The huge Solaris project under construction in Vail for four years isn’t simply going to produce new residences and commercial spaces in a Colorado resort. It also has the potential to yield green cards for as many as 160 wealthy foreigners and their families.
This fast track to legal status is possible because Solaris developers are seeking $80 million from foreign investors — mainly Chinese and South Koreans — under a little-known but rapidly growing visa program called the EB-5. The 21-year-old program is currently being rediscovered in the aftermath of America’s crippling recession.
To qualify for EB-5 visas, foreigners must invest at least $500,000 in a U.S. project or business that will create at least 10 jobs. If that happens within two years, the foreign investor qualifies for legal-residence status that includes bringing a spouse and dependent children to America.
Detractors say it is nothing more than a way for the wealthy to buy their way into the country or another avenue for investment scams. But backers of the program call it a great alternative to going to a bank in this economy for loans: It’s a way to garner capital funding, create jobs, and attract educated and accomplished immigrants who will be valuable additions to the American melting pot.
“It’s like when you buy a season pass to Vail to ski. With EB-5, you buy a season pass to live in America and you pay $500,000 for it,” said Jeff Edwards, who recently sold one of four government-approved centers in Colorado that serve as middlemen linking developers with foreign investors.
Edwards added that the goal of the EB-5 program is “sincere and genuine.”
“It’s desperately needed in this economy,” he said.
That need is reflected in the mushrooming of so-called EB-5 Regional Centers across the country as banks clamp down on domestic lending and unemployment rates stay high. The numbers of approved centers that make money by charging fees to hook up investors and projects climb weekly on the U.S. Citizenship and Immigration Services website. There are currently 191, compared with 11 in 2007.
There also is huge growth in the number of EB-5 marketers, attorneys and economists who do everything from drawing in foreign investors to writing financial reports for the regional centers. The Internet is rife with pitches for “free consultations” and promises of “Get your USA green cards.” EB-5 “boot camps” are being held in hotel ballrooms across the country.
There is not yet a corresponding increase in EB-5 projects. Several planned EB-5 projects in Colorado, including a new residential community near Leadville, have drawn no foreign investors and did not get off the drawing board after the economy spiraled downward.
Developers have been seeking EB-5 investors for other Colorado projects that have not yet panned out, including a biomass-fuels facility, a metals-purification plant, an assisted-living center and a senior living center.
Another EB-5-funded project planned for downtown Denver is being kept under tight wraps after the sale of Invest America EB-5 from Edwards to a group of Colorado investors.
The $375 million Solaris project in Vail is the first project in Colorado to be approved and to begin lining up foreign investors.
Schwartz said part of the problem is that, like most government programs, obtaining EB-5 investments and working one’s way through the entire process is enormously complicated. It’s nowhere near as simple as handing over a chunk of cash for a green card. And it is by no means free of risk.
A limit of 10,000 foreign investors and family members can earn EB-5 visas annually but they receive no guarantee of any return on their investments.
They also can face deportation if their money fails to create 10 jobs in the two years following the investment.
Half get green cards
Nearly 6,000 foreign EB-5 investors have applied for permanent residency through the program since it was created, but only 3,200 have received green cards. In an example of how interest in this program has soared, 715 investors applied for permanent residency in the first four months of this year.
Another example of its increasing popularity: Enough investors have been caught up in projects that didn’t pan out that the Chinese government has issued warnings about EB-5 visas.
Ira Mehlman with the Federation for American Immigration Reform said those who favor reforming immigration in the United States also should be issuing warnings about this program.
“If there is such a good business investment, you don’t need to promise people all sorts of visa benefits,” Mehlman said. “We have reviewed this program, and we think it is dysfunctional.”
EB-5 backers currently are a little nervous about a bill introduced this month to help bail out the U.S. real estate market. That bill would allow foreigners who spend at least $500,000 in cash on residential property to obtain visas. At least $250,000 of that money would have to be spent on a primary residence that the owner would live in for at least 180 days a year. It could be rented for the remainder.
If the property is sold, buyers would lose their visa eligibility.
Even with all the requirements, the housing program sounds easier than plowing through EB-5 requirements.
“I would think someone would think about that if it is, in fact, as simple as initial reports make it sound,” Schwartz said.
The U.S. Chamber of Commerce is supporting the home-buying bill, citing the many EB-5 hurdles that deter foreign investors from coming to the United States to spend their money.
- Colorado Regional Center
- U.S. Chamber of Commerce
- U.S. Citizenship and Immigration Services
- Solaris Project
- Chester Schwartz
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