Florida Investors Push for EB-5 Extension

Dilip Barot, Creative Choice Group, on the importance of government programs to boost Florida affordable housing12-9-15 - EB-5 Program in Florida

According to the Bureau of Labor Statistics, unemployment rates were up at the end of 3Q with Florida reaching 5.1%.  http://www.bls.gov/lau/. With continued economic pressures, positive investment in the US is a critical component for market stability.  One important government program is the EB-5 program which entices foreign investors to come and invest in the US.  The program offers access to green cards in exchange for investment funds.  Unfortunately the program was slated to expire on September 30th 2015. Miami officials addressed their EB-5 concerns during a conference at City Hall last month explaining the detrimental impacts of cancelling the program for Florida residents. Miami Mayor Tomás Regalado brought key business leaders and attorneys together to discuss how they could use the city’s EB-5 regional center to build affordable housing. The mayor said affordable housing is the No. 1 issue residents contact his office about. In fact, over 50K people in Miami-Dade County are on the waiting list for publicly funded affordable housing.  As an Indian investor, I came to the US and have developed commercial real estate in across the US and also a large smart city called Infocity in India. With over 30 years of experience, I can personally vouch for the value the EB-5 program brings to local communities. It is my opinion that the specific requirements defined by the US Government help promote the strength of the program. This includes:

  • Investment capital cannot be borrowed.
  • The minimum qualifying investment in the United States is $1 million.
  • The minimum qualifying investment either within a targeted high-unemployment area or rural area in the United States is $500,000.
    • A targeted employment area is an area that, at the time of investment, is a rural area or an area experiencing unemployment of at least 150 percent of the national average rate.
    • A rural area is any area outside a metropolitan statistical area or outside the boundary of any city or town having a population of 20,000 or more according to the decennial census.

But there is good news!  After months of debate, the US Congress passed an extension of the EB-5 program through Dec. 11, 2015. The EB-5 community has been wondering and worried that the program would expire, although Congress never really made it seem like they would pull the plug on the wildly popular program. 

The extension gives EB-5 supporters a slight reprieve. Wright Johnson president Aaron Goforth highlights one of the best features of the EB-5 program… “Creating American jobs at zero cost to the taxpayer.” He goes on to comment that the program continues to be a “win-win as long as the requisite 10 permanent jobs are created.” Job creation is a big focus for our organization. From our Etech Global Solutions team in Texas to our Creative Choice Group in Palm Beach Gardens, Florida, we have successfully created thousands (and thousands) of jobs in the local market.

The primary reason the program was under scrutiny was tied to major concerns surrounding potential EB-5 fraud. All parties agree that proper due diligence should course correct any challenges with the program.  Specifically engaging continued oversight by government agencies like the SEC will clearly enhance the integrity and execution of the program nationwide.

Business leaders like myself draw on programs like EB-5 to extend our reach across international boundaries.  I am excited to program was extended and look forward to the reform so that others can capitalize.  Jobs are created.  Residents gain housing options.  Investors enhance financial success.  The economy blossoms. Clearly the strength of a team effort is what makes this type of program a success!