Tuesday, June 29, 2010

Bona Fide and “EB-5ed”: The Impetus for a Genuine Job Recovery

Information on the wonders and blessings of EB-5 Immigrant
Investor Regional Centers and their positive impact on local economies abounds
online…in the websites of said Regional Centers.  Unfortunately, the tale of the EB5 tape tells
a different story in many cases. 
Statistically speaking, there are a handful of EB-5 Regional Centers
which can lay claim to meaningful job creation and financial impact numbers,
and even the impressive figures cited by industry proponents rely largely upon
these big players.  The rest of them,
well…not much going on except the marketing.



If we take off our immigration attorney hats, however, there
is a bigger picture here, and one more directly relevant for the manifestation
of the job creation purposes envisioned 
by Congress when it introduced the EB-5 Immigrant Investor visa in its
first incarnation via the Immigration Act of 1990 (IMMACT90).  You see – and this will come as a bit of a
shock to many developers and attorneys – the original purpose of the EB-5 visa
was to create long term jobs via foreign
investment.
  It wasn’t, as it seems
so often today, for the purpose of giving developers a new, low-cost source of
capital in the wake of  a devastated
financial sector, nor was it to generate that latest and most profitable of immigration
sub-specialties, EB-5 Regional Center Formation, which is making many of us grin ear-to-ear. 

Nope, it wasn’t about those of us on this end who directly
benefit from what these foreign investors pump into the U.S. economy via EB-5
Regional Center investments.  It’s
about the jobs.
 And when we, as attorneys, fail to keep that
in mind, we are committing a TRIPLE disservice:


  • We are failing to provide our Regional Center
    clients with all of the tools they need to establish more successful project;

  • We are letting our EB-5 investors to
    participate in projects which are neither properly hedged nor sufficiently “invested”
    in a public purpose and, worst of all...

  • We are not playing the role we can play in maximizing the job-generation
    objectives envisioned by our Congress, signed into law by our President, and so absolutely crucial for today's U.S. economy.



I am talking about the fact that in the great toolbox provided by our
local, state, and federal government to stimulate the creation of U.S. jobs
during a faltering economy, the EB-5 Regional Center program is but one tool,
and we, as attorneys, have a responsibility to our clients – be they individual
EB-5 investors, Regional Centers -- or both (as is, to my continuing
discomfort, the case with so many in my profession) to provide our clients with
as many tools as possible to protect their interests.  It is a fact that most Regional Centers
situated in Targeted Employment Areas (TEAs) – the only Regional Centers offering a $500,000  investment threshold and actually securing
investors today – sit within geographic locations which are targeted in
numerous other was by government…and, IMHO, it IS the job of the immigration
attorney – no matter how much you might take offense – to look beyond the EB-5 issues and educate
clients on the basics of these other resources, the deployment of which can
mean the difference between a successful EB-5 project and another botch job
leaving EB-5 investors hanging at the I-829 stage.



So what are these other tools?  Well, for example, there are New Market Tax Credits.  There are federally-designated impact zones,
created by oil spills and hurricanes and other messes.  There are HUB zone designation.  There are job credits funded by municipal and county governments.  There are federal matching funds for
infrastructure related projects.  Then of course there
are President Obama’s billions set aside as “stimulus spending”, sitting there,
waiting to be tapped.  A TEA-based EB-5
Regional Center which does not explore these opportunities but chooses instead
to rely wholly upon EB-5 investors for capitalization has a fool for a General
Partner.



Note that I am NOT suggesting that we, as immigration
counsel, need to be well-verse or even marginally familiar with all this stuff.   That's what the other experts are for.  (It seems to me, frankly, that most attorneys filing I-526s don't know the difference between an IMPLAN and an implant; lack of expertise has rarely troubled some in my profession.)   But there are municipal law attorneys, bond experts, grant finders as well as the
pricey expert offices of the leading national law and accounting firms.  THESE are the folks who put these deals together…but only if we get our developer client to
the point of inquiry.  Then and only then
are we making sure that our EB-5 Regional Center clients are forging new
methods of strengthening the fiscal integrity of their project, insuring that our
EB-5 investor clients are getting financially involved in a collective pool of
source funds which is both diversified and government-driven, and, last but
most importantly, doing everything we can to create the jobs America needs.



 



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