Starting as early as September, the city of Miami will begin dangling green cards to foreign investors as a means to spur economic development in South Florida and further cement Miami’s status as the global business hub.
Mayor Tomás Regalado made the announcement at a packed City Hall Thursday while unveiling the city’s Office of International Business Development. The city created the agency to oversee its newly approved EB-5 visa regional center, which is authorized by U.S. Citizenship and Immigration Services to match up tri-county area projects with investors.
“Our mission is to market Miami to the world,” said Regalado.
The visa center — the first to be run by a city — will act as an intermediary between local businesses and foreign investors. Applicants ranging from charter schools to developers can submit their business plans to the city. If the project meets muster, it is placed in a portfolio marketed to investors seeking U.S. visas.
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One “hypothetical” project included in Miami’s application to the federal government is developer Tibor Hollo’s Panorama Tower, which according to the document is seeking $100 million from up to 200 investors. In return, investors are offered a “regular income” among other benefits, with the terms of the return of their investment to be negotiated.
Under the EB-5 program, investors are required to put up at least at least $1 million, or $500,000 for projects in areas of high unemployment, into a special fund outside the city’s control. At least some of their capital must be “at risk.”
In return, they receive a two-year green card for themselves and their immediate family. If the project succeeds, and at least 10 U.S. jobs are created, the investors gain permanent residency plus dividends on their investment. If it fails, they’re out their green cards — and in some cases their money.
The city, meanwhile, stands to earn application fees and a cut of the secured financing, according to Mikki Canton, a Coral Gables attorney and executive director of the city’s EB-5 office. Much of that money is expected to be set aside in a special public safety fund.
“We recognize the honor and the responsibility coming to us,” she said. “Also, how it sets us out to be the blueprint that other municipalities and states might follow.”
Thursday’s event was part informational for future applicants and part celebration for city officials, who have touted the initiative from Spain to the Yucatan. But while Regalado said the city hasn’t faced any detractors, Miami is certainly wading into a controversial program.
Critics, like the Center for Immigration Studies say the initiative, created long ago by Congress, is akin to allowing wealthy immigrants to buy their way to the front of the visa line. Others say the program, which boasts hundreds of centers across the country, is poorly regulated and ripe for abuse. Last month, Fortune Magazine referred to the EB-5 program as “a magnet for amateurs, pipe-dreamers, and charlatans, who see it as an easy way to score funding for ventures that banks would never touch.”
Canton said Miami plans to run a tight ship and Regalado said the U.S. Department of Homeland Security would background investors. The intent of Thursday’s event was to explain the regulations involved in the financing process and issues monitored by the Securities and Exchange Commission.
“Not only is our responsibility as a regional center to the people, developers’ projects, [and] future investors that may come, but also to the citizens,” she said. Canton said Miami would “not make mistakes that unfortunately other regional centers have made, many times inadvertently.”
Regalado said the city expects to begin adding to its portfolio next month, and will then begin marketing projects to investors. The operation of the center can cost the city up to $1 million annually, to be funded through grants.