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CRE Finance World, Summer 2013

Euros, Yuans and You: The EB-5 Investor Visa Program as a Capital Source for Commercial Developers economy has been one of the few issues that Republicans and Democrats agree on. The EB-5 program enjoys broad bipartisan backing, with President Obama signing an extension of the Pilot Program, previously set to sunset in September 30, 2012, through September 30, 2015,21 following nearly unanimous congressional support. Congress is also looking to expand the investor visa program, including a proposition by Sens. Charles Schumer (D., N.Y.) and Mike Lee (R., Utah) to provide residence visas to foreigners purchasing at least $500,000 of residential real estate.22 Conclusion The EB-5 program has proven to be a popular and valuable source of available and inexpensive financing for commercial real estate developers. In the first quarter of 2012, USCIS issued 2,364 EB-5 visas, as opposed to 158 in all of 2005,23 with 2012 expected to shatter the records for visas granted in a fiscal year. While not without its faults, the program’s increasing efficiency, low cost and potentially-limited direct investor involvement makes it an ideal source of capital for development projects, while also encouraging job growth at little cost to U.S. taxpayers. 1 Forest City Ratner borrowed $228 million in EB-5 money from 456 foreigners to be applied to certain development costs at the Atlantic Yards Project. Dune, Infra note 18 2 Bill Pennington, A New Jay Peak, in Vermont, N.Y. Times (December 11, 2011) http://travel.nytimes.com/2011/12/11/travel/with-renovationsjay peak-in-vermont-grows-up.html?pagewanted=all&_r=0 3 Sean Ryan, Milwaukee Aloft Operator Could Also Run Proposed Park East Hotel, The Business Journal (Sep. 25, 2012), http://www.bizjournals. com/milwaukee/blog/real_estate/2012/09/milwaukee-aloftoperator could-also.html?page=all 4 Patrick McGeehan and Kirk Semple, Rules Stretched as Green Cards Go to Investors, N.Y. Times (Dec. 18, 2011), http://www.nytimes. com/2011/12/19/nyregion/new-york-developers-take-advantage-offinancing for-visas-program.html?pagewanted=all 5 Janet Morrissey, Visas for Dollars Program a Boon to Hotel Developers, N.Y. TIMES (Sept. 6, 2012), http://dealbook.nytimes.com/2012/09/06/ visas-for-dollars-program-a-boon-to-hotel-developers/ 6 McGeehan, Supra note 4. See also http://nyifund.com/knickerbocker/ 7 Morrissey, supra note 5 8 Morrissey, Supra note 5 9 McGeehan, Supra note 4. Also, Brian B. Su, EB-5 Visa Stats Update, EB-5 NEWS BLOG (Nov. 8, 2012, 6:01 PM), http://eb5news.blogspot. com/2012/07/eb-5-visa-stats-update.html CRE Finance World Summer 2013 30 10 David North, The Immigrant Investor (EB-5) Visa: A Program that is, and Deserves to Be, Failing, CENTER FOR IMMIGRATION STUDIES, http://www.cis.org/investor%20visa%20program%20is%20failing (last visited Nov. 29, 2012) 11 “Indirect jobs” are defined by USCIS as those jobs shown to have been created collaterally or as a result of capital invested in a commercial enterprise affiliated with a regional center by an EB-5 investor 12 “Direct jobs” are defined by the USCIS as actual identifiable jobs for qualified employees located within the commercial enterprise into which the EB-5 investor has invested his or her capital 13 Congress has set aside 3,000 of the 10,000 annual EB-5 visas for EB-5 investors who invest in Targeted Employment Areas 14 http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e6 6f614176543f6d1a/?vgnextoid=d765ee0f4c014210VgnVCM100000 082ca60aRCRD&vgnextchannel=facb83453d4a3210VgnVCM10000 0b92ca60aRCRD 15 U.S. Citizenship & Immigration Servs., EB-5 Immigrant Investor Program (2010), and Antonio Olivo, Fast Track to the American Dream, CHI. TRIBUNE (July 15, 2012), http://articles.chicagotribune.com/2012- 07-15/site/china-investment-visa-mainbar-20120715_1_eb-5-visaprogram foreign-investors, U.S. Citizenship and Immigration Servs., Immigrant Investor Reg’l Ctrs., http://www.uscis.gov/portal/site/uscis/ menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=d765e e0f4c014210VgnVCM100000082ca60aRCRD&vgnextchannel=facb8 3453d4a3210VgnVCM100000b92ca60aRCRD 16 Olivo, Supra note 15 17 P.J. Huffstutter, In U.S. Visa Program, Money Talks, L.A.Times (Sept. 3, 2011), http://articles.latimes.com/2011/sep/03/business/la-fi-easyvisa 20110904 18 Dune Lawrence, Coming to America Costs $500,000 With Job Plan Prone to Failures, Bloomberg, March 23, 2012, http://www.bloomberg. com/news/2012-03-23/coming-to-america-costs-500-000-with-jobplan prone-to-failures.html 19 Ann Lee, Making Visas-for-Dollars Work, N.Y. Times (April 15, 2012), http://www.nytimes.com/2012/04/16/opinion/reform-the-eb-5- program.html 20 Id., Dune Supra note 18 21 http://www.whitehouse.gov/the-press-office/2012/09/28/statementpress secretary-hj-res-117-s-3245-and-s-3552 22 Nick Timiraos, Foreigners’ Sweetener: Buy House, Get a Visa, Wall Street Journal (Oct. 20, 2011), http://online.wsj.com/article/SB10001 424052970203752604576641421449460968.html 23 Dune, supra note 18


CRE Finance World, Summer 2013
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