New RCs (CT, FL, MA, NY, PR) and TEA Resources

Regional Centers
The number of new Regional Centers approved by USCIS this year is up to 40, as the USCIS Regional Center list has added five new entries.

Connecticut
New England Regional Center

Florida
Gardens Regional Center, LLC

Massachusetts
Arundel Capital Partners
Website: http://arundel-group.com/
Geographic Area: Suffolk County, MA
Industry Categories: Commercial and Institutional Building Construction (NAICS 236220), Lessors of Nonresidential Buildings (NAICS 531120)
Designation Letter

New York
American Regional Center for Entrepreneurs
Email: info@arcfe.com
Geographic Area: New York, Bronx, Queens, Kings, Nassau, and Westchester Counties, NY
Industry Categories: Nonresidential Building Construction (NAICS 2362), Residential Property Managers (NAICS 531311)

Puerto Rico
Omega Puerto Rico Regional Center, LLC
Website: http://omegaregionalcenters.com/

(Note: See my Regional Center directory page for my most updated listings for all RCs. And please email me if you would like to provide additional information regarding your RC.)

Targeted Employment Area (TEA) Resources
Impact Data Source has published useful resources related to TEAs. For analysis of newly-released unemployment data from the US Bureau of Labor Statistics, a list of state agencies responsible for TEA designations, and an awesome interactive map of unemployment rates nationwide, see:

Blog Post discussing finalized average annual 2012 unemployment data – http://www.impactdatasource.com/2013-tea-data/

EB-5 TEA Map web page – http://www.impactdatasource.com/eb-5/tea/

Full Screen EB-5 TEA Map – www.impactdatasource.com/map

List of State Agencies Certifying TEAs – http://www.impactdatasource.com/eb-5/state-agencies-teas/

Determining the unemployment rate of a given area is one element in the process of determining TEA qualification. It’s also necessary to strategize about how to define the boundaries of the area to be designated, to consider the timing of designation, and to understand how the process works at the state level. As usual, Kate Kalmykov has a useful post on this topic: Determining if Your EB-5 Project is Located in a Targeted Employment Area (TEA). See also the following recent guidance from USCIS regarding TEA designation.

from p. 7-8 of the 5/30/2013 EB-5 Adjudications Policy Memorandum
a. “Targeted Employment Area” Defined

The statute and regulations governing the EB-5 Program defines a “targeted employment area” as, at the time of investment, a rural area or an area that has experienced unemployment of at least 150 percent of the national average rate. A “rural area” is defined as any area not within either a metropolitan statistical area (as designated by the Office of Management and Budget) or the outer boundary of any city or town having a population of 20,000 or more (based on the most recent decennial census of the United States). 8 U.S.C. § 1153(b)(5)(B)(ii), (iii); 8 C.F.R. § 204.6(e). In other words, a rural area must be both outside of a metropolitan statistical area and outside of a city or town having a population of 20,000 or more.

Congress expressly provided for a reduced investment amount in a rural area or an area of high unemployment in order to spur immigrants to invest in new commercial enterprises that are principally doing business in, and creating jobs in, areas of greatest need. In order for the lower capital investment amount of $500,000 to apply, the new commercial enterprise into which the immigrant invests or the actual job creating entity must be principally doing business in the targeted employment area.

For the purpose of the EB-5 Program, a new commercial enterprise is “principally doing business” in the location where it regularly, systematically, and continuously provides goods or services that support job creation. If the new commercial enterprise provides such goods or services in more than one location, it will be deemed to be “principally doing business” in the location that is most significantly related to the job creation. Factors to be considered in making this determination may include, but are not limited to, (1) the location of any jobs directly created by the new commercial enterprise; (2) the location of any expenditure of capital related to the creation of jobs; (3) where the new commercial enterprise conducts its day-to-day operation; and (4) where the new commercial enterprise maintains its assets that are utilized in the creation of jobs. Matter of Izummi, 22 I&N Dec. at 174.

As discussed fully below, investments through the Immigrant Investor Program can be made through regional centers and the new commercial enterprise may seek to establish indirect job creation. In these cases, the term “principally doing business” will apply to the job-creating
enterprise rather than the new commercial enterprise. See 8 C.F.R. § 204.6(j)(6); Matter of Izummi, 22 I&N Dec. at 171-73 (discussing the location of commercial enterprises to which the new commercial enterprise made loans).

The immigrant investor may seek to have a geographic or political subdivision designated as a targeted employment area. To do so, the immigrant investor must demonstrate that the targeted employment area meets the statutory and regulatory criteria through the submission of: (1) evidence that the area is outside of a metropolitan statistical area and outside of a city or town having a population of 20,000 or more; (2) unemployment data for the relevant metropolitan statistical area or county; or (3) a letter from the state government designating a geographic or political subdivision located outside a rural area but within its own boundaries as a high unemployment area. 8 C.F.R. § 204.6(j)(6).

b. A State’s Designation of a Targeted Employment Area

The regulation provides that a state government may designate a geographic or political subdivision within its boundaries as a targeted employment area based on high unemployment. Before the state may make such a designation, an official of the state must notify USCIS of the agency, board, or other appropriate governmental body of the state that will be delegated the authority to certify that the geographic or political subdivision is a high unemployment area. The state may then send a letter from the authorized body of the state certifying that the geographic or political subdivision of the metropolitan statistical area or of the city or town with a population of 20,000 or more in which the enterprise is principally doing business has been designated a high unemployment area. 8 C.F.R. § 204.6(i).

Consistent with the regulations, USCIS defers to state determinations of the appropriate boundaries of a geographic or political subdivision that constitutes the targeted employment area. However, for all TEA designations, USCIS must still ensure compliance with the statutory requirement that the proposed area designated by the state in fact has an unemployment rate of at least 150 percent of the national average rate. For this purpose, USCIS will review state determinations of the unemployment rate and, in doing so, USCIS can assess the method or methods by which the state authority obtained the unemployment statistics. Acceptable data sources for purposes of calculating unemployment include U.S. Census Bureau data (including data from the American Community Survey) and data from the Bureau of Labor Statistics (including data from the Local Area Unemployment Statistics).

There is no provision that allows a state to designate a rural area.

Q&A from USCIS’s Executive Summary of the 5/1/2012 EB-5 Quarterly Stakeholder Engagement

Q: Will a single or multiple contiguous census tracts be considered as a geographic subarea?

A: USCIS encourages that standard Bureau of Labor Statistics (BLS) estimation methodology be used. In the event that subareas for which Local Area Unemployment Statistic estimates are not regularly produced, such as census tracts, the TEA applicant should be aware of the following: (1) the census-share technique be used ONLY where inputs for the preferred BLS methodology are not available and (2) only household-only inputs be used, in order to eliminate the impact of the Census 2000 Group Quarters processing error. More information regarding this answer can be found at the Bureau of Labor Statistics webpage at: http://www.bls.gov/bls/empsitquickguide.htm

Q: Can a qualifying census tract with unemployment 150% of the national rate be certified as a TEA?

A: Yes, but designation will depend on the quality and timeliness of the data used to support the 150% of the national average rate of unemployment claim. Acceptable data sources for purposes of calculating unemployment include Local Area Unemployment Statistics produced by a government agency, U.S. Census Bureau data, and data from the American Community Survey.

Q: Has there been any progress on further defining an acceptable vs. gerrymandered TEA? Will USCIS be providing additional guidance?

A: This issue is being examined in the context of the draft memorandum, which will be posted for comment in the near future. [See pages 6-8 of 2/14/2013 version of the draft EB-5 policy memorandum.]

And a final reminder: A Targeted Employment Area is not the same as a Regional Center. Non-Regional Center investors can invest in TEAs at the $500,000 level. Regional Centers can cover areas that are not designated TEAs. It’s a common misconception that Regional Center investments are $500,000 and direct/non-regional center investments must be $1 million. That’s not the case. The amount of EB-5 capital that must be invested depends simply on whether or not the new commercial enterprise is principally doing business and creating jobs in a “targeted employment area” defined “as, at the time of investment, a rural area or an area that has experienced unemployment of at least 150 percent of the national average rate.” Whether the investment is within a Regional Center or not makes no difference to the TEA qualification and qualifying investment amount.