Tuesday, December 27, 2011

States push further into the EB-5 act: New York offers grant to get Capital area regional center off the ground, Maine backs application in progress

Given that states and cities benefit when local developers and businesses get cheap foreign capital, it's no surprise that states have begun to assist efforts to establish regional centers that recruit green card-seeking immigrant investors.

According to a 12/8/11 article in The (Albany) Business Review, State plan includes $125K to create EB-5 visa program in Albany
The state will pay $125,000 [see p. 59 of this awards list] to help establish a federal visa program in the Albany, New York, area that would match wealthy foreign investors with local developers.
The funding is among the $62.7 million awarded to the Capital Region today through a competition set up by Gov. Andrew Cuomo to promote economic development.
The money was requested by the Center for Economic Growth to create the EB-5 visa program.
There are significant start-up costs to a regional center, including a lengthy application and an economic analysis--apparently funded by the grant--that must be submitted to the United States Citizenship and Immigration Services. Then there are marketing costs. The total can reach $600,000,

The Center for Economic Growth (CEG), a not-for-profit membership organization in the Capital Region, would not operate the regional center, according to the article; rather, the overseer would be another not-for-profit or, as is most common, a private business.

CEG President F. Michael Tucker told the 11/8/11 Business Review, “It basically provides a tranche of financing that would complement traditional bank debt and developer equity because right now in this credit market developers need more equity than they have in the past,” Tucker said.

And in Maine

Meanwhile, the state of Maine, recognizing the success that Vermont has had with a state-sponsored regional center, has begun its push, assisting a regional center in progress. According to a press release from the new USA Lifestyles regional center:
In late spring 2011, the 125th legislature passed LD-1 which directed the Department of Economic and Community Development (DECD) to collaborate with other agencies and businesses to make application for an EB-5 state regional center. When it was discovered that a group in Franklin County had already made application in November 2010, DECD chose rather than "reinventing the wheel" to put their support behind the initiative. George Gervais, Commissioner of the Department of Economic and Community Development explained,
The press release states:
The Regional Center designation is the result of a collaborative private enterprise effort between Saddleback Mountain, Greater Franklin Development Corporation, and Otis Ventures.

USA Lifestyles Inc. will focus on offering EB 5 compliant capital investment opportunities in new commercial enterprises within their geographic scope in these economic categories; Ski Lodges and Resorts, Testing Laboratories, Wood Products Manufacturing, Restaurants, Lessors of Non Residential buildings, Museums and Construction.

The start of this initiative began in 2008 with the recommendation of marketing strategist, Foster Chandler of Killington, VT. Saddleback then began looking at the success of Jay Peak Resort and the Vermont State EB-5 Regional Cente
It drew a salute from Sen. Olympia Snowe (R-ME), in a 10/25/11 press release:
“This EB-5 designation is certainly welcome news for Franklin County and Maine and will make great strides in providing critical investments at institutions like Saddleback in our state during these challenging economic times. It is crucial we in Congress do everything possible to create an environment for job creation in the U.S. and the EB-5 program has the potential to bolster Maine’s economy. It is also critical for our government to make certain that all immigration programs are capable of verifying the backgrounds and eligibility of applicants – and when it comes to these employment-based visas our top priority must be to create and sustain jobs for American workers.”
Note that Snowe seems untroubled by whether we are actually getting value for such visas--whether the program truly creates jobs in needy areas (arguably a better bet in Maine than Midtown Manhattan)--but is concerned about ensuring that the applicants are vetted.

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