21 Mar Rise in the Decline of Regional Center Approvals
March 21, 2012
The EB-5 Program is seeing a slowing of the approval of new regional centers across the United States. According to The Daily, nationwide, U.S. Citizenship and Immigration Services, which administers the program, has approved 219 development zones — rural areas or areas of supposedly high unemployment, where money can be raised through the EB-5 program at the discounted $500,000 per investor rate. That is up from just 11 zones in 2006. California has the most with 58; Florida is second with 20. The Daily went on to state that during the first quarter of fiscal year 2012, the agency denied 61 percent of the applications for new regional centers — 22 applications in total — compared to 39 percent during fiscal year 2011. USCIS spokesman Christopher Bentley cautioned against drawing conclusions about the spike in denials, noting, “It’s only a three-month window.”
While this is only a short window of time from which to draw a conclusion, what the EB-5 community can draw from this news is that the USCIS is carefully reviewing the regional center process to ensure that regional centers in high unemployment areas do in fact meet the requirements necessary to offer investments of only $500,000 USD. Regional Centers, like the U.S. Immigration Fund, have already been fully approved by the USCIS and have received TEA (Targeted Employment Area) designation from the Government and State of Florida. Investors can rest assured that they will only be required to invest $500,000 in any of the numerous U.S. Immigration Fund projects, like Harbourside Place.
Having the USCIS tighten the reins on the Regional Center business community will be trying for some organizations and developers, but it is essential to ensure that the right regional centers are being approved to insure the integrity of the program. If the program is allowed to be flooded with sub-par organizations, it will ultimately lead to the demise of the program, as investors will begin to invest in companies that are not fully aware or able to create the jobs necessary to remove USCIS conditions to receive investor green cards. The USCIS has also been quoted as saying it would be demanding more evidence that certain types of projects, such as office buildings and retail space built for tenants, would actually create new jobs, rather than just provide a new building for existing jobs to move into. To ensure proper job creation numbers, the U.S. Immigration Fund uses the expertise of renowned economist, Dr. Michael Evans. As the founder of Evans, Carroll & Associates, Dr. Michael Evans is the lead economic advisor for the U.S. Immigration Fund in job creation methodology. In recent years, Evans has specialized in providing the underlying economic analysis for EB-5 programs, determining the number of total permanent new jobs that will be created by new projects funded by foreign investors in EB-5 regional centers and has become the leading firm offering this type of analysis. Evans uses the IMPLAN and RIMS II regional input/output models to calculate the employment or output multipliers for each project, but that is only one of many steps in preparing the overall report. Dr. Evans takes care to estimate the direct new jobs created, which can differ depending on local economic conditions, existing businesses in the area, and — in multi-dimensional projects — the mix of retail shopping, restaurants, offices, hotels, and other commercial buildings. Using great care to determine job creation sets centers like the U.S. Immigration Fund apart from the competition and is another reason why an investment in one of their project offerings has been proven to be safer and more secure as it relates to job creation and conditional green card approvals than many of the competitions offerings.