Continued from page 51 agency officials . It took several months , but eventually Mr . Berez advised that USCIS concluded that it was charged with determining if an applicant earned his or her capital legally and that it was not the agency ’ s job to enforce China ’ s restrictive currency policy . That green light is why we pursued the China market .
More recent examples of challenges pertain to the timing of being able to release investor funds . Initially , it took three to five months for an I-526 application to be adjudicated . At the time , our escrow agreement provided for the unconditional release of an investors ’ capital contribution to a specific project only after his / her I-526 petition was approved ; it was fully returned if the petition was denied . When adjudication timeframes steadily increased toward 14 or 15 months , not only were investors distressed , but also the unanticipated delay became a very serious problem for the project developers .
For instance , construction workers at our University of Hawaii West Oahu campus development project were not being paid because our investors ’ escrowed funds could not be released until their individual petitions were approved . The story made the papers and the University of Hawaii Board of Regents called me in to explain . I did my best to explain the industry-wide delays and expressed my confidence that the project met the highest standards of the EB-5 program . The University Regents voted to allocate sufficient short-term interim funding to ensure the construction workers were paid . After the EB-5 investors were approved , this interim funding was fully reimbursed .
Staff : When you do projects , is it a loan model where you ’ re the lender , or do you actually own the project as well ?
Rosenfeld : One thing that we ’ re really clear about is that we are in the job creating immigration business . The idea that you can find a project that ’ s going to achieve the substantial job requirements of the EB-5 program , protect your principal and also provide you with a good return , is more than we can accomplish . That ’ s not our model . Our model is very conservative .
Staff : So your model is a loan model ?
Rosenfeld : Exactly . Ours is a loan model . We ’ re interested in providing below-market-rate loans , on an interest-only basis , to companies who find that additional incentive significant enough to undertake a job-creating project that they may not otherwise pursue . In consideration for this attractive loan , we need to be relatively confident that the project will create the requisite number of qualifying jobs and is very likely to repay the EB-5 partnership loan in a timely manner .
We advise potential investors that if they want to earn a high return , or have an equity interest — that ’ s not us . That ’ s not to say that it ’ s right or wrong , it ’ s just not our business model .
Staff : When people are contacting you , are they mostly governmental agencies or project developers ? Do people ask you to look at their project and tell them if it ’ s EB-5 friendly ?
Rosenfeld : We receive inquires from both sources , however , most of the projects we have promoted originate from our governmental agency partners . States and cities aggressively compete for job creating businesses and these businesses are not shy about seeking economic incentives . Our main source of projects is economic development agencies that are approached by businesses promising jobs and looking for something in return . Because of the substantial cutbacks to traditional economic incentive programs , EB-5 financing has become a very important incentive tool for our governmental agency partners .
Staff : If a big developer were to call you and ask you to do the raise for them , do you say “ That ’ s not my business model ,” or do you say , “ Let ’ s talk ?”
Rosenfeld : We are always willing to talk and we have worked with a select group of developers . For CanAm , the recent interest of large U . S . developers seeking to use the EB-5 program as a cheap source of financing for their traditional office or residential development projects raises new considerations . The EB-5 program is a national asset with a limited number of visas . The idea that a sizable percentage of these visas will be monopolized by a select group of multi-billion dollar developers for office or residential projects that would likely be completed , with or without EB-5 funds , doesn ’ t pass “ the smell test .”
During our over 25-year history with immigrant investor programs , we have repeatedly been sensitized to the fact that these programs will continue to evolve and change in response to media attention and political concerns . Senator Leahy , who chairs the Senate Judiciary Committee with USCIS oversight , became the program ’ s most important proponent , in large part , because of the importance of the EB-5 program to the Vermont business community . If that community expresses its concerns about the monopolization of the program by large New York or Los Angeles developers , or a few negative articles are written about this development , it is my opinion that these traditional office or residential development projects will receive greater USCIS scrutiny .
“… we are very interested in promoting socially responsible projects that clearly have a public benefit .”
The bottom line is that , in the current EB-5 environment , we are very interested in promoting socially responsible projects that clearly have a public benefit . It doesn ’ t matter whether these projects originate from our economic development partners or large developers .
52 EB5 Investors Magazine