New AAO Decision (RC application denial)

The AAO has published another EB-5-related decision (04/26/2011), this one affirming denial of a Regional Center application filed on behalf of The Statesman Group and its Pleasant Harbor Marina and Golf Resort project in the North Olympic Peninsula. The decision is interesting, if unsurprising. To quote a portion of the analysis:

… the AAO finds that the applicant’s proposal is a marketing strategy to attract buyers for vacation suites rather than investors of capital in a new commercial enterprise. Specifically, the evidence incontrovertibly establishes that the applicant proposes that “investors” would purchase a vacation suite as either a “primary residence,” “second home” or “investment property.” For the reasons discussed below, the AAO affirms the director’s determination that such a real estate purchase of a private residence, even if still under construction, is not an at-risk investment of capital that can be credited with direct or indirect job creation under the employment creation program set forth at section 203(b)(5) of the Act and the implementing regulation at 8 C.F.R. § 204.6. The purchase of individual residential suites by alien “investors,” even if concentrated in one resort complex, is also not the type of “pooled investment” concept Congress envisioned for the regional center program. In addition, the offer in the record indicates an alien “investor’s” funds would be returned should the residence not be completed on time, even if the alien has already adjusted to conditional permanent resident status. Thus, the alien’s funds would not be at risk if the project failed or construction was delayed. Furthermore, the record does not identify a new commercial enterprise, such as a limited partnership, in which alien investors invest capital. Rather, their full involvement would be to purchase residential units from the regional center. Finally, the applicant asserts that membership in the resort’s Homeowner’s Association will constitute management in a new commercial enterprise. As the Homeowner’s Association is not the new commercial enterprise in which the alien investors will invest, this assertion lacks credibility. As the described proposal does not contemplate an investment of capital in a new commercial enterprise, the job creation at a proposed resort is immaterial.

According to the Peninsula Daily News, The Statesman Group is planning to try again with its Regional Center application, this time “expecting better luck… because he hired a professional writer to pen the application.”  (Hooray for professional writers!) I trust that the writer in question will take care to keep in tune with “the letter and spirit” of the EB-5 regulations, as the AAO’s summary requests. To be fair to The Statesman Group, this is surely not the only RC application denied for trying to frame purchase of residential real estate as an EB-5 investment.

For all EB-5-related AAO decisions, see my AAO Decision summary page.

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

2 Responses to New AAO Decision (RC application denial)

  1. Pingback: Acquiring Real Estate as EB-5 Investment? « EB-5 Updates

  2. Pingback: Acquiring Real Estate as EB-5 Investment? « EB-5 Updates

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