EB-5 investments in SoFla hanging in balance

Miami /
Dec.December 04, 2015 01:30 PM

The future of the EB-5 visa program remains unclear as a Dec. 11 deadline for it to expire draws closer.

Congress simply cannot reach a consensus on a host of reforms that would severely limit developers in urban areas from recruiting foreign investors seeking U.S. permanent residency, according to a pair of south Florida lawyers who specialize in the EB-5 lending market.

Roger Bernstein, an immigration lawyer who owns American Life Investments, and Ron Klein, a partner with the law firm Holland & Knight, told The Real Deal they expect Congress to extend the life of the EB-5 program in its current form for a third time in the past year.

“From what I am hearing, we will see an extension,” Bernstein told TRD. “There is not a consensus among senators and house members on what targeted employment areas should be and the employment methodology.”

The EB-5 visa program was set to expire or be renewed on Sept. 30, but a stopgap bill signed that day is keeping it afloat through Dec. 11, when Congress plans to discuss amendments to the program.

“For those of us representing EB-5 interests, we are letting Congress know it is better to do an extension for another year rather than pass a bad bill,” Klein added.

The EB-5 program offers foreign investors and their families the opportunity to qualify for green cards if they invest at least $500,000 in the U.S. and create at least 10 permanent jobs. While supporters claim EB-5 visas help projects get off the ground and obtain financing through an unconventional source, detractors say the program has been poorly regulated and is susceptible to fraud.

Bernstein, whose company is a regional center — a government sanctioned entity that sponsors EB-5 applications to the U.S. Immigration and Citizenship Service on behalf of projects and their foreign investors — said the proposed reform bill would be bad for south Florida and New York real estate projects because only projects in rural parts of the country would qualify for EB-5 investments.

“It would effectively pull urban centers out of the program,” Bernstein said. “It would limit the ability of major U.S. cities to obtain much needed capital. We don’t want that to happen.”  

Bernstein has assisted several EB-5 projects in South Florida, including Design 41, a seven-story mixed-used building in Miami’s Design District that will include class A office space, a restaurant, and luxury retail, and the Las Olas Ocean Resort hotel in Fort Lauderdale.

“For Design 41, we raised $14.5 million from 29 EB-5 investors,” he said. “We raised $30 million from 60 EB-5 investors for Las Olas Ocean Resort.”

His company is currently sponsoring the $1 billion project in Miami’s Brickell neighborhood being developed by China City Construction Holding Group and American Da Tang Group, Bernstein said. “It’s the first EB-5 project in South Florida devoted to Chinese investors,” he said. “For EB-5 projects, we typically draw investors from Europe and South America.”

Klein, who has been lobbying Congress on behalf of U.S. Immigration Fund, a regional center with three EB-5 projects in South Florida, said pro-EB-5 groups have been pushing legislators to include provisions in the reform bill that will continue to allow urban areas to attract foreign investors.

However, one pro-EB-5 group claims congressional leaders have heard the industry’s concerns and are supporting the passage of the reform bill. The Invest in the USA group is pushing its members to lobby congressional leaders to enact the legislation by Dec. 11.

“These reforms are important to the program reauthorization and should be enacted now,” said Invest in the USA Executive Director Peter Joseph. “These reforms are urgently needed and the time is now to enact this important bipartisan agreement.”


Related Articles

arrow_forward_ios
(Getty)
Weston man pleads guilty in Vermont Jay Peak EB-5 biomedical research case
Weston man pleads guilty in Vermont Jay Peak EB-5 biomedical research case
Royal Palm Business Plaza at 9200 Belvedere Road in Royal Palm Beach (Google Maps, US District Court Southern District of Florida/Illustration by Alexis Manrodt for The Real Deal)
Joseph Walsh hit with $26M judgment over alleged Royal Palm Beach EB-5 fraud
Joseph Walsh hit with $26M judgment over alleged Royal Palm Beach EB-5 fraud
Triton Center (iStock)
Questions surround $50M in EB-5 investments tied to former INS building: lawsuit
Questions surround $50M in EB-5 investments tied to former INS building: lawsuit
Harbourside Place in Jupiter
More EB-5 investors allege fraud at Jupiter development
More EB-5 investors allege fraud at Jupiter development
Daily Digest Miami
Moishe Mana sells Hibiscus Island home for $12M, CitizenM scores $48M loan to build Brickell hotel
Moishe Mana sells Hibiscus Island home for $12M, CitizenM scores $48M loan to build Brickell hotel
Glenn Straub and the Palm House Hotel
Glenn Straub loses appeal on Palm House sale
Glenn Straub loses appeal on Palm House sale
Robert Matthews and Palm House Hotel
Embattled Palm House developer Robert Matthews agrees to federal securities charges
Embattled Palm House developer Robert Matthews agrees to federal securities charges
Academica founder Fernando Zulueta and rendering of Somerset Academy Parkland (Credit: Blue Ridge Rendering)
Parkland charter school scores $15M in EB-5-backed financing
Parkland charter school scores $15M in EB-5-backed financing
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...