As Rochester’s economy continues to grow, government leaders and business developers are learning more about EB-5 capital, which is becoming one of the most sought-after sources of financing for economic development projects across the nation.
The Federal Reserve of New York and NAIOP Upstate New York chapter will present an EB-5 Forum on Tuesday, Nov. 18, at Oak Hill Country Club. Speakers will share their wealth of knowledge about EB-5 requirements, deal structure, future availability and more.
Congress created the EB-5 program, also known as the Immigrant Investor Program, in 1990 to benefit the U.S. economy by attracting investments in job creating projects from qualified foreign investors. Under the program, each investor must create or save at least 10 new U.S. jobs as a result of the EB-5 investment, which must be a minimum of $1 million, or $500,000 if the funds are invested in certain high-unemployment or rural areas. Organizations called EB-5 Regional Centers pool capital from multiple foreign investors for investment in economic development projects within a defined geographic region.
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A comprehensive, peer-reviewed economic impact study published by the Association to Invest in the U.S.A., the national trade association representing more than 200 EB-5 Regional Centers, found that in 2012, investments made through the EB-5 program contributed over $3.39 billion to U.S. gross domestic product, supported over 42,000 American jobs, and generated over $712 million in federal/state/local tax revenue, all at no cost to the U.S. taxpayer. Initial data for 2013 promises even stronger numbers.
Federal Reserve vice president Rae Rosen said EB-5 capital can be a catalyst to help revive areas of the U.S. still struggling in the wake of the recession. “We hope the Rochester forum sparks some projects,” she said.
“In the coming months, we expect a number of EB-5 project announcements that will have a significant impact on the local economy,” said Del Smith, Commissioner of Neighborhood and Business Development for the City of Rochester. “We’re glad to facilitate opportunities that leverage this innovative program. We welcome the investments in our community and the local jobs they bring.”
Indeed, EB-5 capital is being used effectively in other parts of the state. In Buffalo, Kaleida Health turned to EB-5 New York State Regional Center to supply $10 million in capital to help launch its Gates Vascular Institute, which is now in operation. EB-5 New York State also raised capital from foreign investors for the development of MiGo, a multi-modal transportation structure that is serving Buffalo’s burgeoning medical campus, and for the Health Science Charter School’s renovation of its historic downtown Buffalo building.
These projects demonstrate exactly what Congress intended the EB-5 program to do – create new U.S. jobs and spur economic development. The contributions of foreign investors in job-creating projects on the Buffalo Niagara Medical Campus were augmented and compounded by subsequent sources of capital from other public and private partners.
Projects like these will create jobs and bring needed industry to Rochester, so we need to keep the momentum going. The best way to do this is by encouraging members of Congress to support the permanent authorization of the EB-5 Program. And with continued support from local stakeholders, we can make sure that EB-5 capital will play a vital role in the development of Rochester long into the future.
Stephen Yale-Loehr is an adjunct professor of law at Cornell University and one of the nation’s preeminent authorities on U.S. immigration law. He also practices immigration law at Miller Mayer LLP in Ithaca, NY, one of the nation’s best-known EB-5 law firms.
William Gresser is the President & CEO of EB-5 New York State, LLC, a Regional Center covering all of New York State, which has successfully deployed EB-5 capital into multiple job-creating EB-5 projects in Upstate New York