They are hardly "huddled masses" and far from "poor" or "wretched refuse," but they are foreigners and they want to become U.S. citizens. And, under the federal EB-5 visa program, they not only don't have to wait in line, they get a fast-track route to a green card and potential citizenship -- provided they invest $500,000 in a designated U.S. company's capital investment project.New Hampshire recently jumped on the EB-5 bandwagon by opening its first EB-5 Regional Center, designed to attract foreign investors to help Ragged Mountain Resort in Danbury with its $35 million expansion.The centers are essentially equity brokerage firms that find foreign investors and promise meager returns, along with a green card. Two others, broader regional centers that cover multiple businesses, are in the works in the North Country and in southern New Hampshire.EB-5 is a revised federal program that has been around since the 1990s to lure foreign investment into areas that need economic development and promise to produce jobs. It offers as many as 3,000 expedited green cards to investors who pony up $500,000 and another 7,000 to those who come up with $1 million to invest.Until recently, only the $1 million option existed. Dropping the threshold has opened the floodgates for more investors -- and more regional centers. The number of new regional centers has doubled in last two months."It's not an easy thing do," said Dave Strong of the Utah-based Pacific Group, which owns Ragged Mountain. But it will "create a significant number of new jobs as the investment comes in" and the Danbury resort is expanded.It took nearly a year for the Department of Homeland Security to review the plethora of paperwork to ensure that the resort and its plans are legitimate. Now it has the right to seek funding from vetted investors who meet high security standards.Ragged Mountain's plans call for replacing its existing lodge and adding a 40-unit hotel, condos, a spa and other facilities, including a new ski lift, a mountain coaster and a mountain bike course as well as improving the golf course.'Unfettered access'Capital-hungry entrepreneurs say participation in EB-5 is all about the math and the money."It's more than twice as hard to find an investor with $1 million than $500,000, and this (reduced threshold) has brought life to this program," said Tom Mullen, who has developed several projects in the state and is co-owner of Owl's Nest Resort in Campton, where he is hoping to attract investors for $25 million in improvements.For over a year, Mullen has been spearheading the North Country regional center. "It's virtually impossible to get conventional debt financing" for development projects in the current environment, he said.EB-5 investors are "equity investors and will own a part of the company." There is no downside to the program, Mullen said. He didn't have much trouble convincing Adam Tager and his brother, Kyle, who own two furniture manufacturing companies -- Brown Street Furniture and Vermont Tubs, both based in Whitefield."You've got to be kidding me," was Adam Tager's first response. "It sounds too good to be true." But it isn't -- and the evidence can be seen about an hour north at the Jay Peak Ski and Golf Resort in Jay, Vt.This once-sleepy ski mountain in Vermont's Northeast Kingdom has become a magnet for foreign investment. The state government started a regional center, which cost about $325,000, and promotes it aggressively. Jay Peak has already sold out the first phase of its investment offering and is working on a second.This made Adam Tager a believer. He and his brothers bought two companies in 2009 and are undercapitalized. Over the years, they've had to cut their workforce from 100 to about 60."It has been a challenging few years without capital," Adam Tager said. "I've spent a lot of time looking for alternative financing. An opportunity like this is a dream."EB-5 financing is not only more accessible, Strong said, but it's also more affordable."Banks lend at 6 to 9 percent on resort development, he said, while EB-5 investors are happy with a 2 1/4 to 4 percent" return.What the investors really want is the green card, or as Mullen calls it, "unfettered access."They tend to be savvy businessmen from places like China, South Korea, Russia, India and England. They may be attracted to the United States' political stability and free market system, but most fall into two categories: They want to retire or send their children to top colleges."(They're) buying a green card, basically. That's what this is," said George Bruno, a Manchester immigration attorney and former ambassador to Belize. But, he added, "a rich person could always get into the U.S."He said it's a good program that produces jobs, economic development and has never reached its quota. After five years, if jobs are produced, the immigrant can become a citizen, but the government benefit hardly ends there -- the investor's worldwide income becomes taxable and usually finds other local investment opportunities.Bruno said the program is a "door for people who would have no way of getting into the U.S.," but for entrepreneurs like Adam Tager, it's a dream come true.
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This article appears in the November 4 2011 issue of New Hampshire Business Review