The recent Global Mobility & Investment Summit, presented by EB5 Investors Magazine, served as an educational and networking event for companies looking to attract overseas investors and those who wish to put money into the U.S. real estate market while also earning a green card.
The day-long event brought executives from several companies involved in the hospitality industry, including Peachtree Hotel Group, Driftwood Capital and The LCP Group, to the Mandarin Oriental, Miami, alongside firms that focus on EB-5 investment.
The day began with an introduction to the EB-5 Immigrant Investment program by David Hirson, managing partner, David Hirson & Partners LLP, who said he filed his first EB-5 case in January 1991, not long after the program started.
Representatives of Green Card Fund and EB5 United, co-winners in the rural category, hold the ceremonial check surrounded by the judges and EB5Investors.com’s Ali Jahangiri (right).
“From 2010 to 2023, the EB-5 program created more than 300,000 jobs and attracted more than $40 billion in foreign direct investment,” he said. “This is a win-win program because it’s of no cost to the taxpayers and the economy gets stimulated, jobs get created and the investors will get their green card.”
The EB-5 veteran continued, “Many EB-5 projects have revitalized urban areas, bringing new life to local businesses. For example, from 2015 to 2023, immigrant developments contributed significantly to the revitalization of cities like Detroit and Cleveland.”
Under the program, foreign nationals who invest a minimum of $800,000 in a U.S.-based project that creates or preserves at least 10 full-time jobs for U.S. workers are eligible to apply for permanent residency in the U.S.
An educational session on EB-5 basics for new projects, moderated by Kraig A. Schwigen, VP, strategic development, American Lending Center, followed Hirson’s introduction. Panelist Marjan Kasra, founder/managing attorney, The Law Offices of Marjan Kasra LLC (LAWMAKS), touched on the goals the developer and investor have on an EB-5 project.
“For a developer, the goal is to complete the project and to be in compliance with federal, state local rules,” she said. “Also, you want to make sure you have sufficient funds to build the project and manage your job-creating entity. From an investor’s perspective, the focus is, ‘Am I going to get my green card?’ and ‘Am I going get my money back?’”
Fellow panelist Trevor Anderson, director, EB-5 financing, Homefed Corporation, said EB-5 investing, is “not like it used to be 10 or 15 years ago” when developers believed it was free or cheap money for their projects.
“Today, regulations are much tighter, competition is more competitive and the cost of funds is not free,” he said. “There’s definitely a cost associated with it, whether you’re fundraising yourself or you’re strictly acting as a borrower within the program.”
Sam Newbold, member/chair, immigration law, CSG Law, discussed the capital raise and the role of the EB-5 regional center, a firm designated by United States Citizenship and Immigration Services to work as a service agent for EB-5 investors and project developers by managing the investors’ funds.
“If you’re a new developer who’s looking to get into this space, you have to understand you’re going to pay for it no matter which options you select,” he said. “If you’re a pure borrower, you’re likely going to have to go to a regional center, which has a pipeline of salespeople and agents who can raise the capital for you, but you might have to pay a higher interest rate than if you were to go out and try to get it yourself. “
He continued, “For developers that might be thinking about the long-term aspects of investing in this program, the trade-off with EB-5 and lowering the overall cost of capital over time is that you’re going to create more exposure for yourself, whether it be compliance exposure or financial exposure.”
John Pratt, partner, Kurzban Kurzban Tetzeli & Pratt, who manages the firm’s Immigration & Nationality Law Department, provided insights of the mistakes that have been made during the EB-5 application process.
“We need to understand that EB-5 is a regulated industry, and there are certain requirements that have to be satisfied— job creation, sustainment of the funds, how the funds are used, etc.—and a lot of the mistakes that we have seen from the investor perspective is that the projects or the developers did not have the proper audience or the proper documentation to show how the funds were used.”
Pitch time
Taking up almost the last two hours of the event was the Agents Top Project competition, a “Shark Tank”-like pitch presentation where eight companies showed off their current EB-5 project for a chance to win $5,000.
Projects included hotels, residential communities, luxury cabins and an entertainment complex. A panel of judges made up of EB-5 program experts was tasked to pick one winner each from the rural and urban categories. It was decided that the rural winner would receive the $5,000 prize.
Peachtree Group and regional center operator Green Card Fund both presented hotel projects, with the former providing EB-5 information on its SpringHill Suites development in Bryce Canyon, UT, while the latter showcased a 65-room property at Yosemite National Park.
After all the votes were tabulated, Green Card Fund was tied with EB5 United, which presented the Yellowstone Club residential project in Big Sky, MT, for the rural category. HomeFed Corporation won in the Urban category for its Cota Vera 2 residential project near San Diego.
For more on the EB-5 program, visit eb5investors.com.
