Real estate experts in the EB-5 visa field strongly believe new legislation governing the controversial immigration program that rewards foreign investors with permanent U.S. residency will pass by the end of September.
“Either Congress will pass a new EB-5 law, which will be the best news,” said H. Ronald Klasko. “Or the U.S. Citizenship and Immigration Service will pass regulation that will have a significant impact on the EB-5 program.”
Klasko, who heads Klasko Immigration Law Partners, moderated a panel on Friday during an Arnstein & Lehr EB-5 Seminar at the JW Marriott Miami that included Walter M. “Marty” Cummins Jr., president of Florida EB-5 Investments, LLC; Reid Thomas, a senior vice-president for NES Financial Services; Kamyar Amiri-Davani, co-founder of EB5 Investors Magazine; and Arnstein partner Ronald R. Fieldstone.
The panelists shared Klasko’s view that Congress will approve new rules and regulations for the EB-5 program after the current law governing it has been extended six times in the past three years. Lawmakers have struggled to agree on a multitude of measures meant to reform two EB-5 visas are issued.
Cummins said a bill proposed by Sen. John Cornyn, an EB-5 supporter, has the backing of the entire EB-5 industry, which had been having a difficult time coalescing behind one single piece of proposed legislation.
“We have been on the defense now for three years even though the EB-5 program has been great for the economy,” Cummins said. “The Cornyn bill is a good start.”
Currently, foreign investors can obtain green cards for themselves and immediate family members by providing $1 million in funding to U.S. development projects that produce 10 direct or indirect jobs. The investment threshold drops to $500,000 if investors put money into projects located in a targeted employment area, which are usually in rural locations or places with high unemployment.
Despite success stories revolving around EB-5 funded projects, the program has been dogged by incidents of fraud over the years and criticisms from some Republican lawmakers like Sen. Chuck Grassley, who has sponsored legislation that industry leaders claim would have a devastating effect on places like New York City and South Florida courting foreign investors.
In Miami, signature projects Jeff Berkowitz’s SkyRise Miami are Paramount Miami Worldcenter pursuing EB-5 investors. Dozens of smaller projects such as office buildings and hotels by Riviera Point Development Group have also counted on EB-5 investors for financing.
Klasko said Cornyn’s bill would increase the number of investors who qualify for EB-5 visas by excluding visas given to spouses and children from an annual cap of 10,000 visas U.S. Citizenship and Immigration Services can issue. The proposed legislation would also raise the minimum investment in a targeted employment area to $800,000, but lower the minimum for non-targeted employment areas to $925,000.
“The entire EB-5 industry has aligned with Sen. Cornyn,” Klasko said. “Everybody is aligned behind one bill.”