs in return for a green card, and that by simply stating that since funds have been spent in a targeted region, by default, "x" amount of jobs have been created.

I will use South Florida as an example of why I question this methodology (please forget for a minute that neither Miami nor Ft. Lauderdale qualify as a TEA; this is an illustration only). I can show beyond any doubt that billions of dollars were spent to build some of the most beautiful hotels, condos and office space this side of Dubai.

At the same time, I can also show a vacancy rate of over 80% in many of these luxury apartments, thousands of square feet of unoccupied Class A office space, and a doubling of the local unemployment rate. There is no question that the money was spent, but where are the jobs? By any definition, there was a huge loss of jobs (direct, indirect, and induced) in all sectors of the economy despite a massive investment of capital (both equity and debt). Fortunately, no EB-5 regional center investments were located in this area at the time, but one can see the analogy for Centers located in other regions of the country that might have experienced job loss despite capital being invested.

I can see where the capital expenditure method works in times of rising GDP and declining non-farm payrolls, but I do see the possible need for evidence that direct jobs were created (in the particular EB-5 regional center investment) when the opposite is true, if only

Lincoln Stone

to verify that the foreign nationals' funds did indeed create jobs through the EB-5 regional center’s investment. One can argue that on the macro level investment would eventually create jobs, and that might be true in the long term, but unfortunately this is a program with a very short timetable and high standards for removal of conditions at the I-829 stage.

The long term success of the EB-5 program, I believe, will mean that regional centers should be able to demonstrate that U.S. jobs were created or saved. Simply showing that the investor’s money was spent may not be adequate proof to our representatives in Washington of what a valuable program this is or that American jobs were indeed created or saved as a result of foreign nationals investing through the immigrant investor green card program. Empirical evidence would discredit those who say this program is about rich foreigners “buying” green cards by showing definitive proof that investment resulted in expanded U.S. payrolls and a greater U.S. GDP.

Opponents of the program are likely to ask for empirical data that U.S. jobs were indeed created, not simply transferred from one location to another, or that capital invested resulted in increased U.S. GDP through production of goods and services and the creation of employment. It is my belief that the indirect-only capital contribution methodology does not adequately prove the creation of jobs. It may satisfy the requirements of the law as Congress intended, despite concerns from the agency that oversees the program, but I feel that if the program is to succeed there should be a realization that opponents of the program (and immigration in general) may try to block efforts to make this visa program permanent or expand the scope for investment unless the stakeholders here can positively prove that jobs are created through immigrant investment.

What Happens When USCIS Breaks the Law?

From Charles Kuck, noted immigration attorney and Principal at the Georgia Center For Foreign Investment and Development, comes insightful commentary in the American Immigration Lawyers Association (AILA) Leadership Blog. A long time member of AILA, Kuck comments on the recent "Neufeld" policy memos issued by USCIS and the effects they are having on the EB-5 immigrant investor visa program.

His comments have been echoed by many in the EB-5 community, in particular EB-5 regional center principals and EB-5 visa attorneys, who feel the direction and guidance from USCIS and California Service Center officials is counterproductive to the intent of Congress when it established the EB-5 visa program.

Charles Kuck

Here is an excerpt from “What Happens When USCIS Breaks the Law:"

The Neufeld memo on the EB-5 program, essentially makes that job creation program unworkable, and the Neufeld Memo on the H-1B program, literally changes decades of established policy on the most important visa allowing U.S. companies to hire foreign nationals. The USCIS, without any input from the users of the program (really, there was no input), has broken the camel’s back. Absent an immediate withdrawal of these memos, it is quite clear that in order to keep these programs workable, additional action will have to be taken. AILA USCIS HQ Liaison Committee has sent to USCIS Chief Counsel Roxana Bacon a detailed letter explaining how the USCIS has fundamentally eviscerated the H-1B program, and has clearly violated the APA. I strongly urge you to read it, to understand the depths to which the USCIS has delved in its war on the H-1B program.

Kuck goes on to state that USCIS issued the said memos so as to "curry favor" with particular elected officials who harbor concerns about both the H-1B and EB-5 visa programs. While he concedes that instances of fraud do crop up in both programs, Kuck also maintains that changing the rules in a way that jeopardizes "legal and correct" utilization of the programs is not the best way to purge either of its fraudulent users. USCIS, he believes, has no business punishing others for its own "failure to police" either program.

Read Charles Kuck's complete article here.

Washington Post Explains Growth of the EB-5 Program, Affirms Bipartisan Support

It was only "a matter of months," reports the Washington Post, before "more than 50 private and public enterprises were certified as [EB-5] regional centers, increasing the total from 23 to 74." In a piece that focuses on the explosive growth of the EB-5 program, the Post examines why the number of individuals coming to the United States with EB-5 visas rose from 1,443 in 2008 to 4,218 in 2009.

The piecemeal "streamlining" of EB-5 processing procedures on behalf of USCIS together with the recession and credit crunch have made the EB-5 program a more attractive avenue for financing, the piece explains. Construction projects, in particular, are able to use the program for funding during an era when banks aren't lending.

According to Michael Wallach of the Anacostia Regional Center, the area in which his group is developing real estate projects has the highest rate of unemployment and the lowest income of any location in Washington D.C. Whereas getting equity capital to an area like that would normally be difficult if not completely impossible, the EB-5 program actually provides an incentive to invest in such regions – the opportunity to get a green card through an investment of $500,000 as opposed to $1 million elsewhere.

The Post explains: Since "the primary motivation of the immigrant investors […] is to create enough jobs to meet the visa requirement rather than to maximize the return on their investment, they might prove less skittish" than a more traditional investor.

Also considered is the potential for fraud in an environment where regional centers are springing up everywhere you look. Attorney David Morris, who was also quoted in the piece, expresses concerns that the efforts of a few fraudulent operations soliciting funds from foreign nationals could "poison the well" for legitimate organizations trying to take advantage of the program.

EB-5 proponents, it seems, also fear that the process of seeing that all conditions are met for regional center projects is still too slow. The Canadian immigrant investor program is also seeing a record number of applicants, the Post reports, and its numbers are "three times" that of the EB-5 program. A recent article on ABC News.com says that many investors themselves "complain that EB-5 runs about as efficiently as the DMV," and some have waited up to a year just to get denied and have to reapply.

Nevertheless, the EB-5 program enjoys bipartisan support. Jeff Sessions (R-AL) and Patrick Leahy (D-VT) have even banded together to try and make the Regional Center Pilot Program permanent. As Leahy tells the Post, "At a time when we’re seeing so many of our jobs exported out of the country, [EB-5] creates jobs in the United States."

And it's hard to argue to be against job creation. Recession or no recession.

NPR: Recession Fuels Growth of Immigrant Investor Program

National Public Radio’s Jennifer Ludden has produced a very balanced and informative piece on the EB-5 immigrant investor visa program.

David Morris

In the audio broadcast published this month, she speaks with an English investor about his investment in the Marriott Hotel project run by EB-5 principal Henry Liebman of the American Life Seattle Regional Center and with EB-5 Regional Center Principal Ron Drinkard of America's Center for Foreign Investment (ACFI).

The piece outlines the benefits of the EB-5 program for both the foreign national and the United States as a job stimulus program, but Ludden also mentions its critics, such as Mark Krikorian of

the Center for Immigration Studies, who states that despite safeguards against fraud enacted by USCIS after problems with the EB-5 visa program in the 1990s, it would still be possible for fraudulent petitions to be approved.

Krikorian also believes EB-5 is a way for rich foreigners to simply “buy a green card."

Muzaffar Chishti of the Migration Policy Institute then notes that the majority of EB-5 investors have been from Asia, predominantly from China, and that despite the recent upsurge in applicants, the visa program is still widely underutilized.

Brian Thompson, the American Life EB-5 visa immigrant investor from England, states that if the program were better publicized, there would be more demand for the visas. Currently, the program is relatively unknown outside of the United States.

America's Center for Foreign Investment (ACFI)

The following two articles were written by Michael Gibson of USAdvisors.org in response to recent attention given to the push for a startup visa bill in both the U.S. House of Representatives and Senate. Both articles originally appeared on EB-5 Visa News.

Investors Try to Open Door for Foreign Entrepreneurs

From the Wall Street Journal comes a story EB-5 Visa News reported some time ago that illustrates the efforts of a group of U.S. venture capitalists in organizing a grassroots movement to modify the EB-5 immigrant investor visa so that foreign entrepreneurs can come to the United States under a “start-up” visa program and obtain their U.S. green card in exchange for creating U.S. jobs.

The proposal, which has recently gotten the support of several congressmen and senators in Washington and lawmakers across the country, is similar to the EB-5 visa in that it provides the investor with a conditional green card in exchange for his or her investment, but unlike the EB-5 visa “pilot” or passive regional center program, the start-up visa requires that the investor also be actively engaged in the formation of the venture and creation of U.S. jobs. That would mirror more closely the traditional or “stand-alone” active EB-5 visa, sometimes referred to as the "Million Dollar Green Card," but would allow the foreign born investor to qualify for entry for a lower amount.

The effort is headed by very well known venture capitalists Brad Feld, Dave McClure, Eric Ries, and others, and the effort is both well funded and organized. They are already using their intimate knowledge of social media tools like Twitter to promote awareness and understanding of the program, and have managed to send several thousand Twitter feeds to members of Congress in support of their ideas.

This quote from their website illustrates the point that not only is foreign capital or equity needed for the enterprise to be successful, but also the entrepreneurs themselves:

The United States has a similar program – the EB5 visa category, which allows immigrants to invest $1 million or more and generate ten jobs as part of that investment. However, that category is limited to investors, and not the entrepreneurs who are going to drive that value creation. The impact of this visa category could be dramatically increased if we focus on the entrepreneur who creates the business, as opposed to focusing solely on the

investor holding capital. Small changes can dramatically increase the efficacy of this program and increase our economic competitiveness in the future.

If you would like to know more about the Startup Visa, you can visit the website here. Tracking of their campaign results can be found here.

Incubating Change to Immigration Law with the Startup Visa Movement, EB-5 Visa Assessment From Silicon Valley

A slightly different angle from the IT/Tech community on the Startup Visa was featured in a story published by Tech Crunch in October of 2009. It is interesting to note the author's take on the EB-5 visa’s limitations for Silicon Valley entrepreneurs, especially concerning the two year timetable for creating jobs and the fact that capital typically comes from other sources (not the entrepreneur):

First off, the EB-5 requires that an immigrant invests $1 million (or $500,000 under certain circumstances) of their own money in a new business. This rule ignores the fact that tech startups are often backed by venture capitalists, and it overemphasizes the role of money instead of assessing a foreigner’s talent and ambition as primary factors. The EB-5 is also only given to immigrants who can promise to create 10 full-time jobs within 2 years, which doesn’t mesh well with the reality that successful startups (while creating plenty of new jobs in the medium and long-runs) often maintain deliberately low head counts in the short-run.

This emphasis on allowing the foreign born entrepreneur to come in and create a company that employs Americans through his or her hard work, effort, and ingenuity rather than solely through the investment of capital is quite different from the current EB-5 immigrant investor visa program.

At some point, the efforts of those involved in the EB-5 community will have to reach out to these individuals to see if there is common ground and/or to carry the message to our representatives in Washington that foreign investment in the United States is good for creating jobs and increasing the standard of living for both the immigrant investor/entrepreneur and American citizens as a whole.

Miller Mayer Releases Video Explaining EB-5 Program Basics

From New York immigration law firm Miller Mayer comes this video, which is arguably the most concise description of the EB-5 visa program yet made available by any EB-5 practitioner. Thanks goes out to Miller Mayer for making this available.

Click to watch the video.

February

• New EB-5 Regional Centers in Michigan, Washington Receive Approval• Commentary Critical of EB-5-Funded Car Manufacturing Plant in Alabama• Greece's Debt Problems May Mean Fewer European EB-5 Immigrant Investors• National Visa Center Issues Annual Report: Visa Applicants by Country

New Regional Center in Michigan Has High Hopes for "Low-Risk" EB-5 Investments

According to Jim Lynch, operator of the newly-minted and USCIS-approved EB-5 Michigan Regional Center (EB-5 MRC), he and other principals at the Saginaw, Michigan operation will help foreign national investors "looking for low-risk investments."

A press release issued by the center states that EB-5 MRC, only the second EB-5 regional center in the State of Michigan, has been approved to seek investments for a multi-county region. Nine counties are listed in the release, and Lynch says that he and associates are "eager to expand the authorized area" and work with other counties toward creating jobs and putting investment dollars to work.

EB-5 MRC has already met with several investors who are interested in projects the regional center may pursue. USCIS

EB-5 MRC will raise c a p i t a l f o r b i o f u e l manufacturing.

has approved the Michigan operation to solicit investments in biofuels, biotechnology, and alternative fuels manufacturing and research facilities, and its team boasts many years of experience in venture capital investment and new product development.

As Lynch notes, "There’s plenty of competition out there for investment dollars, and we’ll be calling on our local EDCs, chambers of commerce, business authorities and investor groups to help us sell mid-Michigan." Competition among regional centers – there are now nearly 80 – has certainly grown fiercer since the dawn of the economic downturn and subsequent hunt for alternative sources of financing.

Lynch continues, "We know that [mid-Michigan is] fertile ground to grow successful businesses, but we need to prove it, and we will." EB-5 MRC will begin soliciting funds for its projects in what is perhaps the most fertile ground of all for regional centers – The People's Republic of China.

Commentary Skeptical of HK Automotive's Plans for EB-5 Visa Project in Alabama

From Charles Child of Automotive News comes a very skeptical view of Hybrid Kinetic Motors Corporation's plan to produce a line of “green” hybrid cars through the EB-5 visa immigrant investor program. As EB5info.com reported last month, there was concern from

within Alabama about the large number of investors needed by America’s Center for Foreign Investment (ACFI) before the State of Alabama would provide any funding or incentives.

According to Child, the HK Motors project is little more than a "pie-in-the-sky" fantasy, and its contention that the plant will produce 3 million hybrid cars per year is simply "absurd." Child compares that number, which has appeared as a 2018 target production goal in HK's promotional literature, with General Motors's 2009 sales of 2.1 million units.

Nor does Child accept that the quality of HK automobiles will rival that of Mercedes Benz, an assertion that comes straight from the lips of HK CEO Chuantao Wang.

Whether HK Motors will ultimately produce cars in as great a volume and as of fantastic quality as its leaders contend may be beside the point. The automaker is already soliciting funds from

HK Motors hopes to build cars like this I t a l i a n - d e s i g n e d Quaranta.

wealthy Chinese investors through ACFI, the only EB-5 regional center in Alabama. If the center is able to raise $1 billion in total capital investment, it's likely that the state will help foot the bill.

HK Motors would not be the first Asian carmaker in recent years to build a plant in the region. Hyundai built a factory near Montgomery in 2002, and KIA opened a facility just across the Georgia border in 2007. Car manufacturing plants are labor-intensive enterprises that bring jobs to communities. If there is a market for the product, there are jobs for the taking.

Citing its use of the EB-5 program, Child says HK's "plans have little to do with making cars." However, if cars are not made and no jobs are created, the potential for EB-5 would not exist.

For now, the State of Alabama will wait and see if ACFI comes up with the funds.

Regional Center to Pursue Mixed-Use Development in Washington State's 8th Largest City

A press release from Twin Development LLC outlines the group's plan to bring a mixed-use development to Federal Way, Washington.

The project will be funded by the EB-5 visa program during a time when "conventional lending for large mixed-use projects has been all but frozen," said Patrick Doherty on behalf of the City of Federal Way. Turning to the EB-5 program for funding is not uncommon in today's climate, and more developers are starting to see the program as a viable way to raise the money not being leant by banks.

USCIS just granted regional center designation to the city, which will operate under the name Twin Development Regional Center. The City of Federal Way has a population of 88,580, but the press release claims it currently has "only 38,000 jobs." Regional center operators have the support of Washington's governor, Christine Gregoire,

above: Tacoma, Washington; Federal Way is roughly 15 miles from Tacoma.

who has said "it is precisely the EB-5 foreign investor visa program that may be able to provide [the necessary] source of financing" to get Twin Development's projects underway and start creating jobs for the community.

The press release quotes Twin Development Co-Manager, Steve Smith: "This project is further confirmation of the Pacific Northwest’s status as an international gateway. […] By leveraging the opportunity presented by the EB-5 program, we can broaden access to foreign capital sources while providing a lucrative opportunity for international investors."

Twin Development Regional Center joins American Life, one of the oldest, most established regional centers, and Whatcom Opportunities in offering foreign nationals an investment opportunity in Washington State.

Why Greece’s Problems May Mean Fewer European EB-5 Visa Immigrant Investors

European leaders met this month to discuss plans to rescue Greece from a financial free-for-all which threatens to drag other European Union countries, economies, and debt down with it.

Comments in anticipation of help from EU leaders, in particular from Germany, helped the euro rise to $1.38 from a 9-month low against the dollar. All eyes will be on the outcome of the meeting today and what package, if any, can be put together to stop the euro from falling further.

The fate of not only Greece, but Portugal and Spain may also rest with whatever fiscal and monetary measures the stronger EU countries can put together. Should these countries be unable to curb their massive budget deficits and their GDP continue to stagnate, there will be further pressure on the euro as investors unload European assets in favor of the stronger dollar, which would make investment in the U.S. EB-5 immigrant investor program much more costly for any potential EU investors.

According to Reuters:

Police in Greece quell protests.

Fiscally fragile euro-zone countries like Greece, Portugal and Spain are under intense pressure to rein in huge budget deficits, aggravated by a steep economic downturn and billions of euros in stimulus spending. Their financial woes have hit investor confidence in the European single currency bloc and even sparked speculation that a country could be forced out of the euro area.

As EU countries struggle to retain their financial integrity, rising costs will make it unlikely that even the lure of EB-5 visas will bring European foreign nationals to the U.S. in large numbers. A much more likely scenario is that Asian nations in less dire financial straits than the EU, in particular China and South Korea, will continue to send the largest number of EB-5 recipients to the U.S.

EB-5 Immigrant Investor Visa "Applicants by Country" Annual Report Issued by the National Visa Center

The National Visa Center (NVC) has released last year's totals for the number of approved visa recipients as of November 2009.

Various visa categories were considered in the NVC report, and the released figures show the number of approvals during the last year. Totals are grouped by country and include the petitioners as well as "spouses and children entitled to derivative status under INA 203(d)."

According to NVC:

Most prospective immigrant visa applicants qualify for status under the law on the basis of family relationships or employer sponsorship. Entitlement to visa processing in these classes is established ordinarily through approval by Citizenship and Immigration Services (CIS) of a petition filed on the applicant’s behalf. The petitions of applicants who will be processed at an overseas post are forwarded by CIS to the Department of State; applicants in categories subject to numerical limit are registered on the visa waiting list. Each case is assigned a priority (i.e., registration) date based on the filing date accorded to the petition.

Here are the 2009 totals for the EB-5 visa:

• China-mainland born: 126 approvals (38.8% of total)

• Iran: 63 approvals (19.4%)• Korea, South: 57 approvals (17.5%)• All Others: 79 approvals (24.3%)• Worldwide Total: 325 approvals (100%)

March

• Bill with bipartisan sponsorship would "reform" EB-5 program and create a new visa category for entrepreneurs.

• National Public Radio Profiles EB-5 Visas, California Regional Center• Attorneys From International Immigration Services Publish Landmark Article on

Regional Center Pilot Program• California Service Center to Host EB-5 Visa Forum for Immigration Attorneys

Senators Introduce Startup Visa Act to Create New EB-6 Visa Category for Immigrant Entrepreneurs

In an effort to bring innovation and jobs to the United States, Senators John Kerry (D-MA) and Richard Lugar (R-IN) have introduced a bill they hope will encourage foreign entrepreneurs to start their businesses here.

The Startup Visa Act, which has received acclaim from the National Venture Capital Association (NVCA), would allow foreign nationals the opportunity to obtain a U.S. green card when they receive at least $100,000 in venture capital funding from an Senator John Kerry

American investor and acquire at least $250,000 in total financing. It would create a new visa category for immigrant entrepreneurs, the EB-6, and individuals taking advantage of the program would have to create at least 5 new jobs to actually receive permanent residency.

EB-6 recipients would not be able to count family members employed by a new enterprise toward the total of 5, but only U.S. citizens they employ. By contrast, the EB-5 visa requires that an investment from a foreign national create at least 10 new jobs.

According to Dave McClure, who organized a trip to Washington in which Silicon Valley venture capitalists lobbied members of Congress in support of the bill, "job creation is a national priority. […] With the Startup Visa Act, we can create thousands of new jobs immediately, and tens of thousands more as these new startups grow into the next Googles, Yahoos, and eBays of their generation."

Business-centered media outlets were all abuzz with last month's introduction of the EB-6 bill. An article in BusinessWeek cites venture capitalist Jeff Clavier, who says investors "sometimes shy away from even compelling pitches from overseas startups in part because of visa-related hassles" endemic to the status quo. Clavier claims he would likely "give more favorable consideration" to foreign entrepreneurs soliciting funds were the new visa category approved.

Critics of the bill cite its potential for loopholes, in particular the possibility that foreign entrepreneurs would get to stay in the United States even if their businesses fail. BusinessWeek quotes Kim Berry, who heads the Programmer's Guild trade group: "We're not opposed to the concept. We're opposed to the loopholes."

Of course, there is no guarantee that the Startup Visa Act would bring scores of entrepreneurs to the U.S., although a press release from the NVCA claims "close to 50 percent of current venture-backed companies were founded by immigrant entrepreneurs." And that's under current immigration law.

If the Startup Visa Act becomes a reality, it's also not exactly clear whether it would "compete" in any way with the EB-5 visa program. To obtain an EB-5 visa, an immigrant must invest at least $500,000 of his or her own money in a U.S. business. The EB-5 would seem to cater to a different class of prospective green card recipient than the EB-6.

Whether the Startup Visa Act actually stands a chance of passage is unknown. Inc. Magazine points out that Congressman Jared Polis (D-CO) has "introduced a similar visa-Senator Richard Lugar

reform initiative" in the House of Representatives, and some postulate that attention to the issue in both chambers means some form of startup visa will receive approval by each. Polis's bill, however, is bundled together with the House of Representatives' "Comprehensive Immigration Reform" package, which is thought to be more controversial than a separate startup visa bill.

NPR: EB-5 Program a Way to Get Financing in a Down Economy

According to National Public Radio, what "[sounds] like a back-alley deal" between foreign nationals and the U.S. government may be the best way to fund construction projects when the banks are unwilling to provide a loan.

Of course it's the EB-5 program that was the subject of the NPR piece, which included an interview with Justin Huang of YK America Regional Center in California.

Referring to a mini-mall project, Huang tells NPR, "In late ‘08, we got Bank of America to commit $50 million on this project, and in ‘09 they just said we can’t help you anymore." He and many others have turned to the EB-5 visa program as an alternative to more traditional funding sources. YK America has already hired several Mandarin-speaking employees, and it hopes to have at least one hundred by 2011.

NPR also quotes Stephen Yale-Loehr of Miller Mayer, who claims EB-5 is a "win-win-win" for U.S. businesses, jobseekers, and immigrant investors. While the program has (and likely always will) have some critics – the Federation for American Immigration Reform, for example, calls EB-5 a "pay-for-play" system – more immigrant investors are utilizing the program every year.

Sometimes the immigrant investors who actually stay in the U.S. are not the investors themselves, but their children, notes NPR. Wang Wei, a 22-year old student, will be staying in the U.S. because "his father is giving him a half a million dollars to invest in a mini-mall in the city of El Centro."

Stephen Yale-Loehr

International Immigration Services Attorneys Publish Major EB-5 Article

Brandon Meyer and Karen Caco, attorneys with International Immigration Services, P.A., have published a must-read article on the EB-5 Regional Center program in the prestigious journal, Immigration Briefings. Their article is entitled “Spreading Like Wildfire! What Explains the Explosive Growth of EB-5 Regional Centers?”

The authors interviewed numerous heavyweights in the Regional Center field, including Henry Liebman of American Life, Michael Sears of the Capital Area Regional Center (CARc), and several others in order to gain greater perspective on the Regional Center program.

Mr. Meyer and Ms. Caco examine the growth of the Regional Center program in recent years, offer theories on why growth is occurring, and examine the EB-5 program from a historical perspective. This historical perspective yields the not-so-comforting conclusion that the EB-5 program is only as stable as USCIS wants it to be. Therefore, political and bureaucratic risk in the EB-5 context should never be minimized.

Mr. Meyer and Ms. Caco also provide a helpful overview of the process for establishing a regional center in light of recent changes in the Regional Center program stemming from the December 2009 USCIS memo.

“Spreading Like Wildfire” is the first installment in a two-part series written by Mr. Meyer and Ms. Caco. The second installment, scheduled for publication in the next issue of Immigration Briefings, will highlight day-to-day issues faced by regional centers and attorneys who are actively practicing or seeking to practice in the EB-5 arena.

Readers interested in finding out more about this article should contact the authors directly: Brandon Meyer (Brandon@ezusimm.com) or Karen Caco (Karen@ezusimm.com).

Download the article here: "Spreading Like Wildfire!"

Brandon Meyer

Karen Caco

USCIS California Service Center to Host EB-5 Visa Forum for AILA Members

The USCIS California Service Center (CSC) has scheduled an EB-5 forum for March 16, 2010 from 1:00pm to 3:00pm. The CSC will be providing brief EB-5 updates and will open the floor for an informal question and answer session with a panel of EB-5 managers, supervisors, and service center counsel.

The meeting will be held at the California Service Center, 24000 Avila Road, Laguna Niguel, California 92677. AILA members attending the meeting should meet at the south entrance prior to the meeting to be escorted inside.

The meeting is open to all AILA members by RSVP only. If you wish to attend, please RSVP with Robert Nadalin (robert@nadalinlaw.com) before March 8, 2010.

April

• EB-5 Initiatives in California, Mississippi, Indiana, and New England Gain Traction• The Startup Bill: Actual Language Now Available• Experts to Host Seminar Focused on Essential Issues in EB-5 Practice

California's Inland Empire Region Vigorously Pursues "Foreign Direct Investment"

Local government officials in California's Riverside and San Bernardino counties are utilizing new strategies to lure overseas investment and create jobs. A piece in the Los Angeles Times this month quotes Riverside County Commissioner Tom Freeman, who has been meeting with officials from several countries: "We’re rolling out the welcome mat. […] We’re creating programs that encourage foreign direct investment."

During the economic downturn, the so-called "Inland Empire" region in the southern part of the state has had difficulty

creating enough jobs to bring its unemployment rate – currently 14.7% – below the national average. But with low prices for industrial space, manufacturing jobs have

San Bernardino County, California

become more attractive. Many at the local level agree that courting foreign investment dollars is a good way to breathe new life into the manufacturing sector.

The Times explains:

The United States is the world’s largest recipient of foreign direct investment, helped by its open economy, stable government, rule of law and huge consumer market. More than $300 billion of such investment flowed into the United States in 2008, according to the International Trade Administration.

Foreign companies employed 605,600 California workers in 2007, the last year for which data were available, according to the Bureau of Economic Analysis. Nearly one-quarter of these workers were employed in manufacturing.

Attracting new industries is key to the Inland Empire’s growth. The region, which comprises the more populous parts of Riverside and San Bernardino counties, has shed 183,600 jobs since December 2006, many of them in construction and logistics.

“The two most important sectors for us were arguably the ones that were hit the worst,” said Marc Weidenmier, professor of economics at Claremont McKenna College. “This area needs to develop other things.”

One example of a foreign company that has recently invested in the Inland Empire region is Nepco, a South Korean manufacturer of picture frames. Reasons Nepco cites for its decision to locate operations in a state with a reputation for being expensive include proximity to 37 million consumers and good transportation systems to get materials shipped in and goods shipped out.

Although wages in the U.S. are higher than they would be overseas, says Tommy Kim, Nepco's U.S. Director of Operations, the company saves time by not having material sent back to China before being shipped (again) to the U.S. and placed on a display shelf.

Like neighboring San Bernardino County, Riverside County recently passed a resolution that would encourage foreign investment through the EB-5 program. California currently contains more EB-5 regional centers than any other state.

Mississippi EB-5 Project Recruits Former DNC Chairman

According to the Mississippi Business Journal (MBJ), former Democratic National Committee Chairman Terry McAuliffe will be filling a key role at Greentech Automotive, a company that makes hybrid vehicles.

Greentech announced several months ago its intention to build a manufacturing plant in Tunica, Mississippi, a project scheduled to receive a substantial portion of its funding from EB-5 investments. McAuliffe, known for setting fundraising records during his tenure as DNC Chairman, will now be working to pump those EB-5 dollars into Greentech’s Tunica project.

Will it work? Reporting for the MBJ is Clay Chandler, who shows healthy skepticism in his recent column, "Familiar Name Among Greentech Leadership." Chandler reports that Greentech has been "surrounded by a pile of skepticism (and rightfully so) since news of the company broke last fall. A lot of smart automotive folks think the project is a pipe dream; honestly, it probably is."

Having someone like McAuliffe at its helm, however, may lend Greentech more legitimacy. The manufacturer of hybrid cars wants to build a factory that should cost somewhere around $1 billion to construct.

Although Mississippi governor Haley Barbour is likely "intrigued by Greentech," according to Chandler, he has largely kept mum about the project. "I hope they’ll be able to put together their financing," he recently told the MBJ.

Indiana Explores EB-5 Program Possibilities

With over 80 EB-5 regional centers now operating, few states want to miss out on the opportunity to secure foreign investment dollars through the EB-5 program, and Indiana is no exception.

The Ball State Daily News has just reported that Delaware County, Indiana will court foreign national immigrant investors who want to receive a green card for themselves and their families by investing in a U.S. business. The county will try to receive immigrant investor

Former DNC Chairman Terry McAuliffe

dollars through its work with a company called Energize East Central Indiana, which seeks investment in logistics, advanced manufacturing, and food processing and distribution.

For clarification on why officials believe EB-5 a valuable way to raise capital investment in local projects, the newspaper sites Michael Hicks, Director of the Ball State University Center for Business and Economic Research. According to Hicks, "Indiana is well-suited to attract foreign business because it’s one of the few states that has remained fiscally solvent during the past year."

Though true, it remains to be seen whether that fact will resonate with potential investors. Competition among EB-5 regional centers is growing fiercer every day, and travel to Asian

nations like China and South Korea to promote projects before groups of investors is becoming more common. In some cases, high profile political figures – in particular, governors – have even traveled abroad to promote the program.

According to the article:

Terry Murphy, vice president of Economic Development in Delaware County, said this summer Delaware County officials will try to attract foreign business from Japan, China, Europe and possibly Turkey.

“I only see a plus side to it,” he said. “New businesses will bring construction jobs here as well. All the service industries will benefit.”

Murphy said initial job creation could result in job opportunities for students and those just out of college.

So far no foreign companies are on board with the program, and Hicks said it’s hard to speculate when the program will actually get started.

If Indiana is able to sell investors on its solvency and what Hicks terms its "trustworthy tax system," foreign investor dollars via the EB-5 program may help curb the trend of static job growth that plagued Central Indiana even before the most recent recession.

Indiana State House

Seaway Valley Pursues EB-5 Regional Center for Six States

According to a press release published this month, holding company Seaway Valley Capital Corporation is partnering with ACG Consulting to create a new EB-5 regional center that will cover six states in the Northeast. In what appears to be a large potential investment zone (land in New York, Massachusetts, Connecticut, Vermont, New Hampshire, and Maine would be included), the company plans to fund projects for Hackett’s Stores, a retail sales outfit, and the Harbor Brewing Company.

Seaway Valley would take exactly 49% interest in the proposed EB-5 regional center, which would include "certain new retail concepts" according to the release. Harbor Brewing Company, on the other hand, develops "new restaurant concepts."

Here's what the press release says about ACG Consulting:

ACG Consulting is affiliated with ACG Companies (www.acgcompanies.com) and possesses specialized expertise in the employment based EB-5 Program. It develops and provides economic research and consultation services to clients nationally and is currently working with a number of clients who in the aggregate are seeking to raise more than a billion dollars in capital from foreign investors.

Seaway Valley is located in Sackets Harbor, New York, and the new regional center would presumably have its headquarters at the holding company's current office address. There are currently three USCIS-approved EB-5 regional centers in New York state.

Actual Language of the Startup Visa Act Now Available

For readers looking for the actual bill introduced by Senators Kerry (D-MA) and Lugar (R-IN), it is now available here.

The following comments come from Will Herman, well known entrepreneur and incubator of several startups:

Seaway Valley's Portfolio Includesthe Harbor Brewing Company

Simply put, anyone from anywhere who starts a company in the U.S. and is able to reasonably capitalize it can get a visa to stay in this country to develop their business here, on American soil with American employees, paying American taxes.

That’s a no-brainer you say? You might be surprised to learn that the country is routinely kicking entrepreneurs out, telling them to start their businesses elsewhere.

These aren’t people who are taking away American jobs. They’re entrepreneurs – people who are creating new technologies, services, products and . . . wait for it . . . jobs. It’s a meritocracy, folks, the best stuff wins. Anyone is allowed to play. That is, for now, if you live here.

The new legislation is supported with over 100 signatures from leading venture capitalists and angel investors throughout the country.  I’m honored that my name is included on the list. Not because I’m an investor looking for more deals, but I’m an American with an insanely strong desire to see this country continue to set the pace for the rest of the world when it comes to opportunity and leadership.

Relatively speaking, the streets of the US are, in fact, paved with gold. I’d like to see us keep it that way and to provide opportunities for even more Americans to be able to mine it.”

Three-Part Seminar to Discuss EB-5 Investment Essentials

Click to see all current EB-5 Events.

Beginning Thursday, April 29, a number of EB-5 experts and practitioners will participate in a phone seminar to discuss key issues surrounding the EB-5 visa program. Among the topics to be discussed are EB-5 indirect jobs, direct jobs, and induced jobs, risks for EB-5 investors, a breakdown of the regional center/business structure, and changes made to the EB-5 program since the 2009 USCIS memorandum.

Speakers will include Michael Gibson of USAdvisors.org, attorney David Morris, professors John Barrett and Scott Barnhart, Melissa Krinzman of Venture Architects, and Jason Oleet of Oleet & Co.

The following are summaries of each seminar session provided by ILW:

FIRST Phone Session on April 29: EB-5 Indirect Jobs? Induced Jobs? Ask the Economist, "What are direct/indirect/induced jobs?"

•Overview of USCIS approved models including RIMS II and IMPLAN•Reality check on job creation claims by Regional Centers•Coordinating business plan, econometric report, and reality during I-526 and I-829 petitions•Defining TEA's to claim $500,000 reduced investment threshold•Questions and Answers

SECOND Phone Session on May 20: No – The Actual Business? A Regional Center or a Regional Center Project

• Survey of Business/Structure Characteristics Used By EB-5 Projects• Two biggest risk factors for EB-5 investors: job creation and capital preservation• Independent business analysis and valuations/investment banking Issues• Different Business Models: Commercial Real Estate, Manufacturing• Different Investment Models: Loan, Equity, other• Testing the Business Plan & Job Creation Plan• Testing the Exit Strategy & Return of Capital plan

THIRD Phone Session on June 10: Change, Change, Change. USCIS Issues 38 Pages of EB-5 Policy Changes (December 2009)•What are the new EB-5 policies and adjudication standards?•What policy problems has the Service fixed and what is now broken•How a “material change” could result in an investor losing both residency and an “age out” child under CSPA•How a TEA today may not be a TEA tomorrow (failing to preserve $500,000 investment qualification)•USCIS burdens on investor not Regional Center/Project

•Using “Exemplar” I-526 Petition To Stop USCIS Second Guessing

Melissa Krinzman

Scott Barnhart

May

• EB-5 Road Trips: USAdvisors.org and International Immigration Attorneys, PA Visit EB-5 Practitioners Across the U.S.

• USCIS Approves Northern California Regional Center• Permanent Extension of EB-5 Program Sought in Immigration Bill• New York EB-5 Project Profiled by the Wall Street Journal• Leading Immigration Attorneys to Speak at EB-5 Visa Seminar in New York City• USAdvisors.org to Publish EB-5 Regional Center and Attorney Directory

USAdvisors.org Visits EB-5 Practitioners Across the South and Midwest

In late April, Michael Gibson and George Wozencraft of USAdvisors.org set out on an ambitious road trip, crisscrossing the U.S.A. for the purpose of meeting with EB-5 regional center operators and other EB-5 practitioners. Beginning in Naples, Florida at an EB-5 visa project being handled by America's Center for Foreign Investment and arriving in Houston, Texas during the last week in April, Michael and George also managed to meet with the City of Dallas Regional Center (Civitas Capital) before heading to Memphis, Tennessee.

Along the way, they have accumulated film footage and conducted interviews with investment immigration specialists involved in the USCIS EB-5 visa program. Wrapping up their initial jaunt through the South by meeting with Memphis attorney Greg Siskand, the two arrived in the Midwest, where stops in Illinois and Wisconsin included CMB Export Regional Center in Moline, IL as well as the Metropolitan Milwaukee Association of Commerce (MMAC), both of which are active regional centers.

California Military Bases – CMB Export and CMB Summit – handle some of the oldest, most established EB-5 visa projects in the U.S. With sites in San Bernardino and McClellan Park, California, CMB's projects focus on converting old military bases into developments for civilian use. While at CMB's offices, the USAdvisors.org duo met with Pat Hogan, Kraig Schwigen, and Chan Freitag.

MMAC's headquarters, on the other hand, is located within its EB-5 investment region. According to the regional center's literature, “the Milwaukee Immigrant Investment Zone includes Kenosha, Milwaukee, Ozaukee, Racine, Waukesha, Washington, and

Walworth counties,” making it one of the larger EB-5 investment areas in the Midwestern United States.

USAdvisors.org wrapped up its Midwest tour with visits to Chicago, Illinois and East Lansing, Michigan. In the Windy City, Michael and George met with Taher Kameli of the Chicagoland Foreign Investment Group in addition to other immigration attorneys and EB-5 practitioners. The stop in East Lansing included visits with attorney Bob Hood of Willingham & Cote and Jim Lynch of the Michigan Regional Center Global Investment Program. Based in Saginaw, the Michigan regional center is one of two in the state, and its most recent press release states its mission to use the USCIS EB-5 visa program to “rebuild the [Michigan] economy.” Mr. Lynch, no stranger to new product development, has over two decades of experience in early stage venture capital investment.

In Chicago, USAdvisors.org paid a visit to The Cleveland International Fund, which is among those regional centers most recently approved by USCIS for the EB-5 Visa Program. The Fund is a project of The Cleveland Group, an established Ohio consulting firm with a global reach and presence.

Since hitting the road, Michael also managed to participate in two installments of the ILW “Investor Options for Experts” phone seminar series, topics for which included

USAdvisors.org in Houston; George Wozencraft (left), Michael Gibson (right)

methodology-related questions about direct jobs, indirect jobs, and induced jobs as well as what a regional center is, how it operates, business models for the regional center, and risk factors for EB-5 investors. Other speakers included David Morris, Scott Barnhart, Melissa Krinzman, Jason Oleet, and John Barrett, all of whom are either immigration attorneys, EB-5 service providers, or EB-5 visa specialists. This phone seminar series will continue throughout the spring and early summer.

Other organizations visited by USAdvisors.org on its Midwest tour included the following:

• Barry Lichterman and Levitt Shell

• RCI First Pathway Partners; Bob Kraft (Milwaukee)• Foster Quan, the nation’s second-largest immigration law firm (Houston); Attorneys

Charles Foster, Ignacio Donoso, and John Meyer

• Dunbar Harder, a full-service immigration law firm in Houston; Attorneys Ken Dunbar, Terry Weir, April Thompson Nakanishi, Christin Burns, and Amy Donnelly Ashby

• Chuck and Christopher Randall; Randall Residence (Lawton, MI)

• Scott Zimmer and David Simmet; Air Advantage (Frankenmuth, MI)

• Clara Dematteis Mager, Marie Alsace Galindo, Michele Polito, Du Zhiguo, and Amy Orlowski of Butzel Long (Detroit, MI)

• Svetlana Schreiber, Tom Gilbert, and Michele Norton; Svetlana Schreiber & Associates (Cleveland, OH)

• Law Offices of Adan G. Vega and Associates (Houston); Attorney Adan Vega

• Yu, South & Associates in Dallas; Attorneys Abraham Yu and Becky Wu

• Law Offices of Nejla Lane • Law Offices of Barbary Sussman • Adam Lewis and Vedder Price.

Michael Gibson in Saginaw with Michigan Regional Center Operators

USAdvisors.org would like to extend its wholehearted thanks to everyone who met with them during the months of April and May.

Immigration Attorneys Visit California EB-5 Regional Centers

It has been three years since USAdvisors.org Director Michael Gibson and immigration attorney Karen Caco first filmed EB-5 visa projects, touring the country to lay down footage of the then 20 existing EB-5 regional centers. Now, with over 80 regional centers to cover, both are pursuing individual tours in order to obtain news, information, and necessary updates about EB-5 visa projects nationwide.

Ms. Caco, the Senior Attorney and Managing Director at International Immigration Services, PA (IIS), acts as an advisor to U.S. businesses and foreign corporations planning their investment and immigration strategies. With over two decades of experience in

immigration law, she brings to the table a wealth of knowledge and experience when it comes to the USCIS EB-5 visa program.

For this impending endeavor, she will film regional centers on the West Coast, in particular the newly-approved Northern California Regional Center, where center principals Jake and Stephen Weststeyn are planning an agricultural project that they anticipate will "generate $170 million in economic activity" according to a recent press release.

Other stops in California include the Bay Area Regional Center, California Wineries & Vineyards Regional Center, LLC, CMB McClellan Park, and the California Global Alliance Regional Center.

The following is an excerpt from Karen Caco’s account of the first stop on the tour:

"Our first stop [...] was at California Wineries & Vineyards Regional Center, LLC ("CWVRC") started and operated by Christina Lau. [The center includes] the geographic area of Napa

From left to right: Brandon Meyer, Karen Caco, Brendan Heafey (Bay Area Regional Center)

County [...] Christina was kind enough to meet with us for two+ hours and shared her vision for this Regional Center. [...] A well thought out plan indeed."

Earlier this month, Ms. Caco's firm, International Immigration Services, PA, released this press release:

Karen Caco of International Immigration Services, PA (“IIS”) has started her filming of EB-5 Regional Centers throughout the United States. The first filming will be done in Northern California and starts next week. IIS Associate Attorney Brandon Meyer is accompanying her.

They are filming 3 Regional Centers at this time; Northern California Regional Center in Stockton, CMB, McClellan Park in Sacramento and California Global Alliance in Selma.

Remaining the only Attorney in the world to actually visit and film the Regional Centers and their projects, this is the second trip for Karen Caco. The inaugural tour and filming was undertaken in 2007 when there were less than 20 Regional Centers in the United States. At the time, she completed the filming in collaboration with Michael Gibson. Today with more than 80 Regional Centers, both have decided that it made more sense to divide up the filming of these 80+ Regional Centers throughout the remainder of 2010.

Karen and Brandon will conduct interviews and collect film footage that will be used for future DVD’s and media with USAdvisors.org. Filming the production for IIS is Javier Araujo with 360 Image Design, a well-known professional artist, photographer and videographer.

Brandon and Karen recently wrote two EB-5 articles on business immigration; “Now for the Hard Part: Attracting Investors to EB-5 Regional Centers.” Immigration Briefings (March 2010), and “Spreading Like Wildfire! What Explains the Explosive Growth of EB-5 Regional Centers?” Immigration Briefings (February 2010), both published by Thomson Reuters.

Keep track of Karen and Brandon and their filming at EB5info.com and at www.easyUSimmigration.com.

USCIS Approves Northern California Regional Center

United States Citizenship and Immigration Services has just granted EB-5 regional center status to the Northern California Regional Center, and the new center’s principals are optimistic about bringing jobs and economic growth to the region.

According to an April press release, the center’s “first project, an agricultural development project, will create a large impact on Northern California, generating $170 million in economic activity both directly and indirectly.” Of course, no EB-5 visa project can get off

the ground without investors, but center principals, Jake and Stephen Weststeyn, feel that the design of the EB-5 program holds promise for a region hit hard by the economic recession.

“I think there is a lot of potential for our regional center being in Northern California,” said Stephen Weststeyn during a brief conversation with EB5info.com. “It’s a region that could use a lot of job creation.”

And the Northern California Regional Center’s focus on agricultural development – it was approved for agriculture projects – is an area in which the center principals boast nearly a lifetime of experience.

“We’ve been in dairy and ag,” notes Jake Weststeyn, “It’s a family operation.”

As for acquiring investors, Stephen Weststeyn says there are tentative plans to take a trip to China and participate in EB-5 seminars. “We’re probably going to focus most of our efforts on Asia,” he says.

While traveling to Asian countries for the purpose of promoting an EB-5 visa project is not the least bit uncommon in today’s environment, getting to this point has been a long time coming for the Weststeyns and the Northern California Regional Center. It was two and a half years ago when a Wall Street Journal article about the EB-5 program first snagged their mutual attention.

After reading “a follow-up article in Forbes that piqued [their] interest,” according to Stephen Weststeyn, they finally determined that a new regional center based in Stockton, California would be an excellent way to utilize the program.

“In the early days, there wasn’t too much online about EB-5,” say the Weststeyns, “It was through Michael’s [Michael Gibson of USAdvisors.org] DVD that we learned about the program. He was one of the first people we got in touch with when we started all this.”

After making the decision to become a regional center under the EB-5 visa program, navigating through the Department of Homeland Security’s approval process, and finally getting the coveted letter of approval from USCIS, the Northern California Regional Center is ready to become a viable force for economic growth in a region where there is a great need for job creation.

“I think there is a lot of opportunity for our regional center in the area,” says Stephen Weststeyn, “I think it will open things up for a lot of jobs.”

Permanent Extension of EB-5 Visa Program Sought As Part Of Immigration Legislation

According to a statement from the desk of Senator Patrick Leahy (D-VT), “Senators Reid, Schumer, and Menendez have released a productive framework for the process of drafting comprehensive immigration reform legislation.” Among the many reforms included in the proposal is a permanent extension of the EB-5 Visa Program, which Senator Leahy supports.

While perhaps little more than political PR, the statement is a good indicator of the continued support enjoyed by the EB-5 immigrant investor program among several powerful legislators.

Here is the statement from Senator Leahy’s press room:

“Senators Reid, Schumer and Menendez have released a productive framework for the process of drafting comprehensive immigration reform legislation. I share their commitment to enacting key legislative efforts including AgJobs, the Uniting American Families Act, the DREAM Act, and a permanent extension of the EB-5 foreign investors program, as part of comprehensive reform. These are sensible, constructive and urgently needed measures that have had, and should continue to have, bipartisan support.

“I remain committed to meaningful comprehensive immigration reform. There is bipartisan agreement that reform is needed; there are

differences of opinion over how we can accomplish that. I remain seriously concerned with proposals for establishing biometric identification requirements, and I will need to carefully study the details of any such proposal. I also expect to carefully review proposals for enforcement and border security. Meaningful reform must include a realistic path to citizenship to allow us to bring illegal immigrants out of the shadows.

“I hope the outline released today will encourage discussions across the aisle, and that they will lead to a bipartisan legislative proposal. All Americans are concerned with updating our immigration laws, fulfilling our labor needs, and addressing the escalating violence along our southern border. I hope we can come together to address these pressing matters.”

Senator Patrick Leahy

EB-5 Program To Fund Redevelopment Of Brooklyn Navy Yard in New York City

This month, the Wall Street Journal reported that the New York City Regional Center “is making the [Brooklyn] Navy Yard its initial investment.” A 20th century relic, most of which has sat unused since the end of World War II, the Brooklyn Navy Yard project should create nearly 3,000 new “green jobs” through a combination of EB-5 visa investments and additional funding from New York City.

A 220,000 square foot space will be transformed into a “Green Manufacturing Center,” according to the Journal, and other changes to the property will include “five new sound stages and a parking lot” for Steiner Studios, a TV and film production company.

According to the Journal:

New York’s first regional center is making the Navy Yard its initial investment. There are 95 other regional centers across the country. New York has two others serving Buffalo and upstate. California, with 26 regional centers, has the most in the nation.

The New York City Regional Center LLC wanted to target a project in an area with high unemployment that would also have government support, said George Olsen, the group’s managing principal.

The unemployment rates in the neighborhoods that border the Navy Yard were 14.8% in Bedford-Stuyvesant, 9.9% in Fort Greene and 7.9% in Williamsburg, according to figures from the third quarter of 2009, the latest available from the Fiscal Policy Institute.

The Navy Yard currently houses 242 businesses and has 5,000 employees working in industries such as e-commerce, manufacturing and film.

The paper also reports that the city is paying "an additional $81 million for infrastructure upgrades." The $125 million raised through the EB-5 program will be divided nearly equally between the Steiner Studios project and green jobs creation project.

Leading Immigration Attorneys to Speak at EB-5 Visa Seminar in New York City

On Thursday, May 20, immigration attorneys Stephen Yale-Loehr and Ron Klasko are leading a seminar at the Grand Hyatt Hotel at Grand Central Station in New York City, the focus of which is the USCIS EB-5 immigrant investor program. The New York City chapter of the American Immigration Lawyers Association (AILA) is coordinating the event.

Geared toward the immigration attorney needing to know more about the EB-5 program, be it rudimentary knowledge or a more in-depth understanding of particular EB-5-related topics, the seminar will last from 6:00 to 9:00 PM.

According to Stephen Yale-Loehr, this seminar "will cover all aspects of the EB-5 program, from basic to advanced issues."

An instructor at Cornell Law School in Ithaca, New York, Mr. Yale-Loehr is also a practicing attorney with Miller Mayer, LLP and a well-known name in the EB-5 community. For more than a quarter of a century, Mr. Yale-Loehr has practiced immigration law and is often cited as an expert when it comes to the USCIS EB-5 visa program.

Ron Klasko is a highly-respected immigration attorney and Managing Partner at Klasko, Rulon, Stock & Seltzer, LLP. According to his firm’s website, Mr. Klasko is “one of the most sought after” speakers in the country when it comes to immigration law, and he, like Mr. Yale-Loehr, is an EB-5 visa program expert.

Mr. Klasko currently chairs the AILA EB-5 Committee.

At the upcoming seminar, both attorneys will expound upon their knowledge of the EB-5 visa program so that attendees can utilize what

they learn for practical applications in the field of immigration law.

“Attendees will gain an appreciation for the complexities of the program” as well as when the visa is or is not appropriate for particular clients, says Mr. Yale-Loehr. Non-AILA members can still attend the seminar for $50, which will be payable at the door.

For those considering attending the event who have additional questions about seminar topics, discussions, or other matters relating to the event itself, Stephen Yale-Loehr can be reached at swy1@cornell.edu or (607) 273-4200 x 318.

Stephen Yale-Loehr

Ron Klasko

EB-5 Directory To Be Distributed AT AILA Conference, Other Events

Tuesday, June 1 is the last day for regional centers, firms, and other EB-5-related organizations to sign up for the 2010 USAdvisors.org EB-5 Regional Center Directory. The directory will be distributed at this year’s AILA conference, the EB-5 Investors Conference in Boston this August, and a host of additional EB-5 events and seminars.

Net profits for the directory will be donated to the Wounded Warrior Project. For additional information or to sign up, see the EB-5 Directory page at EB5info.com.

June

• Wall Street Journal and CNBC Cover the EB-5 Program Before a National Audience• South Dakota EB-5 Effort Saved at the Last Minute by State Government• Projects in Alabama and Michigan Receive USCIS Approval• Victorville One of the "Most Successful" Regional Centers Declares Principal• Western Governor Travels to China Seeking EB-5 Visa Program Investors• List of Florida Regional Centers Continues to Grow

Wall Street Journal Declares Immigrant Investors "An Underserved Market"

A recent entry in the Wall Street Journal's "Financial Analyst" blog hones in on the EB-5 immigrant investor program, in particular the opportunities it may create for financial services professionals in the United States.

According to USAdvisors.org Managing Director Michael Gibson, who was interviewed by the Journal, "Any financial services firm that does not cater to these people is going be missing out [on] a huge source of revenue over the next few years." Gibson, who runs EB5info.com, points out how his clients often have net assets higher than $5 million. These are people who not only open up bank accounts and buy houses, but who "need a broad array of financial services, including insurance and investments, estate

planning, tax services, and help planning for their children," he says.

And as the number of USCIS-approved EB-5 regional centers grows and more US projects are funded by EB-5 dollars, a larger number of immigrant investors and their families will be making use of the EB-5 visa. It is a niche market where growing demand could spell opportunity for financial professionals willing to tailor their services to these individuals' needs.

Greg Siskand, an immigration attorney with Siskand Susser, was also quoted by the Journal: "I’ve not heard of the big Wall Street firms being involved in a major way in this business, so I think it’s an area of opportunity."

For financial advisors who would like to enter the immigrant investor market, Gibson and Siskand provide these recommendations:

• Leverage diversity and foreign language skills

“If they have foreign language skills and can cater to these individuals,” that’s a huge advantage, Gibson notes.

• Investigate multiple Regional Centers

Since most centers haven’t been operating long enough to complete their projects or establish an investment track record, Gibson said he fears that many projects marketed to investors “won’t be successful commercially, or in terms of job creation.”

• Establish broader networks

Regional Centers and immigration lawyers are good sources of referrals for EB-5 clients, but they rely on referrals, too. Many centers pay about $25,000 for investor referrals, Gibson said.

• Deepen conversations with clients

In closing, the Journal notes that investors who participate in the EB-5 program should be prepared to have their funds tied up for several years. According to Siskand, there may also be significant "uncertainty about the end of the process."

CNBC's Take on the EB-5 Visa Program: "If you want to come to America, money talks."

CNBC profiled the EB-5 visa program this month, acknowledging both the regional center platform as well as those investors who utilize the EB-5 program as individuals.

One immigrant investor interviewed for the special was Grant Fraser, a Canadian entrepreneur and founder of Utah-based Navigator, which CNBC describes as an "award-winning" computer software company.

"I probably would have started the business, but without the ability to get the green card, I probably would have moved back to Canada," says Fraser, whose company employs 48 Americans.

The CNBC piece also included commentary from immigration attorney Martin Lawler, who describes the the EB-5 program as "not well known." As Lawler also points out, EB-5 "requires a lot of capital […] The capital has to be at risk."

Click to watch the video on EB5info.com.

Hope not Lost for EB-5 Investors in South Dakota Agriculture Project

The South Dakota Banking Commission may have just saved several EB-5 investors from losing their opportunity to obtain U.S. residency. According to American News, a small group of investors will be able to make a short-term $30 million construction loan to Northern Beef Packers, a South Dakota company, without obtaining a state lending license.

An affidavit filed for Wai Yee Christine Ma, a Hong Kong resident who directs a Cayman Islands-based company that recently formed a special purpose entity – Epoch Star Limited – for the sole purpose of making the loan, states that going through a state licensing process would effectively end the ability of Epoch Star Limited to make the $30 million loan to Northern Beef Packers, which the latter urgently needs. During a hearing with the South Dakota Banking Commission, the loan was described as the "last major piece" needed to revive a stalled beef plant project,

which happens to be a primary piece of South Dakota's certified program for producing high-quality beef products.

Additional financing for the program has already come in the form of investments made by wealthy foreign nationals participating in the U.S. EB-5 visa program. Were the State of South Dakota not to allow an additional avenue for financing, the project may very well become a financial failure, compromising the ability of investors to receive their green cards.

The project, which began in 2005, involves the use of an empty building that currently "has many liens and other claims against it," according to the press. Capital raised by the original investors, among them EB-5 immigrant investors, is still insufficient to make the new beef packing plant operational. The $30 million obtained from Epoch, however, should be enough to convert the building in question into a beef packing facility and close any gaps in financing.

At the hearing, Steve Sanford, the attorney representing Epoch, reportedly stated, "I think we need to be grateful we live in a state where we can get this kind of thing done with dispatch." EB-5 investors are likely to feel the same way.

ACFI's HK Motors Proposal Receives USCIS Approval

America's Center for Foreign Investment Regional Center may now use EB-5 funds to finance a hybrid car manufacturing facility in Alabama.

In a letter to the regional center dated June 1, USCIS states the following: "Based on its review and analysis of your proposal, USCIS hereby designates the Hybrid Kinetic [HK] Motors Project A as an approved Capital Investment Project for the America's Center for Foreign Investment (ACFI) Regional Center."

photo courtesy of HK Motors

With the USCIS seal of approval, ACFI is free to move forward seeking immigrant investor dollars via the EB-5 visa program. Its doing so, however, has not already been without some skepticism from the press.

As a columnist for the Montgomery Advertiser points out, the project must receive at least $1 billion in financing before the State of Alabama is willing to cut the regional center a check. Since initial funding for the HK Motors project will largely come from the EB-5 program, the regional center will need to find an extraordinarily large number of investors if it is to receive any additional funding.

According to regional center operator Boyd Campbell, ACFI understands that the "scope of the HK Motors project is huge […] But we are moving forward because time doesn’t stand still and HK Motors wants to build a fleet of next-generation motor vehicles using next-generation ‘green’ technologies that are here today."

HK Motors is a Pasadena, California-based startup. It has yet to manufacture any cars, but plans to produce up to 3 million hybrid cars per year in the United States. On display at a press conference earlier this year was an Italian-designed concept car, the likes of which HK would like to produce at the Alabama facility.

Michigan State Capital Receives EB-5 Regional Center Designation

USCIS has approved the city of Lansing, Michigan as an EB-5 regional center. According to a press release from the Lansing Economic Development Corporation (LEDC), Lansing Mayor Virg Bernero claims the "coveted designation" will allow the city to "attract and leverage foreign investment that will help grow the city's economy and create new jobs."

With nearly 100 EB-5 regional centers now operating in the U.S., the city joins a growing list of organizations created to attract investment dollars from wealthy foreign nationals interested in obtaining a U.S. green card. According to LEDC, the city's EB-5 regional center will tentatively operate under the moniker "International Business Investment Zone" (IBIZ) as it seeks to finance projects in the sectors for which it has received approval – information technology, bioscience, advanced manufacturing, and higher education.

IBIZ will also work with the Lansing Regional Chamber of Commerce (LRCC), the Lansing Regional International Trade Center, and the Lansing

Economic Area Partnership (LEAP) to facilitate the arrival of EB-5 funds from abroad. Those involved with the regional center's operation have made the following statements in reference to Lansing's approval as an EB-5 regional center:

"This is another home run for our regional business community," said Tim Daman, President and CEO of the LRCC. "Mayor Bernero and the Chamber share a vision of transforming the Lansing region into an economic powerhouse with global reach. The EB-5 program is a perfect companion to our successful efforts to designate Capital Region International Airport as a U.S. Customs Port of Entry and Foreign Trade Zone."

LEAP President and CEO Denyse Ferguson said the city's EB-5 status will make the Lansing region an even more compelling location to start a new business. "When you add together all of the tremendous assets that already make our region a great place to live and work, the EB-5 Regional Center sends a strong signal to the rest of the world that Lansing, Michigan is open for business," Ferguson said.

Whether the presence of a third regional center in Michigan – the EB-5 Michigan Regional Center and International Michigan Investments Regional Center have already received USCIS approval – will help spur the state's struggling economy is yet to be seen. Interest in the EB-5 program has increased significantly this year, and competition on the regional center playing field continues to increase.

Victorville EB-5 Projects Among "Most Successful" in United States Says Principal

Last month, the Victorville Regional Center in Southern California secured ten Chinese investors for its project at a local airport.

Inland Development Group, the company with which the city of Victorville has partnered for the purpose of raising funds through the EB-5 immigrant investor program has obtained a total of 21 investors in its project thus far, all of whom are from China. Each investor put forward $500,000 for the Southern California Logistics Airport project in Victorville, raising a total of $10.1 million.

In a statement to the press, Inland Energy president William Buck Johns said the program in Victorville is "one of the most successful [EB-5] programs in the country." 18 more

investors are already in the process of wiring an additional $9 million into the city's escrow account.

Victorville's EB-5 funding will first go toward construction of a wastewater treatment facility integral to the operation of a nearby Dr. Pepper/Snapple bottling plant and Plastipak plastics facility. This is the cornerstone of larger efforts to fund development near the airport. The city's goal is to raise $25 million through the EB-5 program by November, and each investor is putting it closer toward achieving that goal.

On June 15, Johns will travel to Asia on another of several trips he has been making to secure additional EB-5 investor capital for the city of Victorville. In addition to China, Johns will pitch the project to prospective investors in other countries, including South Korea.

Idaho Governor Travels to China to Promote EB-5 Investment

The state of Idaho is making an effort to secure investment dollars via the EB-5 visa program, and many Chinese investors have already committed.

Earlier this month, Governor Butch Otter traveled across China pitching the Idaho State Regional Center's cornerstone project--an existing gold mine in the Boise Basin near Idaho City. The regional center and Westlink, its Chinese partner, have already secured 120 investors who will be pumping a total of $60 million into the project in exchange for U.S. green cards.

The visit was not limited to Idaho's effort to obtain EB-5 investments, but also served as a platform for the governor to push for the increased presence of Idaho businesses in the Asian nation. Otter managed to meet with Yi Xiao Jhun, the Chinese Minister of Commerce, on behalf of Melaleuca, an Idaho company that sells health and wellness products. With Otter's blessing upon the company, Yi agreed to consider licenses that would expand the Melaleuca's Chinese operations.

According to Steve Wood of Oxyfresh, an Idaho company that sells dental, pet, and healthcare products, "Every company we met wanted to do something with us." Oxyfresh

and several other Idaho companies were represented by Otter on his most recent China visit.

List of South Florida EB-5 Projects Continues to Grow

The municipality of Jupiter, Florida may see an influx of money from the EB-5 program. The Palm Beach Post is reporting how, with domestic sources of financing growing more scarce in the down economy, some South Florida businesses are looking to foreign investors to raise capital.

A $127 million Jupiter development known as Harbourside Place (pictured) is among the new ventures seeking investment from abroad, and it will use EB-5 as an incentive for receiving those funds. According to the paper:

The ambitious project would include retail, offices, boat docking and a hotel, with a rooftop bar and pool. Harbourside is slated to rise at the northwest corner of Indiantown Road and U.S. 1. Construction is expected to begin by the end of the year.

Normally, a project of this nature would obtain partial financing from banks. But with banks continuing to fail at a record pace, and remaining ones forced to set aside capital for souring loans, Harbourside's developer has had to be creative. So the developer is asking the U.S. Department of Homeland Security to approve the creation of an EB-5 center in Jupiter.

Nick Mastroianni, who would become an operator at the regional center if it receives USCIS approval, expects the project to create around 2,000 jobs.

In addition to construction of Harbourside, Mastroianni hopes investment in the new regional center will spill over into the biotech manufacturing vertical. Two biotech companies already operate nearby, and Mastroianni believes more than 5,000 jobs could be created over the next 7 years once the ambitious development comes to fruition.

The Palm Beach Development and Finance Center, the Palm Beach Post notes, is another EB-5 regional center already operating in South Florida. It seeks to raise capital for projects as diverse as solar technology, security systems for the military and government entities,

Artist's Rendering of Harbourside Place

and home goods. While there is a lot of interest in the regional center, attorney Al Zucaro acknowledges that it has not yet secured any investors.

EB-5 projects are most attractive, says Zucaro, when they are both real estate-based and endorsed by local governments.

July

• Victorville Regional Center Receives "Notice of Intent to Terminate" From USCIS• Immigration Attorney Critiques "Creative" Job Counting Methodologies• Chinese Media Outlet Profiles the EB-5 Program• EB5info.com Launches Russian Language Site• EB5info.com Editor Note – Jose Latour's "Immigration Insider" Blog

USCIS Threatens to Revoke Victorville's EB-5 Regional Center Status

According to the Victorville Daily Press in Victorville, California, the Victorville Regional Center, approved last year by USCIS, has just received notice of the federal government's "intent to terminate" its EB-5 regional center status.

Aside from being bad news for anyone involved in Victorville's projects, the fact that USCIS has taken such action is unusual if not totally unprecedented in the history of

the EB-5 visa program. It appears that problems at Victorville have to do with allegations

Excerpt from USCIS "Notice of Intent to Terminate"

the center targeted investors by marketing projects not considered viable EB-5 investments by USCIS.

There was a total of four projects, all of which are in question to some degree. USCIS sent a letter to Victorville's attorney stating that at least three of the projects probably were not viable, but that the regional center went on to promote the projects anyway. The first project involved construction of a power plant, but the city defaulted on the equipment needed to build it.

Another was a railroad project that was supposed to connect the Southern California Logistics Airport (SCLA) to the Burlington Northern Santa Fe (BNSF) rail line. It appears the city spent $30 million on site work to prepare for the railroad connection despite the fact that BNSF had already made it known that it did not intend to connect its line to SCLA.

Then there were proposed infrastructure improvements at SCLA, a project that never had a budget.

The only project that Victorville claims to have marketed to EB-5 investors, however, is a wastewater treatment facility that is currently under construction and will accommodate the needs of a nearby Dr. Pepper-Snapple bottling plant. That project, in fact, is the only one currently displayed on Victorville Regional Center's website.

But USCIS says it never received a business plan for the wastewater project and that the financing plan for the facility seems to have changed significantly over the course of the past year.

In a statement to the Victorville Daily Press, Victorville Economic Development Director Keith Metzler maintained that all of the projects are still "active," but merely delayed.

Although there is still much to learn about Victorville's troubles, it may be a couple of months before the final word comes from USCIS. The city just sent several hundred pages

Excerpt from USCIS "Notice of Intent to Terminate"

of documentation to the federal government in an attempt to make its case, and it is awaiting a response.

Information about the regional center's troubles began leaking when Inland Energy, the company that received a contract from the city to raise money for regional center projects, fell short of the $25 million it pledged to raise by May of this year. So far, Victorville has only received $3 million of that amount.

Victorville Regional Center Responds to USCIS "Notice of Intent to Terminate"

On behalf of Victorville Regional Center, attorney David Hirson sent this letter to Michael Gibson of USAdvisors.org:

Dear Michael,

The following are some of my comments on the press articles released by the two local publications in Victorville over the past two weeks in connection with the Notice of Intent to Terminate (NIT) issued by the USCIS to the Victorville Regional Center (VRC).

From my personal perspective I am not sure what triggered the Notice of Intent to Terminate (NIT). One would have hoped that one government agency would have made a courtesy call to the other and the issue would most likely have ended there. The biggest

‘offense’ in this whole saga was that the Victorville Regional Center reflected four projects in its web site marketing materials.

Of the four only one, the Victorville Wastewater Treatment Facility (VWTF) was actually marketed to potential investors. The City of Victorville (City) and the Southern California Logistics Airport Authority (SCLAA) have been extremely conservative and set high standards to be met in handling their Regional Center and in dealing with the investors. I have personally attended many meetings and had discussions about the program with City Council members, City officials and members of the board of SCLAA.

Construction Site, Victorville EB-5 Project

The other three projects were not immediately ready for receiving investment money. The other projects are not proceeding at this time and are put on hold to allow for an improvement in the economy. They are not ‘defunct’ but simply delayed. Immediately upon receipt of the NIT all the web site was amended to reflect this, thereby removing the main tangible cause for complaint by the USCIS.

The other issues were also puzzling. USCIS had approved an I-526 for an investor. In that package as with all subsequent filings, business plans and econometric reports were filed. The NIT challenges this while stating “…. Although a review of the regional center proposal and three Form 1-526 petitions appears to indicate that this project is a viable commercial venture, …..”. Subsequent to the NIT the Adjustment of status for the first approved I-526 investor was also approved for the investor and his family.

The RFE for another I-526 investor cases did not deal at all with the business plan issue or the alleged missing econometrics report. Only issues relating to source of funds and a date of birth clarification were raised. Based on my review of the response to the NIT filed by the City, I am confident that this unwarranted “cloud” will be removed very shortly.

Please do not hesitate to contact me with any questions or concerns that you may have.

Thank you. David David Hirson, Partner, Fragomen, Del Rey, Bernsen & Loewy, LLP. Fragomen Consular Practice (FCP) 18401 Von Karman Avenue, 2nd Floor Irvine CA 92612-1596 +1.949.660.3504 (Direct) +1.949.261-0209 (Main) +1.949.279.2156 (Mobile) +1.949.261.2821 (Fax) dhirson@fragomen.com http://www.fragomen.com

Waffling Like a Roadside Diner: The CSC Addresses Creative Job Counting Methodologiesby Brandon Meyer, International Immigration Services

When I attended the EB-5 Stakeholders Meeting at the California Service Center (“CSC”) in March 2010, a regional center principal asked a question something along the lines of:

In the venture capital (“VC”) world, out of ten projects, VC firms expect nine to fail and maybe one will be the next Google. Since this is accepted business practice, can I count jobs using this same approach? Meaning, if four of my regional center projects fail (which, of course they won’t) and project five creates enough excess jobs to satisfy the job creation requirements for the investors in projects one-four, will this work? Likewise, can an investor’s money be divided among the five projects or must it all go to one project?

The answer provided at the March 2010 meeting was an unequivocal “no” to both questions. I thought this was a reasonable answer. Thinking this to be reasonable and settled EB-5 law, I had a hard time understanding why the regional center principal who asked this question was so incredulous about the response. Now I understand why.

Apparently, “creative” job counting methodologies are creeping back into regional center’s designation applications. In some instances, regional centers believe that their well-meaning and well-intended, but questionable, job counting approaches were actually approved by USCIS, when in fact their attorney failed to clearly explain this newly creative approach, which also happened to be missing from the business plan and other materials that were submitted to USCIS. The regional center, reasonably believing that USCIS has blessed their reinvention of the wheel, proceeds to circulate marketing materials to whoever is interested in seeing them. In approximately two to three years, the regional center hopes to deploy their creative job counting approach when their investors reach the I-829 stage. Unfortunately, having good intentions and engaging in best practices are sometimes mutually exclusive.

Having seen this pattern on a couple of occasions when representing individual investors in their I-526 regional center petitions and having been met with various levels of denial and resistance when I raised this issue with the regional center, I decided that I would seek a reiteration of the definitive answer provided in March 2010. The July 28, 2010 CSC Liaison Meeting was my chance, but this is where things get interesting…and even less clear.

During the Q&A session of the July 28, 2010 CSC meeting, I asked the following questions:

Let’s assume that I’m a prospective regional center investor. I want to invest in a regional center with projects 1-5. Must my $500,000 be invested in one of these projects, such as Project 1, or can my money be equally divided among Projects 1-5? Consequently, at the I-829 stage, let’s say my funds went to Project 1, which fails to create jobs. If Project 2 creates excess jobs, can I utilize jobs created by Project 2 to lift my conditions?”

Brandon Meyer

I expected to receive three quick “no’s” to these questions and that this would be the end of the matter. Instead, I started getting a meandering, waffling response of “well, it depends on whether the different projects are separate or related, subsidiaries, the particulars of the project, yada, yada, yada. This waffling continued for a couple more minutes before it was abruptly cut off under the guise that I was intentionally asking tricky questions that were case-specific and otherwise trying to trick the CSC into making policy in the field. Thus, it was all my fault and I should feel bad for committing some type of sin! Nothing could be further from the truth. I was merely seeking reiteration of what had been said in the past. Nevertheless, CSC did reveal that these questions were being considered at USCIS headquarters for definitive guidance, the timetable for which was unclear.

Therefore, maybe some type of a more creative approach will be blessed as compliant at some undefined point in the future under certain circumstances that have yet to be determined. So what does one do in the meantime until this guidance is released, remembering that USCIS spent eight years mulling over regulations to deal with the 800 or so stalled EB-5 cases impacted by the 2002 amendments? After all, life must go on while bureaucrats mull over the fate of the world. Here are the lessons I believe should be drawn from these experiences:

Bottom line to regional centers:

If your project is solid, there is no need to reinvent the wheel and come up with a highly creative approach to job counting. The project will create the requisite jobs. Creativity is good for the art gallery, but it’s just inviting problems in the future in the regional center context.

Bottom line to attorneys representing regional centers:

Creativity is good for the art gallery, but it really isn’t helping your regional center client in the future. Perhaps you think you’re doing your regional center client a favor by blessing the creative approach, but if the history of the EB-5 program tells us anything, it’s that a “by-the-book” conservative approach wins the race. Don’t be afraid that advocating a conservative approach will result in the prospective regional center taking their business elsewhere. Telling a client what they want to hear may win the business, but it’s not good practice.

Furthermore, creativity and envelope pushing is just exposing regional center investors and their attorneys to a potential future of pain and disappointment. The I-829 denial that was used as an example for the June 2010 EB-5 Stakeholders Meeting makes this point crystal clear.

Bottom line to attorneys representing individual investors in regional centers:

When reviewing a regional center’s business plan, partnership agreement, escrow agreement, marketing materials, offering memorandum, etc; if something looks wrong, it probably is. Do not be afraid to raise your concerns with the regional center. While everybody wants to be on good terms with regional centers, you represent the individual investor. The promise of endless case referrals from a regional center (which are frequently made, but rarely fulfilled) should not deter the attorney from representing the best interests of his or her client.

If the regional center’s explanation is unsatisfactory, you may wish to have a serious discussion with your client (within SEC guidelines, of course) about whether he or she wants to proceed with an investment in that regional center. If the regional center fails or something else happens that the investor finds unacceptable, you will get sued along with the regional center if you failed to raise your concerns with the regional center or the client. It’s just not worth the risk.

Conclusion:

While USCIS seems to waffle on whether a creative approach might be acceptable and may waffle on the circumstances under which a creative approach might also be acceptable, what is the point in finding out the hard way that a creative approach is not compliant with the EB-5 program?

Again, I refer the reader to the I-829 denial featured in the June 2010 EB-5 Stakeholders Meeting. Conservatism may have a bad name on Air America (which went bankrupt and was quickly forgotten), but sometimes it may be a better approach to EB-5 practice. I hope that this essay does not come off as too sanctimonious or as the random missives of the naïve and unseasoned. However, nobody benefits from a return to the bad old days of EB-5 practice that characterized the period from 1998 to 2006. Pushing the envelope too far will get us back there faster than any of us can imagine.

International Immigration Services Attorneys with Principals at the California Global Alliance Regional Center

China Daily Interviews Idaho Regional Center Operator, EB-5 Service Provider Brian Su

In a new profile of the EB-5 immigrant investor program, China Daily's English-language website notes both the increasing popularity of the program as well as the growing competition among regional centers resulting from that popularity.

According to the article, China recently outstripped South Korea in EB-5 participation with nearly 2,000 foreign investors utilizing in the program last year compared to 900 from South Korea. This reality, along with the ever-increasing number of regional centers vying for EB-5 investors, has led to an unprecedented level of regional center marketing activity in China.

For details about recent changes in the program, China Daily speaks with Brian Dickens of the Idaho Department of Commerce:

The Idaho state government regards China as one of its major potential markets for the program and has hired Chinese market specialists to help sell the state as an investment destination.

Dickens made his third trip to China, bringing along Idaho governor C.L. “Butch” Otter to promote the regional centers.

Idaho launched its first regional center in December last year and the second in January. It has not had any success story yet out of the program. But the centers are still new and hopes are still high.

“It will happen soon,” said Dickens.

China Daily also points out how emigrating to the United States is a "popular move" among China's wealthy citizens, although moving to countries like Canada or Australia is often a less tedious process. Despite the difficulties, it appears there is still an allure particular to the United States that motivates Chinese people of means to bear any hindrances inherent to the immigration process.

For clarification on Chinese interest in emigrating to the United States, China Daily publishes commentary from EB-5 service provider Brian Su:

“The US is still a huge attraction to Chinese people and is always the first pick for the most capable investors,” said Su. “And the EB-5 program can be a fast track to a US green card.”

In major Chinese cities, such as Beijing, Shanghai and Hangzhou, wealthy Chinese are often invited to glamorous EB-5 promotions events, where high-level state officials greet them. […]

“It is a risky investment,” [Su] said. “The number of regional centers is

growing too fast and they can barely control the quality of the projects.”

Sima Muroff, an operator at the Idaho State Regional Center who was also contacted by China Daily, acknowledges that one of the primary concerns of the EB-5 investor is not whether he or she will receive a return on any investment, but whether the project is sound enough to create the 10 jobs necessary for the investor to qualify for a green card. Even so, Muroff claims his regional center is the first in the country to offer "an insurance program designed to repay investors their original investment amount in case the projects do not generate enough profit to cover the original capital costs."

Whether such an incentive pays of for Muroff is yet to be seen. Additional comments from Dickens indicate that the majority of Chinese individuals interested in EB-5 are "not sophisticated investors." They are, instead, "entrepreneurs who start private companies or those who made their fortune from China’s real estate bubble."

Investors like these prefer to invest in "familiar industries," according to China Daily, like "real estate and retail trade."

EB-5 Investor CLE Conference: Friday, August 27, 2010, Seaport Hotel, Boston, MA

The American Immigration Lawyers Association (AILA) has provided the following invitation:

Though greatly underutilized, the EB-5 immigrant visa may be the answer for clients who lack other options as a result of our broken immigration system. This comprehensive one-day program provides exceptional training in EB-5 investor law for practitioners at every level.

Brian Su

The morning sessions are split into two tracks. Track I, designed for the new EB-5 practitioner, will provide an overview of the law, recommend a protocol for determining whether EB-5 is an appropriate client strategy, and will delve into the details of preparing and filing an EB-5 case.

If you are a seasoned EB-5 veteran looking for in-depth analyses of sophisticated legal issues, you will begin your day on Track II, where you will consider country-specific issues presented by a panel of experts, and hear about the many challenges immigration lawyers face as U.S. businesses attempt to use the EB-5 category as a tool to raise capital. The two tracks merge for a series of joint sessions in the late morning and afternoon. Special attention will be given to the effect of recently-issued USCIS

memoranda on EB-5 adjudications and practice.

Registration Information:AILA Member: $475AILA Member's Paralegal: $475Nonprofit AILA Member: $325AILA Law Student Member: $275Government Rate: $475

Nonmember Attorney $675Nonprofit Nonmember: $475Nonmember Law Student: $375

CLE Credit:

This AILA conference has been filed for MCLE and specialized credit in appropriate jurisdictions. Participants must designate the state(s) for notification on the registration form and sign the official record of attendance for the state(s) on site. Number of credit hours awarded for each state will be available at the conference. Eligible participants can receive up to 8.4 CLE credit hours.

EB5info.com Now Available in Russian

EB5info.com now has a Russian counterpart with a ".ru" URL. To be exact, EB5visa.ru is the address, and it's still a "young" site according to webmaster Igor Kasyanchuk, who is responsible for its creation and maintenance.

When everything is set up, says Kasyanchuk, the site will be visible in Yandex, the popular Russian-language search engine, and should include complete translations of everything published on the English site.

Of course, the purpose of a Russian-language site with information about the USCIS EB-5 visa program is to begin making news, events, and contact information for EB-5 practitioners more globally available. According to Kasyanchuk, the creation of EB5visa.ru may, in the future, serve as a template for creating versions of the site in other languages.

Get EB-5 Updates From an "Insider"

Many an EB-5 attorney maintains a web presence, and in that regard Jose Latour is no different. Unlike some reading material focused on immigration law, however, Latour's "Immigration Insider" blog offers a perspective on investment immigration that is fresh and colloquial.

While we at EB5Info.com want to thank Jose Latour for providing such frequent and well-informed commentary, we'll also go ahead and post a "disclaimer" that the views and opinions presented by "Immigration Insider" belong to its author and are not necessarily our own. That said, merely pointing out that some regional centers handling EB-5 investment visa projects offer more potential for the investor than others, a matter often discussed on his blog, is far

from a radical suggestion. That some regional centers are more transparent than others is also well-documented.

A typical update on "Immigration Insider" may include coverage of investment immigration news, EB-5 regional center observations, or general commentary on the politics of immigration in the United States. So thanks again, Jose, for keeping the updates in our inboxes and for rarely holding back an opinion. Regular updates from immigration attorneys and others in the EB-5 community are always welcome as they help keep us informed about what's happening in the EB-5 visa marketplace.

Jose Latour

August

• How Might a USCIS/Department of Commerce Partnership Affect the EB-5 Program?• Idaho Governor Promotes Regional Center Projects Abroad• EB-5 Project Helps Transform Washington D.C. Neighborhood• Why China Doesn't Like Seeing its Wealthiest Citizens Leave the Country• Suburban "Sportsplex" in Illinois Receives Help From Foreign Investment

USCIS Proposes Partnership With Department of Commerce to Manage the EB-5 Immigrant Investor Programby Michael Gibson, USAdvisors.org

Thanks to the alert eyes of Jeff Carr of EPR/EB-5 Economics who brought to our attention a newly released memo from USCIS titled “Alternative to Comprehensive Immigration Reform.” The memo, which was posted on ABC News, has several recommendations for the agency should comprehensive immigration reform not get passed by Congress this year.

Of interest to the EB-5 visa community are recommendations on how USCIS and the Department of Commerce (DOC) could work together to improve the outreach of the EB-5 immigrant investor visa program to prospective EB-5 foreign national investors. The memo is fascinating as the subject of a USCIS/DOC partnership to promote the EB-5 immigrant investor visa program has been the subject of a number of stakeholder discussions. This is

the first time, however, that an actual plan has been put in writing and proposed to a large audience.

Seeing that the memo addresses a potentially enormous legislative and national problem should comprehensive immigration reform not occur this year, the fact that the EB-5 immigrant investor visa program even gets mentioned is big news for EB-5 investors, practitioners, and stakeholders.

On Page 5, Section B: To Foster Economic Growth:

Partner with Department of Commerce (DOC) to administer the EB-5 Immigrant Investor Visa Program

The paragraph mentions how the EB-5 immigrant investor visa program requires foreign nationals who invest in the United States to create at least 10 jobs to obtain LPR status. Then it states:

Due to a number of factors the EB-5 program has been underutilized and, as a result, job creation under this program has been limited. USCIS views the EB-5 visa program as an important tool in assisting the U.S. economy as our country continues to recover from the recent recession.

Currently, an opportunity exists for USCIS and the DOC to work together in promoting the EB-5 Visa Immigrant Investor Pilot Program (Pilot Program). The goals of the Pilot Program and the goals of certain DOC components, such as Invest in America, seem to provide a natural starting point for agency collaboration. OPS proposes setting up a working group with the DCO to determine how DOC might assist USCIS in making the EB-5 program more accessible to foreign investors through administrative efficiencies and promotion.

The memo goes on to describe how such a working group can operate, and it lists the implementation method, resources/consideration & target date. For instance, under Resources/Considerations it specifies that "DHS and USCIS leadership agree that the partnership with DOC would be beneficial to USCIS as well as the EB-5 stakeholder community.”

As for implementation, the memo emphasizes that rules would need to be made to “codify joint administration of the EB-5 Visa Program once parameters are agreed upon between the two agencies.”

As for the target date, the memo mentions that such date is to be determined, also stating in parentheses, "We can begin cooperating with Invest in America immediately. Allow 3-9 months so that the low hanging fruit can be harvested first."

Michael Gibson

Although this proposal is controversial within the EB-5 visa stakeholder community, it appears as though a partnership between USCIS to manage the visa portion of the program and DOC to manage the commercial operations, compliance, and promotion may be beneficial to increasing awareness among potential EB-5 immigrant investors and providing oversight of regional center operations.

EB-5 Visa Program a Gold Mine in Idaho, Literally

The State of Idaho is currently engaged in a full-fledged effort to create jobs via the USCIS EB-5 Visa Program.

Its cornerstone project? Reopening a gold mine that was abandoned during the Great Depression.

This month, an Idaho Statesman article provided a lengthy profile of efforts by Idaho Governor Butch Otter and the Idaho Regional Center, which was established by real estate investors in a project called Blackhawk on the River, to secure Chinese investment in an old mine that sits on private property near Placerville, Idaho. Along with Taiwanese businessman Raymond Ku, who has experience in the Asia-U.S. immigration process, Otter already has at least 20 investors on board, which means the Idaho Regional Center has raised around $10 million. The State hopes that EB-5 will ultimately bring $60 million to Idaho every year.

Incidentally, Otter's interest in EB-5 is due, in large part, to "Project 60," an effort "aimed at increasing Idaho's gross domestic product to $60 billion," according to the Statesman. The first time Idaho tried to start a regional center, it created the tech-focused InvestIdaho, an undertaking that, in the words of Brian Dickens of the Idaho Department of Commerce, "[isn't] going anywhere" due to the fact that the regional center is not located in a Targeted Unemployment Area and cannot qualify for $500,000 EB-5 investments.

Idaho became interested in the gold mine project when Sima Muroff, Principal Manager for Blackhawk on the River, learned of the potential that may lie in land recently acquired by Don and Candy Miller, a wealthy Idaho couple. This from the Statesman:

In 2005, the Boise North End couple had bought a ghost town called Quartzburg, about three miles outside of Placerville, with the idea of turning it into a recreation or second-home development.

The Gold Hill Mine there was first opened in 1864 but has been abandoned since 1938.

At the sale closing, the previous owner told Don Miller he had some papers with information about the property. Miller was presented with a garage full of documents - the entire record of all mining and exploration at Quartzburg since 1863. The documents offered a road map for geologists looking to reopen the mine.

"It would be worth $30 million to $40 million if you had to go out and collect it today," Don Miller said.

He worked with the Colorado School of Mines to analyze the documents and the information. The most remarkable find was that the piles of tailings sitting on the property since the mine closed in 1938 weren't tailing at all.

Instead of a pile of waste, Miller was sitting on 180,000 tons of rich ore that had been mined and left unprocessed. It is valued at more than $50 million, he said. Best of all, the ore has few contaminants and has not leached heavy metals into the ground.

A mutual friend at the Cascade Bank in McCall referred the Millers to Muroff. He and his partners bought into the Gold Hill Mine and it became the centerpiece of the Idaho Regional Center's investment.

If Muroff and Governor Otter can reopen and exploit this mine with the help of foreign investment capital, it will be a success story for the EB-5 visa program, which, as the Statesman also notes, "has produced mixed results."

With nearly 100 EB-5 regional centers operating and so few projects actually getting off the ground relative to that number, a successful gold mine in Idaho would certainly show that the EB-5 program can work as it was intended and be a win-win situation for Americans and foreign national investors.

According to one EB-5 immigrant investor questioned recently by China Daily, "Gold is always precious. Times change, but it keeps its value."

Transformation of D.C. Neighborhood Receives Help From EB-5

The Washington Post is reporting that a "new Giant grocery store and mixed-use development in [Washington D.C.]'s Shaw neighborhood" has received $5 million from foreign investors. More specifically, it's the EB-5 visa program that has made the project possible.

According to Angel Brunner, who is working with the Anacostia Development Corporation to raise money from foreign national immigrant investors, residents of Washington D.C. "have half the number of grocery stores that our suburban neighbors have." She goes on to tell the Post that any development initiative in D.C. that involves a new grocery store is a "good opportunity."

Brunner, who is a former official in the city of D.C.'s National Capitalization Revitalization Corporation, is heading up the project with her partner, immigration attorney David Morris of the Visa Law Group.

The new D.C. development is receiving a $100 million loan from the Department of Housing and Urban Development, and Brunner says that the amount of funding to be raised through the U.S. EB-5 immigrant investor program may ultimately match that figure.

Dubbed "CityMarket," the development is a 1-million square-foot plan that will take up a two-block area between 7th and 9th streets and O and P streets. The first phase will include 395 apartments, the Giant grocery store, and a hotel with nearly 200 rooms.

All told, the project is valued at $260 million, according to the Post.

The EB-5 Investment Visa and "Naked Officials" – Regional Center Marketing in China

When asked how the Chinese government feels about the USCIS EB-5 investment visa program, EB-5 service provider Brian Su's response is simple and to the point: They don't like it.

Although it's true that the Chinese State Council made a statement last month proclaiming the government's respect for a "citizen's choice for immigration," Su notes, China's recent request that all high-level officials and Communist Party leaders register their family

Angel Brunner

members living overseas belies the fact that it's not completely comfortable with such emigration – in particular with foreign government incentives like the EB-5 visa program.

"There's a new term in Chinese," Su explains. A "naked official" refers to a high-ranking party member living in mainland China whose wife, children, and personal assets all reside abroad. This official is said to be "naked" because he has nothing of great value left in the country other than himself. Last month's call for these officials to register their family members underscores the government's concern that wealth is leaving the country.

The rise of high-ranking individuals with this status is just one factor that has the government worried, however. In July, the Guangdong Provincial Exit and Entry Administration issued a warning about the EB-5 investment visa program stating that the projects are risky and advised migration brokers and potential investors to exercise caution when considering the large volume of EB-5 visa regional center projects and investment immigration initiatives now being marketed.

This statement comes in response to growing EB-5 regional center marketing efforts in the country, particularly

in the Pearl River Delta Region where EB-5 visa project promotion is widespread and frequent. According to Su, too many regional center projects are being marketed, and the government is "sending a message" that "[regional centers] have to disclose all necessary information to their clients."

As for whether such a warning will discourage potential investors from investigating the EB-5 visa program, Su isn't worried.

"People are still interested," he says. "I don't think there will be any significant impact on the interest." But for regional centers "following the rules," he adds, "it's bad news."

Bad news or not, more EB-5 visas were issued to Chinese immigrant investors than to those from any other country in 2009, and it's unlikely the government's fear of wealth leaving the country will put a large damper on regional center marketing efforts or Chinese interest in investment immigration any time soon.

EB-5 Program Breathes New Life Into Plan for Suburban Sports Complex

Developers in McHenry County, Illinois first looked to the traditional bond market when they tried to fund construction of a new sports complex. But when the market fell in 2008, they were forced to investigate alternative avenues for financing. What they found was the EB-5 Visa Program.

Now the Lakewood Village Board in Lakewood, Illinois has given the new "Sportsplex" its seal of approval, and the Chicagoland Foreign Investment Group (CFIG) is in charge of raising foreign investment capital. According to the Northwest Herald in McHenry County, CFIG Regional Center Operator and Chicago attorney Taher Kameli says "about 45 people" have already showed interest in putting up money for the Sportsplex.

Kameli says that CFIG recently raised $8.5 million for the Aurora Memory Care Center, an assisted living establishment in suburban Chicago. "Based on my experience, I don't see any issues to raising these funds," Kameli tells the Herald.

The Sportsplex will be built in two phases and will cover 165 acres in McHenry County. The Herald adds the following:

Given recent immigration debates, project developers and planners are quick to defend the EB-5 program.

"Not many of the investors will live in McHenry County. They may live somewhere else in the U.S.," Kameli said. "But their money creates jobs in McHenry County. That’s what residents should care about."

Managing partner for the complex [Lou] Tenore said it was a way for potential new citizens to speed their progress.

"It doesn’t guarantee citizenship," Tenore said. "They just don’t have to sit in line."

The Sportsplex initiative has also received permission to sell $18 million in recovery zone bonds received through the federal stimulus package. That funding, along with EB-5, will bring in money for the development without having to pay back debt to any banks.

Taher Kameli

September

• Regional Centers in Colorado, Montana, Washington, and Utah Make News• Victorville Regional Center Receives Second Termination Notice from USCIS• New EB-5 Visa Projects in Florida Focused on Mixed-Use Development• New York Deal May Become the Most Expensive EB-5 Project on Record

Colorado EB-5 Visa Projects "Sensible Development Deals," Says Principal

Could Colorado be the next success story for the EB-5 visa program?

Chet Schwartz thinks so. As Managing Director of the newly-approved Colorado Regional Center, Schwartz believes his outfit's development-centered investment immigration projects will appeal to foreign investors for one simple reason – they stand on their own merits.

"They're good deals," says Schwartz. "They're sensible development deals."

Ski Slopes in Vail, Colorado

But with the number of USCIS-approved regional centers edging forward each month, the competition for immigrant investors' attention may be stepping up. This summer, USCIS approved the nation's 100th regional center, a noteworthy leap from the roughly 80 or so approved centers listed on its website at the beginning of 2010.

As Schwartz points out, however, only a handful of those regional centers appear to be active, which may leave a larger opening for more serious newcomers eager to have the EB-5 visa program fund new initiatives.

An attractive destination for EB-5 visa investors?

When it comes to whether the state of Colorado holds any particular appeal to the immigrant investor, Schwartz is confident.

"We think there is some appeal to the international community," he says, noting that "Colorado and the world-class ski areas" are not exactly unknown locales in other parts of the world. Compared to some parts of the country, he adds, "Colorado has a little more pizzaz."

And the projects themselves? One is an existing initiative – a mixed-use development in Vail – which is "already pretty far along," according to Schwartz. Were the Colorado Regional Center to find the EB-5 visa investors it's looking for, those dollars would help spur the venture forward.

Another project is planned for Aurora, a Denver suburb where a new hospital complex is currently under construction. New developments near the complex would be the recipients of immigrant investor funding, and Schwartz says the regional center is currently negotiating with developers.

As for selling investors on its proposed initiatives, the regional center is aware that alleged instances of "over-marketing" EB-5 visa projects to foreign investors has the Chinese government issuing warnings about the program. But Schwartz says he isn't worried.

"I'm not concerned about it," he says. "We're trying to find [sales] contacts who are honest and straightforward."

Development projects already seen through by Waveland Ventures LLC, Colorado Regional Center's parent company, are listed on the center's website.

Downtown Vail, Colorado

Scouting out a TEA

Given the current high rate of unemployment, it may come as a surprise that finding a Targeted Employment Area (TEA) in Colorado is easier said than done.

"The good news for Colorado is that the unemployment rate isn't as high as the national average," says Schwartz. That's why the regional center received approval to take on EB-5 visa projects all throughout the state – in particular those rural areas with populations low enough to qualify as TEA's.

"We're focusing a lot of attention on areas in the mountains," he says. "There is still some zeal for development in the mountains."

If the Colorado Regional Center is successful in its attempts to use investment immigration as a catalyst for new development initiatives in the Centennial State, it will join the relatively small percentage of regional centers in the United States actively managing EB-5 visa projects.

Victorville Receives Second Termination Notice from USCIS

The San Bernardino County Sun reported this month that USCIS has sent a second "Notice of Intent to Terminate" to the Victorville Regional Center.

Earlier this year, Victorville became the first USCIS-approved regional center to receive such a notice, and the second letter, dated August 10, states that most of the jobs the regional center was generating do not have any direct link to the $30 million wastewater treatment plant that is the centerpiece of its EB-5 investment portfolio.

Regional Center CEO Keith Metzler has now mailed a letter and more than 50 pages of supporting documents to USCIS and remains confident that the regional center is well within the bounds of what is required by the EB-5 program.

Southern California Logistics Airport

According to the Sun, Metzler says in his letter that "Had it not been for the commitment by the city of Victorville and its redevelopment agency to build the (wastewater treatment plant), the jobs generated by (Dr. Pepper Snapple) and Plastipak would not currently exist."

Metzler is referring to new jobs created at nearby industrial facilities that depend on the wastewater treatment plant.

Dated September 1, Metzler's letter also states that the new notice "jeopardizes the ability of the Southern California Logistics Airport Industrial Wastewater Treatment Facility to sustain jobs created as it prohibits the ability of the SCLA (wastewater treatment plant) to refinance its construction debt."

USCIS does not appear so sympathetic, however. In its letter to Victorville, it asserts that "neither the Dr. Pepper Snapple plant nor the Plastipak plant appear to have a relationship with the wastewater treatment plant other than being parties to agreements to be consumers of the services of the wastewater treatment plant […] It would appear that your regional center asserts that any newly created public or private entity that provides a commodity or service to commercial consumers, such as a wastewater treatment plant, power plant, solid waste disposal center, etc., would in effect be able to claim credit for the jobs created by the commercial consumers of its services."

Regional center operators, however, seem confident in their assertions that the regional center has nothing to fear.

William Buck Johns of Inland Energy, the developer awarded the contract to seek out immigrant investors, tells the Sun they're "expecting the green light from USCIS any day now." The article goes on:

Johns said other companies planning a move to the SCLA and create jobs will be utilizing the wastewater treatment as well. In addition, the Victorville Federal Prison will also be a user of the plant.

Johns said the regional center is still actively marketing the EB-5 program to investors, but said it is dire that the matter be cleared up with the federal government.

“It’s just a clear misunderstanding by the USCIS. We’re well within the bounds of the program, and this is one of the more successful EB-5 programs in the country.”

With so many new EB-5 regional centers opening their doors, seeing one in danger of having to shut them is certainly an anomaly. If USCIS and Victorville cannot come to an agreement, 28 committed investors are likely to lose their chance for a green card.

EB-5 in Montana? The Governor Says Yes.

Montana may be hopping on the EB-5 regional center bandwagon. Its governor, Democrat Brian Schweitzer, made a few comments to a local television station in Missoula indicating his support for the program.

"As we attract new capital to Montana, we create new jobs in Montana, so new capital, new jobs, good for Montana," said Schweitzer.

The governor was meeting with ALPS CEO Robert Minto, who updated him on plans to open a regional center in Big Sky Country. According to the KAJ18 television channel, he "hopes to have the first projects funded by late 2011 or early 2012."

See the network's video at kaj18.com.

American Life, Inc. Shares New Promotional Video

Jo Hwang of American Life, Inc. has published a new video his regional center is using to promote its SODO – Home Plate Center EB-5 visa project in Seattle.

According to American Life’s website, the property at 1501 1st Ave. will undergo development for new retail, office, and parking facilities, an endeavor to be funded by EB-5 visa capital investment. The site is located in Seattle’s SODO district, which sits directly south of downtown.

American Life Inc. began funding development projects in the SODO district in 1996 and became eligible for immigrant investor funding ten years later with the formation of American Life Ventures. The group now oversees 10 USCIS-approved regional centers participating in the EB-5 visa program.

Utah's Mountain States Regional Center Focused on the Hospitality Industry

Approved August 11, Mountain States Regional Center is the first to appear in the state of Utah.

In reference to EB-5 investment in development projects, Regional Center President and CEO Heath Westfall tells the Salt Lake City Tribune, "We're excited to be at the forefront of this." Westfall is a former venture capitalist working with Stephen Studdart, a veteran political advisor who is also collaborating with the Orem, Utah-based regional center as it exploits the EB-5 visa program for immigrant investor capital.

Since 2006, Westfall has worked with Z.H. Lodging, a company that operates Marriott-branded properties, according to the Tribune.

The paper explains:

Mountain States Center’s focus is on the hospitality industry, particularly attracting investment in Marriott-branded properties developed and/or operated by Z H Lodging, a company Westfall has worked with since 2006.

But it also is authorized to pursue foreign investments that could be used in Utah and other parts of the West in fields as varied as horse ranch development, high technology, healthcare services and innovation, entertainment, education and infrastructure.

Without providing details, Westfall said “we have several projects around the state that are in the pipeline. We anticipate having all of the funds put together for our first project in 60 days.” He added that center officials have been in discussions with investors in China, the Middle East, Japan, Russia and several other countries.

If Westfall is trying to get foreign investors to fund Marriott-branded properties, he will join a fairly large group of EB-5 regional centers seeking funds for new hotels and other development initiatives in the hospitality industry.

Jimmy Buffett-Inspired EB-5 Visa Project Profiled by South Florida Newspaper

Will a beach bum-themed resort in Florida attract EB-5 investor capital?

Lon Tabatchnik, a South Florida developer who plans to raise $75 million from 150 investors through the EB-5 visa program, is confident that it will. The completed project would be a Hollywood, FL beach getaway named after the popular Jimmy Buffet tune, "Margaritaville."

According to South Florida's Sun Sentinel, Tabatchnik plans to break ground on the development in 2012.

In its article on the Margaritaville project, the paper notes some common controversies regarding the EB-5 program in general, but balances those with commentary from a Florida immigration attorney:

“The United States gets about 1 million immigrants a year. EB-5 is open to 10,000 a year, who are high net-worth individuals, generally well-educated with no criminal record,” said immigration lawyer Larry Behar of Fort Lauderdale. “Is that the kind of immigration we want? You’re darn right.”

Behar has developed a specialized EB-5 unit with a staff of eight who do legal work for proposed regional centers, help market the approved centers and help foreign investors obtain the visas.

He recently returned from a trip to China with the governor of Idaho to tout mining ventures in Idaho approved as an EB-5 regional center. And he’s now seeking approval for what would be the largest EB-5 regional center nationwide: a $250 million cancer treatment hospital in Brooklyn, N.Y.

Along with the highly-publicized Hollywood Florida retail/residential development being touted by the newly-approved Gold Coast Florida Regional Center, the Margaritaville Resort is likely to be among Florida's larger development-centered EB-5 projects being marketed to foreign investors. Like the Gold Coast Florida initiative, Tabatchnik has suggested that the resort will create thousands of new jobs.

"Some EB-5 investors worry if they’ll meet employment requirements," he tells the paper. "But a hotel creates jobs immediately, and we've found some investors are more comfortable when government is involved."

Miami Herald Takes a Look at Possible Florida EB-5 Project

The Miami Herald ran a story this month about the Great Southern Hotel, which it contends was once "a landmark of Hollywood's [Hollywood, FL] Young Circle." It seems that the hotel has sat idle for some time but is now about to get a "$100,000 face-lift."

Raelin Story, spokeswoman for the city of Hollywood, tells the Herald that "the project is a compromise between the owner and the city to clean up decaying property - at least what the public can see - while it sits empty awaiting redevelopment.

That redevelopment would come in the form of a project funded by EB-5 investment under the auspices of developers Chip

Abele and Mo Abbas of the Gold Coast Florida EB-5 Regional Center.

Abele announced in 2003 that his group would be razing the hotel and building a mixed-use development in its place. In a recent conversation with EB5info.com, however, Abele stated that redevelopment of the property where the Great Southern

Hotel currently sits is still not an active project, EB-5 or otherwise, but is merely in the pipeline.

The Florida Regional Center Issues First Press Release

The Florida Regional Center has received USCIS approval and will begin raising immigrant investor funds for a Palm Beach County initiative. Its first EB-5 visa project is a new town center development in Jupiter, Florida called Harbourside Place (pictured), which the center says will provide a “gathering place” much like a traditional downtown.

The regional center’s EB-5 visa project is located in a TEA and is stated to be worth $144 million, $80 million of which it plans to receive from immigrant investor visa funding. The center’s marketing material states that the project should create 400 more jobs than required.

Nicholas Mastroianni II, President of Allied Capital & Development of South Florida, LLC and new managing principal at the regional center has experience in the real estate and development market, and past projects have included subdivisions, town home developments, commercial facilities, and mixed use sites. USCIS approval of the Florida Regional Center brings the total number of EB-5 regional centers in Florida to 15.

Here is the text of the press release:

Decision Green Lights Overseas Investment Opportunities in Harbourside Place Jupiter, FL Development Project

Florida Regional Center, www.FLRegionalCenter.com, the U. S. government-approved entity that provides investment opportunities in Florida real estate development projects for foreign nationals through the U.S. government EB-5 Visa Program has been given full approval as a designated regional center by the United States Citizenship and Immigration Services (USCIS). The approval gives the green light to the agency’s Harbourside Place development project in Jupiter, Florida.

Nicholas A. Mastroianni II, Manager, Florida Regional Center, said, “Not only is this a major milestone for the Florida Regional Center and Harbourside Place, but it is a life raft for Palm Beach County and the Town of Jupiter; the economic stimulus this will bring to the area is a necessity. We have been promoting this project for months and we can now begin to file I-526 applications for interested foreign investors.”Harbourside Place features an entertainment plaza and outdoor amphitheatre, retail space, restaurants and eateries, office sites, 4-star hotel accommodations and marina. This full-scale development encompasses a thrilling range of opportunities for business, visitors and residents.

About Florida Regional Center and the EB-5 Visa Program

Each year, the U.S. government reserves 3,000 green cards for foreign investors who invest in designated regional centers through the EB-5 Visa Program. These initiatives enjoy full government support as they stimulate the economy, generate at least ten jobs per investment, and promote community development while providing direct access to green cards for foreign investors and their families.

The Florida Regional Center will bring the benefits of the EB-5 Visa Program to the business community of Palm Beach County. Regional center projects must be approved by the U.S. government and the main criteria is that each investor’s contribution will create ten sustainable jobs for U.S. workers in a designated geographical region.

For more information on Harbourside Place and other Florida Regional Center projects, visit www.FLRegionalCenter.com or email us at info@FLRegionalCenter.com.

New York Project May Raise Largest Figure on Record for EB-5

According to the Wall Street Journal, New York developer Bruce Ratner is headed to China next month to see if he can use the EB-5 visa program to raise money for an enormous project in Brooklyn known as "Atlantic Yards." The centerpiece of the project, which is estimated to be worth around $4.9 billion according to the Journal, is a new arena for the New Jersey Nets.

Although Ratner is only seeking about $250 million of that amount through the EB-5 funding element, that figure would still be among the largest amounts ever raised through the immigrant investor green card program – possibly the largest.

It also seems Ratner received some guidance from New York City officials who, impressed by the successful Brooklyn Navy Yard project being handled by the New York City Regional Center, have urged Ratner to use the EB-5 visa program as a source of financing for his own ventures.

It remains to be seen whether Ratner's trip to China or any subsequent efforts to exploit the EB-5 program for his Atlantic Yards project will culminate in the largest figure ever raised by the program for a single initiative. The plans, however, are ambitious. The Journal is also reporting that construction of 16 residential towers – also part of Atlantic Yards – is planned for next year.

The New York City Regional Center does have a hand in the project as "sponsor," the paper states, but the Atlantic Yards project still needs approval from the federal government before it can use any of the $250 million it is able to raise through the program.

October

• USCIS Shuts Down Victorville Regional Center• USAdvisors.org Forges Partnership With Chinese Media Company• Atlantic Yards Project a Hit With Chinese Investors• Chinese Public Security Bureau Issues Warning About EB-5 Investments• Northern California Regional Center Principals Comment on the Dairy Industry, China• Gold Coast Regional Center Operator Speaks With EB5info.com• Former DNC Chairman to Use EB-5 Funding for Mississippi Project

USCIS Orders Victorville Regional Center to Close its Doors

For the first time ever, USCIS has shut down an operational EB-5 regional center.

On October 20, the federal government sent a final letter informing the Victorville Regional Center that it was pulling the plug on the regional center's ability to participate in the EB-5 immigrant investor program. This comes after at least two other letters from USCIS to officials at the regional center detailing concerns over job creation methodology Victorville was using to justify its EB-5 visa projects.

USCIS and the "Termination" Saga

Approved by USCIS on June 19, 2009, Victorville received from

the feds an unprecedented "Notice of Intent to Terminate" in May of this year. Among USCIS' chief concerns were changes made to the business plan for one of Victorville's projects, a wastewater treatment facility that would service a nearby Dr. Pepper-Snapple bottling plant.

Other EB-5 visa projects in Victorville's pipeline also caused skepticism among USCIS officials, most notably the construction of a power plant for which the city of Victorville defaulted on needed equipment costs and a railroad project that never came to fruition.

In August, the regional center received a second termination notice calling into question the jobs it was counting toward totals needed to satisfy the USCIS requirement that 10 jobs be created per green card issued. It seems the regional center attempted to include jobs created at the bottling facility among its totals since the plant was a consumer of the service provided by the wastewater treatment utility – methodology ultimately deemed faulty by USCIS.

According to USCIS' second termination notice:

It would appear that your regional center asserts that any newly created public or private entity that provides a commodity or service to commercial consumers, such as a wastewater treatment plant, power plant, solid waste disposal center, etc., would in effect be able to claim credit for the jobs created by the commercial consumers of its services.

Victorville's Response

In light of continued requests that Victorville demonstrate it was able to raise money for its EB-5 visa projects according to criteria approved by USCIS, city spokeswoman Mariana Gitmore told the Victorville Daily Press Tuesday that the regional center was unable to do so.

Speaking on behalf of the regional center, attorney David Hirson (pictured) sent the following statement to EB5info.com:

Victorville Regional Center I, LP wishes to place on record that it regards the termination of the Victorville Regional Center (VRC) by the USCIS as bad in law and incorrect on the facts. The only issue that the USCIS had in terminating the VRC was the methodology used by the economist for proving the number of jobs to be created.   Notwithstanding the position of the USCIS, the VRC has obtained an additional third party economist report which satisfies more than the minimum number of jobs that are to be created. The VRC is about to file a formal motion to reopen and a positive response, namely the reinstatement of the VRC, is expected very soon thereafter.

While Victorville, California's local paper reports that the regional

center's website, vveb5.com, was still active upon receiving the USCIS notice, it now appears that all marketing for the center's projects has ceased. Access to the website is "Forbidden."

That the 28 investors who have already agreed to invest in Victorville's projects are eagerly awaiting any news of the regional center's appeal goes without saying.

USAdvisors.org Partners with Chinese Media Group

Chinese television is putting the spotlight on the US EB-5 visa program.

A new partnership between USAdvisors.org, which provides due diligence services to EB-5 investors, and China Stock TV, a division of the FuDong Cultural Dissemination Company, LTD that broadcasts news to an audience of over 100 million Chinese investors, will bring information on EB-5 regional center investment initiatives to viewers across China. As the current format through which potential Chinese investors receive information about regional center projects involves individual seminars

sponsored by regional centers, this partnership provides a new way for interested foreign nationals to obtain information.

In an interview with the network, USAdvisors.org Managing Director Michael Gibson explains how most Chinese investors receive information from television as opposed to other print or media sources. This would be the first time the US EB-5 visa program has received major attention from a respected finance-focused media network in China.

Watch Michael Gibson's interview on EB5info.com. An accompanying video explains the FuDong Cultural Dissemination Company's media services and national influence.

Michael Gibson on China Stock TV

US EB-5 Practitioners to be Featured on Chinese Television

As part of its partnership with the China Stock TV news network, USAdvisors.org will film and conduct interviews with attorneys, securities analysts, service providers, EB-5 regional centers, and project managers in many major US cities from November of this year through February 2011.

The focus of the interviews will be to give Chinese investors a source of correct information, best practices, and issues of concern regarding the EB-5 visa immigrant investor program from professional practitioners – in other words, not filtered through the Chinese agent/broker market. We are inviting a select group of knowledgeable professionals to discuss topics related to the process of applying for and investing in EB-5 projects. Their comments will be broadcast to a large audience of Chinese investors.

USAdvisors.org will visit the following cities on these dates:

Miami, November 22-26, 1633 North Bayshore Drive, Miami, Florida 33132, Marriott Biscayne Bay Hotel

New York, November 29-December 3, 85 West Street at Albany Street, New York, New York 10006, Marriott Downtown

Los Angeles, December 9-10, 333 South Figueroa Street, Los Angeles, California 90071, Los Angeles Downtown Marriott

San Francisco, December 13-17, 55 Fourth Street, San Francisco, California 94103, San Francisco Marriott Marquis

Houston, January 10-14, 5150 Westheimer, Houston, Texas 77056, JW Marriott Houston

Atlanta, January 17-21, 3300 Lenox Road, Atlanta, Georgia 30326, JW Marriott Atlanta Buckhead

Chicago, January 24-28, 540 North Michigan Avenue, Chicago, Illinois 60611, Marriott Downtown Magnificent Mile

Washington D.C., January 31-April 4, 1331 Pennsylvania Avenue Northwest Washington D.C., DC 20004, JW Marriott Hotel

For more information or to be a part of the filming, contact Michael Gibson at 239-465-4160 or email michael@usadvisors.org.

Atlantic Yards Project Makes Waves with Chinese Investors

New York City developer Forest City Ratner (FCR) has been very active in China during the month of October.

According to EB-5 service provider Brian Su, FCR's project, which is being handled by the New York City Regional Center (NYCRC), "presents a lot of pressure and challenges to other EB-5 projects that are currently being marketed in China" largely due to the star power of its unlikely promoters.

The project involves financing for infrastructure at Atlantic Yards, FCR's gargantuan construction project in the heart of Brooklyn. Atlantic Yards, in addition to residential towers and retail facilities, has already received funding for a new New Jersey Nets basketball stadium. On October 13, the Nets played the Houston Rockets in Beijing as part of a large marketing event targeting Chinese immigrant investors.

According to The National, an Abu Dhabi news blog which covered one of NYCRC's China seminars:

Some were dressed in suits, some in casual and even worn-out clothing, but all of the Chinese in the banqueting hall had one thing in common – money, or access to it.

About 200 potential investors had streamed into the west Beijing hotel to hear about an opportunity in New York that seems well-calibrated to a changing world: Green Cards in return for interest-free credit.

The roadshow was showcasing the biggest-ever use of the US government’s EB-5 scheme, which offers Green Cards to foreigners who invest US$500,000 (Dh1.8 million) in America for two years, thereby creating at least 10 new jobs.

Officials from the New York City Regional Centre (NYCRC) are touring China to drum up 498 investors with the aim of contributing $249m to the city’s biggest property project outside Ground Zero.

Some have criticized the New York project, suggesting that its use of EB-5 is merely an excuse to exploit low-interest financing for a portion of the project the developer could have afforded anyway. Others emphasize that the Nets stadium itself has already received full funding.

Whatever the case, the presence of American basketball stars in Beijing definitely helps FCR's project stand out. A seminar held in Beijing's Minzu Hotel brought over 200 prospective investors, a large number of whom signed up "on the spot" to invest in the project. The roadshow, which includes 9 dates, will continue through November 5.

Image courtesy of Wailian.

Chinese Public Security Bureau Points out EB-5 Project Risks

As many EB-5 practitioners are already aware, the Chinese government has issued warnings to potential EB-5 investors about risks associated with the program. The following document is an English translation from the Chinese-language news site, SINA net:

Recently, at a meeting of the “Exit and Entry Service Association” held by the Division of Exit and Entry Administration Department of Public Security of Canton Province, the speaker from the division relayed to attendees the instructions of the Ministry of Public Security of the People's Republic of China and pointed out the huge risk of US EB-5 Projects. According to the rule of The Ministry of Public Security, all agencies engaged in EB-5 projects must supply the legal documents signed with a foreign partner (those documents need to be notarized by foreign bodies). Agents should tell the investors the risks involved with EB-5 investment. Some immigration professionals state clearly that people should be aware of the two risks, “investing

fund” and “conditional green card,” even though the EB-5 program is strongly accepted by immigration agencies and applicants.

Current Status: EB-5 applicants increased dramatically in Mainland China

The EB-5 Program was first introduced to China at the end of 2005. With increasing trade between China and the US, more and more Chinese entrepreneurs need the green card to go to the US for business purposes, expanding their business in the US, as well as sending their kids to study in US. The EB-5 Investment Immigration Program has been expanded since 2007. LiJuan Zhou, CEO of the overseas branch of HONGHAI, said that there are now way more Chinese EB-5 applicants than Korean applicants according to the latest statistic report from OCT – 2008 to Sept, 2009 – by USCIS. 1795 Chinese from mainland China applied for EB-5 besides 142 Chinese from Taiwan. Sheng Liu, General Manager of the US Project Division of Fei Yang Group, said that USCIS issued more than 1800 green cards to investors in 2009, almost double those issued in 2008. Chinese applicants obtained one fifth of the total green cards, a little bit less than Korean applicants, but the number of Chinese investors who applied for the green card is increasing the most.

The EB-5 marketing promotion in China also expanded rapidly. For example, in 2005, there was only one EB-5 project being promoted in Guang Zhou. At the end of 2009, however, there were more than 20 EB-5 projects introduced with different scales – some projects are big and some are small, such as a restaurant project.

Analysis: EB-5 “Flexible Immigration Requirement”

Senior Immigration Consultant of GuoFeng LLC, ShaoHeng Lin, indicates the reason why the EB-5 program has gained popularity among the immigration agencies and investors in the last two years is the EB-5 “ Flexible Immigration Requirement.”

The EB-5 “Flexible Immigration Requirement” gives you the flexibility to do what you want in the USA: No degree requirement, any age, and no entrepreneur experience requirement. Any person who reaches 21 years old and shows a source of $500,000 legally (business income, stock gain, house sale, house loan, gifts, etc.) can apply.

In Canton, A lot of people can easily meet the EB-5 requirement. For instance, a kid who wants to study in US, as long as he is 21 years old and has a $500,000 investment fund from his parents can apply for it and come back to China with a green card after graduation.

The whole family can get the green card if one of the households applies for EB-5.

For many Chinese individuals and families, it's an easy and fast way to get a green card. It’s also very attractive to the immigration agency. They can turn around cash in a much shorter time since the EB-5 program process only takes about 3-8 months.

Risks: “Investment Fund” and “Green Card” are two major risks

According to the EB-5 program, foreign immigration applicants must invest in a commercial enterprise that will benefit the US economy and create 10 full-time jobs in order to get a “conditional green card” for a two year period. Prior to the two-year anniversary of the granting, the EB-5 applicants must submit supporting documents stating they have invested or are still in the process of investing to remove the “condition” and become permanent US residents. 2010 is the first “mature year” for EB-5 investors' “5 year terms." Whether the EB-5 investors can meet these two requirements is a very sensitive topic.

However, recently the Ministry of Public Security has warned potential immigration applicants that EB-5 projects promoted by some of the immigration agencies belong to private equity activity and have huge risks.

YouWen Zhen, General Manager of GuoHeLi investment consulting LLC in Shen Zheng, pointed out two huge risks:

First, Investing Fund Risk: The investors need to fund the project first before getting the visa, and EB-5 projects are not financially guaranteed by the US government; the investing fund cannot be withdrawn within 5 years. The investment must be truly at risk. From the EB-5 procedure, the applicants must fund $500,000, a huge amount once they start to apply through the agency. While Canada's investor immigration funding is backed up by the Canadian government, USCIS asks all regional centers to clearly state in their contract with EB-5 investors that EB-5 investments must be “at risk” and there can be no mention of redemption rights or guarantees. However, some of the immigration agencies and American personnel ignore this rule and promote EB-5 illegally, as private equity.

Second, Green Card Risk: The EB-5 applicants cannot control and manage the investing process themselves. If the investment fails and does not create 10 jobs in two years, their green card will be canceled. At the beginning, the applicants and family only get a “conditional green card." There is a long way to go to get the permanent green card; in case the investment fails, they not only lose the green card, but also the investment fund. In China, there are EB-5 investors who got “conditional green cards," but as for today, none of them have successfully changed to I-829. We encourage people to do their own due diligence, especially studying the mutual fund companies who actually run the EB-5 projects before they choose to invest in the project.

Yahoo! Finance Profiles Current State of EB-5 Program

In a column this month, Yahoo! Finance Economics Editor Daniel Gross provided a brief profile of the EB-5 visa program, noting that if the program were "fully utilized, it would bring at least $7 billion annually and create or preserve 100,000 jobs per year."

These comments are reiterated in a video interview with Gross that accompanies the column.

Even though nobody can "purchase an American passport," he writes, the prospect of more foreign national immigrant investors utilizing the program should be a welcome boon to areas where EB-5 visa investments are likely to make a large impact--rural areas and high-unemployment TEA's to be specific.

As millionaires are "being minted by the millions" abroad, Gross notes, U.S. companies are themselves investing elsewhere. He sees EB-5 as a way for the United States to make up for those investment dollars that are traveling to places far away and not stirring the cauldron of economic activity at home. Making brief mention of developer Bruce Ratner and the New York City Regional Center's "controversial" Atlantic Yards project recently profiled by the Wall Street Journal, Gross's piece also summarizes how the program may be used as a source of funding for existing initiatives for which American investors are not likely to be found.

If Gross's observation that EB-5 is still producing "lackluster numbers" that are nowhere close to the 10,000 visas USCIS is able to issue each year really can be, as he contends, "chalked up to a failure of marketing," then perhaps this year's explosive growth in the number of regional centers will begin bringing more immigrant investor dollars to U.S. shores.

Last year, the number of EB-5 visa approvals was just shy of 1,000. Considering the level of marketing and competition in many countries – China, in particular – Gross may be content to learn there's a good chance that number will increase.

The EB-5 Visa, Canada, and High Quality Protein – Reflections on the Northern California Regional Center's Trip to Chinaby Stephen Weststeyn, Northern California Regional Center

We at Northern California Regional Center traveled to China last month to seek out investment for our current EB-5 project, Weststeyn Dairy Farms. As there are many investors coming to the U.S. from China, we decided to travel there and spend some time informing people of our current project. We traveled to many cities in China, including Beijing and Shanghai, and it was quite the experience.  

The timing of our trip could not have been better, noting the changes in the Canadian immigration program that have made the U.S. EB-5 program much more desirable to foreign immigrant investors. Traditionally, the Canadian immigration program has outperformed the United States EB-5 program quite substantially, and there have been far more Chinese emigrants going to Canada through its immigration program than have gone to the United States. However, Canada has changed its immigration-by-investment program, and Chinese emigrants see the United States as a much better deal. This recent change in the Canadian

immigration program provided our regional center with the most optimal timing for its China trip.

Also when we were in China, we learned that California Governor Arnold Schwarzenegger was going to be in Shanghai talking about the United States EB-5 program. The star power of Arnold made for very responsive enthusiasm about California EB-5 projects.

The Chinese economy is growing very rapidly, and you could feel that there was a wealth of opportunity to be had in China. Every city we visited confirmed this feeling. One thing we noted when visiting is that there is a need for high-quality protein food sources. The traditional Chinese meal is very low in protein. The Chinese demand for high-quality protein sources will be a huge driver of growth in the global marketplace. With over 1.5 billion people to feed, China will need to source food products from all over the world in order to feed its populace. In the dairy industry, the Chinese have been one of the largest driving forces of global demand. Rabobank, a large international agriculture

Beijing, China

bank, has recently cited milk demand growth to quickly outpace supply over the next decade, leaving tremendous opportunity for the dairy industry in the United States. There is a great potential in the United States, especially California, to help China quench its thirst for dairy products. California has been the United States' leader in dairy with higher milk production than any other state, and it has some of the most efficient dairy operations in the world. Northern California Regional Center is proud to offer investors the opportunity to invest in a project that will essentially be helping feed the world

Our trip to China was not only an opportunity to inform potential investors of our project thanks to the changing Canadian immigration program and the California governor's visit, but it also provided a chance to see how successful our EB-5 project could be in the coming decade with China’s growing demand for high-quality food sources.

Gold Coast Uses Track Record, Global Presence to Find EB-5 Investors

If you ask Chip Abele, using the EB-5 visa program to fund new development projects is little more than a "different twist" on what he has been doing for years.

"We're putting $30 million of our own funds into the deal," says the Chairman of Gold Coast Florida Regional Center. "Every one of our dollars" is headed in the same direction as any immigrant investor capital.

The deal Abele is talking about is the regional center's first EB-5 visa project (pictured), a mixed-use retail and residential development in Hollywood, Florida called Hollywood Circle. According to the regional center's first press release, the space should include an upscale hotel, nearly 400 apartments, a restaurant, and a Publix supermarket.

Perhaps a bit more lavish than your average grocery store, Abele says private elevators will give residents direct access to the Publix.

Artist's Rendering of Hollywood Circle

Track Record and Global Position

Gold Coast received USCIS approval in May of this year and was quick to publicize its first project. While some claims, in particular the notion that Hollywood Circle will bring 18,000 jobs to South Florida in the next five years, have led to a raised eyebrow or two among some EB-5 visa practitioners, Abele is confident that Hollywood Circle is a solid investor green card opportunity.

"We were very bullish on the EB-5 program, and we're very bullish on structuring an investment opportunity that we'll present to clients and investors. We have offices in South Africa that have been there 20 years," he says, also adding that for players in the "South Florida real estate market, doing business in Latin America is what you do."

And an already-established global presence – one that now includes Hong Kong and Venezuela in addition to South Africa – is one way Abele hopes Gold Coast will distinguish itself from the growing multitude of EB-5 regional centers, though he admits he and his partners have almost no experience in European or Asian markets.

"We're taking in more than a million dollars a year from state and local government," he says. "We've got state-subsidized funding. We've got Publix."

After initially forming the Broward County Regional Center, the group quickly decided to expand its request beyond the single-county area.

Projects to Come?

As for any additional EB-5 visa projects in Gold Coast's future, Abele is willing to discuss the Great Southern Hotel redevelopment recently profiled by the Miami Herald, though he says it's merely in the center's pipeline.

"It is not a project for the regional center currently," he says. "I have not submitted it or run the economic model on it."

For now, it seems Hollywood Circle is Gold Coast's primary EB-5 item. Whether that project ultimately stands out against the veritable flood of mixed-use residential-retail facilities being marketed to EB-5 visa investors, however, remains to be seen.

Big Political Name Uses EB-5 Funds for Electric Car Project

Former Democratic National Committee Chairman Terry McAuliffe made news this month when he and former President Bill Clinton made a public appearance in Times Square to

show off McAuliffe's latest project: an electric car that will be built in the United States.

Using funds from the EB-5 visa program as well as other undisclosed donors, McAuliffe plans to build vehicles that drive at speeds up to 45 miles per hour but are unable to drive on highways. The "MyCar," which is already available in the UK, needs to be recharged every 70 miles and is considered by McAuliffe to be a "neighborhood" vehicle.

The cars will be assembled by Greentech Automotive, which McAuliffe founded last year. In addition to a plant Greentech plans to build in Tunica, Mississippi, McAuliffe is looking to purchase land in both Tennessee and Virginia.

According to Bloomberg, which reported on the McAuliffe venture:

He expects the MyCar to go on sale mid-2011, after it’s modified to meet U.S. regulations and upsized for American consumers. The first 100,000 [cars] will sell for $10,000, with federal and state tax credits knocking the price down to around $8,500, he says.

“No one can afford not to buy it,” says McAuliffe.

Three more hybrid cars are planned for as early as 2013: a sports car, a mid-sized vehicle and a subcompact. He won’t disclose his backers, saying only that they are “strategic investors active in the green technology area.

Bloomberg goes on to describe the amount of money McAuliffe is raising through EB-5 as "infinitesimal" compared to the millions he will need to get this project off the ground.

Some commentators believe McAuliffe's motivation may be, in part, political. After an unsuccessful run for the Virginia gubernatorial nomination in 2009, some view McAullife's latest venture as an attempt to show he can bring jobs to Virginia – a move that would give him considerable bragging rights among contenders in any future political contest.

Terry McAuliffe

EB-5 Reform? Startup Act in the News Again

An article in news blog Business Daily takes a look not only at the EB-5 visa immigrant investor program in its current form, but also the new Start-Up Visa Act introduced earlier this year by Senators Kerry (D-MA) and Lugar (R-IN). As many EB-5 practitioners are already aware, were the bill to ultimately pass and be signed into law, it would re-allocate a number of the 10,000 EB-5 visas available for issue each year to a new category – the EB-6 visa.

The main purpose of the bill is reform of the EB-5 program, and it includes measures also called for by the Employment Benefit Act, a House bill introduced last December by Representative Jared Polis (D-CO).

According to Business Daily, the Start-Up Visa Act "amends current immigration law, lowering the investment threshold to $250,000 [from $500,000] in equity funding from qualified super-angel investors or venture capital firms."

These "qualified super-angel investors" would have to meet certain requirements set forth by the Securities and Exchange Commission in order to participate, a rule favored by attorney Angelo Paparelli, who Business Daily quotes in the article.

Any qualified venture capital firm must be based in the United States and have been in business for at least two years. Partners must be U.S. citizens and the firm must have made investments in the recent past.

"Immigrant entrepreneurs" who have employed at least five employees after two years or have acquired capital assets worth $1 million will receive green cards.

While the news blog seems to make no bones about the potential of a bill that includes EB-5 reform and provisions for an EB-6 visa – the article headline is "Change in start-up visa law sure way to lure investment" – it also states that such a bill is unlikely to come before Congress again until sometime next year.

It's worth noting that passage of this law would almost certainly cross into territory occupied by the politics of immigration. As Business Daily notes, "[Lawmakers] who tout this bill emphasize the job-creation aspect rather than the political hot potato of immigration reform."

Angelo Paparelli

November

• EB-5 Project to Create Jobs in Chicago Suburb• New Colorado Regional Center Pioneers Historic Restoration, Biofuel Initiatives• Washington D.C. EB-5 Project Breaks Ground• USAdvisors.org Adds Dates and Locations to its Chinese TV Filming Schedule• Chinese IPO Market Growing at an Extraordinary Rate in 2010• Canadian Immigration Program Implements Tougher Criteria• Attorney Essay: In Defense of the EB-5 Program

McHenry County, Illinois EB-5 Regional Center to Create Jobs for the Communityby Michael Gibson, USAdvisors.org

Taher Kameli is the principal broker for a Lakewood, Illinois EB-5 project involving construction of a new sports complex. He is an Iranian-born Chicago attorney who has partnered with a Naperville dentist and a small group of other board members to launch the two regional centers now operating in Illinois.

Local supporters of the Lakewood sports complex laud the idea of new immigrants creating a recreational paradise with arcades, shops, and restaurants that developers say would create 400 new jobs.

Taher Kameli

“In this economy, the opportunity to bring a (multimillion-dollar) commercial project into the village of Lakewood without investing high taxpayer dollars? That’s pretty unique,” said the Village President of Lakewood, Erin Smith, in an interview with WGN News.

“The investor wants to come to the United States for a better future for their children and grandchildren,” said Kameli, who secures most of his foreign investors through an office in Dubai. “The local governments are happy because you’re bringing all that sales tax and property tax revenue to them. The U.S. government is happy because you’re creating jobs.”

Kameli has been a strong advocate for federal scrutiny for EB-5 visa regional centers. While much of the local opposition has deemed the project not viable, Kameli is certain that his region needs these jobs to stimulate the economy. He has plans for other developments in the region for which he has been soliciting tens of millions of dollars during numerous trips to Dubai, United Arab Emirates.

One plan is to build a string of “memory care” centers for Alzheimer's patients in Aurora, Elgin and Wood Dale, Illinois. Other ideas include a manufacturing plant in Rockford, a water park in Wisconsin, and coffee shops and restaurants throughout the region, he said.

He has eased investors’ concerns by structuring the EB-5 visa financing so the money would serve as a loan, with the farmland and whatever is built on it serving as collateral.

Colorado Intercontinental Regional Center, LLC to Use EB-5 Investments for Historic Restoration, Biofuelsby Adam Green, USAdvisors.org

Regional center operators are bringing the EB-5 visa program to a town once home to one of America's highly-canonized folk heroes.

Leadville, Colorado, in addition to having the highest altitude of any incorporated U.S. city, was also where famed gambler and gunslinger Doc Holliday took up residence after his participation in the O.K. Corral. Now this former mining boomtown may be getting a makeover, and immigrant investor dollars may help foot the bill.

According to Jeff Edwards of the Colorado Intercontinental Regional Center (“CIRC”), which is handling the Leadville project, "our vision is to take historic buildings in downtown Leadville dating back to the late 1800s" and spend EB-5 money "renovating them and bringing them back to life for real estate and technology-driven businesses." If all goes according to plan, those businesses will use the historic commercial property as office space.

Though the mining industry left Leadville long ago, remnants of its heyday still line

city streets. An EB-5-fueled revitalization of downtown Leadville may provide an economic boost – as well as aesthetic improvements – to a town not far from many tourism-driven skiing destinations such as Vail, Beaver Creek, Cooper Mountain, Breckenridge, and others.

A Change of Plans

In 2008, Edwards learned his colleague Steve Smith had purchased about 700 acres of land in Leadville and had plans to build a community of 1,000 homes. The goal was to create affordable housing for people who worked in the nearby resort communities, but could not afford to live there.

In order to "create potential for EB-5," Edwards explains, they decided to capitalize on a problem in the area, the Beetle Kill Plague, which has wrought havoc upon local forestland and made it necessary to clear many nearby sites. The investor visa program would fund a "labor-intensive" tree harvesting and construction apparatus using downed timber for home construction. The name of the "program" would be Timber to Homes, and it would create the new "Village of AltaColorado."

But that project, which was the basis for CIRC's December 2009 regional center designation, was developed prior to the collapse in the housing market. In 2010, Leadville and the surrounding area’s economy "will not support a growing population," Edwards acknowledges. Even so, he and Smith still believe commercial real estate is viable, and both are "in the process" of setting up the downtown Leadville renovation project. With an increase in local employment driven by new businesses occupying the renovated office space coupled with the nearby anticipated reopening of one of the largest molybdenum mines in North America, Edwards and Smith are confident that the need for local housing will increase, bringing the Village of AltaColorado closer to realization.

Downtown Leadville, Colorado

"We've had discussions with multiple marketing entities with a presence in China," Edwards says, "and they are anxious to market our projects in China.”

If all goes according to plan, Chinese and other international investors will soon be hearing about the small town of Leadville, its historic properties, and the commercial restoration initiative.

Timber to Fuel?

Just as the regional center has re-defined its real estate efforts with shifts in economic realities, Edwards and Smith have had to alter the focus of their Timber to Homes project. As construction of new homes may no longer be a workable use of the EB-5 visa program, the regional center sees an opening in the market for ethanol, which the federal government has mandated must compose a larger percentage of the nation's fuel supply each year.

Instead of using downed timber for home construction, Edwards explains, it will be used to produce cellulosic biofuel. Trees cut down in the mountains of Colorado will be transported by truck or rail to cellulosic ethanol plants to be constructed either in Colorado or elsewhere in the US. One such plant, partially funded by the US Department of Energy and provided with loan guarantees by the Department of Agriculture, is located in Soperton, Georgia, and CIRC is already in discussion with that facility on potential feedstock collaboration. At these plants, cellulosic biomass will be converted into ethanol, which can then be added to the nation's fuel supply and help satisfy federal ethanol requirements.

According to Edwards, "There isn't a single US plant operating today that's producing [cellulosic biofuel] on a commercial scale," and the nation has not even approached the number of gallons the government has mandated be part of the fuel supply by 2011. He feels the current lack of supply versus federal government requirements will ensure ongoing demand for biofuels.

Of course, everything from the logging itself to the biofuel processing element will be part of what Edwards terms a "labor intensive" EB-5 investment project that should satisfy USCIS job creation requirements.

"We're hoping to have a project in front of investors by first quarter 2011," he says.

EB-5 Capital Issues Press Release on Marriott Hotel Project

From Angel Brunner of EB-5 Capital comes the following press release:

Ground Breaking for Marriott Marquis Convention Center Hotel, Long-time DC Dreams Become Reality, Significant Economic Impact

November 23, 2010, Washington, D.C. – Earlier this month the Marriott Marquis Hotel broke ground after years of planning. EB-5 Capital is pleased to partner with the City and Marriott in this exciting project which includes two additional Marriott hotels – a Courtyard and a Residence Inn as part of Phase II.

With projected completion of all three in Spring 2014, the $520 million, 14-story Marriott Marquis will complement the city’s Convention Center that opened in 2003. The Marquis will bring over 1200 direct jobs to the City. It will be the largest hotel in Washington with 1,175-rooms, 100,000 s.f. of function space and 53,000 s.f. of meeting space and will enable the city to compete and capture revenue previously lost to Prince George County’s 2,000-room Gaylord hotel. The Courtyard and the Residence Inn locations will bring an additional 500 rooms to the Marriott Convention Center complex.

Hometown hotel giant, Marriott, will manage the four-star hotel, which upon completion, will be the third Marriott Marquis property in the world and the first Marquis development in over 25 years.

“Not only is EB-5 Capital bringing much needed capital to projects throughout the District, it is putting its resources to work in projects that will deliver real job opportunities for our residents,” said Neil O. Albert, City Administrator of the District of Columbia. “EB5 Capital’s investment in this project is an incredible endorsement of strength of our hospitality industry.”

The Marriott complex gives the city the unparalleled ability to strengthen its convention and tourism industry, which is just second to the federal government,” adds Ms. Brunner, Managing Director for EB-5 Capital. “This project, along with the DC regional center’s Roadside Development’s project, the City Market at O Street, is another success story of EB-5 creating partnerships with international clients who are making a substantial contribution to the United States economy.”

Marriott Groundbreaking Ceremony

For more information about the Marriott Marquis, Capstone Development, City Market at O, or EB-5 investment opportunities, please contact Angel Brunner: (angel@eb5capital.com) or visit www.eb5capital.com. for additional information.

UPDATE: New Cities and Dates added to USAdvisors.org China TV Filming Schedule

USAdvisors.org has added dates and locations to its EB-5 filming schedule. In addition to the locations listed in last month's newsletter, regional centers, attorneys, and other EB-5 practitioners can participate in the filming sessions listed below.

For those unaware of the USAdvisors.org China TV initiative, see the new China section on EB5info.com. As part of its partnership with the China Stock TV network, USAdvisors.org will film interviews with EB-5 practitioners to be broadcast on one of China's largest business and financial news networks. China Stock TV is part of the

FuDong Cultural Dissemination Company, and boasts an audience of over 100 million.

Here are the dates:

Orlando, December 13-17, 8701 World Center Drive, Marriott World Orlando

Houston, January 18-19, 5150 Westheimer, Houston, Texas 77056, JW Marriott Houston

Austin, January 21, 4537 South IH-3555

Phoenix, January 25-27, 1101 North 44th Street

Los Angeles, January 31-February 4, 333 South Figueroa Street, Downtown Marriott

San Francisco, February 7-11, 55 Fourth Street, San Francisco Marriott Marquis

Las Vegas, February 15-18, 325 Convention Center Drive

Provo, February 22, 770 E University Pkwy

Denver, March 1-4, 1701 California Street

Kansas City, MO, March 7-8, Location TBD

St. Louis, March 10-11, 10700 Pear Tree Drive

Louisville, March 14-15, 280 West Jefferson

Nashville, March 17-18, 555 Church Street

Atlanta, March 21-25, 3300 Lenox Road, JW Marriott Buckhead

Washington D.C., March 28-31, 1331 Pennsylvania Avenue Northwest

For more information or to be a part of the filming, contact Michael Gibson at 239-465-4160 or email michael@usadvisors.org.

U.S. Government Answers EB-5 Questions in Chinese Newspaper

USCIS is communicating directly with investors via Chinese media.

According to a recent entry on The Beacon, the official blog of USCIS, an October article in the Chinese-language Epoch Times provides an overview of the EB-5 visa program that addresses specific questions about investor-regional center logistics. Information for the article was submitted directly by USCIS as part of "an ongoing series addressing general immigration questions posed by [Epoch Times] readers."

Most of what USCIS shares is basic. Immigrant investor questions like "What is the most common way to obtain an EB-5 visa?" and "How long does it take for me to immigrate after applying for an EB-5 visa?" crop up in the article.

Although the target audience appears to be Chinese investors who have heard about EB-5 and are still in a very early investigation phase, other questions address possible concerns of more serious would-be investors.

"I want to invest $500,000.00 in an area, but there is no regional center there. How long does it take for a regional center to be established in mid-America?" is one question USCIS answers for the Epoch Times, and its response details establishment of a regional center, approval of a business plan, and the use of said business plan in determining "market conditions, project costs, and activity timelines."

Definitions for Forms I-526, I-829, and the new I-924 are also provided.

EB-5 Practitioners Take Note: Chinese IPO Market Growth

According to an update earlier this year from China Private Equity, a blog that follows Chinese companies on a path toward IPO and private equity investment, "the world's busiest and largest IPO market" from January through June of 2010 was the Shenzhen Stock Exchange. This is a stock exchange that two years ago was nowhere close to one of the largest in the world or, for that matter, in all of Asia. All told, 161 firms were able to raise $22.6 billion in IPO's during the first half of 2010.

That means Shenzhen was home to more IPO activity than the Shanghai Stock Exchange, Nasdaq, and NYSE during the same period. Of particular interest is the fact that all activity on this stock exchange is performed by domestic Chinese companies and domestic Chinese investors. Only

the Chinese have access to Shenzhen's IPO deals.

By comparison, the Shanghai Stock Exchange ranked fourth for the largest IPO market during the same time frame with 11 firms raising $8.2 billion.

It's likely that the sudden surge in IPO's was due to the October 2009 debut of the 创业板, or Chinext, subsidiary board, which helps smaller companies access capital markets.

Chinext makes it possible for Chinese companies without any kind of state ownership to provide public offerings.

As of July 2010, there are 57 companies with IPO's on Chinext, the total market value of which makes up about 5.5% of the Shenzhen Stock Exchange.

The total number of domestic IPO's on the Shanghai Stock Exchange will likely eclipse Shenzhen by the end of 2010, but the shift in growth is still worth mentioning. As China Private Equity author Peter Fuhrman, who is also Chairman and CEO at China First Capital, notes, "the locus of the world’s IPO activity is shifting to China."

EB-5 visa practitioners would be well served to stay aware of domestic capital investment activity in China and consider how the impact of such investment – not to mention the general increase in Chinese domestic wealth – will impact their efforts to secure immigrant investor dollars for projects in the U.S.

Commentators Heap Praise On Startup Visa Act

Two national publications put the spotlight on the Startup Visa Act this month, and both portrayed the bill in a positive light.

According to Forbes.com contributor Marueen Ferrell, "Large and small businesses are lining up behind an immigration policy that would make it easier for entrepreneurs and high-tech professionals to come or stay in the United States."

And to provide an example of said immigration policy, Ferrell sets her sights on the Senate bill sponsored by Senators John Kerry (D-MA) and Richard Lugar (R-IN), which would provide renewable US visas to any foreign national entrepreneur coming to the US with at least $100,000 in venture capital backing from a US investor. To qualify for the Startup Visa, the entrepreneur would also have to possess at least $250,000 in equity investment.

To underscore just how strongly Corporate America supports such a bill, Ferrell quotes Ernst and Young CEO Jim Turley, who is also serving on President Obama's National Export Council: "Whenever there’s a student from anywhere in the world who is walking across the stage from a leading university getting his or her PhD or masters we should staple a visa there to him or her and say you’re welcome to stay."

Writing for Slate magazine, Jill Priluck says the Startup Visa Act "can't come soon enough." Priluck also notes how "British Prime Minister David Cameron just established a new 'entrepreneur visa' for foreign founders with investment commitments from leading investors" in spite of "a pending immigration cap" in the United Kingdom. Such a move

indicates that other Western nations are already capitalizing on the prospect of luring innovation from overseas by putting entrepreneurs on a fast track to citizenship.

Both publications also note how the EB-5 visa, in particular, is currently underutilized due to the greater risk involved in obtaining one. Participants must invest in a U.S. business and place their faith in projects that may or may not create 10 jobs and allow them to obtain permanent residency. In the process of obtaining the visa, the investor takes on a good deal of risk.

While the H1B, E-1, and E-2 visas are options for some skilled workers who want to reside in the United States, Priluck explains, these visas are only temporary. Quoting Stephen Yale-Loehr of Miller Mayer, "We don't have a true startup visa on the green-card side of the immigration equation."

As the current lame duck Congress is unlikely to pick up on the Startup Visa Act or other immigration legislation not passed this year, it will probably be some time before a new entrepreneur visa becomes a reality.

Canada Breathes New Life into its Investment Immigration Program With More Stringent Criteria

A November press release from Citizenship and Immigration Canada (CIC) indicates that the nation will re-open its immigrant investor program, which stopped receiving applications on June 26. According to the release, the program will once again accept applications on December 1, but immigrant investor applicants must meet new criteria if their applications are to be considered by CIC.

In the past, applicants to Canada's program needed to have a personal net worth of $800,000, but that figure is now higher. Prospective immigrant investors must have a net worth of $1.6 million to qualify for the program, and each must make an investment of $800,000 in a Canadian business. Before CIC's most recent changes, the minimum investment threshold was $400,000.

According to the release, "Canada’s old immigrant investor criteria were the lowest when compared to other countries with similar programs. The new criteria now align it more closely with other immigrant-receiving countries."

The closest one comes to an investor visa program similar to Canada's is the US EB-5 visa program, which requires a minimum $500,000 investment in a US business. While the US program has never hit the maximum number of investor green cards it's permitted to issue in a given year, the Canadian program had to take a hiatus last summer when "the volume of applications submitted under the Program had grown exponentially and processing times had increased," according to the government release.

As the new criteria set forth by the Canadian government clearly reduce the number of prospective applicants to its foreign investment program, application volume will likely diminish as well. Whether doing so will actually increase the number of individuals applying for the EB-5 investor green card, however, remains to be seen. The EB-5 visa program attracts investors who may or may not also have an interest in moving to Canada. Sometimes the desire to reside in one place over another supersedes dollar figures, especially for those individuals with the means to participate in either program.

"These changes were necessary," said Jason Kinney, Canada's Minister of Citizenship, Immigration and Multiculturalism. "The requirements had not been increased in more than a decade and we need to keep pace with the changing economy."

Applications from earlier this year that still have not been processed will continue being considered alongside new ones subject to Canada's most recent criteria.

In Defense of the EB-5 Programby Carolyn S. Lee, Attorney at Miller Mayer, LLC

When there is misinformation in the public about the EB-5 program, attorneys in the trenches of this area have a duty to set the record straight. To permit otherwise leaves our clients – investors and regional centers – having to defend themselves against individuals and organizations maligning the EB-5 program for other ends.

I have an individual in mind. The Internet has given this person a wide-reaching forum to vent his ire against a large urban development project. His medium is his blog. As with many projects of this scale, this one involves a partnership of private and public funds. EB-5

capital is a component. In a down economy hostile to immigration, the EB-5 program has

Carolyn S. Lee

become an easy target for this individual, who is dedicated to the downfall of the overall project and who has latched onto the EB-5 part of the project for his latest criticism.

Valid criticism is helpful. Attorneys in the EB-5 bar have offered passionate, well-reasoned critiques of USCIS’ administration of the EB-5 program. The goal has been to inform USCIS of the harmful effects of some of its interpretations, unfounded in the law. So the larger goal of what I’d call “valid criticism” is to improve the EB-5 program by bringing clarity and predictability, consistent with the law and regulations. In contrast, the individual I have in mind criticizes the general EB-5 program as a way to deter a particular project. Not surprisingly, many things he has said about the program are false. These false and ill-informed statements, however, have a real impact. They taint the public’s perception of the EB-5 program, which the federal government reported as bringing an estimated $1 billion into the U.S. economy back in 2005.

They paint USCIS as lax guardians of immigration, when more astute observers have criticized the Service for its undue and arguably unlawful restrictions of the EB-5 program. They undermine investors’ confidence in the program, deterring capital and job creation in rural and high unemployment areas. Finally, they smear the reputations of conscientious regional center operators who work hard do everything right with one hand tied behind their back, partially blindfolded on treacherous terrain.

The regional center unfairly smeared in this instance is the New York City Regional Center, a client my firm has worked with closely for the past three years to obtain initial designation and subsequent amendments.

Here are just some things the blogger has gotten wrong:

1. “Not only does it look like the United States is selling visas, but the terms are easier than in other countries.”

Wrong. For example, the federal Canadian investor program has three basic requirements:

1. Business experience2. Minimum net worth of CN$800,000 (US$560,000)3. Investment of CN$400,000 (US$281,000).

There is no requirement that any jobs be created. The Canadian government holds the money for five years, after which it is returned to the investor without interest.

The low threshold is responsible for the vast oversubscription of the Canadian investor program, resulting in a current three-year backlog.

2. “The EB-5 controversy.”

Wrong again. In a Congress notable for partisan bickering, the EB-5 program is among the few that both Republicans and Democrats endorse.

Senator Patrick Leahy (D-VT), Senator Jeff Sessions (R-AL), Representative Zoe Lofgren (D-CA) and Representative Steve King (R-IA) are all on record as EB-5 supporters. No one in Congress has criticized the EB-5 program.

3. He quotes with disapproval an unnamed person related to the project who purportedly said or wrote the following:

"[T]he costs of using investment funds are relatively lower than the costs of bank loans. […] [W]e are in pursuit of profit maximization.” The blogger adds a condemning gloss: “That may impress potential investors, but sure seems to contradict the spirit—and perhaps the letter—of the EB-5 program.”

Wrong again. The law requires the EB-5 new commercial enterprise to seek a profit. Nonprofits are barred as proper recipients of EB-5 money in the regulatory definition of “commercial enterprise.” So both the spirit and the letter of the EB-5 program embrace the profit-making drive and, in fact, require it.

4. “That’s why the USCIS and the rest of the press should give this ‘project’ serious scrutiny.”

He apparently doesn’t know that USCIS did give this project serious scrutiny. USCIS approved the project in an amendment filed by the regional center in question – a filing called an “exemplar” I-526 petition for pre-approval of a project. Or perhaps the blogger thinks that the Wall Street Journal is not serious enough press? The Journal recently covered the development project in an article dated May 10, 2010, including the EB-5 component.

Everyone involved in the EB-5 program – regional center operators, investors, attorneys, advisors, and USCIS – have much at stake in the proper administration of this program. When there are inaccuracies about the program, or the program as applied to certain projects, it harms everyone doing their best to contribute to a clean system. It’s one thing if we have disagreements about what the program should look like. It’s another thing when someone tries to tear down the program to further another agenda. Let’s at least agree to resist the latter.

December

• Major Media Outlet Publishes Harsh Critique of the EB-5 Visa Program• Deadline to Participate in ILW.com Seminar Rapidly Approaching• New EB-5 Statistics Made Public at USCIS Stakeholder Meeting• EB-5 Stakeholders, Economists Comment on Letter from Director Mayorkas to

Senator Leahy• South Florida EB-5-Funded Marina to Operate on "Fractional Ownership"• Milwaukee EB-5 Construction Project Forced to Compromise with Preservationists

Reuters Investigates Unsavory Side of the EB-5 Visa Program

In a sweeping and highly critical expose of the EB-5 visa program, a December Reuters story asserts that foreign brokers are "overselling" the possibility of permanent residency to prospective immigrant investors.

Not only does the Reuters piece condemn players in the overseas broker market for misleading investors with empty promises of an easy route to U.S. residency, but it casts a suspicious eye on USCIS' ability to competently administrate the EB-5 program.

According to Chris Bentley, USCIS spokesman whom Reuters quotes in the story, "the overwhelming majority" of EB-5 visa hopefuls later receive permanent resident

status, a claim disproven by USCIS' very own data, which suggests that about "half of the immigrant investors who won EB-5 visas during [the program's] 20-year history have failed to obtain permanent residency."

Also documented by Reuters is the regional center explosion of 2009-10, a phenomenon that continues to the present moment with almost 90 more regional center applications currently being processed by USCIS.

Prominent voices from the EB-5 community are featured in the story, among them Stephen Yale-Loehr, an immigration attorney who Reuters declares the "unofficial dean of the EB-5 bar," and attorney Jose Latour, who runs the popular blog "Immigration Insider." Michael Gibson of USAdvisors.org also contributes to the piece.

"As sources of domestic capital have dried up, developers have tried to scramble to find other ways to finance their projects either in whole or in part," Yale-Loehr told Reuters, noting just how attractive foreign investment capital has become to players in a down real estate market.

According to Gibson, many former peddlers of sub-prime mortgages are now promoting regional center projects and "will tell investors almost anything they can to get them to sign the subscription agreement."

Citing the practices of Maslink, a firm that markets the EB-5 program in China, Reuters reveals how firm operator Jason Lee's pitch to prospective investors violates a fundamental rule of EB-5 law by suggesting that investors will get all of their $500,000 investment back if the project – in this case, the re-opening of an Idaho gold mine – were to fail.

By law, EB-5 investments are required to be at risk throughout the lifetime of the project. There is never any guarantee that the investor will receive repayment of his or her principal, much less any return on the investment itself.

Reuters also reveals a number of EB-5 program blunders that have occurred over the years, one of which is the recent case of four Korean investors who "lost their entire investment" in a South Dakota dairy operation "when the price of milk collapsed and the operators of the farm stopped paying the mortgage." As soon as the investors tried to intervene and save the venture, they realized their names

were not on the title, and they were unable to bring their case to state court.

Stephen Yale-Loehr

Michael Gibson

EB-5 practitioners interviewed for the piece still contend that the program, in a very general sense, is sound. Yale-Loehr claims that EB-5 is essentially a win-win-win-win for the U.S. business, the investor, the taxpayer, and the American worker.

Even so, the expose paints a critical picture of what the EB-5 program has brought upon the immigrant investor community that has sought to utilize it:

In all, 13,719 immigrant investors have applied to participate in the EB-5 program since 1990, according to USCIS.

But 4,489 of the applicants were rejected outright for any number of reasons, including an inability to prove to the government's satisfaction that the funds they proposed to invest came from legal sources. Another 848 are still pending.

Of the 8,382 immigrant investors who were allowed into the program and granted conditional visas over the years, 5,748 have theoretically been in the country long enough to apply for unconditional green cards - the permanent resident status that represents the finish line.

So how many have actually reached that milestone during the past 20 years? Just 3,127 investors. The other 2,621 have either had their applications for permanent residency rejected, fallen into some sort of legal limbo or just given up and gone back home with their families in tow and their dreams broken.

In other words, only 54 percent of the immigrants who start the process of gaining permanent residency using the EB-5 program actually attain it. That's a coin toss, not a slam dunk. Yet the businesses marketing the program promote it as a sure thing.

Also listed among Reuters's causes for concern is the common practice among immigration attorneys of accepting undisclosed commissions in return for steering clients toward a particular regional center or centers – a glaring conflict of interest that "may violate U.S. securities laws" or even turn into a nasty malpractice suit if a client's EB-5 investment heads south.

The Association to Invest in the U.S.A. (IIUSA) – profiled briefly in the article – came into being in large part to curb some of these less savory practices, in particular the habit of attorneys collecting finders fees.

Whether such actions will ultimately abate or continue thriving is impossible to predict. The picture painted by Reuters, however, isn't exactly optimistic.

Jose Latour

ILW.com EB-5 for Experts Phone Seminar Series – Registration Deadline: January 11

With speakers: Michael Gibson, Robert C. Divine, Robert Gaffney, J. Bennett Grocock, Michael G. Homeier, Elizabeth Hurst, John Patrick Pratt and Sarah von Helfenstein

Click here to register now!

To follow-up to the December 30 seminar, ILW.com will host two more phone sessions on January 13 and February 3. Below are the details from ILW.com:

SECOND Phone Session on January 13: Securities law: Avoiding Litigation and Rescission – REGISTRATION DEADLINE: JANUARY 11, 2011, 11:59 PM!

With so many EB-5 regional centers marketing to so relatively few, the pressure is on to deliver investor clients, and the tactics and techniques employed by some of the centers, their agents and "finders," both in the U.S. and overseas may cause increased scrutiny by the Securities & Exchange Commission and attorneys who specialize in malpractice and litigation on behalf of their investor clients. How can EB-5 practitioners and regional centers who have offerings in the market stay safe and avoid potential litigation and rescission? Topics:

• Reg. D & Reg. S offerings (definition of exemption)• Solicitation and 502(c) rule• Internet advertising: Lamp & IPO.net• Seminars: overseas and domestic, rules and practices• Compensation and fees: definition of Agents & Finders• Marketing material v. operating documents• Project failure and investor litigation

THIRD Phone Session on February 3: Valuation & Risk

What factors improve the chance of success in an EB-5 investment? This session will address the roles of capital, debt and equity, cash flow, and other factors that are critical to making an informed decision in assessing the strength and weakness of the offering. Topics:

• Why proper valuation of risk is important• Factors used in evaluating risk, research, due diligence• The importance of capital• The importance of the timeline in project completion• Cash flow• Equity v. Debt• The role of management, competition & market• The decision making process• Comparisons of dissimilar projects• Risk ratings and standards in risk valuations

Click here to register now!

New EB-5 Statistics Made Public at USCIS Stakeholder Meeting

A comprehensive slide presentation from the USCIS December 16 EB-5 Immigrant Investor Program Stakeholder Meeting illustrates changes that have occurred in the program throughout 2010.

One remarkable feature of the presentation, which is available in full at the USCIS website, is the 55% drop in overall issuance of the EB-5 visa in 2010 compared to the previous year. According to the presentation, 1,885 EB-5 visas were issued in 2010 compared with 4,218 in 2009. The drop likely reflects an effort in 2009 to expedite the EB-5 approval

process pending the previous "sunset date" for the program.

When it comes to EB-5 usage by country, very little changed at all between 2009 and 2010. China still sent the largest number of EB-5 investors to the United States, followed by South Korea, Great Britain & Northern Ireland, Taiwan, and

India. The only change in the top 5 recipients of EB-5 visas was India replacing Canada in the fifth spot.

As for I-526 approvals, the percentage of those approved rose again in 2010 as it has every year since 2005. In 2009, there were 1,262 I-526 approvals and 207 denials versus 1,369 approvals

and 165 denials this year. Just as the percentage of approved I-526's rose, the percentage of denials dropped 3 percentage points from 2009.

The presentation also included information about the new form I-924, "Application for Regional Center Under the Immigrant Investor Pilot Program." According to USCIS, the agency "received approximately 100 RC initial and amended proposals in the week or so prior to the implementation of the Form I-924."

That means several new EB-5 regional centers could begin competing for investors in 2011. Currently, 120 regional centers have been approved by USCIS.

EB-5 Stakeholders, Economists Shed Light on December Letter from Director Mayorkas to Senator Leahy

On December 3 2010, a letter received by the Office of Senator Patrick Leahy (D–VT) from USCIS Director Alejandro Mayorkas confirmed that USCIS interpretation of EB-5 law does, in fact, allow for the counting of indirect jobs outside a regional center's approved geographic boundaries. Although a regional center must still "focus its EB-5 capital investment activities on a single, contiguous area within the defined geographic jurisdiction requested by the regional center," according to the letter, indirect jobs outside the approved investment zone may be included in job creation totals.

For regional center operators, Director Mayorkas's comments assuaged concern over a statement made by a USCIS employee suggesting that indirect jobs created outside a regional center's geographic boundary could not count toward its totals. According to Boyd Campbell of America's Center for Foreign Investment, many EB-5 stakeholders were "horrified" by that assertion.

"We knew this was incorrect because it defied logic, was insupportable by statute law, case law, or regulations, and the California Service Center was ignoring the statement," said Campbell. "But still, we needed some assurance that someone of Director Mayorkas's stature and authority agreed that this is incorrect."

Many economists' reactions to the letter were positive as well, with Judson C. Edwards of Edwards Economics offering the following comments:

Boyd Campbell

This letter adds needed clarity for economists analyzing impacts for EB-5 projects. In my opinion, this opens the door for national economic impact studies becoming the standard for all EB-5 job creation models – making enforcement of regional center boundaries applicable only to the location of the direct jobs. Accordingly, the national impacts would provide maximum indirect job creation for qualifying projects and simplify the justification for calculation.

Edwards adds, "It will be interesting to see how this 'national focus' will be accepted by USCIS."

While largely a breath of fresh air for EB-5 stakeholders concerned about the future of their job counting methodologies, others in the EB-5 community are approaching the letter with caution.

Scott W. Barnhart and Alan Hodges of Barnhart Economic Services released a memo stating that the Mayorkas letter will likely "create more confusion for practicing economists and Regional Center entrepreneurs as the geographic area where indirect job creation can be measured is not defined by USCIS at all.

"While the economist has a good idea of what the likely impact area is from most types of economic activities," they argue, "the Regional Center principals likely do not and will feel the need to press for greater job creation outside the defined region because of this current ruling."

Both economists also believe the letter may "amplify a trend already underway whereby the geographic areas of proposed Regional Centers seem to be expanding to entire states or multi-state areas, primarily to apply the Regional Center’s existing businesses to a larger geographic area, but given the recent ruling, to also increase the indirect jobs created by their economic activity."

Jeff Carr of Economic & Policy Resources is also skeptical. "I am not sure this is the panacea that everyone thinks it is," he said.

"Some EB-5 projects may actually result in a net loss of jobs outside of the regional center (e.g. a facility location and expansion), so are some folks going to now subtract job losses outside of the regional center from regional center job impacts to arrive at the net new number of jobs?"

Dr. Judson C. Edwards

Dr. Scott Barnhart

Dr. Alan Hodges

Jeff Carr

Whether Mayorkas's statement provides clarity or confusion, it is sure to affect the way regional centers and economists approach the geographic and job creation models of current and upcoming EB-5 initiatives.

South Florida Developer Using EB-5 Program to Fund Unorthodox Marina Project

According to the Sarasota Herald-Tribune, a Port Charlotte, Florida developer is pioneering what the paper calls "a new concept in marina ownership."

Allen Heise, who has found success building condos and commercial complexes in South Florida, plans to construct a type of marina that has existed in other parts of the world for some time – the Herald-Tribune lists New Zealand and India as examples – but has never really been attempted in the United States: Fractional

marina ownership.

Here's how it works: Marina racks won't be sold to individual buyers, but instead to six different owners. Each boat owner then has the ability to use any boat in the whole complex. That way, the boat owner can choose which type of boat he or she wants to use depending on his or her desired activity. Heise hopes this concept will attract boat owners who want more bang – and more boat – for their buck.

According to Heise, "the average boater only uses his boat 30 days a year." Fractional ownership in a marina should provide more value to boat owners and, if you ask Heise, "[reduce] the cost of boat ownership to about half."

The Herald-Tribune reports:

Heise said he got the idea for fractionalized marina ownership from NetJets, the Columbus, Ohio, company that began selling fractional ownership shares in jets back in 1986 and was purchased by billionaire investor Warren Buffet 12 years later.

To make his project a success, Heise said he needs to raise $34 million — on top of his family's $3.5 million contribution.

At a time when accessing capital to fund any real estate-related project in Florida is almost impossible, Heise is deploying another novel idea.

He intends to tap into the federal government's EB-5 visa program, which is designed to help foreigners expedite the process of applying for green cards by encouraging them to invest in businesses that create jobs in the United States.

By selling $500,000 stakes in his marina- management company to 68 foreign investors, Heise expects to raise the needed funds.

Heise also tells the paper that his EB-5 brokers are bringing him 10 to 20 investors at a time. He wants to have a fully operational marina that employs in excess of 150 people by 2012.

To handle demand for boats during busy seasons, Heise will create ownership levels that range from $30,000 to $100,000 per year. Those who pay the most money will get the most access to the most boats.

If he can just "take some of [the hassle associated with boat ownership] away" from boat owners, Heise tells the Herald-Tribune, this somewhat unusual venture will be successful.

Development and Preservation Reconciled for Milwaukee, Wisconsin EB-5 Initiative

After a battle between preservationists and developers, Milwaukee's Historic Preservation Commission has decided to sanction construction of a $50 million Marriott Hotel in downtown Milwaukee.

According to the Milwaukee Journal-Sentinel, the hotel, which is being financed largely through the USCIS EB-5 immigrant investor program, will utilize the existing facades of downtown buildings in an attempt to preserve the character of the immediate area. The use of these facades – an alternative to complete demolition of the existing structures – appears to be the compromise the commission was able to reach after hearing arguments from local

Downtown Milwaukee, Wisconsin

preservationists and the Metropolitan Milwaukee Association of Commerce (MMAC), which is handling the foreign investment element.

In a report, preservationists noted the structures' past uses, which include housing the first Jewish English-language newspaper in Wisconsin. The buildings are also excellent examples of Italianate design, according to the report.

Steve Bass, on behalf of MMAC, suggested before the commission that the buildings were not actually historic, but "merely old."

Supporters of the Marriott project cite its potential to create 350 to 450 construction jobs and up to 200 hotel jobs after construction. Estimated annual tax revenue from the hotel stands at $2.26 million.

Although it appears an appeal of the commission's decision may be out of the question – the decision was unanimous – the developer has expressed concern over the feasibility of incorporating existing facades into its construction plan.

Appendix A:USCIS-Approved EB-5 Regional Centers

Visit EB5info.com for detailed descriptions of every EB-5 regional center.

Aero Space Port International Group (ASPI Group) Regional Center Alliance Regional Center | Oasis Growth Partners LLC America's Center for Foreign Investment, LLC American Life Development Company LLC American Life Investments, LLC American Life Seattle RC/Gold Rainbow/Freedom Fund American Life Ventures Everett, Washington American Life Ventures, Tacoma, Washington American Life, Inc. - Lakewood Regional Center American Logistics International Regional Center American Redevelopment RC / American Redevelopment Solutions LLC Anacostia Regional Center Arizona EB-5 Regional Center, LLC Atlanta EB5 Regional Center LLC Atlantic Regional Center for Foreign Investment, LLC (ARCFi) Bay Area Regional Center LLC BirchLEAF Miami 31, LLC Regional Center Broward County Regional Center, LLC Buffalo Regional Center California Consortium for Agricultural Export (CCAE) California Energy Investment Center California Global Alliance Regional Center c/o Lewis C. Nelson & Sons, Inc. California Green Regional Center California Investment Immigration Fund, LLC (CIIS) California Pacific Group Regional Center California Wineries & Vineyards, LLC Regional Center (CWVRC) Capital Area Regional CenterTM (CARCTM) c/o Global Capital Markets Advisors Carolina Center for Foreign Investment RC Central Arizona Regional Center Charlotte Harbour Regional Center Chicagoland Foreign Investment Group (CFIG) Regional Center City of Dallas RC (CDRC) Clark County Regional Center Cleveland International Fund, Ltd CMB Export, LLC CMB Summit LLC RC Colorado Intercontinental Regional Center, LLC

Colorado Regional Center, LLC DC Regional Center EB-5 Jobs for Hawaii, LLC EB-5 Jobs for Massachusetts, Inc. EB-5 Michigan Regional Center LLC Ecorntech Regional Center El Monte Regional Center FDIUS Regional Center Federal New York Metropolitan Regional Center FFC-East Bay Regional Center Florida EB-5 Regional Center, LLC Florida EB5 Investments LLC Regional Center Florida Equity & Growth Fund Regional Center, LLC Florida Overseas Investment Center RC Florida Regional Center, LLC Georgia Regional Development Center RC Global Century (Houston) Gold Coast Florida Regional Center Golden Pacific Ventures Regional Center Grand Canyon Regional Center, LLC Green Card Fund, LLC Green Detroit Regional Center, LLC Green Energy Regional Center, LLC (GERC) Guam Strategic Development LLC RC Gulf Coast Funds Management Regional Center (GCFM) Gulf Coast Funds Management, LLC Hawaii Regional Center Idaho State Regional Center LLC Imperial Regional Center International Michigan Investments Regional Center Invest Idaho Regional Center Invest U.S. Regional Center Iowa Department of Economic Development (IDED) Kansas Bio-Fuel RC, LLC Lake Buena Vista RC Lansing Economic Development Corporation (LEDC) Regional Center Las Vegas Regional Center LaSalle County Business Development Center (LCBDC) Los Angeles Regional Center C/O American Dream Fund, Inc. Los Angeles Regional Center California Film Commission Louisiana Mississippi Regional Center M&D Regional Center, LLC Metropolitan Milwaukee Association of Commerce (MMAC)

Midwest Center for Foreign Investment, LLC Midwest EB-5 Regional Center Mirzam Investor Green Card Regional Center Mississippi Gaming and Entertainment Regional Center Mountain States Center for Foreign Investment (MSC) Nevada Regional Economic Development Center (NREDC) New Jersey Regional Center, LLC New Orleans' Mayor's Office RC New York City Regional Center, LLC New York Immigration Fund, LLC New York Proton Regional Center, LLC North Carolina Center for Foreign Investments, LLC North Texas EB-5 Regional Center LLC Northeast Ohio Regional Center Northern California Regional Center Palm Beach RC Palm Coast Florida Regional Center Pennsylvania Dept. of Community and Economic Development Regional Center Philadelphia Industrial Development Corporation (PIDC) Regional Center Regional Center Management Los Angeles Regional Center of South Florida Regional Center Properties, Inc. Riverside PUMA Area Regional Center Rocky Mountain High Regional Center Silicon Valley Venture Investment Regional Center. South Atlantic Regional Center (SARC) South Dakota International Business Institute (SDIBI) South East Los Angeles RC (SELARC) South Florida Investment Regional Center (SFIRC) South West Biofuel RC, LLC (SWBRC) Southeast Regional Center LLC Star of Texas Regional Center Synergy California Green Hospitality Regional Center, LLC Tennessee Regional Center, LLC Twin Development LLC Regional Center Upstate New York Regional Center (UNYRC) US Commercial Regional Center US Employment Development Lending Center, LLC Velocity Regional Center Vermont Agency of Community Development EB-5 RC Victorville Regional Center Whatcom Opportunities RC YK America Regional Center LLC

Appendix B:Map of USCIS-Approved EB-5 Regional Centers

Visit EB5info.com for more information on these locations.

Map Data © 2011 Europa Technologies, INEGI

Appendix C:Top 10 Attorney Contributors

Read more about the EB5info.com rating system here.Browse the full list of EB-5 attorneys.

Appendix D:Top 10 Service Provider Contributors

Browse the full list of EB-5 service providers.

Appendix E:Top 10 Advisor Contributors

Browse the full list of EB-5 Advisors.

Appendix F:Top 10 Firm Contributors

Browse the full list of EB-5 firms.

Appendix G:Top Q&A Contributors

Browse the full list of EB-5 Questions and Answers.

Appendix H:Top 10 EB-5 Resource Contributors

Browse all EB-5 resources.

Appendix I:The Neufield Memo, June 2009

Office of Communications

www.uscis.gov

USCIS Update June 18, 2009

USCIS Issues Guidance Memorandum on EB-5 Immigrant Investor Program Update to Adjudicators Field Manual Clarifies the Timing of Job Creation and the Meaning of

“Full-Time” Job Positions WASHINGTON—U.S. Citizenship and Immigration Services (USCIS) today issued a guidance memorandum that provides USCIS adjudication officers with instructions related to the timing of job creation and the meaning of “full-time” positions in the EB-5 Immigrant Investor Program. The guidance memorandum update to the Adjudicator’s Field Manual (AFM) clarifies that for purposes of the Immigrant Petition by Alien Entrepreneur (Form I-526) adjudication and the job creation requirements, USCIS will consider the two-year period to begin six months after the adjudication of the Form I-526. USCIS officers will ensure that the business plan filed with the Form I-526 reasonably demonstrates that the requisite number of jobs will be created by the end of the two-year period. For Regional Center petitions and for purposes of indirect job creation, USCIS adjudicators may consider economic models that rely on certain variables to show job creation and the amount of investment to determine whether the required infusion of capital or creation of direct jobs will result in a certain number of indirect jobs. USCIS also has concluded that certain direct and indirect jobs that would have previously been considered to be temporary or intermittent (such as construction jobs) may be considered as permanent jobs for Form I-526 and the Petition by Entrepreneur to Remove Conditions (Form I-829) purposes if the positions can be expected to last at least 2 years.

– USCIS –

U.S. Citizenship and Immigration Services Office of Domestic Operations Washington, DC 20529

HQDOMO 70/6.1.8 AD09-04

Memorandum To: SERVICE CENTER DIRECTORS REGIONAL DIRECTORS

DISTRICT DIRECTORS FIELD OFFICE DIRECTORS NATIONAL BENEFIT CENTER DIRECTOR

From: Donald Neufeld /S/ Acting Associate Director, Domestic Operations Date: June 17, 2009 Subject: EB-5 Alien Entrepreneurs - Job Creation and Full-Time Positions

(AFM Update AD 09-04) 1. Purpose This AFM update provides United States Citizenship and Immigration Services (USCIS) personnel with instructions related to the timing of job creation and the meaning of “full-time” positions in the EB-5 program. The AFM update clarifies that each petitioner must submit a business plan, along with their Form I-526, Immigrant Petition by Alien Entrepreneur, which provides an accounting of the required number of qualifying jobs that will be created within the two-year period of conditional residency. This AFM update also clarifies that there may be some flexibility with respect to the timing of job creation at the Form I-829, Petition by Entrepreneur to Remove Conditions, stage. Finally, this AFM update clarifies the meaning of full-time position as it relates to job creation.

The AFM update conforms the filing locations with the Federal Register Notice dated January 9, 2009, 74 Fed. Reg. 912-913. 2. Relevant Laws

INA § 203(b)(5) creates a class of immigrant visas (EB-5) for individuals who invest a specified amount of capital in the United States and who will “create full-time employment

Clarification of Two-Year Period the Meaning of Full-Time Positions for Job Creation by EB-5 Alien Entrepreneurs HQDOMO 70/6.1.8 AD09-04 Page 2

for not fewer than 10” qualified employees. INA § 216A places conditions upon the permanent resident status of aliens admitted in the EB-5 classification that must be removed at the end of a two-year period of conditional residency. In order to have the conditions removed, EB-5 visa holders must file a Form I-829 that demonstrates that the petitioner is, among other requirements, “conforming to the requirements of INA § 203(b)(5).” INA § 216A(d)(1)(B).

Consistent with the two-year period of conditional residency, USCIS regulations generally require evidence to obtain approval of a Form I-526, including a business plan that demonstrates that jobs will be created within the two-year period of conditional residence. 8 C.F.R. § 204.6(j)(4)(i)(B).

USCIS regulations relating to the removal conditions from the lawful permanent resident status of alien entrepreneurs status provide that a petitioner must demonstrate that “the alien has created or can be expected to create within a reasonable period of time” the required jobs. 8 C.F.R. § 216.6(c)(1)(iv).

3. Field Guidance Summary

Effective immediately, USCIS personnel are directed to comply with the following instructions, as set forth in revisions to the Adjudicator’s Field Manual (AFM) noted in section 5, as summarized below. For purposes of the Form I-526 adjudication and the job creation requirements, USCIS will deem the two-year period described in 8 C.F.R. § 204.6(j)(4)(i)(B) to commence six months after the adjudication of the Form I-526. USCIS officers should ensure that the business plan filed with the Form I-526 reasonably demonstrates that the requisite number of jobs will be created by the end of this two-year period. For Regional Center petitions and for purposes of indirect job creation, USCIS officers may consider economic models that rely on certain variables to show job creation and the amount of investment to determine whether the required infusion of capital or creation of direct jobs will result in a certain number of indirect jobs. USCIS also has concluded that direct and indirect construction jobs that are created by the petitioner’s investment and that are expected to last at least 2 years may now count as permanent jobs for Form I-526 and I-829 purposes. 4. Use

This AFM update is intended solely for the guidance of USCIS personnel in performing their duties relative to adjudications. It is not intended to, does not, and may not be relied upon to create any right or benefit, substantive or procedural, enforceable at law or by any individual or other party in removal proceedings, in litigation with the United States, or in any other

Clarification of Two-Year Period the Meaning of Full-Time Positions for Job Creation by EB-5 Alien Entrepreneurs HQDOMO 70/6.1.8 AD09-04 Page 3

form or manner. In addition, the instruction and guidance in this AFM update is in no way intended to and does not prohibit enforcement of the immigration laws of the United States. 5. Contact Information Questions related to this memorandum should be directed to Joseph P. Whalen, USCIS Headquarters Office of Service Center Operations, through appropriate supervisory channels. 6. Field Guidance and AFM Update

Chapter 22.4(c)(4)(D) of the AFM is amended to number it as three subsections and include the new subsections (ii) and (iii) at the end of Paragraph (D) and prior to the Note. (D) Job Creation.

(i) The petition must be supported with evidence the new commercial enterprise will create no fewer than 10 full-time positions (or the equivalent). …. ***********

(ii) Clarification of the Two-Year Period for Job Creation.

(a) Petitioners who are filing a Form I-526 must submit “a comprehensive business plan showing that, due to the nature and projected size of the new commercial enterprise, the need for not fewer than ten (10) qualifying employees will result, including approximate dates, within the next two-years, and when each employee will be hired.” 8 C.F.R. § 204.6(j)(4)(i)(B) (emphasis added). The requirement for a business plan that shows jobs will be created in two years applies to all Form I-526 petitions, including those filed under the Regional Center Program, that will rely on indirect job creation to satisfy the statutory employment creation requirement. The regulations, however, do not clearly state when the two-year period commences for purposes of adjudicating the Form I-526. The reference to a two-year period relates to the two-year period of conditional residence, and the time requirement of 8 C.F.R. § 204.6(j)(4)(i)(B) is intended to ensure that aliens seeking to enter the United States on EB-5 visas have a legitimate and feasible plan to create jobs as required by the statute within that period of conditional residence. Nevertheless, at the time of adjudication of Form I-526, the alien entrepreneur will not have attained conditional permanent residence, and the officer adjudicating Form I-526 cannot be certain when the period of conditional residence will in fact commence. USCIS has determined that the average processing times for EB-5 petitioners filing for immigrant visas via consular processing and EB-5 petitioners filing

Clarification of Two-Year Period the Meaning of Full-Time Positions for Job Creation by EB-5 Alien Entrepreneurs HQDOMO 70/6.1.8 AD09-04 Page 4

for adjustment of status is approximately six months. Accordingly, in order to best approximate the two-year period of conditional residence, the two-year period described in 8 C.F.R. § 204.6(j)(4)(i)(B) will be deemed to commence six months after the adjudication of Form I-526. USCIS officers should ensure that the business plan filed along with Form I-526 reasonably demonstrates that the requisite number of jobs will be created by the alien’s investment by the end of the two-year period that commences six months after the adjudication of the petition. If, in the future, processing times significantly change, this paragraph may be amended. (b) Special considerations for Regional Center based I-526 petitions:

(i) Aliens filing I-526 petitions for investments to be made through a regional center may use reasonable methodologies to establish the number of jobs created. 8 C.F.R. § 204.6(j)(4)(iii). However, some of the economic models may not expressly consider temporal aspects of job creation, and will not be able to conclusively state that indirect jobs will be created within two years. In such circumstances, officers should first explore whether there are reasonable and/or accepted temporal assumptions that can be attributed to the particular economic model and consider such assumptions in determining compliance with the two-year requirement. For example, the RIMSII handbook states the following about the RIMSII economic model, which is often used to demonstrate indirect job creation:

RIMS II, like all I-O models, is a “static equilibrium” model, so impacts calculated with RIMS II have no specific time dimension. However, because the model is based on annual data, it is customary to assume that the impacts occur in 1 year. For many situations, this assumption is reasonable.

This assumption supports the conclusion that the indirect jobs will be created within the requisite two-year period. If, however, there are no reasonable and/or accepted temporal assumptions that can be made with respect to a particular economic model, USCIS may presume that the jobs will be created within the required period of time provided that the alien can demonstrate compliance with paragraph (ii) below. (ii) Many economic models used to demonstrate indirect job creation rely on certain assumptions or variables to show the requisite job creation. For example, a model might demonstrate that the requisite jobs will be created

Clarification of Two-Year Period the Meaning of Full-Time Positions for Job Creation by EB-5 Alien Entrepreneurs HQDOMO 70/6.1.8 AD09-04 Page 5

if a Regional Center infuses $10 million into a particular industry. Similarly, a model might demonstrate that, using accepted multipliers, the creation of 100 direct jobs will result in a certain number of indirect jobs. Under such circumstances, the I-526 petition should demonstrate that the required infusion of capital or the creation of the direct jobs will occur within two years.

Nothing in this paragraph should be construed to alter in any way the current adjudication procedures. Officers may review the evidence required by the petitioner to demonstrate the number of jobs that will be created by the investment. For example, Form I-526s filed under the Regional Center Program which rely on indirect job creation must also comply with the evidentiary requirements of 8 C.F.R. § 204.6(j)(4)(iii) to demonstrate the number of jobs created. Officers may also continue to determine the reasonableness of a business plan to ensure that the jobs are likely to be created. (iii) Clarification of the Meaning of Full-Time Position. Section 203(b)(5) of the INA requires that the investment in a new commercial enterprise will create full-time employment for not fewer than 10 qualified employees. The INA further defines full-time employment as “employment in a position that requires at least 35 hours or service per week at any time, regardless of who fills the position.” USCIS has interpreted the full-time employment requirement to exclude jobs that are intermittent, temporary, seasonal or transient in nature. See, e.g., Spencer Enterprises v. U.S., 229 F.Supp.2d 1025 (E.D.Cal. 2001). For example, historically, construction jobs have not been counted toward job creation because they are seen as intermittent, temporary, seasonal and transient rather than permanent. USCIS, however, now interprets that direct and indirect construction jobs that are created by the petitioner’s investment and that are expected to last at least 2 years, inclusive of when the petitioner’s I-829 is filed, may now count as permanent jobs. Although employment in some industries such as construction or tourism can be intermittent, temporary, seasonal or transient, officers should not exclude jobs simply because they fall into such industries. Rather, the focus of the adjudication should be on whether the position, as described in the petition, is continuous full-time employment rather than intermittent, temporary, seasonal or transient. For example, if a petition reasonably describes the need for general laborers in a construction project that is expected to last several years and would require a minimum of 35 hours per week over the course of that project, the positions would meet the full-time employment requirement. However, if, for example, the same project called for electrical workers to provide services during three to four five week periods over the course of the project,

Clarification of Two-Year Period the Meaning of Full-Time Positions for Job Creation by EB-5 Alien Entrepreneurs HQDOMO 70/6.1.8 AD09-04 Page 6

such positions would be properly deemed to be intermittent and not meet the definition of full-time employment. Generally, it is the position that is critical to the full-time employment criterion, not the employee. Accordingly, the fact that the position may be filled by more than one employee does not exclude a position from consideration as full-time employment. For example, the positions described above would not be excluded from being considered full-time employment if the general laborers needed to fill the positions varied from day to day or week to week as long as the need for the position remains constant. This interpretation is consistent with 8 C.F.R. § 204.6(e), which, as part of the regulatory definition of full-time employment includes job sharing arrangements. It is important to note, however, that this new interpretation does not override the regulatory definitions of employee and full time employment at 8 C.F.R. § 204.6(e). Thus, the positions must still be filled by qualifying employees, and such positions may not be filled by independent contractors. In addition, multiple part time positions may not be combined to create one full time position.

2. Chapter 25.2(e)(1) of the AFM is amended to include the following new paragraph at the

beginning of Paragraph (1). The existing Paragraph (1) will now become Paragraph (2) and so on. (1) Initial Review. Form I-829 petition is intended to examine whether the alien entrepreneur has satisfied the conditions of his admission to the United States. Primarily, USCIS is determining whether the alien has invested the requisite capital and created the requisite jobs through that investment. Form I-829 petition is to be filed within 90 days prior to the second anniversary of the alien’s admission to the United States in conditional resident status.

3. Chapter 25.2(e)(4)(D) of the AFM is amended to include the following new paragraphs at the end of Paragraph (D). Recognizing that circumstances may change after an alien secures admission to the United States, USCIS chose to implement INA § 216A with some “flexibility.” See, 59 FR 1317-01, 1317-18 (Jan. 10, 1994) (proposed rule). Consistent with this flexibility, USCIS provides that Form I-829 must contain evidence that the petitioning alien “has created or can be expected to create within a reasonable time ten full-time jobs for qualifying employees.” 8 C.F.R. § 216.6(a)(4)(iv).

In making the “reasonable time” determination, officers should consider the evidence submitted along with the petition that demonstrates when the jobs are expected to be created, the reasons that the jobs were not created as predicted in Form I-526,

Clarification of Two-Year Period the Meaning of Full-Time Positions for Job Creation by EB-5 Alien Entrepreneurs HQDOMO 70/6.1.8 AD09-04 Page 7

the nature of the industry or industries in which the jobs are to be created, and any other evidence submitted by the petitioner.

If after considering the evidence, the officer determines that the jobs are more likely than not going to be created within a reasonable time, Form I-829 should be approved consistent with 8 C.F.R. § 216.6(d)(1) if the petitioner is otherwise eligible to have his or her conditions removed. If, however, the officer determines that the jobs will not be created within a reasonable period of time, Form I-829 should be denied consistent with 8 C.F.R. § 216.6(d)(2).

4. Chapters 22.4(b), 25.2(a), 25.2(b), 25.2(g)(1), and 25.2(i)(2)(C) of the AFM are revised to reference that all petitions and applications related EB-5 immigrant classifications and Regional Center proposals must be filed at the California Service Center (CSC). Chapter 22.4(b) [fourth bullet]

The petition must be filed with the California Service Center. Chapter 25.2(a) California Service Center director, regional directors and field office directors in offices with a high volume of Form I-829s shall designate an EB-5 trained and certified officer as an EB-5 point of contact (POC) to facilitate the review and management of Form I-829. For purposes of clarity in these instructions, references to service center management and field office management includes the appropriate EB-5 POC. Chapter 25.2(b) Officers are reminded that, in accordance with the Notice in the Federal Register at 74 Fed. Reg. 912-913, published on, and in effect since, January 9, 2009, Form I-829 petitions are to be filed with the California Service Center. Chapter 25.2(g)(1) All such Form I-829s shall be returned to the California Service Center. Chapter 25.2(i)(2)(C) The California Service Center shall generate weekly a printout from the MFAS to determine those conditional residents within its jurisdiction who have failed to file a timely Form I-829 to have the conditions on their status removed in accordance with section 216A(c) of the Act and will take the actions described above in this section to terminate the status of such conditional residents and their dependents.

Clarification of Two-Year Period the Meaning of Full-Time Positions for Job Creation by EB-5 Alien Entrepreneurs HQDOMO 70/6.1.8 AD09-04 Page 8

5. The AFM Transmittal Memoranda button is revised by adding a new entry, in numerical

order, to read:

AD 09 -04 (02-xx-2009)

Chapter 22.4(c)(4)(D) Chapter 22.4(b) Chapter 25.2(a) Chapter 25.2(b) Chapter 25.2(e)(1) Chapter 25.2(g)(1) Chapter 25.2(i)(2)(C)

This memorandum adds five paragraphs at the end of Chapter 22.4(c)(4)(D); adds a new first paragraph to Chapter 25.2(e)(1); adds three new paragraphs at the end of Chapter 25.2(e)(1); and makes changes to both Chapter 22.4 and 25.2 to reference that all EB-5 petitions and applications are now filed with the California Service Center all in the AFM.

Appendix J:The Startup Visa Act (U.S. Senate), 111th Congress

MDM10086 [Discussion Draft] S.L.C.

111TH CONGRESS 2D SESSION S. ll

To establish an employment-based immigrant visa for alien entrepreneurs who have received significant capital from investors to establish a busi-ness in the United States.

IN THE SENATE OF THE UNITED STATES

llllllllll Mr. KERRY (for himself and Mr. LUGAR) introduced the following bill; which

was read twice and referred to the Committee on llllllllll

A BILL To establish an employment-based immigrant visa for alien

entrepreneurs who have received significant capital from investors to establish a business in the United States.

Be it enacted by the Senate and House of Representa-1

tives of the United States of America in Congress assembled, 2

SECTION 1. SHORT TITLE. 3

This Act may be cited as the ‘‘StartUp Visa Act of 4

2010’’. 5

SEC. 2. STARTUP VISAS. 6

(a) IN GENERAL.—Section 203(b) of the Immigra-7

tion and Nationality Act (8 U.S.C. 203(b)) is amended— 8

2

MDM10086 [Discussion Draft] S.L.C.

(1) by redesignating paragraph (6) as para-1

graph (7); and 2

(2) by inserting after paragraph (5) the fol-3

lowing: 4

‘‘(6) SPONSORED ENTREPRENEURS.— 5

‘‘(A) IN GENERAL.—StartUp visas shall be 6

made available, from the number of visas allo-7

cated under paragraph (5), to qualified immi-8

grant entrepreneurs— 9

‘‘(i) who have proven that a qualified 10

venture capitalist or a qualified super 11

angel investor has invested not less than 12

$100,000 on behalf of each such entre-13

preneur in an equity financing of not less 14

than $250,000; and 15

‘‘(ii) whose commercial activities will, 16

during the 2-year period beginning on the 17

date on which the visa is issued under this 18

subparagraph— 19

‘‘(I) create not fewer than 5 new 20

full-time jobs in the United States 21

employing people other than the im-22

migrant’s spouse, sons, or daughters; 23

‘‘(II) raise not less than 24

$1,000,000 in capital investment in 25

3

MDM10086 [Discussion Draft] S.L.C.

furtherance of a commercial entity 1

based in the United States; or 2

‘‘(III) generate not less than 3

$1,000,000 in revenue. 4

‘‘(B) DEFINITIONS.—In this paragraph: 5

‘‘(i) QUALIFIED SUPER ANGEL INVES-6

TOR.—The term qualified super angel in-7

vestor means an individual who— 8

‘‘(I) is an accredited investor (as 9

defined in section 230.501(a) of title 10

17, Code of Federal Regulations); 11

‘‘(II) is a United States citizen; 12

and 13

‘‘(III) has made at least 2 equity 14

investments of not less than $50,000 15

in each of the previous 3 years. 16

‘‘(ii) QUALIFIED VENTURE CAPI-17

TALIST.—The term ‘qualified venture capi-18

talist’ means an entity that— 19

‘‘(I) is classified as a ‘venture 20

capital operating company’ under sec-21

tion 2510.3-101(d) of the Code of 22

Federal Regulations; 23

‘‘(II) is based in the United 24

States; 25

4

MDM10086 [Discussion Draft] S.L.C.

‘‘(III) is comprised of partners, 1

the majority of whom are United 2

States citizens; 3

‘‘(IV) has capital commitments of 4

not less than $10,000,000; 5

‘‘(V) has been operating for at 6

least 2 years; and 7

‘‘(VI) has made at least 2 invest-8

ments of not less than $500,000 dur-9

ing each of the most recent 2 years.’’. 10

(b) CONDITIONAL PERMANENT RESIDENT STA-11

TUS.—Section 216A of the Immigration and Nationality 12

Act (8 U.S.C. 1186b) is amended— 13

(1) by striking ‘‘Attorney General’’ each place 14

such term appears and inserting ‘‘Secretary of 15

Homeland Security’’; 16

(2) in subsection (a)— 17

(A) in paragraph (1)— 18

(i) by striking ‘‘(as defined in sub-19

section (f)(1))’’ and inserting ‘‘, sponsored 20

entrepreneur’’; and 21

(ii) by striking ‘‘(as defined in sub-22

section (f)(2)) shall’’ and inserting ‘‘shall 23

each’’; 24

5

MDM10086 [Discussion Draft] S.L.C.

(B) in paragraph (2)(A), by inserting 1

‘‘sponsored entrepreneur,’’ after ‘‘alien entre-2

preneur,’’; 3

(3) in subsection (b), by adding at the end the 4

following: 5

‘‘(3) SPONSORED ENTREPRENEURS.—The Sec-6

retary of Homeland Security shall terminate the per-7

manent resident status of a sponsored entrepreneur 8

and the alien spouse and children of such entre-9

preneur if the Secretary determines, not later than 10

3 years after the date on which such permanent resi-11

dent status was conferred, that— 12

‘‘(A) the qualified venture capitalist or 13

qualified super angel investor who sponsored 14

the entrepreneur failed to meet the investment 15

requirements under section 203(b)(6)(A)(i); or 16

‘‘(B) the entrepreneur failed to meet the 17

job creation, capital investment, or revenue gen-18

eration requirements under section 19

203(b)(6)(A)(ii).’’; 20

(4) in subsection (c)— 21

(A) in paragraph (1)— 22

(i) in the matter preceding subpara-23

graph (A), by inserting ‘‘sponsored entre-24

preneur,’’ after ‘‘alien entrepreneur,’’; and 25

6

MDM10086 [Discussion Draft] S.L.C.

(ii) by striking ‘‘alien entrepreneur 1

must’’ each place such term appears and 2

inserting ‘‘entrepreneur shall’’; 3

(B) in paragraph (3)— 4

(i) in subparagraph (A)(ii), by insert-5

ing ‘‘or sponsored entrepreneur’’ after 6

‘‘alien entrepreneur’’; and 7

(ii) in subparagraph (C), by inserting 8

‘‘sponsored entrepreneur,’’ after ‘‘alien en-9

trepreneur’’; 10

(5) in subsection (d)(1)— 11

(A) in the matter preceding subparagraph 12

(A), by striking ‘‘alien’’ and inserting ‘‘alien en-13

trepreneur or sponsored entrepreneur, as appli-14

cable’’; 15

(B) in clause (i), by striking ‘‘invested, or 16

is actively in the process of investing,’’ and in-17

serting ‘‘has invested, is actively in the process 18

of investing, or has been sponsored by a quali-19

fied super angel investor or qualified venture 20

capitalist who has invested,’’; 21

(C) in clause (ii), by inserting ‘‘or 22

203(b)(6), as applicable’’ before the period at 23

the end; and 24

7

MDM10086 [Discussion Draft] S.L.C.

(6) in subsection (f), by adding at the end the 1

following: 2

‘‘(4) The term ‘sponsored entrepreneur’ means 3

an alien who obtains the status of an alien lawfully 4

admitted for permanent residence under section 5

203(b)(6).’’. 6

Appendix K:Notice of Intent to Terminate, USCIS to Victorville Regional Center

Appendix L:Notice of Final Termination, USCIS to Victorville Regional Center

Appendix M:Letter, USCIS Director to Senator Patrick Leahy

12/09/2010 16:39 FAX 2023052707

DEC - 3 2010

The Honorable Patrick J. LeahyChairmanCommittee on the JudiciaryUnited States SenateWashington, DC 20510-6275

Dear Mr. Chairman:

DOJIINS/HQ

•

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NO ,

u.s. Depclrtmlllt 01HomeJlUld SecurityU.S. Citizenship and Immigration ServicesOfficeofthe Director (MS 20(0)Washington, DC 20529

u.s. Citizenshipand ImmigrationServices

Thank. you for your September 27, 2010 letter regarding the EB-5 Regional Center Programadministered by U.S. Citizenship and Immigration Services (USCIS). You expressed your viewthat, contrary to USCIS's existing interpretation, a proposed regional center business plan mayencompass job creation outside the center's geographic boundaries. Upon review of the applicableEB-5 law and regulations, we agree that a regional center may rely on jobs indirectly createdoutside its geographic boundaries.

USCIS's interpretation derived from the geographic requirements identified inMatter ofIzummi, 22I&N 158 (Comm'r. 1998), and other sources. Matter of[zummi holds that if a newenterpriSe is engaged directly or indirectly in lending money to job-creating businesses, thosejob-creating businesses must all be-located within the regional center's geographic limits.Similarly, Section 61O(a) of the Departments of Commerce, Justice and _state, the Judiciary, andRelated Agencies Appropriations Act of 1993, Pub. L. 102-395, as provides that "[a]regional center shall have jurisdiction over a limited geographic area, which shall be described inthe proposal and consistent with the purpose of concentrating pooled investment in definedeconomic zones." Likewise, USCIS's regulation at 8 CFR 204.6(m)(3)(i) requires each regionalcenter to provide a proposal that "clearly describes how the regional center focuses on a geographicregion of the United States."

Based on those sources, USCIS interprets the law to require that a regional center focus its EB-5capital investment activities on a single, contiguous area within the dermed geographic jurisdictionrequested by the regional center. Nevertheless, we agree that the law does. not further mandate thatall indirect job creation attributable to a regional center take place within that jurisdiction. I will,therefore, ensure that USCIS policy reflects this understanding of the law.

12/09/2010 - 3:47PMAILA InfoNet Doc. No. 10122135. (Posted 12/21/10)

12/09/2010 16:39 FAX 2023052707

the Honorable Patrick J. LeahyPage 2

DOJ/INS/HQ 141003

Thank you again for your letter. I assure you that USCIS maintains its commitment to the successof the EB-5 Regional Center Program. I look forward to our continued collaboration on importantissues ofmutual interest.

Sincerely,

Director

12/09/2010 3:47PMAILA InfoNet Doc. No. 10122135. (Posted 12/21/10)

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