T
oday’s conventional EB-5 projects have a more
difficult time creating permanent, solid working
jobs in America. The typical regional center-sponsored
project is in real estate development: hotels, resorts,
multipurpose complexes and condos. Hudson Yards in
Manhattan, Pacific Park in Brooklyn and Hunters Point
in San Francisco are some of the largest real estate
developments and well-known EB-5 projects, accounting
for nearly $1.5 billion in EB-5 funds. As a result, the jobs will tend to be better paying, higher
skilled, sustainable, and diversified.
For direct EB-5 projects, restaurants, nursing homes and
other healthcare facilities make up a significant share.
But with approximately 90 to 95 percent1 of all EB-5
visa applicants investing in a
regional center project, hard
hats, shovels and cement
trucks are common attributes
of the standard EB-5 project.
As a result, many of the jobs
c re a t e d by E B - 5 f u n d i n g
tend to be either low-skill,
homogenous, low-wage or
short-term. As manufacturing becomes increasingly competitive, the
U.S. turns to high-tech solutions to regain its competitive
advantage. Coherix, Inc. is one such company that has
leveraged EB-5 funds to drive
innovation. The company,
b a s e d i n A n n A r b o r, M I ,
develops and manufactures
high-speed, high-definition
3D machine vision products.
Using 3D data, Coherix allows
companies to assess and
improve their manufacturing
processes. This results in less
waste and greater throughput.
The company received its first
EB-5 investment of $500,000 in 2013.2 In total, Coherix
is a $10 million project and will create 200 much-needed
jobs in Metro Detroit.
Here are some success stories of innovative projects
that were funded by EB-5 capital.
HIGH-TECH MANUFACTURING
"...Opportunities to
drive innovation and
create diverse, good
jobs through EB-5
funding still exist..."
However, a growing trend
is entrepreneurs and startup companies seeking EB-5
funds for their innovative projects. One company that has
gone that route to fuel its growth is Xtreme Green Electric
Vehicles (XGEV), which designs and manufactures
electric specialty vehicles for police, military, security,
landscaping and off-road commercial users in United
States.
“Today, too few jobs created by EB-5 are sustainable over
longer periods,” said Byron Georgiou, the CEO of XGEV.
His voice is just one among a growing number of
advocates that want to see the EB-5 program be
leveraged in a way that truly benefits the country over
the long haul. Many hope that a greater share of EB-5
funds go to projects that propel U.S. innovation forward,
creating skilled , diverse and well-paying jobs that last.
That was the original intention when the United States
Congress’ Immigration Act of 1990 introduced the EB-5
program.
In 1992, when Congress permitted foreign nationals to
invest in regional centers as part of the EB-5 program,
the vision was for innovative U.S. companies to benefit
and become more competitive on the world stage.
At the same time, American workers would profit from
the creation of longer lasting, meaningful jobs. Today,
the opportunities to drive innovation and create diverse,
good jobs through EB-5 funding still exist, but it requires
that regional centers and investors step outside their
comfort zone and into some less conventional projects.
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EB5 INVESTORS M AGAZINE
LOGISTICS
Port of Wilmington Cold Storage is another example
of a non-conventional use of EB-5 funds. The roughly
3-million cubic-feet cold storage warehouse facility is
the only such facility in North Carolina, strategically
located to provide importer and exporters with logistical
benefits. In addition to serving the food industry, Port of
Wilmington Cold Storage assists pharmaceutical clients
when vaccines and biologic drugs, for conditions such as
rheumatoid arthritis and Type 2 diabetes, must be stored
in controlled temperatures. The storage facility raised $15
million in EB-5 funding through 30 investors,3 helping
bring food, medicine, and other necessities to the people
of America and around the globe.
ALTERNATIVE ENERGY
As American leaders and lawmakers look to reduce
the country’s reliance on other nations for energy, EB-5
funding can play a major role in enhancing the United
States energy independence. Some alternative energy
companies have taken note and have managed to
secure millions in EB-5 capital. In North Dakota, Midwest
AgEnergy Group started operations in 2015 at its new
biorefinery thanks to $75 million in EB-5 investments.4