From TRD New York: The United States Citizenship and Immigration Services issued three years of EB-5 visa data this week, confirming what was already known to many in the industry: big city regional centers servicing developer clients dominate the field for investors looking to immigrate to the U.S.
Between 2014 and 2017, USCIS approved more than 26,000 petitions for visas nationwide and rejected 3,313, its data show. The overwhelming majority of regional centers saw 100 or fewer petitions processed during the period. EB-5 visa issuance is currently capped at 10,000 new investor visas annually.
The US Immigration Fund (USIF), a Florida-based EB-5 regional center company with branches in New York City and New Jersey, accounted for more than 3,100 approved petitions, or 17 percent of all approved EB-5 visas in this period, the data show. In New York, developers like Forest City Ratner, HFZ Capital Group, the Durst Organization, Steve Witkoff and Michael Shvo tapped USIF to bring in funds for major projects, many of them luxury condos. And in New Jersey, the firm’s regional center is raising funds for two Kushner Companies residential projects, Trump Bay Street and One Journal Square. The latter project recently came under fire for making reference to Jared Kushner’s connections to the President Trump in a presentation to potential Chinese EB-5 investors.
Related Companies also made extensive use of the investment program in New York through its own regional center, which accounted for nearly 1,400 approved visas since 2014, the data show.
Both USIF and Related are among the biggest spenders on EB-5 lobbying. Related reportedly spent $1.4 million lobbying for the program between 2015 and 2016 and USIF reportedly spent nearly $1 million on lobbying over the last four years.
Other large developers maintain their own regional centers, too. Silverstein Properties’ Gotham Regional Center saw 477 approvals during the period. Extell Development’s New York center saw 269 approved petitions. Extell has most recently sought to raise EB-5 dollars for high-rise condo projects such as One Manhattan Square and Central Park Tower, which is set to be the most expensive condo in New York history.
Regional centers associated with California Military Bases (CMB) were also among the biggest visamongers. Its centers, which are spread over several states and deal with several developers, saw at least 2,945 visas approved. Its website claims 3,923 of its petitions were approved since it started 20 years ago.
Track records for scoring visas are likely to be used by the regional centers as a marketing tool, according to Jim Butler, an attorney at Los Angeles-based Jeffer Mangels Butler & Mitchell who represents developers on EB-5 matters.
“The number one thing for an EB-5 investor is to get the green card,” he said. “Yes, they would like to get their money back… but the driving factor, the reason for the investment has to do with the certainty of getting the U.S. green card.”
In addition to petition approvals, USCIS also provided data for the next step in the process, the removal of temporary restrictions from the first visa that solidifies an investor’s permanent residency status. Just under 5,000 of these applications were approved in the study period, at a much higher success rate than the original visa petitions. This step is crucial, Butler said, because immigrants who began to establish lives after getting their first petition approved may have to return to their home countries if they don’t make it through the next step, which can happen if the project they invested in falls through.
“If the project fails, they face deportation,” Butler said.
USCIS’ data may not be perfect, however. Many EB-5 professionals have already taken issue with the data. Suzanne Lazicki, an EB-5 business plan writer, found that there were duplicate regional centers in the data.
“Whoever created this database of approvals and denials made a number of entry errors on RC names (resulting in some double or even triple listings from name variants), so the probability of numerical errors is also high,” Lazicki wrote
Matthew Galati, an EB-5 attorney with Green and Spiegel, said that because of the potential errors, investors should not make decisions based on the new data.
“My advice to investors is this data doesn’t change anything,” he said. “If the data is inaccurate, it can’t be relied upon, and I would discard it completely.”
In a blog post on his firm’s website, Galati pointed to the case of CanAm, a regional center in Philadelphia. CanAm’s CEO Tom Rosenfeld contends that the number of rejections cited for his company in the USCIS data, 159, should have actually been 12.
“[I]t is irresponsible to send out such misleading numbers that cause unnecessary concern to our investors,” Rosenfeld wrote in a letter to business associates.
USICS’ data release does come with the disclaimer that the agency “makes no claims that the published list below is complete, timely or accurate.”