EB5 Investors Magazine | Page 48

O P I N I O N : B I L L S . 1 5 0 1 Rethinking Targeted Employment Areas in Downtown Districts by Elliot Winer Armed with words like “loopholes” and “gerrymandering,” critics of the EB-5 visa program have turned their attention to capital from immigrant investors flowing into Targeted Employment Areas, and the methods by which these “TEAs” are determined. However, stating that the economic impact of an EB-5 project in a TEA does not extend to nearby high unemployment areas simply because the project itself is not in a high unemployment area is an overgeneralization that does not paint the full picture. Further, it discredits the work performed by state governments in reviewing and approving an area to be designated as a TEA, which is supposed to reflect the potential economic impact and job creation that EB-5 projects will have throughout the designated area. The EB-5 visa program awards conditional green cards to immigrants who invest $1 million in U.S. enterprises and create 10 full time jobs for American workers. The minimum investment amount is lowered to $500,000 if the enterprise is in a TEA, which is a rural area or an area with 150 percent the 46 national unemployment average, as defined by the Immigration Act of 1990. The regulations provide that a state government may designate a contiguous geographic or political subdivision within its boundaries as a TEA, e.g. a group of census tracts, based on high unemployment. The jobs that are generated through EB-5 investments can impact entire regions, not just the specific census tract in which a project is located. States allow, at their discretion, requestors to combine contiguous tracts to form TEAs. These areas reflect a project’s projected job creation impact on the surrounding area. A common criticism of TEAs is that EB-5 projects pop up in areas that normally are not considered high-unemployment, like downtown Seattle. However, downtown commercial areas often show inherently lower unemployment rates and may have relatively few residents. The areas surrounding EB-5 projects in commercial districts, however, often do have higher unemployment rates. Continued on page 48 EB5 INVESTORS MAGAZINE