New RCs (CA, DC, FL, GA, MD, NV, TX, TN, VA)
July 22, 2013 10 Comments
The USCIS EB-5 office continues hard at work on the Regional Center application backlog, with 11 new designations last week bringing this year’s total to 81 new Regional Center approvals. The new staff still seem to be feeling their way on the question of what RC approval means. The two recent approval letters that I have are very different, though issued only three days apart. Both the Nevada State and EB5 Express approvals are based on hypothetical projects, but the EB5 Express letter goes out of its way to specify that this is a “limited decision” based on “approving” some projects and “disallowing” others (with “approving” not meaning approval with reliance, and with “disallowing” not meaning to disallow but simply to not approve at this time). The EB5 Express letter is also interesting as additional evidence of USCIS’s stand on counting tenant jobs among the impacts of real estate development projects. This time I’m listing the new RCs in order based on the information I have about them. If you are associated with one of the centers so far unattested on the Internet, please publish some information about your business and send me an email. Otherwise I’m left Googling registered addresses and wondering – for example – what EB-5 has to do with importing genuine python skins. For those of you who have shared information, thank you, and welcome to the community!
New USCIS-approved Regional Centers as of July 19, 2013
Nevada State EB-5 Regional Center, Inc.
Website: http://nveb5.com/
Geographic Area: Carson City, Douglas and Lyon counties, Nevada
Industry Categories: Traveler Accommodation (7211), Other Personal Services (8129), Engine Turbine Power Transmission Equipment Manufacturing (3336), Scientific Research and Development Services (5417), Animal Slaughtering and Processing, Non-Residential Building Construction, Professional and Commercial Equipment and Suppliers of Merchant Wholesalers
Designation LetterEB5 Express Regional Center
Geographic Area: San Francisco and San Mateo counties, California
Industry Categories: Hotels (except casino hotels) and Motels (721110), Semiconductor and Related Device Manufacturing (NAICS 334413) Battery Manufacturing (NAICS 33591)
Designation LetterRosti Capital Regional Center (California)
http://www.rosticap.com/Encore S. CA RC, LLC (California)
http://encoreeb5.com/Encore Wash D.C. RC, LLC (District of Columbia, Maryland, Virginia)
http://encoreeb5.com/Encore Nashville RC, LLC (Tennessee)
http://encoreeb5.com/Robstown Improvement Development Corporation EB-5 Regional Center (Texas)
http://www.robstownidc.com/L.A. Life Regional Center (California)
The Z Global Corporation Regional Center (California)
US EB5 Florida Regional Center (Florida)
American Investment and Immigration Center, LLC (Georgia)
(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.)
EB-5 Updates 
I wrote an article about the new “Limited Decision” and posted it at: http://www.slideshare.net/BigJoe5/the-regional-center-limited-decision
Why does the EB5 Express approval letter request the evidence of “unmet demand and/or limited supply for the services to be offered by the specific tenant businesses”? Asking for a proof that the particular tenant’s services are in limited supply seems impractically high burden to meet, and also illogical. Who cares what businesses the tenants under the LOOOM structure intend to go into?
USCIS may reasonably care about the detail of the tenant businesses when that detail underlies job creation estimates that USCIS is asked to approve. And of course any business plan must be founded on an argument about how the proposed product/service meets specifically-identified market needs. No conventional lender or investor would consider a proposal that didn’t address demand. I agree that USCIS gets disingenuous in asking for evidence of “excess demand,” which theoretically won’t exist in a functioning market economy absent artificial constraints such as price ceilings. I think of those stories involving a King who, unwilling to risk a straight “no” to the powerful man who wants to marry his daughter, promises the Princess’s hand in exchange for something like a drop of golden dew from the flower the blooms when the moon is blue in the Land of Faraway. USCIS faces a battalion of lawyered-up companies and investors, so I understand why they ask us to “prove excess demand” and such instead of risking a simple overt “no” to job count practices that used to be accepted. But anyway, I think USCIS has made the unofficial, implicit message pretty clear by now: from 2012 on, no counting tenant jobs among the impacts of a real estate development investment.
I understand why USCIS may care about “the detail of the tenant businesses when that detail underlies job creation estimates that USCIS is asked to approve.” But why should USCIS care whether this particular tenant’s business is in “excess demand”, even assuming such “excess demand” can be evidenced? For example, if the tenant is a Starbucks store, why should the jobs count be influenced by the fact whether the Starbucks is in “excess demand” or is “sort of in demand”? Are you saying if there is no “excess demand”, the revenue will not be as great as assumed in the Jobs Study, so that the jobs count will be lowered than estimated? If that’s the case, why not just take a lower, conservative jobs estimate based on what an average Starbucks store’s revenue is? So what if the Starbucks coffee store ends up doing badly in 5 years because people no longer like to drink coffee? The fact of the matter is that a Starbucks coffee store will be established with new employees, whether such Starbucks store keeps on operating for 10 years or 2 years, which no one knows. I am not sure your response addresses this point.
To clarify: Your comment that “no conventional lender or investor would consider a proposal that didn’t address demand”, while true and which I agree with, is not the same thing as saying “only businesses with proven excess demand will create jobs”. My point is why does USCIS believe that only the tenant with a proven or demonstrated excess demand will create jobs? Just wanted to clarify what the issue is here for a more productive discussion.
I was only half joking in speculating that USCIS requests “excess demand” not because the concept is meaningful so much as because it’s functional — a safe way to set the bar for tenant occupancy methodology so that no one can clear it. (My non-economist impression, based intro micro, is that proving excess demand is a lost cause because there won’t be any for long in a market economy, unless a factor like government regulation artificially restricts market forces.) Of course, it’s always possible that the people writing the RFEs don’t intend the technical sense of the term, and just mean to request evidence of garden variety demand. In that case, I think the concern is to show that tenants will materialize at all. We can probably blame real estate development cases that reached I-829 in 2010 and 2011, and the Offerors who found themselves with unexpectedly high vacancy thanks to the recession and who complained to USCIS (in stakeholder meetings and lawsuits) about the unfairness of holding investors to occupancy estimates that turned out to have been unrealistic. If USCIS had to deport many investor families because developers didn’t end up getting the tenants they had expected, I can see why USCIS would be cautious now about job creation projections associated with tenants.
I feel that USCIS is being disingenuous in asking for “excess demand” for the LOOOM Approach ULESSS indirect jobs MUST be included in the make-up of jobs for allocation to EB-5 investors. IF no indirect jobs are needed, THEN the business in which the EB-5 investor is a co-owner, is in the same boat as a stand-alone or direct (non-Regional Center-affiliated) EB-5 investor with non-EB-5 partners. Those folks don’t need any economic analsis as they cannot count indirect jobs. However, IF indirect jobs are needed THEN USCIS is justified in asking for “some demand” for the product and/or services but “execess demand” is still an overstatement and usually unrealistic.
Strictly speaking, according to USCIS definitions of “direct” and “indirect” jobs, all tenant jobs are really “indirect” jobs per USCIS definitions. Therefore, indirect jobs are the ones being counted and included in I-526 petitions.
My personal feeling is that USCIS made a mistake of allowing future tenants’ jobs to be counted in the first place, not because we do not know what kinds of tenants will ultimately occupy the spaces, but because the connection between the EB-5 moneys and tenants are too attenuated UNLESS the tenants can show that without this particular building, they would not have been able to find good enough spaces to rent. Therefore, I can logically see even the unreasonable requirement of the “excess demand” for the spaces in relation to jobs count; I just don’t see the logical need for “excess demand” for the tenant’s business or service offered in relation to the jobs counting.
Suzanne, from your last response, I do understand that USCIS was concerned that the tenants described in the Biz Plan might not end up occupying the spaces, but that’s an I-829 issue; the possibility that the tenants might not occupy the spaces should not affect the jobs estimate which is based on an assumption that these tenants will occupy the spaces. USCIS should deny I-829s if the assumption turned out to be wrong.
A limited approval is no better than an RFE for all practical purposes.