Senate Pushes Eb5 Visas Limits
By Meisha Perrin
Miami has spent several months doing due diligence on an application to US Citizenship and Immigration Services for an investment visa regional center to be run out of city hall that is geared to spur international investments and grow jobs.
But there are limits to the program — limits Kate Kalmykov, of counsel with Greenberg Traurig in New York, said are currently being pushed in the US Senate by senators who see the benefit of the program.
Last week, she said, officials released proposals that included some key EB5 provisions they seek to change, which include changing the limit on immigrant visas that can be given out from the current 10,000.
As it stands, that 10,000, she said, includes not only the principal investor, but also the investor’s family — and that limit in turn puts a limit on the amount of capital that can be raised each year through the program.
Members of the Senate, however, she said, are seeking to increase that number and exclude family members from the new limit.
Though that capacity has never been reached before, she said, if interest remains as is, it is expected to do so next year.
In 2011, only 3,463 visas were issued, according to Citizenship and Immigration, but that number increased to 7,641 last year, as more and more countries are becoming aware of the program and its benefits, Ms. Kalmykov said.
Reaching capacity, though, would not close the program, she said. Investors could still file petitions, though they would not be able to file green card applications.
Another part of the provision, she said, seeks to make the EB5 regional center a permanent program, instead of a three-year pilot as it is now that must seek continued renewal.
Under that pilot, she said, regional centers can count indirect as well as direct jobs that stem from the investment projects.
The benefits of the program, she said, are that projects have access to low-interest financing, which is much cheaper than conventional financing; attract foreign direct investment into the community; and are bringing not only the EB5 money but also the best and brightest from foreign countries, she said — "people who have been successful in business abroad and are now going to bring those practices to the United States."
And there are many benefits to the investors as well, she said. Among them, the primary benefit is that this green card area does not require a sponsorship.
Normally, Ms. Kalmykov said, immigrants would need a sponsor here in order to get a green card, but in the EB5 category, investors can sponsor themselves.
"The ability to self-sponsor is very appealing to people," she said. "It gives them flexibility."
It also provides a much quicker route to getting the green card, which she said would normally take about 5 to 10 years for Chinese and Indian nationals in bachelor’s and master’s degree and higher categories.
EB5, however, puts it at a year from start to finish.
Still, other limits to the program put a cap on the number of green cards that can be given to nationals from specific countries, according to Ms. Kalmykov.
"Every country can’t represent more than a certain part of each green card category."
And Chinese investors have shown the most interest.
According to the Wall Street Journal, 80% of the visas issued in the US last year were given to investors from China.
As for Miami, because its regional center is being applied for as a city, she said, it is being approached by a lot of developers and private equity firms seeking financing with the comfort of a city as a safety net.
Although real estate currently makes up about 80% of the EB5 investment targets, Ms. Kalmykov said, Miami is working on a host of other projects that may require EB5 funding that are not primarily driven by real estate.
"Miami is already receiving a lot of interest from investors," she said. "I think the city definitely sent a wave of interest throughout the community when they held the press conference saying that they are seeking designation to become a regional center."
Under the EB5 program, which was created in 1990 as an engine of job creation, foreign investors who inject $1 million — or $500,000 for a target employment area — into a qualified project can be entitled to a temporary resident visa, if that project helps create or maintain at least 10 full-time jobs for US workers.
After two years, if the investment and job-requirement conditions are met, investors can apply for unconditional permanent residency, even though they aren’t required to live in the US, for their spouse and children under 21.
And the approval rate for the visas, according to the US Citizenship and Immigration Services, is 80%, while the petition to get the permanent green card approval rate is 92%.
Miami’s city hall has been working since last year on its regional center application, of which attorney Mikki Canton was the architect, and is still in the process of fine-tuning all its moving parts.
Earlier this year, the city opened its international business development center at city hall, under which the program would run, with Ms. Canton at the head.
Miami would become the third city to have a government-owned regional center.
And the city, she said, has created its own hybrid model for the center that would charge developers an application fee as well as a percentage from 0.5% to 3% to develop the project.
That percentage, she said, will depend on the size and the nature of the project, and will be determined on a project-by-project basis.
Money made from the regional center, Ms. Canton said, will go into an account dedicated only to the regional-center-related funds that will not only help with the daily operations and marketing of the center but will also go toward the international activities involved with getting the word out, and, per request of Mayor Tomás Regalado, a special designation every year will go toward the police and fire departments.
"Not only are you creating jobs and economic development," Ms. Canton said, "but it’s also going to be a benefit to the city."
The application’s signature project, developer Tibor Hollo’s planned 830-foot-tall Panorama Tower at 1101 Brickell Ave., qualifies for the targeted employment area designation and, according to Ms. Canton, will be creating more than 2,000 jobs. Mr. Hollo told Miami Today last week that the project is fully funded.
The employment area designation, Ms. Kalmykov said, is specific to each project as it is designated based on where each project is being built — and Miami-Dade County jumping on board in support of the center broadens the scope for projects to go through the center.
County Mayor Carlos Gimenez reached out to Ms. Canton last month to partner on the regional center designation, and according to Ms. Canton, he has pledged $50,000 to $100,000 to the city to help with the startup of the center.
With that, Ms. Canton said, the city is working on a memorandum of understanding with the county that if a project funded through the center is not in the City of Miami, the city where the project is being developed will get a certain amount of money to be used for public safety services.
"This really puts the faith on what a regional center should be doing," Ms. Canton said: "creating jobs, spurring economic development and making people feel more comfortable."
The city has yet to submit its application for the center and has no target date for when it will do so. To read the entire issue of Miami Today online, subscribe to e-MIAMI TODAY, an exact digital replica of the printed edition.