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Business Officer Magazine
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Conduits for Construction, Job Creation

The U.S. Citizenship and Immigration Services’ EB-5 Program has evolved into a way to facilitate investment in projects, while creating new jobs for foreign workers. In certain federally designated regional centers, the program can also apply to college and university facilities.

By Jeffrey D. Turner, Nicholas M. Gabel, and Erik Wishneff

U.S. Citizenship and Immigration Services (USCIS) administers the Immigrant Investor Program, also known as "EB-5." Created by Congress in 1990, the purpose of the initiative was to stimulate the U.S. economy through job creation and capital investment. Under a pilot immigration program first enacted in 1992 and regularly reauthorized ever since, certain EB-5 visas also are set aside for investors in regional centers designated by USCIS, based on proposals for promoting economic growth.

The initiative provides a green card for immigrants, in exchange for an investment in a project that creates at least 10 permanent U.S. jobs. Such investments are facilitated through the federally-designated regional centers that serve as a conduit for the interactions. Colleges and universities that undertake projects with a significant job-component may be strong candidates for the EB-5 opportunity.

This is just one of several alternative funding methods for capital projects. For more details, see "Inviting Investments," in November 2015 Business Officer.

Guidelines, Timing

Typical investment sizes are $500K per individual, and most regional centers prefer total investments of at least $10 million per project. The money reaches the project through either a loan made on favorable terms or an equity investment in the project. The total EB-5 funding that a project can receive is contingent upon the number of direct and indirect jobs created by the project.

The biggest challenge associated with EB-5 is time. From the time an application is made, it can take up to 24 months to actually receive the funds. However, if schools have projects with long time horizons, EB-5 can be an attractive source of capital.

An Example in Development

The University of Miami used the EB-5 program for the first phase of its Life Science and Technology Park (UMLSP), an urban research park developed by Wexford Science and Technology, in conjunction with the university. Building One (of the UMLSP) used the EB-5 program to raise equity to help fund a 252,000-square-foot, $107 million life science building.     

Wexford and the university worked with BirchLeaf Miami 31 Regional Center, and Birch Capital to assemble 40 foreign investors that collectively provided $20 million in project equity. To secure the funding, leaders needed to demonstrate that the project created 400 jobs. An economic impact study performed by the Jacob France Institute of the University of Baltimore indicated that the number may be closer to 1,500 direct and indirect jobs-once the building becomes fully operational.

For more details on EB-5 funding, go to www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/about-eb-5-visa.

JEFFREY D. TURNER is senior vice president, and NICHOLAS M. GABEL is a project manager, Brailsford and Dunlavey Inc., Washington, D.C. ERIK WISHNEFF is vice president and general counsel at Brian Wishneff and Associates, Arlington, Va.


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