State's second EB-5 investor center awaits OK

Under the little-known EB-5 Immigrant Investor Program, foreign nationals who make qualified investments in American projects are eligible to receive expedited green cards


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After 18 months of filling out applications, revising those applications, waiting, and some more waiting, Tom Mullen is hopeful he'll win approval to open New Hampshire's second EB-5 Regional Center by month's end.

"The process is a daunting one, to say the least," said Mullen, who owns the sprawling Owl's Nest Resort in Campton. He has big expansion plans for the resort, chief among them a new pro shop, a pavilion for weddings and other events, and nine more golf holes.

Considering it's a golf resort, no big surprises there. But the project is indeed unusual, if not for the plans themselves, than for the way that Mullen hopes to finance them.

Under the little-known federal visa program known as the EB-5 Immigrant Investor Program, foreign nationals who make qualified investments in American projects are eligible to receive expedited green cards.

How much they need to invest depends on where they make the investment. In metropolitan areas, they have to invest at least $1 million to qualify for EB-5. But in high unemployment areas, and in rural areas -- which includes most of New Hampshire -- foreign investors can invest $500,000 in an approved EB-5 project and, in return, get a conditional green card.

After two years, if those investors can prove their investment created or preserved 10 jobs, they become eligible for an unconditional green card, which five years down the road can lead to U.S. citizenship.

"Basically you come to the front of the line and get a green card for you and your family," said Jason Sullivan, an attorney specializing in immigration law at Craven, Sullivan & Splendore in Portsmouth.

Participating foreign investors "come from all over the world," he said, and must go through stringent requirements to prove the money is coming from a lawful source.

Though Sullivan said he has fielded many inquiries about EB-5 from the Middle East, some of the biggest EB-5 markets are China, South Korea and the United Kingdom. Many EB-5 investors are looking to retire or send their children to college in the U.S.

Resurgent interest

For Mullen, EB-5 is a win for American businesses, which can use the program to get an infusion of capital to create or sustain American jobs. For the investors, the benefits are clear.

"These are sophisticated investors who definitely want a return, but their primary interest is getting visas approved," said Mullen.

While the EB-5 program was founded in 1990, it has long been underutilized. Not once has it come close to distributing the 10,000 green cards that are set aside annually for the program.

That trend could be reversing some these days, though. Thanks to tightened bank lending and a difficult financing market, more businesspeople are looking to the EB-5 program as a potential solution for some of their funding woes.

"When the recession happened, a lot of traditional bank financing kind of dried up," said Mark Fischer, a spokesman for the Pacific Group of Utah, which owns Ragged Mountain Resort, an EB-5 project in New Hampshire. "EB-5 is just another form of financing, and one that's pretty cost-effective."

The resurgent interest in the Immigrant Investor Program is evident in the sudden rise in EB-5 visa applications. Some 7,461 visa applications were received in fiscal year 2012 -- more than double the 3,463 received in 2011, according to the U.S. State Department.

It's also obvious in the growth in EB-5 regional centers across the country.

The centers, which act as brokerages between investors and commercial EB-5 projects, have to be approved by the Department of Homeland Security's Citizenship and Immigration Services, which administers the program.

The vast majority of EB-5 investments are made in projects associated with a center, which are tasked with making sure the requisite number of jobs are created and submitting citizenship applications on behalf of its investors.

In 2007, there were just 11 regional centers; in 2012, there were more than 200.

The centers, which can be private or public, are located all across the U.S. They are soliciting funds for such projects as ski resorts, shopping malls and hotels. Even the Barclays Center arena, the new home of the NBA Brooklyn Nets, used EB-5 money to fund part of the construction of the massive billion-dollar complex.

Long, expensive process

Without a doubt, the most notable EB-5 success story has been Jay Peak in northern Vermont, which has raised huge sums of money through immigrant investors.

For its first expansion phase, the ski mountain raised $275 million from 550 foreign investors, with plans to raise another $500 million in two more phases, according to a recent New York Times report.

"That appears to be a poster child for the program," said Mullen. "They really have utilized this program to the maximum extent."

Mullen hopes to repeat some of that success at Owl's Nest, though on a markedly smaller scale.

He initially sought $25 million for the expansion, but over the course of the USCIS approval process, he reduced the scope of the project to $16 million.

The process has been long and expensive. He's had to pay fees for the application itself, as well as for the services of economists and attorneys.

If Mullen gets his approval, the North Country center would become the second EB-5 regional center in New Hampshire.

The first -- called, not surprisingly, the New Hampshire EB-5 Regional Center -- gained its approval from USCIS in October 2011. It was formed with the goal of raising some $35 million for upgrades to Ragged Mountain Resort in Danbury.

Fischer, the Ragged Mountain spokesman, said it took about 18 months for the EB-5 center to gain approval.

"It's just a process," said Fischer. "I think the thing it does is it vets out the people that shouldn't be qualified, and it works to the benefit of everybody that way."

Ragged has big expansion plans to make it more of a destination, four-seasons resort. The plans include constructing a hotel and condos; replacing the Spear Mountain lift with a detachable, high-speed lift; and building a mountain coaster, bike course and zip lines, among other plans.

For the first phase of expansion, Ragged has been seeking to raise $35 million from 70 EB-5 investors. In the more than a year that the business has been soliciting investors, Fischer said it has raised "a substantial portion" of the goal, though he wouldn't say how much.

"We do have funds in place to start to do some of the things we want to," he said.

What's important to note, said Fischer, is that it's not all-or-nothing funding. "We don't have to raise $35 million or nothing. If we raised $10 million, we do this, $20 million, we do that."

Fischer said that his group has made several overseas trips to meet with prospective investors.

"The trips primarily have been to China because that's a large market," he said. "A lot of the Chinese are taking advantage of that because they want to be able to visit the U.S. on a regular basis. It's easier for their children to attend U.S. colleges and universities."

While the North Country center has yet to be approved, Mullen said he's ready to hit the ground running if and when it is. Already there's a working website, staff in New Hampshire, representatives on the ground in China and the U.K., and Mullen is working on finding someone to represent Owl's Nest in Brazil to attract South American investors.

"We're ramped up and ready to go," he said.

If the center is approved, it would initially seek investors just for Owl's Nest, but Mullen said he would like to see it serve other businesses in the future.

"Our intention here is creating a regional center that, once it addressed our needs, we were interested in making sure it would be available to the needs of other businesses, at least initially in the North Country."

Fischer echoed those sentiments, and said that the group has identified some other projects that may benefit from EB-5 funding.

"The idea is not to just do one and go away," said Fischer. "It took a lot of work to get the regional center up and running. I think we would definitely look to continue to expand beyond that."

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