ILW.COM - the immigration portal Immigration Daily

Home Page


Immigration Daily

Archives

Processing times

Immigration forms

Discussion board

Resources

Blogs

Twitter feed

Immigrant Nation

Attorney2Attorney

CLE Workshops

Immigration books

Advertise on ILW

VIP Network

EB-5

移民日报

About ILW.COM

Connect to us

Make us Homepage

Questions/Comments


SUBSCRIBE

Immigration Daily


Chinese Immig. Daily




The leading
immigration law
publisher - over
50000 pages of
free information!
Copyright
© 1995-
ILW.COM,
American
Immigration LLC.

Results 1 to 2 of 2

Thread: Article: EB-5 TEA's: A policy Perspective. By Matthew Gordon

  1. #1

    Article: EB-5 TEA's: A policy Perspective. By Matthew Gordon




    EB-5 TEA's: A policy Perspective

    by





    Targeted Employment Areas - TEAs - were supposed to be about bringing desperately needed investment capital into economically distressed areas. The thesis goes, create employers in those areas and the jobs are likely to go to those who live there. The current EB-5 program抯 treatment of TEAs, in all but a minority of cases, does anything but that. The current rules allow the combination (gerrymandering) of affluent and distressed areas to create a larger area that satisfies, on average, the TEA unemployment rate requirements. Because of this, as pointed out in the recent Wall Street Journal article, the program抯 capital flows in increasing volumes to high profile construction projects in affluent neighborhoods, such as Hudson Yards on Manhattan's West Side. The clever counter-argument admits that the neighborhoods benefiting from the EB-5 capital development doesn't need the money, but that it's ok, because the people who work in these projects come from the economically distressed areas that we wanted to help in the first place. Ron Klasko published a solution premised on this logic that would allow already accepted "area of intended employment' to serve as the basis for determining the geographical boundaries of a TEA. (http://discuss.ilw.com/content.php?5030-Article-Some-Ideas-for-Resolving-the-Controversial-Issues-in-the-EB-5-Legislation-By-H-Ronald-Klasko)



    But what about the economically distressed neighborhoods? So the workers who travel from them get the jobs in the affluent areas. Under a trickle down (or maybe trickle across) theory of econometrics, these households then spend more money in their downtrodden areas, which is enough to help revitalize the depressed areas. Maybe. Or maybe the workers pick up and leave as soon as they can afford it. Assuming they have enough disposable income (to matter) from their new jobs (assuming the salaries were above subsistence wages), that seems just as likely a result as the trickle-across econometrics. In the end, the distressed neighborhoods stay, well, distressed. Even worse, the most employable of the population demographic have left.



    From a policy perspective that result leaves a somewhat unsatisfied feeling. The goal of the TEAs was to bring investment capital into the areas of high unemployment and rural areas to spur the development of those areas. That development would then lead to jobs in those areas, which could even lead to a re-population of those areas by increasingly higher earning cohorts, thus restoring the tax base and supporting the local businesses that exist in those areas and the new ones that might be created to support the upswing. It is the virtuous circle argument that was the focus of an EB-5 policy forum organized by ICIC.org, the leading foundation working on the redevelopment of inner cities (www.icic.org) at Harvard University's Kennedy School of Government. See their white paper, Increasing Economic Opportunity In Distressed Urban Communities With EB-5 available at the following link: (http://www.icic.org/ee_uploads/publications/ICIC_EB5Impact_Report.pdf)



    Labor will always be mobile, but anchoring capital to an area holds the real promise of structural revitalization. The policy to help the area, as originally intended, is sound and the current practice of gerrymandering has completely subverted that policy. Recognizing a static snapshot of commuter patterns as the justification for the gerrymandering leaves things no better off. Maybe it is time to recognize the problem for what it is and not kick the legislative can down the road any longer. If congress wants to create another program to support unemployed (or under-paid or under-employed) workers, then what Mr. Klasko proposes may be a sound proposal, at least in the short term. But if the point is to revitalize the areas, to use the precious foreign direct investment (EB-5 Capital) to help rebuild the downtrodden forgotten and ignored areas of this country and usher in true long term structural improvement, then it will not. Maybe it is time that investors who want to invest in high income areas simply have to pony up a greater investment amount as was always intended by Congress from the get-go. The point of the EB-5 program is not to ensure the supply of development capital for Class A real estate development projects in prime neighborhoods. It is to provide the most bang for the buck for the American people. With respect to TEAs, it was to provide an incentive to invest in the areas that need it the most.









    Reprinted with permission.






    About The Author






































    Matt Gordon

    Matt Gordon is a the Managing Director of E3 Investment Group. He is a finance professional whose vision and passion is to help realize extraordinary value through the flawless planning and execution of strategy, financings and transactions that foster aggressive sustainable growth. Mr. Gordon is a licensed attorney, having practiced law with some of the most prestigious Wall Street firms, including Fried Frank and Sullivan & Cromwell. He is a member of the New York State Bar and holds SEC securities licenses.





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



  2. #2
    EB5 Corporations
    Guest
    We couldn't agree more. Thanks for your thoughtful comments.

    Also, glitzy projects in economically robust areas are generally eligible for traditional financing. So the jobs are already provided by these developments.

    It is the economically struggling areas where it might be harder to obtain traditional financing where EB-5 has its role stimulating those areas with development and LOCAL jobs.

Similar Threads

  1. Article: A Gusher. By Matthew Gordon
    By ImmigrationDaily in forum Immigration Daily
    Replies: 0
    Last Post: 07-06-2015, 04:25 PM
  2. Article: Letís Get The Facts Straight. By Matthew Gordon
    By ImmigrationDaily in forum Immigration Daily
    Replies: 1
    Last Post: 06-25-2015, 06:52 PM
  3. Article: Miami Vice. By Matthew Gordon
    By ImmigrationDaily in forum Immigration Daily
    Replies: 0
    Last Post: 06-24-2015, 11:12 AM
  4. Article: It's All About Perspective by Ed Poll
    By ImmigrationDaily in forum Immigration Daily
    Replies: 0
    Last Post: 05-31-2013, 01:59 PM
  5. U.S. Immigration Policy in Global Perspective
    By Hudson in forum Immigration Discussion
    Replies: 1
    Last Post: 01-11-2007, 05:19 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
Put Free Immigration Law Headlines On Your Website

Immigration Daily: the news source for legal professionals. Free! Join 35000+ readers Enter your email address here: