“It’s cheap because the foreigners who invest in these deals are primarily interested in getting their green cards and becoming permanent residents,’’ he said. “They’re not so interested in the return they’re going to get from their investments.”
Supporters see the EB5 program as another option for bringing overseas cash into the domestic economy, and then target the money to increasing employment for U.S. citizens. While most green-card programs are tied to a foreign resident obtaining employment — and competing with U.S. job seekers — the EB5 program only asks that a foreign resident invest in creating jobs for existing residents.
Federal law allows up to 10,000 EB5 visas to be issued each year. The more popular visa categories, such as the H1B (skilled foreign workers) and H2B (seasonal foreign workers), regularly hit their annual caps mid-year. But the EB5 has never reached the 10,000 mark.
Immigration experts expect that to change in 2013, as applications from China threaten to push approvals above the cap. That would kick-in limits on the number of EB5 visas that could go to China, since per-country caps automatically go into effect once the overall limit is reached on a single visa category. That could make 2013 the most complicated year yet for South Florida’s cottage industry of EB5 projects as the pool of potential Chinese investors shrinks to those admitted under the cap.
The US Citizenship and Immigration Service lists more than two dozen EB5 centers in Florida, some with four or five projects attached to them. There is no official list of EB5 projects in South Florida, but the program has been popular in the region for years. Some EB5 ventures are merely ideas awaiting investor interest. Balco International in Royal Palm Beach wants EB5 backing to launch a chain of Great American Diner restaurants out of converted mobile homes. A steel-house factory to be built in Miami-Dade was announced in 2011 as an approved EB5 project but now has a dead website and disconnected phone lines.
While getting an EB5 project approved in Washington takes time, the real crunch comes in the two years when the ventures must create the jobs tied to the visas. At the start of the two years, investors receive a temporary green card. At the end of the two years, if the jobs have been created and still exist, investors receive permanent green cards — a crucial step that makes citizenship within reach . Investors face deportation if immigration officials conclude there aren’t 10 jobs to match each visa.
At the lone building at the new University of Miami Life Science and Technology Park, developers hope to soon win final approval for their 40 investors, said Benjamin Cummings, the Richmond, Va., consultant to who brokered the EB5 deals for UM’s developer, Wexford Science and Technology.
The foreign investors covered about $20 million of the building’s $107 million price tag. About half of them were from Asia, Cummings said, with Latin America accounting for a third of the investors. Federal rules require the creation of 400 jobs to justify those investment visas for a building that Wexford said is 75 percent full and where the main tenants are existing UM operations that relocated from other locations.
Thanks to indirect employment calculations, Cummings said the UM building expects to take credit for at least 1,000 jobs. “We will be well over the 400,’’ Cummings said.