“On hold at USCIS headquarters”

2/17 update: USCIS has identified the problem as relating to whether for a particular case “it is economically reasonable to attribute ‘tenant-occupancy’ jobs to the underlying EB-5 commercial real estate project.”
2/6 update: I recommend this article on the issue by Bernard Wolfsdorf , an attorney who works with EB-5: “Transitions and Predictions for the EB-5 Program”
1/23 update: In the 1/23 EB-5 Stakeholder meeting, Sasha Haskell confirmed that the hold at headquarters indeed resulted from questions about the economic analyses that were raised by USCIS’s contract economists and currently under review by the senior leadership.

A number of Regional Center applicants, including a few who filed over a year ago, have been told that their applications are currently “on hold at USCIS headquarters pending resolution of an issue.”

This hold hasn’t affected all I-924s (the CSC has issued recent Regional Center approvals and RFEs), but it’s a significant phenomenon. I’ve heard several personal reports from attorneys and applicants in the last couple months, and the audience at the 1/12/2012 EB-5 engagement asked USCIS Director Mayorkas about it.

So far as I’ve heard, communications from USCIS to the affected applicants haven’t disclosed the nature of the hold-up(s) or when resolution might be expected, and Director Mayorkas didn’t give much more information at last week’s meeting. He agreed that USCIS should be able to identify the issues and provide a timetable for resolution, and he suggested that the matter will be treated at the up-coming January 23 EB-5 stakeholder meeting. (He didn’t agree that it was unfair for applications filed many months ago to be judged according to current standards. He also noted that the unusual volume of new RC applications has been naturally accompanied by an unusual volume of unprecedented issues requiring judgment calls, thus the need for evolving guidance.)

While we wait for the 1/23 meeting, can we guess what might be the unresolved issue(s) holding up some Regional Center applications? Let’s review a few questionable/questioned areas that we know of:

1)     Econometric Studies
As a layman I’ve struggled to make sense of the economic impact reports and job counts that get filed with Regional Center applications, and I’ve wondered what to conclude when different professional economists working with EB-5 criticize each other’s approaches. How do the adjudicators at the CSC interpret and assess these reports? What do they make of the widely varying length, level of detail, and use of methodologies? And now that USCIS has just hired three new economists, do they disagree among themselves as much as the economists preparing the reports do? Perhaps most adjudicators used to rubber stamp the econometric studies, not being qualified to critique them, but now the new team of USCIS economists is providing more oversight and raising questions? I’ve heard several people (including Joseph McCarthy, who asked about holds at the in-person meeting with Director Mayorkas) speculate that issues raised by the newly hired economists may explain the “hold at headquarters” phenomenon.  I expect that the 1/23 stakeholder meeting will include new guidance for econometric studies.

2)     Targeted Employment Area Designation
Even the New York Times recently joined the clamor pointing out “rule-stretching” to allow projects with apparently prosperous surroundings to take advantage of the $500,000 EB-5 investment threshold that Congress intended to benefit areas of high unemployment. Surely USCIS has also noticed the negative press, and is struggling to create guidelines that will limit applicants’ self-serving creativity and the states’ inconsistent practice in TEA designation. For in-depth analysis of the issues at stake, see two excellent articles by EB5info.com (New York Times, EB-5 Visa, TEAS, and Gerrymandering Part I and Part II). I particularly note the issue of whether a census tract per se is an allowable building block for a TEA. Census tracts were the common building block until questions started to be raised last year, and apparently the jury is still out on whether a single census tract or census tract group can qualify as a geographic area or political subdivision for TEA designation purposes. As recently as the 1/12/2012 meeting, Director Mayorkas said that he couldn’t say for sure and would huddle with his team to consider the matter. The conclusion could affect a lot of pending applications.

3)     Project Detail
An unresolved issue that I notice is the question of how much and what kind of project detail needs to be included with a Regional Center application. The I-924 instructions say “The job creation analysis for each economic activity must be supported by a copy of a business plan for an actual or exemplar capital investment project for that category.” The EB-5 community tends to pull one way, taking that “or exemplar” option to allow filing applications based on briefly sketched hypothetical projects, while USCIS tugs the other way, issuing RFEs that request extensive real-world project information, often quoting the further I-924 instruction that: “A business plan provided in support of a regional center application must contain sufficient detail to provide valid and reasoned inputs into the economic forecasting tools and must demonstrate that the proposed project is feasible given current market and economic conditions.”  Official guidance (notably the 2009 Neufeld memo) specifically allows for “hypothetical” projects in RC applications, but I get the sense that the adjudicators currently don’t like them very much and may be debating what to do with initial RC applications not grounded in actual projects.

Anyone else have first hand evidence or guesses about the reasons for the hold on some I-924s at USCIS headquarters? I’m not happy that we have to speculate about this, but also thankful that USCIS is trying to be vigilant. I hope that eventually the new standards will be honed so that the many good proposals aren’t delayed and the many faulty applicants/projects are cut off before they go live and disgrace the EB-5 program. (But if I had to choose delays or disgrace, I’d choose delays.)

About Suzanne (www.lucidtext.com)
Suzanne Lazicki is a business plan writer, EB-5 expert, and founder of Lucid Professional Writing. Contact me at suzanne@lucidtext.com (626) 660-4030.

9 Responses to “On hold at USCIS headquarters”

  1. Joe Whalen says:

    I agree with you….delays are more acceptable than disgrace and the death of EB-5!

    Not having seen the actual materials submitted, you are right, we can only guess.

    I can guess that more than a few folks have submitted vague Business Plans from which unsupported assumptions have been drawn which resulted in the selection of poor categories of input for use in the Econometric Model. (A model which may or may not the best choice for the exemplar industry or project type because the Business Analyst and the Economist probably never met–provided both types of professionals were actually utilized). All of that has likely resulted in inadequate Econometric Analyses (that also probably don’t address the laundry list of items enumerated in the statute and regulations because nobody ever handed them to the Economist and instead they blather on about poverty levels and other issues irrelevant to EB-5).

    But what would I know about it?

  2. I’m sure you could write the book about it…

    • John says:

      Huh? From the way the service refers to the matter, they make it sound like they’re all one class of issues, such as one particular economic approach (which some people on the calls seem clued into, but which I’m clueless about) and I’m just wondering what those are.

      • I think I’m correct in saying that no one knows what the exact issues are except for the USCIS people, who have declined to make a statement in the two recent conference calls. Based on the few cases I’ve seen held and the ones I’ve seen go through, I don’t think the issue could be a specific methodology (e.g. IMPLAN or RIMS II); so I guess it’s a matter of how the methodology is used. Honestly we know that there are many grey areas and even points that deserve to be challenged in many econ analyses out there — the question is just which of these points are being highlighted currently. Existing Regional Centers should be thankful that USCIS is taking its time to discuss what to do about the challenges raised by its economists, because the decision will have far-reaching implications. Many existing RCs have investors filing/filed with econ reports very similar to the ones currently being reconsidered, and who knows what will happen to those cases if these challenges are upheld.

  3. Pingback: New EB-5 Guidance Memo « EB-5 Updates

  4. Tom says:

    I did uscis interview before 2 months. And they told me that they hold my case for review. My case is medical case . Is the problem may be economic reason?

    • I can’t guess what the reason may be. So far as I know, EB-5 cases are not on hold now, just subject to backlog.

      • thomas william says:

        i am a refugee .after i did uscis interview they gave me a decision paper that said “deferred further investigation to get eligibility in united states ” and they gave me additional 2 papers that says “do not bring “khat” (narcotin drug) and second about female genital law. for most refugee that did interview with me with the same decision did biometric. for some us said “on hold for review in uscis”. i do not understand the reason.

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