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only be able to use construction jobs because operations will not
occur within two and a half years of I-526 petition approval. If
construction is starting with other financing (such as developer
equity or bridge financing) or construction is only 24 months
for example, the economic report may be able to use the first
year of revenues if operations will start within two and a half
years of I-526 approval. Stabilized occupancy that may occur
some four to five years in the future is almost always outside the
USCIS-imposed job creation timeline.
Visitor spending is another input that can be used by an
economist to calculate job creation in the hotel context. The
economist will use a study (usually from a convention/visitor’s
bureau) that will calculate the average amount of money spent
per night by visitors to the area. The economist will then multiply that number by the occupancy rate of the hotel to determine
the revenues the hotel guests will generate in the area through
visitor spending. The visitor spending revenue then is used as an
input to the economic model to calculate additional job creation
in and around the area. Visitor spending has received much
scrutiny. USCIS wants the hotel to demonstrate that the hotel is
the reason why visitors are coming to the area, but it is very hard
to show this causation in most cases. The decision on whether
to use visitor spending in the job creation calculation requires a
very fact-specific inquiry for each case in which it is considered.
The Feasibility Study
It is always important to provide independent data to support
key facts in the Matter of Ho business plan. A hotel feasibility
study should support the RevPar, ADR, and occupancy rates for
the hotel, which are then used to create the revenue projections
in the business plan, which, in turn, are used by the economist
to calculate operations jobs. HVS regularly conducts hotel
feasibility studies for EB-5 purposes, which gives background
and support for the data contained in the Matter of Ho business
plan. A best practice is for the assumptions in the business plan,
including RevPar, ADR, occupancy rates, and revenues for the
hotel, to come directly from the feasibility study.
When you follow these key points, EB-5 can be an integral
piece for your next hotel project.
w w w. E B 5 I n v e s to r s . c o m
★
Jennifer Hermansky is an Associate in the
Philadelphia office of Greenberg Traurig, LLP.
Jennifer concentrates on EB-5 immigrant
investor visas. She works with developers
across a variety of industries seeking capital for
new projects that qualify for EB-5 investments
and counsels clients on the creation of new
regional centers, amendments of a regional
center designations and adoptions of developer
projects by existing regional centers. She also
counsels approved regional centers on an
ongoing basis on a