If EB-5 returns in future stimulus bill, consider how new industry tool shows the most attractive projects don't need the money (so the program's about profit enhancement)

EB-5 was not resurrected in the recent federal stimulus bill, The Real Deal reported 3/30/20, despite a report from Politico about a proposal to drastically cut the required investment amount.

But it may not be over. Added the Real Deal:

Yet, EB-5 reform is not off the table, according to some experts. There are reports that Congress is also considering another stimulus package that could be larger than the most recently passed $2 trillion stimulus as the federal government looks to keep the economy afloat during widespread closures and layoffs, according to the Wall Street Journal.
“Congress is sure to consider other economic stimulus legislation this spring, and proponents hope EB-5 reforms may succeed then,” said Stephen Yale-Loehr, an immigration law professor at Cornell University and an expert on the EB-5 program.

Note that Yale-Loehr is not merely an academic expert but a longtime industry insider, of counsel at the law firm Miller Mayer (which worked on the initial Atlantic Yards EB-5 fundraising) and founder of Invest In the USA, a trade association of so-called regional centers, the investment pools that raise money as middlemen and take fees as well as a piece of the interest.

A key admission

Just days before that Real Deal report, I saw a 3/28/20 press release headlined EB5 Affiliate Network and Klasko Law Update EB-5 Project Risk Assessment Tool Following EB-5 Rule Changes. Here's the lead:

EB5 Affiliate Network (EB5AN), a leading EB-5 regional center and EB-5 service provider, has announced that it has updated its EB-5 Project Risk Assessment Tool for EB-5 investors to reflect the recent EB-5 rule changes enacted by United States Citizenship and Immigration Services (USCIS) on November 21, 2019. The tool, developed in collaboration with Klasko Immigration Law Partners (Klasko Law), offers EB-5 investors valuable transparency and insight into the project diligence and reliability of potential EB-5 projects in an attempt to educate investors and enable them to identify fraudulent or poorly managed projects.
The Project Risk Assessment Tool helps investors gauge the legitimacy of potential EB-5 projects through a series of multiple-choice questions and provides a chart at the end to visually assess the reliability of the project examined. All the questions have been updated to reflect the new EB-5 rule changes.

When I took a look at that new risk assessment questionnaire, I saw an astounding admission:

In response to the question, "Is the project construction contingent or dependent on EB-5 capital?" the Strong Answer was this:

There is no minimum EB-5 capital raise for the project and all the capital needed to complete the project has already been committed, OR the EB-5 capital is being used to partially recapitalize bridge funding per USCIS requirements.

Consider what that means, especially the first of the two parts of the answer: they don't need the money.

As I wrote, leading regional center operator Nicholas Mastroianni II told a panel in Shanghai in November 2016 stated, "Projects that don't typically need the capital are the projects that we look to lend money on. If a project can't be developed without the EB-5 capital, it's not a project that you should be looking to invest in, because you've got a desperate situation."

But if projects don't need EB-5 loans, the program has no reason to exist. It's just "profit enhancement," to quote NYU scholar Gary Friedland. Public assets produce no public benefit.