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  • Article: EB-5 Stakeholders Call – What We Learned By H. Ronald Klasko

    EB-5 Stakeholders Call – What We Learned

    by


    After a lapse of well more than one year, USCIS held an EB-5 stakeholders call on February 26. This blog will highlight new information that we have learned. Equally importantly, the next blog will discuss critical open issues that remain and were left either unanswered or answered in a way that leaves open questions.

    What we learned:

    1. USCIS is recommitting to quarterly engagements, the next one being in person in late spring or early summer.
    2. As of February 2014, all I-924s and all I-526s will be adjudicated by the new unit in Washington, DC. The unit at the California Service Center will continue to adjudicate all I-829 petitions and all I-485 applications based on approved I-526 petitions. This will continue through September 30, 2014, after which CSC will no longer be involved in any way in EB-5 adjudications.
    3. After a long delay, USCIS has finally updated and published EB-5 processing times. The published processing times, which will be updated monthly, are 11 months for I-526 petitions, 12 months for I-924 petitions and 11 months for I-829 petitions. While it is helpful to have published processing times, there are three problems with the processing times. First, they are too long. Second, USCIS has indicated that the processing times will likely increase now that 35 adjudicators from the California Service Center who were working on these applications will no longer be doing so. This leaves 20 economists and 25 adjudicators in Washington, DC. Third, the I-526 processing time and the I-924 processing time are not particularly helpful. Realistically, there are vastly different processing times for four categories of I-526 petitions:
      • Direct I-526 petitions, for which the processing times are usually 3 to 6 months;
      • First investors in a regional center project, for which the processing times are generally well over 12 months;
      • Processing times for later investors once the project has been approved, for which the processing times are often well less than 11 months; and
      • Processing times for I-526 petitions for which there is an approved exemplar, for which USCIS has indicated that the processing times should be reduced.

      With respect to I-924 petitions, different petitions have vastly different processing times, with the longest processing time being for I-924 petitions with exemplar I-526s and the shortest processing time being for I-924 petitions with hypothetical projects or just geographical expansion.

    4. There are 7,131 I-526 petitions pending at USCIS as of September 30, 2013. Why is this number so significant? Given that the present 10,000 quota (including family members) leaves room for about 3,000 investors per year, the backlog represents about 2 1/2 years worth of investors under the quota. If all of these petitions were adjudicated relatively promptly, the impact on quota retrogression is obvious.
    5. USCIS clarified the deference given to actual projects. There was some clarity previously regarding the deference given to exemplar projects and the lack of deference given to hypothetical projects. The stakeholders call clarified that the business plan (assuming it is Matter of Ho-compliant) and the economic report would be given deference in the I-526 petition process for actual projects.
    6. There had been some lack of clarity regarding jobs created in multiple TEAs. USCIS clarified that jobs can be created in multiple TEAs as long as the principal place of business is in one of the TEAs within the regional center.
    7. USCIS clarified that an I-924 amendment is purely optional in the event of the sale of a regional center. USCIS does, however, want to be notified within 30 days.
    8. Perhaps the most surprising clarification during the stakeholders call was the detailed explanation of when guest expenditure jobs could be counted on construction projects. Following an earlier stakeholders meeting with USCIS economists, it appeared that USCIS virtually never accepted guest expenditure jobs. The economists had indicated that the standard was proving that guests would not have come to the city were it not for the building of the hotel or other structure. This was a clearly unrealistic and, in most cases unattainable standard.

      USCIS has now set forth three potentially attainable standards, any of one of which could lead to approval of the guest expenditure jobs:

      • Unmet aggregate demand. This requires a showing of unusually high occupancy rates with a detailed economic analysis of how the new hotel (or other structure) would serve unmet demand.
      • Providing a differentiated project to a special market segment. This presumably requires showing that the hotel is a different type of hotel than is presently available on the market. For example, if there is no extended stay hotel in the market and the developer is building an extended stay hotel, presumably that would be considered a differentiated product.
      • If the new hotel is built in response to new development in the community, guest expenditure jobs may be acceptable. For example, if a new sports arena or a new entertainment venue is being built in the area, a new hotel connected with or serving the sports arena or entertainment venue might be the basis for counting guest expenditure jobs.

      This is very significant because jobs based on guest expenditures can sometimes double or triple the job count.


    Originally printed in the Klasko Immigration and Nationality Law Blog. Reprinted with permission.


    About The Author

     	
H. RONALD KLASKO H. Ronald Klasko is recognized by businesses, universities, hospitals, scholars, investors and other lawyers as one of the country’s leading immigration lawyers. A founding member of Klasko, Rulon, Stock & Seltzer, LLP and its Managing Partner, he has practiced immigration law exclusively over three decades. Under his leadership, the firm was chosen with five other firms by Chambers Global in 2006, 2007, 2008 and 2009 as the top U.S. business, hospital and university immigration law firm. Ron, himself, was named as the world’s most respected corporate immigration lawyer (The International Who’s Who of Business Lawyers 2007 and 2008) and one of the country’s top immigration lawyers by clients and other immigration lawyers who said he is “revered for coming up with unique arguments that can save a client” (Chambers Global). A former National President of the American Immigration Lawyers Association (AILA), Ron served as General Counsel of that organization for three Presidents and has been a member of its Board of Governors since 1980. He has served as National Chair of AILA’s U.S. Department of Labor Liaison Committee and Business Immigration Committee, and he served as National Chair of that organization’s INS General Counsel Liaison Committee, Department of Labor Liaison Committee, and the National Task Forces on Labor Certifications, H-1 visas, L-1 visas and Employer Sanctions. He presently serves as Chair of the EB-5 Committee.


    The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.

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