Skip to main content

Senate hearing on EB-5 program December 7; Obama's jobs council recommends EB-5; USCIS issues draft memorandum consolidating EB-5 policy

The EB-5 Regional Center Investment Pilot Program--the main vehicle for immigrant investors seeking green cards--is due to expire in September 2012, unless Congress acts, and advocates and legislators are beginning to take a closer look.

The EB-5 program, which grants green cards to investors and their families who invest $500,000 (or $1 million if it's not in a Targeted Employment Area) to create ten jobs, initially required the investment itself to create the jobs directly.

But investments through regional centers--federally authorized private (or sometimes governmental) investment pools--make it much easier, as indirect jobs can be calculated via an economist's report. No wonder the number of regional centers has been skyrocketing, and developers (like Forest City Ratner) and others seeking cheap capital have glommed onto EB-5.

Hearing December 7

On December 7 at 10 am, the Senate Judiciary Committee will hold a hearing titled “Reauthorizing the EB-5 Regional Center Program: Promoting Job Creation and Economic Development in American Communities.” It will be webcast.

Based on the title, it sounds unlikely that criticism of the program will be highlighted. Previous hearings have, curiously enough, evinced bipartisan support for the program, (as I've written) especially from legislators with prominent EB-5 projects in their districts.

One witness is Bill Stenger, president and CEO of Jay Peak Resort, Jay, VT, a prominent beneficiary of the EB-5 program, who just happens to be from the home state of Judiciary Committee Chairman Sen. Pat Leahy (D-VT). (He testified at the last Congressional hearing, in September before the House of Representatives.)

Another is attorney Robert Divine, former Chief Counsel, Acting Director and Acting Deputy Director of United States Citizenship and Immigration Services (USCIS, who now helps entrepreneurs create, manage, and use Regional Centers. He is now Vice President of the national industry association of EB-5 Regional Centers, the Association to Invest in USA (IIUSA). 

A critic will be there

Still, the witness list includes the one prominent critic of the EB-5 program, David North of the Center for Immigration Studies, which advocates a "'low-immigration, pro-immigrant' vision of an America that admits fewer immigrants but affords a warmer welcome for those who are admitted."

North has criticized the United States Citizenship and Immigration Services for efforts to expedite EB-5 visas, pointed to elements of fraud, cited how the program lacks transparency, and suggested the cost to investors is quite low.

He has written:
When looking at the macro finances of overseas investment in the United States, it should be obvious that the immigrant investors’ program produces peanuts for the American economy.
A slight twitch of the American tax law, or that of China or the European Union, would have a much greater impact on the level of foreign investment than all the visas USCIS could grind out, so would a decision or two by, say, Goldman Sachs, opening up otherwise tightly controlled IPOs (initial public offerings) to foreign investors.
He has also pointed out:
  • The immigrants don't have important skills, close relatives in the U.S., or refugee status--they can buy their way in
  • The cost is much less than that demanded by most other English-speaking nations, subject of an upcoming USCIS report,
  • The cost has not kept pace with inflation over 20 years; the minimum investment should rise by 74 percent
  • The sum of half a million dollars is less than the average (mean) net worth of American families
  • This is not a program for entrepreneurs, it is a program for passive investors, and no other requirements, such as the ability to speak English, are required.
Support recruited

Meanwhile, the IIUSA, a trade group that includes not only Regional Centers but also other EB-5 service providers is recruiting "EB-5 Job Creators" to send letters to Congress in support of the renewal of the EB-5 program.

Support is sought from a wide array of Program stakeholders/beneficiaries, including regional centers;
local/state government officials and/or organizations; local/state chambers of commerce/economic development agencies; Members of Congress; and local unions who represent workers hired through the program.

Administration support

In its October interim report, President Obama’s Council on Jobs and Competitiveness expressed support for EB-5:
The administration is working to improve and leverage the EB-5 immigrant investor visa program, another Council recommendation. DHS’ Citizen and Immigration Services (USCIS) is enhancing the program by creating specialized review teams with business expertise, engaging re-engineering experts to streamline the process, launching a premium processing service and evaluating additional options for maximizing the program’s potential.
The Council also placed EB-5 immigration, which requires high net worth but not necessarily high skills, under the rubric of "High-skilled immigration":
First, we need to fully subscribe and radically expand the so-called EB-5 ‘entrepreneur’s visa’ for immigrant entrepreneurs who invest $500,000 to $1 million in a new commercial enterprise and create at least 10 full-time jobs (or preserve 10 jobs in a troubled business). If the EB-5 program reaches maximum capacity, it could result annually in the creation of approximately 4,000 new businesses $2 billion to $4 billion of foreign investment capital and create 40,000 jobs. But streamlining the application process and fully subscribing the program is just a start. Why have any cap on this kind of visa at all? Why not advertise it worldwide? Indeed, why not go further, as some have suggested, and set up a human resources offices in key countries around the world to recruit their most talented young people to come to America to realize their dreams while fueling the next generation of U.S. innovation?
Our second point is a plea: American can’t afford to let high-skilled immigration reform remain attached to the controversies that surround “comprehensive” immigration reform more broadly.
Well, talent has nothing to do with half a million dollars. These are two separate things. But they're lumped together, and the question of whether jobs are actually created--as opposed to developers gaining savings--is bypassed.

USCIS engagement

According to EB-5 writer and watcher Suzanne Lazicki, USCIS Director Alejandro Mayorkas introduced the document “A Work in Progress: Towards A New Draft Policy Memorandum Guiding EB-5 Adjudications” and fielded stakeholder questions during an 11/9/11 teleconference.

She offered a few items of interest:
Premium Processing for EB-5: Director Mayorkas reported that the goal is to have premium processing available for initial I-924 applications only by Spring of next year. He also reiterated that the service is working hard to speed up processing times across the board for all petitions, independent of premium processing.

...Oversight: Director Mayorkas said that the agency is concerned about fraud and misrepresentation in EB-5 marketing and practices, and that examples should be brought to the agency’s attention.
The agency is concerned about fraud? Evidence has been right in their face for nearly a year.

The new policy

The proposed new policy document (also embedded below) aims to consolidate all policies into a single document. Here's the guidance on job creation:
It is not enough that the immigrant invest funds into the U.S. economy; the investment must
result in the creation of jobs for qualifying employees. As discussed fully below, the EB-5
Program provides that each investment of the required amount of capital in a new commercial enterprise must result in the creation of at least ten jobs.
It is important to recognize that while the immigrant’s investment must result in the creation of jobs for qualifying employees, it is the new commercial enterprise that creates the jobs. This distinction is best illustrated by an example:
Ten immigrant investors seek to establish a hotel as their new commercial enterprise. The establishment of the new hotel requires capital to pay financing costs, purchasing the land, developing the plans, obtaining the licenses, building the structure, taking care of the grounds, staffing the hotel, and the many other types of expenses involved in the development and operation of a new hotel. The immigrant’s investments can go to pay part or all of any of these expenses. Each immigrant’s investment of the required amount of capital helps the new commercial enterprise – the new hotel – create ten jobs. The ten
immigrants’ investments must result in the new hotel’s creation of 100 jobs for qualifying employees (ten jobs resulting from each of the ten immigrant’s investment).
See 8 C.F.R. §204.6(j) (it is the new commercial enterprise that will create the ten jobs).
Jobs connected with a regional center

The document states:
For a new commercial enterprise that is not a troubled business and is located within a regional center, the EB-5 Program provides that the full-time positions can be created either directly or indirectly by the new commercial enterprise.  8 C.F.R. § 204.6((j)(4)(iii).  Indirect jobs are those that are held outside of the new commercial enterprise but are created  as a result of the new commercial enterprise.  For indirect jobs, the new full-time employees would not be employed directly by the new commercial enterprise.  For example, indirect jobs can include those held by employees of the producers of materials, equipment, or services used by the new commercial enterprise.
September update

In a 9/14/11 small group engagement regarding EB-5, Mayorkas offered several updates, according to the official summary:
Director Mayorkas provided an update on the proposal to revise the EB-5 process. On September 13, 2011, USCIS launched the first in a series of enhancements to the EB-5 program whereby Form I-924 applicants will be able to communicate directly with USCIS adjudicators via e-mail. This enhancement will streamline the adjudication process by providing applicants and adjudicators the ability to quickly raise and resolve issues and questions that arise during the adjudication process.
Director Mayorkas also noted that the agency is eager to implement all of the proposed enhancements to the EB-5 program. Premium processing will be introduced through revisions to the Form I-924 and we are currently exploring how to expedite this process which can take several months. Additionally, USCIS is in the process of hiring economists and other experts that will enhance and accelerate the adjudication process and also help constitute the Decision Board that was first described in the EB-5 proposal.

...Stakeholders expressed an overall lack of confidence in the adjudications of EB-5 petitions. In particular, they are concerned about a lack of consistency. Stakeholders would like increased predictability in the processing of EB-5 petitions. Stakeholders seek a more efficient EB-5 adjudication process. Some participants commented that EB-5 processing times are lengthy and requested enhancements to shorten approval times and keep investors informed. Stakeholders further requested transparency through the availability of accurate EB-5 processing times on the USCIS website. Processing times for both the I-526 and I-829 are now available on

Stakeholders also commented that the business community should be given trust and that the agency should not presume fraud exists in any particular case. Director Mayorkas stressed that there is no presumption of fraud in any case and that all cases are adjudicated on their merits. He further noted that USCIS was considering how to embed the perspective of the business community in the adjudication process such as through additional training.


Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

No, security guards can't ban photos. Questions remain about visibility of ID/sticker system.

The bi-monthly Atlantic Yards/Pacific Park Community Update meeting June 14, held at 55 Hanson Place, addressed multiple issues, including delays in the project, a new detente with project neighbors,concerns about traffic congestion, upcoming sewer work and demolitions, and an explanation of how high winds caused debris to fly off the under-construction 38 Sixth Avenue building. I'll have more coverage.
Security issues came up several times at the meeting.
Wayne Bailey, a resident who regularly takes photos and videos (that I often use) of construction/operations issues that impact residents, asked representatives of Tishman Construction if the security guard at the sites they're building works for them.
After Tishman Senior VP Eric Reid said yes, Bailey asked why a guard told him not to shoot video of the site, even though he was on a public street.

"I will address it with principals for that security firm," Reid said.
Forest City Ratner executive Ashley Cotton, the …

Atlantic Yards/Pacific Park graphic: what's built/what might be coming + FAQ (post-dated pinned post)

This graphic, posted in February 2018, is post-dated to stay at the top of the blog. It will be updated as announced configurations change and buildings launch. Note the unbuilt B1 and the proposed--but not yet approved--shift in bulk to the unbuilt Site 5.

The August 2014 tentative configurations proposed by developer Greenland Forest City Partners will change. The project is already well behind that tentative timetable.

How many people are expected?

Atlantic Yards/Pacific Park has a projected 6,430 apartments housing 2.1 persons per unit (as per Chapter 4 of the 2006 Final Environmental Impact Statement), which would mean 13,503 new residents, with 1,890 among them in low-income affordable rentals, and 2,835 in moderate- and middle-income affordable rentals.

That leaves 8,778 people in market-rate rentals and condos, though let's call it 8,358 after subtracting 420 who may live in 200 promised below-market condos. So that's 5,145 in below-market units, though many of them won…

The passing of David Sheets, Dean Street renter, former Freddy's bartender, eminent domain plaintiff, and singular personality

David Sheets, longtime Dean Street renter, Freddy's bartender, eminent domain plaintiff, and singular personality, died 1/17/18 in HCA Greenview Hospital in Bowling Green, KY. He was 56.

There are obituary notices in the Bowling Green Daily News and the Wichita Eagle, which state:
He was born in Wichita, KS where he attended public Schools and Wichita State University. He lived for many years in Brooklyn, NY, and was employed as a legal assistant. David's hobby was cartography and had an avid interest in Mass Transit Systems of the world. David was predeceased by his father, Kenneth E. Sheets. He is survived by his mother, Wilma Smith, step-brother, Billy Ray Smith and his wife, Jane all of Bowling Green; step-sister, Ellen Smith Alexander and her husband, Jerry of Bella Vista, AR; several cousins and step-nieces and step-nephews also survive. Memorial Services will be on Monday, January 22, 2018 at 1:00 pm with visitation from 10:00 am to 1:00 pm Monday at Johnson-Vaughn-Phe…

Some skepticism on Belmont hockey deal: lease value seems far below Aqueduct racino; unclear (but large?) cost for LIRR service

As I wrote for The Bridge 12/20/1, The Islanders Say Bye to Brooklyn, But Where Next?, the press conference announcing a new arena at Belmont Park for the New York Islanders was "long on pomp... but short on specifics."

Notably, a lease valued at $40 million "upfront to lease up to 43 acres over 49 years... seems like a good deal on rent for the state-controlled property." Also, the Long Island Rail Road will expand service to Belmont.

That indicates public support for an arena widely described as "privately financed," but how much? We don't know yet, but some more details--or at least questions--have emerged.

An Aqueduct comparable?

Well, we don't know what the other bid was, and there aren't exactly parcels that large offering direct comparables.

But consider: Genting New York LLC in September 2010 was granted a franchise to operate a video lottery terminal under a 30 year lease on 67 acres at Aqueduct Park (as noted by Gov. Andrew Cuomo).


Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…