EB5 Investors Magazine Volume 2 Issue 1 - Page 29

EB5 Investors Magazine Staff: How did you get started in EB-5? Did your government background lead you to EB-5? Elliot Winer: It was actually a little of both. I worked for many years in Massachusetts, and at one point I ran all of the federal state cooperative programs. One of them was the labor and local area unemployment statistics program, which is the basis for doing the unemployment rates—the background for working on the TEA. Around the early ‘90s—before we had PCs— somebody actually came to me with a poster board with census tracts. He needed me to verify that he had put together a high unemployment area. Over the course of the year, he came in about three or four times with different proposals, and then I didn’t hear anything about the program for a while, because it was dormant for all those years. I retired in August 2009, but shortly before I retired, I got a call from the same person. He told me that the program was active again and that he wanted to check out an area. I told him it wasn’t something I could do right then, so I didn’t get directly involved, but after I left I gave him some advice. He passed my name on to other people, and I wound up with connections to California. They were using me to check out TEAs, so I had to work with the California authorities and figure out what the program was and how they were implementing it. One thing led to another, and I’d get a call from somebody else, who spoke to this person, who said I know how to do TEAs, and it started spreading to other states, regional centers, law firms, consulting groups, hotel chains, other legal firms, and everything, so it snowballed. Staff: We all know the basic definition of a TEA—either a rural area or an area with high unemployment—but what actually goes into the designation? Winer: They are two very distinct categories. The first one, the rural, is one that most people ignore. Obviously, if you think about it, it’s easier to build bigger projects [in an urban area]. But the huge advantage of the rural is that you automatically qualify, and the strange thing about the rural is that the states are actually prohibited from authorizing the TEA. You cannot go to a state to get a rural TEA, but you don’t have to go to anybody. If you know how to explain it according to the definition, you can do it on your own. It’s something I do on occasion—somebody will come to me and want something more official. I tell them they don’t really need me to do it, but I give them a letter and show, according to the regulations, why it fits the [definition]. The definition for rural is that if you are not in a metropolitan statistical area, or a city or town of over 20,000 population, you are rural. That’s all it is in simple language. People will come to me all the time and say, “I’m sure this is rural, there are no houses around, there is no development.” You could drive by and there could be farms and cows, and nobody lives there, but it’s still part of the outline of the metropolitan statistical area. On the other hand, you can have industrial cities of 18,000 population, but if they’re not in a metropolitan statistical area, those are all rural. And even though some states will publish them, the state cannot give you a letter. Now the other part of it, and certainly 99 percent of it, is the unemployment criteria. For a high unemployment area, you have to have an unemployment rate of 150 percent or more of the U.S. average for t