EB-­‐5  Immigrant  Investment  Program  for  Texas  

 Dandan  (Danna)  Zou  

President  and  CEO,  Texas  Investment  Regional  Center  Vice  Chair  –  Greater  Austin  Chinese  Chamber  of  Commerce  Chairwoman  –  GACCC  International  Investment  Committee  

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Agenda  � Texas  Investment  Regional  Center  (TexIRC)  � What  is  the  EB-­‐5  program?    � How  does  the  EB-­‐5  program  work?  � Who  invests  in  EB-­‐5  projects?  � What’s  in  it  for  Central  Texas  Businesses?  � How  can  Texas  Investment  Regional  Center  (TexIRC)  help  you?  

� Current  Project  

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Texas Investment Regional Center (TexIRC)  Matching    

with  strong        

in  Texas    

 

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USCIS EB-5 Program  

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� Heavy  Focus  on  job  creation  

�  Attract  and  encourage  foreign            investment  in  US  

USCIS EB-5 Program Quick History  

� EB-­‐5  category  created  in  1990  �  10,000  EB-­‐5  green  cards  available  each  year  �  3,000  set  aside  for  regional  centers  (RC)  � Total  visas  issued:  

�  FY  2011  –  3,805  � Q1  FY  2012  –  1,293  

�  Slow  start;  Congress  added  regional  center          pilot  program  in  1993  �  Started  to  grow  in  mid-­‐1990s  

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USCIS EB-5 Program Quick History  

� EB-­‐5  program  is  now  on  the  increase  especially  through  regional  centers  

�  90%-­‐95%  EB-­‐5  visas  obtained  through  RCs  �  194  approved  RCs  as  of  June  2012  stakeholder  meeting          -­‐Just  two  years  ago,  there  were  only  114  �  20  approved  RCs  in  2008  

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How does EB-5 Program Work?  � Obtain  Regional  Center  Designation  �  Investors  invest  in  projects  through  Regional  Center  �  Investors  File  for  Conditional  Residency  and  move  to  U.S.    

�  2  years  later,  file  for  permanent  green  card  if:  1)  the  capital  is  still  in  place  and    2)  10  jobs  have  been  maintained  per                  $500k  investment  

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3 Components of EB-5 Program  Regional  Center  Designation  

Investor  Marketing   Regional  Center  Operations  

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Who invests in EB-5 Program?  

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Who invests in EB-5 Program?  �  Chinese  allocated  21%  of  their  assets  to  real  estate.  Global  average  is  14%  *  

�  Chinese  interests  in  overseas  real  estate  and  immigration  are  getting  stronger.    

�  Drop  in  housing  prices  in  US  �  Steady  RMB  have  created  an  opportunity  for  wealthy  Chinese  to  invest  in  real  estate  in  the  US.  

   

*Asia-­‐Pacific  Wealth  Report  2008  by  Merrill  Lynch  and  Capgemini  

 

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The Wealthy in China  �  China  has  960,000  ‘millionaires’  with  personal  wealth  of  10  million  Yuan  or  more  (USD$1.5  million)  **  

�  Up  85,000  individuals  or  9.7%  year  over  year  �  2009  -­‐  825,000  millionaires  �  2010  -­‐  875,000  millionaires  �  China  also  has  60,000  ‘super  rich’  with  100  million  Yuan  or  more,  up  9.0%  over  last  year      

�  4  out  of  5  Chinese  millionaires  are  considering  sending  their  children  to  study  overseas,  with  the  US  and  UK  their  preferred  destinations.  

�  Report  also  indicates  that  about  27%  Chinese  billionaires  have  been  involved  in  emigration  investment.***  

 **  The  GroupM  Knowledge  -­‐  Hurun  Wealth  Report  2011    http://www.hurun.net/hurun/listreleaseen548.aspx  

***  “China's  Private  Wealth  Report  2011”  issued  by  China  Merchants  Bank  

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Why do investors want EB-5?  � Permanent  Residency  in  the  USA  � Access  to  good  schools  for  their  children  � Growing  cost  of  living  in  Asia  � Uncertain  political  climate  in  China  � Half  of  Chinese  millionaires  polled  in  2011  said          they  are  thinking  of  emigrating,  mostly  to          North  America*  

 *Hurun  Research  Institute  and  Bank  of  China  report,  Nov.  2011  

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Why does the USA want EB-5?  

�  Investment  Capital  and  Jobs!!!  � Since  its  inception  in  1990,  EB-­‐5  has  been  responsible  for:  � 46,810  jobs  � more  than  $2.3B  in  investments  � all  at  no  cost  to  the  government  

� Congress  and  Senate  both  voted  to          extend  the  program  for  3  more  years        with  bipartisan  support  

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�  Businesses  considering  EB-­‐5  as            alternative  capital,  sometimes  the            only  source  of  capital  �  EB-­‐5  may  be  the  answer  for    many            investment  projects  without  traditional          capital  funding  �  Job  creation  is  mandatory  requirement  for  EB-­‐5    �  Texas  is  currently  behind  East  and  West  Coasts          in  EB-­‐5  deals  

 

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What’s in it for Central TX Business?  

Why use a Regional Center?  �  Regional  Centers  (RCs)  bring  investors  to  deals  �  Potentially  bring  manufacturing  projects  from  China  �  The  Regional  Center  Pilot  Program  allows  $500k  minimum  qualifying  investment  if  invested  in  a  TEA  or  Rural  Area  vs.  $1M  minimum  

�  TEA  designation  –  area  with  unemployment  of  at  least  150%  of  national  average.      

�  Rural  Area  –  geographic  area  outside  of  an  MSA            and  in  a  town  having  a  population  of  20,000  or  less.  �  RC  allows  indirect  job  creation  to  be  counted  

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What projects are a good fit for EB-5 Capital?  

�  $25M  to  $125M  �  Job  Generators  –  need  10  perm.  jobs  per  EB-­‐5  investor  � Public  and  Private  partnerships  �  “Shovel  ready”  projects  

�  Business  plan  �  Economic  analysis  that  will  satisfy  USCIS  

�  Located  in  a  TEA  or  Rural  Area  � Ongoing  support  

� New  high  net-­‐worth  immigrants  need  housing  �  Support  and  services  for  new  immigrants  

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Important Sectors for EB-5  � Hotels  � Health  Care  � Manufacturing  � Senior  Living  and  Assisted  Living  Facilities  

� Charter  Schools  � Much  more  …  …     17  

Who is using EB-5 Funding?  � Developers  for  Marriott,  Hilton,  Hyatt,  Starwood  � City  Market  at  O  Street-­‐  $225M  mixed  use  project  in  Washington  D.C.,  $15M  in  EB-­‐5  funding  

� Hutchinson  Medical  Office  Complex–part  of  the  42  acre  multi-­‐building  office  campus  in  the  Bronx  

� West  Village-­‐Dallas,  20  story  $100M  mixed  use  project,  $64M  in  EB-­‐5  funding  

� Solaris  Project  –  a  $375M  mixed  use  project        in    Vail,  Colorado,  $80M  in  EB-­‐5  funding  

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EB-5 First Lien Capital Stack Example  

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Project  Cost   $30M  

Private  Equity   25%   $7.5M  

EB-­‐5        Loan   75%   $22.5M  

EB-5 Second Lien Capital Stack Example  

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Project  Cost   $50M  

Private  Equity   25%   $12.5M  

Construction  Loan   40%   $20M  

EB-­‐5        2nd  Lien   35%   $17.5M  

Total  Debt   75%   $37.5M  

How can TexIRC Help You?  �  Established  to  help  fund  activities  in  Texas,  with  focus  on  central  Texas  

�  Help  configure  projects  so  they  are  best  suited  for  EB-­‐5  program  �  Committed  to  the  highest  level  of  integrity  and  ethics  to  all  stakeholders:  �  Investors  �  Developers/business  owners  �  USCIS  

�  TexIRC  is  focused  on  the  following  markets:    �  Commercial  real  estate  development  �  Accommodation  �  Restaurants  �  Manufacturing  �  Senior  Living  

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 Q&A  

     

Texas  Investment  Regional  Center  (TexIRC)  www.TexIRC.com  

512-­‐850-­‐6568    

Dandan  (Danna)  Zou    

President  and  CEO,  Texas  Investment  Regional  Center  Vice  Chair  –  Grater  Austin  Chinese  Chamber  of  Commerce  Chairwoman  –  GACCC  International  Investment  Committee  

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