EB5 Investors Magazine Volume 1 Issue 1 | Page 43

USCIS Questions and Answers: EB-5 Economic Methodologies, July 5, 2012 When stakeholders sought clarifica tion on statements made at a public eng agement by two economists — who had wor ked on the Immigrant Investor Program — USC IS released a short memo discussing EB-5 projects involving hotel/resort development and whether Regional Center funds from EB-5 investors cou ld be used to acquire real estate. The question asked USCIS to prov ide guidance on the economically feasible point in time for inputting projected funds — spent by visitors — into economic models, to project indirect and direct jobs when the EB5 project involved the development of a hote l or resort. USCIS responded by saying that job credit based on “visitor spending” is appropr iate only where the applicant or petitioner can show, by a preponderance of evidence, that the EB-5 Program would result in an increase in new visitor arrivals or spending in the area . USCIS explained, “If the applicant or petition er presents a reasonable case that the visitor spending, and the tourism generated by a proj ect, is new, then it may be reasonable to con clude that the specific project has generated an increase in demand, and thus, has generated increased employment in the region, resultin g from the projected increase in visitor spending .” The second question asked USCIS whether funds from EB-5 investors may be used to acquire real estate. USCIS respond ed by saying that real estate acquisition is not generally recognized as a job-creating activity in and of itself. Therefore, while it is permissib le to use EB-5 funds to purchase real estate, it is “not generally reasonable to treat funds spen t on real estate acquisition as inputs to an emp loyment impact model.” If a project were to use EB-5 funds for acquiring real estate, USC IS recommends that this apportionment be detailed in the business plan. USCIS further recognized that certain soft costs directly rela ted to real estate transactions may be reasonably counted as valid job-creating expenditures and inputs to regional input-output models. USCI S Mes sa ge from th e Di re ct or, New EB-5 Prog ra m Office , Ju ly 18, 201 2 USCIS’ director, Alejandro Mayorkas, an N. nounced the creation of new office in a Washington D.C. to oversee the admin istration of the Immigra Investor Pro nt gram. Led by a new Chief and the addi tion of new staff to th EB-5 Program e team, the cre ation of t