Critique of the Most Recently Released AAO Regional Center Decision                      By Joseph P. Whalen (February 17,...
DISCUSSION: The Director, [REDACTED] denied the proposal for     designation as a regional center. The matter is now befor...
later when we reach the statutory language copied into the text ofthe current AAO Decision under review.     On appeal, co...
(ii) which will benefit the United States economy and create full-     time employment for not fewer than 10 United States...
generated from increased exports, improved regional productivity,           job creation, or increased domestic capital in...
I will gladly post information alongside this article on my webpageat: http://www.slideshare.net/BigJoe5 (if someone sends...
as a description of the promotional efforts taken and planned by the                sponsors of the regional center;      ...
A Court on the other hand, can readily declare the regulation ultravires meaning that it is not in accord with the statute...
FN1              See the March 28, 2009 Employment Creation Immigrant Visa (EB-5)           Program Recommendations prepar...
3. Renovation of functionally obsolete buildings preserving historical          features where appropriate, within a modem...
the jobs that will be created directly or indirectly as a resultof such capital investments, andthe other positive economi...
community banks, a heavily regulated industry. The only mention of a     bank is in scenario three, which presumes a bank ...
operators in the area inform the developer that for every $1 million inhotel revenue, the developer can assume that hotel ...
have realized such income after two years or otherwise explain why this     number is reasonable and not pure speculation....
As for the following section, the main point I hope folks take awayis the valuable MYTH-BUSTING aspect.Folks, Regional Cen...
Targeted employment area means an area which, at the time of      investment, is a rural area or an area which has experie...
TEAs and $1,000,000 in non-TEAs. The remaining examples in the     applicants statement, h o w e v e r , all involve a n i...
above 150 percent of the national rate. In response to the directors request        for additional evidence, the applicant...
Thus, without additional evidence, even if USCIS approved the proposal,      the minimum investment amount would be $1,000...
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Critique of the most recently released AAO Regional Center Decision 2-17-2012

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Critique of the most recently released AAO Regional Center Decision 2-17-2012

  1. 1. Critique of the Most Recently Released AAO Regional Center Decision By Joseph P. Whalen (February 17, 2012)I am of the opinion that the statutory framework that leads to RegionalCenter Designation is built upon Congress good intentions in the same waythat the Road to Hell is paved with good intentions. These journeys sharemuch in common, such as: pitfalls, missteps, frustration, anxiety...well, youget the drift. Once you’ve decided to embark on either one, tread carefully.Before I start in on the most recently released AAO Dismissal of an Appealof the Denial of a Regional Center Proposal, I want to point out a fewconcepts that simply will never make the grade for EB-5 investment,especially in the Regional Center context.The following simply will not work:  house-flipping,  acting as an umbrella for setting up mom-n-pop operations,  mixed-use projects that are top heavy with residential real estate,  any proposal that is simply too vague and/or lacking in focus,  is based on lousy Business Plans,  is based on lousy Economic Analyses, and  any proposal that equals less than the sum of its parts, i.e., crap.I happened upon the following decision on February 16, 2012, (it could havebeen around a few days - I don’t know) but it is close to a year old already asit is dated May 2, 2011. I am confident that AAO will be putting forth moredecisions before very long (it was just a matter of time - they must have beenpiling up to the ceiling) and each will tell us something interesting, if notparticularly new.This one tells me that AAO has been paying attention to what has beenoffered by way of direct comments as well as commentary in publishedarticles. Let’s see what looks new vs. what looks familiar, shall we?The following is merely cut and pasted from the non-precedential decisionPLUS my comments interspersed and distinguished from the body of thedecision text. See May022011_01K1610.pdf Page 1 of 19
  2. 2. DISCUSSION: The Director, [REDACTED] denied the proposal for designation as a regional center. The matter is now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed.____________________________________________________It is not necessary to redact the USCIS Office information,especially for a centralized filing. Newbie worked this redaction. The applicant seeks designation as a regional center pursuant to section 610(c) of the Departments of Commerce, Justice and State, the Judiciary, and Related Agencies Appropriations Act of 1993, Pub. L. No. 102-395, 106 Stat. 1874 (1992), as amended by section 116 of Pub. L. No. 105- 119, 111 Stat. 2440 (1997); section 402 of Pub. L. No. 106-396, 114 Stat. 1637 (2000) and section 11037 of Pub. L. No. 107-273, 1 1 6 Stat. 1758 (2002). The director determined that the economic analysis was insufficient and denied the proposal.____________________________________________________I will not be gentle on anyone in this critique. It is not personal, I’mjust annoyed that my drumbeating is taking so long to be heard.First of all, let’s get the basic legal citation straightened out. TheRegional Center finds its statutory home in the fabled §610 of theblah, blah, blah ad nauseum. I’m tired of that worn out old cite.The damn thing got codified as 8 USC § 1153 Note: PilotImmigration Program. The statutory citation in this AAOdecision is incomplete! That verbiage is most up to date asposted by the Government Printing Office, please go to theirwebsite and copy the current statutory language and follow thechanges already laid out there for you.See http://www.gpoaccess.gov/uscode/browse.html for a place tostart; the INA is Chapter 12 of Title 8 of the USC and while thePilot Program is NOT actually a part of the INA, it is codifiedalongside it there. The importance of this will become more clear Page 2 of 19
  3. 3. later when we reach the statutory language copied into the text ofthe current AAO Decision under review. On appeal, counsel submits a brief and a statement from Dr. [REDACTED] who prepared the economic analysis. The applicant seeks approval of an extremely broad proposal that covers seven broad investment possibilities. For the reasons discussed below, while the applicant need only support the proposal with general predictions, the economic analysis fails to sufficiently address all of the proposed types of investment possibilities for which the applicant seeks approval. In addition, parts of the analysis r e l y o n a s s u m p t i o n s f o r which Dr. [REDACTED] p r o v i d e s no source. Finally, the AAO acknowledges that a regional center may include investments in non-targeted employment areas. Nevertheless, the proposal implies that the regional center would strive to focus investments within targeted employment areas (TEAs). The petitioner, however, has not established that any such areas exist within the proposed geographical limits of the regional center. An application or petition that fails to comply with the technical requirements of the law may be denied by the AAO even if the Service Center does not identify all of the grounds for denial in the initial decision. See Spencer Enterprises, Inc. v. United States, 229 F. Supp. 2d 1025, 1043 (E.D. Cal. 2001), affd, 345 F.3d 683 (9th Cir. 2003); see also Soltane v. DOJ, 381 F.3d 143, 145 (3d Cir. 2004) (noting that the AAO conducts appellate review on a de novo basis). I. Relevant Statute and Regulations Section 203(b)(5) of the Immigration and Nationality Act (the Act), 8 U.S.C. § 1153(b)(5), as amended by Pub. L. No. 107-273, 116 Stat. 1758 (2002), provides classification to qualified immigrants seeking to enter the United States for the purpose of engaging in a new commercial enterprise: (i) in which such alien has invested (after the date of the enactment of the Immigration Act of 1990) or, is actively in the process of investing, capital in an amount not less than the amount specified in subparagraph (C), and Page 3 of 19
  4. 4. (ii) which will benefit the United States economy and create full- time employment for not fewer than 10 United States citizens or aliens lawfully admitted for permanent residence or other immigrants lawfully authorized to be employed in the United States (other than the immigrant and the immigrants spouse, sons, or daughters).Section 610 of the Departments of Commerce, Justice and State, theJudiciary, and Related Agencies Appropriations Act of 1993, as amended,provides: (a) Of the visas otherwise available under section 203(b)(5) of the Immigration and Nationality Act (8 U.S.C. 1153(b)(5)), the Secretary of State, together with the Attorney General, shall set aside visas for a pilot program to implement the provisions of such section. Such pilot program shall involve a regional center in the United States, designated by the Attorney General on the basis of a general proposal, for the promotion of economic growth, including increased export sales, improved regional productivity, job creation, or increased domestic capital investment. A regional center shall have jurisdiction over a limited geographic area, which shall be described i n the proposal and consistent with the purpose of concentrating pooled investment in defined economic zones. The establishment of a regional center may be based on general predictions, contained in the proposal, concerning the kinds of commercial enterprises that will receive capital from aliens, the jobs that will be created directly or indirectly as a result of such capital investments, and the other positive economic effects such capital investments will have. * * * (c) In determining compliance with section 203(b)(5)(A)(iii) of the Immigration and Nationality Act, and notwithstanding the requirements of 8 CFR 204.6, the Attorney General shall permit aliens admitted under the pilot program described in this section to establish reasonable methodologies for determining the number of jobs created by the pilot program, including such jobs which are estimated to have been created indirectly through revenues Page 4 of 19
  5. 5. generated from increased exports, improved regional productivity, job creation, or increased domestic capital investment resulting from the pilot program.____________________________________________________The statutory language in this AAO decision is incorrect!The original statute addressed the Attorney General and byextension, INS. NOW it addresses the Secretary of HomelandSecurity and by extension, USCIS. The Secretary of State hashad a very easy role in this statutory scheme UNTIL NOW.Note that the cross-referenced statutory section changed AFTERthis statute was originally written and the current accurate sectionis 203(b)(5)(A)(ii) as opposed to (iii) which no longer exists. Thereferenced regulation also changed AFTER this statute wasoriginally written but this statute only truly refers to the CFR citeas it existed at the time that the original §610(c) was passed intolaw (please look it up). The CFR posted online only goes backto1997.The promulgation history in the 1997 version reads: [56 FR 60910, Nov. 29, 1991, as amended at 57 FR 1860, Jan. 16, 1992; 58 FR 44608, 44609, Aug. 24, 1993]The promulgation history in the e-CFR as of 2/15/2012, reads: [56 FR 60910, Nov. 29, 1991, as amended at 57 FR 1860, Jan. 16, 1992; 58 FR 44608, 44609, Aug. 24, 1993; 74 FR 26937, June 5, 2009; 75 FR 58990, Sept. 24, 2010; 76 FR 53782, Aug. 29, 2011]The Federal Register is posted online starting with 1994.Someone else can do that painstaking research in order to tracethe changes made since day one of the promulgation of this CFR§ and related regulations. Page 5 of 19
  6. 6. I will gladly post information alongside this article on my webpageat: http://www.slideshare.net/BigJoe5 (if someone sends it tome). I have some additional promulgation info posted now all theway back to 1966 and the prior incarnation of the immigrantinvestor as a labor certification exemption category. Now back tothe May 2nd Decision...... The regulation at 8 C.F.R. § 204.6(m) provides, in pertinent part: (1) Scope. The Immigrant Investor Pilot Program is established solely pursuant to the provisions of section 610 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriation Act, and subject to all conditions and restrictions stipulated in that section. Except as provided herein, aliens seeking to obtain immigration benefits under this paragraph continue to be subject to all conditions and restrictions set forth in section 203(b)(5) of the Act and this section. The regulation at 8 C.F.R. § 204.6(m)(3) provides: Requirements for regional centers. Each regional center wishing to participate in the Immigrant Investor Pilot Program shall submit a proposal to the Assistant Commissioner for Adjudications, which: (i) Clearly describes how the regional center focuses on a geographical region of the United States, and how it will promote economic growth through increased export sales, improved regional productivity, job creation, and increased domestic capital investment; (ii) Provides in verifiable detail how jobs will be created indirectly through increased exports; (iii) Provides a detailed statement regarding the amount and source of capital which has been committed to the regional center, as well Page 6 of 19
  7. 7. as a description of the promotional efforts taken and planned by the sponsors of the regional center; (iv) Contains a detailed prediction regarding the manner in which the regional center will have a positive impact on the regional or national economy in general as reflected by such factors as increased household earnings, greater demand for business services, utilities, maintenance and repair, and construction both within and without the regional center; and (v) Is supported by economically or statistically valid forecasting tools, including, but not limited to, feasibility studies, analyses of foreign and domestic markets for the goods or services to be exported, and/or multiplier tables. The regulation at 8 C.F.R. § 204.6(m)(3)(ii) requires the applicant to provide "verifiable" detail as to how the jobs will be created.____________________________________________________The statute is higher up the ladder than the regulation, so it iscritical that everyone be fully aware that the statute uses the word“or” in two places that are inaccurately still represented by theword “and” in the implementing regulations. It makes a BIGDIFFERENCE!The regulations have not kept pace with statutory amendments.While it is true that AAO as part of USCIS is bound by its APA1compliant and duly promulgated regulations and is stuck withcertain regulations that it now dislikes, (like that gerrymanderingnonsense) the agency can change its regulations throughadditional notice and comment rulemaking under suchcircumstances.1 Administrative Procedures Act codified as 5 USC Part I, Chapter 5 at:http://frwebgate.access.gpo.gov/cgi-bin/usc.cgi?ACTION=BROWSE&TITLE=5USCPI&PDFS=YES Page 7 of 19
  8. 8. A Court on the other hand, can readily declare the regulation ultravires meaning that it is not in accord with the statute orConstitution; or is assuming authority above and beyond thescope of the statute its seeks to implement. Congress can nullifya regulation in whole or in part either expressly or impliedly (alsocharacterized as implicitly).Implicit changes may follow the expressed leanings of the Agencyor advocates or be inadvertent or even surreptitious. The Agencymay clarify when a regulation has been rendered moot or ultravires via Court Precedents or legislative actions and make meretechnical corrections to regulations without formal rulemaking.USCIS can issue yet another Policy Memo or AAO can issue aPrecedent on such issues. To date these ands that should be orshave not been formally addressed anywhere. Back to the May2nd Decision... II. Analysis USCIS is under pressure to accept any projections previously submitted at the regional center stage when adjudicating the Form I-526 petitions filed by individual alien investors provided that there has been no material change and absent fraud. FN1 USCIS will not abdicate its authority to verify that the regional center proposals are reasonable. Addressing any concerns at the regional center stage should increase the likelihood that, absent a material change, the aliens who invest in the project will not only be able to obtain conditional permanent resident status but also demonstrate compliance with the requirements to remove conditions on their status through the success of their investment in the regional center. While the applicant cannot guarantee the proposed regional centers success, it is not in the interest of USCIS or the aliens who invest in a regional center or consistent with Congressional intent to improve regional productivity to approve a regional center whose proposal is not demonstrated to be based on a reasonable economic analysis. Page 8 of 19
  9. 9. FN1 See the March 28, 2009 Employment Creation Immigrant Visa (EB-5) Program Recommendations prepared by the USCIS Office of the Ombudsman, incorporated into the record of proceeding.Certain of the concepts expressed above have been stated beforebut not by USCIS. For instance, back in March 2011, an articleentitled: The Concepts of "Reasonable Reliance" vs."Deference to Prior Decisions" in EB-52, stated, in part: “The whole of EB-5 is intertwined in a highly complex manner that dictates that the separate petitions and applications overlap one another. None can be considered in a void unto itself. In contrast to an I-526 or I-829, an I-924 invites material changes and it is a major function of USCIS to do all it can to help the Regional Centers get the preliminary matters in good order for later compliance and a favorable deference to prior determinations on the various well vetted technical matters. The AAO clearly points out that USCIS is strongly encouraged to accept assertions made during the Regional Center preliminaries later on at the I-526 stage of the process. This is a desirable outcome for USCIS because to be able to do so makes the subsequent I-526 adjudication easier. In order to fulfill such a request, the initial Regional Center evidence must be worthy of consideration and deference later on by refraining from making material changes to what was previously approved. It is not in the best interest of USCIS to accept documentation at the I-924 stage that will not be acceptable at the I-526 stage of the process. It is in the best interest of USCIS, the Regional Centers, the immigrant investors and most especially the U.S. economy and the U.S. workers, to help perfect I- 924 applications and do it most expeditiously.” [Emphasis added]____________________________________________________ A. Types of Projects The initial submission indicated that the regional center proposed to invest in the following types of projects: 1. Commercial/industrial developments, including but not limited to hospitality, retail, industrial, flex, office, and transportation facilities; 2. Public/private arrangements with governmental agencies, non-profits, or other entities to develop civic/public facilities and infrastructure;2 http://www.ilw.com/articles/2011,0321-whalen.shtm Page 9 of 19
  10. 10. 3. Renovation of functionally obsolete buildings preserving historical features where appropriate, within a modem facility; 4. Mixed use or residential developments with or without ground floor retail, including apartments and condominiums; 5. The provision of capital, loans, or investment in businesses wishing to locate in the regional center area; 6. Establish or invest in lending institutions such as community banks; and 7. Establish or invest in agricultural or agricultural-related endeavors, including, but not limited to vineyards and wineries. Dr. [REDACTED] then analyzes five scenarios: 1. Renovation and conversion of an abandoned warehouse to space for architecture/engineering firms, restaurants, or those requiring warehouse or light manufacturing space; 2. Renovation and conversion of an abandoned office building to a hotel; 3. Construction of a four-story mixed use building with a bank, two small retail shops and 20 apartment units; 4. Direct investment in a company developing online computer games; and 5. Investment in a 65 acre farm for development of a vineyard and winery.[Statutory framework in § 610(c) for application procedures:]“.... The establishment of a regional center may bebased on general predictions, contained in the proposal,concerningthe kinds of commercial enterprises that will receive capitalfrom aliens, Page 10 of 19
  11. 11. the jobs that will be created directly or indirectly as a resultof such capital investments, andthe other positive economic effects such capital investmentswill have.”Certain concepts expressed in the recently released Decisionhave been stated before but not by USCIS. For instance, back inMay 2011, an article entitled: The Application For A RegionalCenter Invites Material Change To Perfect That I-924: TheRole Of Transparent Complexity In Preserving InvestmentFlexibility3, stated, in part: “The RC applicant must invest great effort into the planning in order to retain such flexibility for its prospective investors. The “general proposal” based on “general predictions” allowed by the statute [8 USC § 1153 Note] must be presented with sufficiently detailed information “concerning the kinds of commercial enterprises that will receive capital from aliens” as allowed and envisioned all in that same statute. Congress also directed the agency to write regulations and to establish “reasonable methodologies”. Well, those mechanisms are there in the regulations at 8 CFR § 204.6(m)(3). It is up to the RC applicant to comply with those requirements from the very beginning. The Regional Center investor is no-more free to abruptly change midstream than USCIS, however, if the possibility is already built into the USCIS-vetted and approved plan in advance of a shift, then it is not an impermissible material change outside the I-526 approved plan.” Regarding development of civic/public facilities and infrastructure, Dr. [REDACTED] asserts that the [REDACTED] I n p u t -Output model cannot include a government sector and concludes: "A mo r e complete explanation of methodology for such a project will be developed in the future should such a project actually be proposed." USCIS, however, will not approve a regional center covering potential investments in projects for which the applicant has submitted no economic analysis whatsoever. The AAO also notes that the scenarios do not cover project number five, the establishment of or investment in lending institutions such as3 http://www.ilw.com/articles/2011,0525-whalen.shtm Page 11 of 19
  12. 12. community banks, a heavily regulated industry. The only mention of a bank is in scenario three, which presumes a bank will rent space in mixed use development the regional center constructs. This scenario does not contemplate that the new commercial enterprise would establish or invest in the bank, a project the applicant specifically requests approval to pursue. Thus, the applicant seeks to include projects in the proposal for which it has provided no economic analysis. Moreover, the first set of proposed projects is overly broad, including retail, industrial, flex, office, transportation and other unnamed industries. [REDACTED] provides an analysis for a hotel, but it can be presumed that the analysis of an investment in a transportation facility w o u l d involv e different factors. Moreover, the applicant expressly leaves open t h e possibility of development in an entirely unrelated, unidentified industry. USCIS will not approve a regional center proposal for such a vague purpose. In light of the above, the proposal is overly broad, covering several potential projects, some of which are not even identified, for which the applicant has provided no economic analysis at all.I would have to conclude that the applicant failed to provideenough specificity (or any at all) on the “kinds of commercialenterprises that will receive capital from aliens”. B. Unsupported Assumptions In addition, Dr. [REDACTED] relies on three assumptions for which he provides no source. He also does not suggest that he has evaluated the assumptions to determine whether they are reasonable or otherwise explain why they are reasonable. First, in scenario two, Dr. [REDACTED] discusses the conversion of an abandoned office building of unspecified size into a hotel of unsp eci fied size. Dr. [REDACTED] estimates the cost of such development at $20 million. Dr. [REDACTED] continues: "Hotel Page 12 of 19
  13. 13. operators in the area inform the developer that for every $1 million inhotel revenue, the developer can assume that hotel guests will spend another$1 million at nearby businesses." Dr. [REDACTED] then breaks downwhere these amounts would be spent. Dr. [REDACTED] continues:"These estimates are assumed to be based on surveys conducted by alocal hotel association or Chamber of Commerce, providing a statisticallyvalid basis for the estimates." Citing the actual survey source ratherthan speculating as to the potential source would bolster Dr.[REDACTED’s] discussion. Simply going on record without supportingdocumentary evidence is not sufficient for purposes of meeting theburden of proof in these proceedings. Matter of Soffici, 22 I&N Dec.158, 165 (Commr. 1998) (citing Matter of Treasure Craft of California,14 I&N Dec. 190 (Regl. Commr. 1972)). In addition, D r .[REDACTED] then presumes that the hotel would create $2 million inlocal business revenue at the hotel through hotel and nearby businessrevenue. D r . [REDACTED] d o e s not explain how the alleged fact thathotel patrons spend $1 million on local businesses for every $1 million ofhotel revenue leads to the conclusion that every hotel, regardless of size,generates $1 million in hotel revenue in the first place. Thus, while theAAO does not question Dr. [REDACTED’s] model, he has not explainedhow he justifies the input data for that model.Second, in scenario three involving mixed use development, Dr.[REDACTED] calculates jobs created by apartment r ental income. Dr.[REDACTED] does not explain how apartment rental income willnecessarily benefit the geographic territory of the regional center. Theowner/manager of the apartment need not be local. For example, if thelimited partnerships in which the alien investors will invest will own theapartments and receive the rental income, the alien investors may very wellreside outside the geographical limits of the regional center and, thus, theapartment income will not benefit the regional center at all.Finally, in scenario four, Dr. [REDACTED] discusses an investment in ahypothetical computer gaming development company. Dr. [REDACTED]states: "After a 2 year startup period when the company is mostly engagedin development activities, the company projects revenues of $15 million peryear." Dr. [REDACTED] implies this project is purely hypothetical. Assuch, it is not clear what "company" is projecting such revenues. Dr.[REDACTED] does not provide any examples of similar companies that Page 13 of 19
  14. 14. have realized such income after two years or otherwise explain why this number is reasonable and not pure speculation. In summary, while the AAO does not question the models Dr. [REDACTED] uses or his expertise in applying the models to accurate input data, Dr. [REDACTED] has not adequately explained the basis for using certain input data. Even the best of models is only as good as the input data. Without adequate support for input data Dr. [REDACTED] uses, the results have little value.____________________________________________________As mean as it may seem, I don’t think Dr. [REDACTED] will begetting too many Regional Center gigs after this. To be fair, Idon’t think that Dr. [REDACTED] was ever informed what hisWORK PRODUCT needed to accomplish or what specific itemsneeded to be addressed.Are you asking yourself: “What is his WORK PRODUCT?”Well, presumably, he is an economist and he was asked to createan Economic Analysis, right? What specifications was he given?Was he given any at all? Did the client ever even hand him acopy of the pertinent statutes and regulations or precedents? Iwould guess not.Additionally, the “Business Plan(s)” handed to the Economist (ifthere were any) probably lacked sufficient detail. (I know I may bestating the obvious BUT as this very case shows us, it obviouslyis not obvious to everyone attempting to jump on board). Did theBusiness Plan writer (the idea person/true entrepreneur) evereven talk with the Economist? Again, I think not.Therefore, I blame the Regional Center Sponsor/Applicant andhis/her/their EB-5 attorneys, consultants, and/or advisors. Page 14 of 19
  15. 15. As for the following section, the main point I hope folks take awayis the valuable MYTH-BUSTING aspect.Folks, Regional Center does NOT equal TEA, and it never did!Congress defined Targeted Employment Areas in the statute sodon’t go crying about the big bad USCIS! Way back when, in theearly and frantic days in the wake of IMMACT90, INS merelycopied the statute on this subject matter wherever possible andthat included the TEA parameters and associated definitions for: (1.) High Unemployment Areas, and (2.) Rural Areas.This Regional Center wannabe put all of his/her/their eggs in onebasket but that basket had a big hole in the bottom. They did notanticipate that there would be any Economic Recovery!They ONLY submitted information addressing projects in TEAshowever, the entire geographic area selected contained ZEROknown TEAs and they could not even show any probability offinding even one TEA in there at all!Lesson Learned: If you submit irrelevant, substandard, and/orimmaterial supporting documentation that does not provide anysupport whatsoever, your case will be denied. C. Targeted Employment Areas The regulation at 8 C.F.R. § 204.6(e) states, in pertinent part, that: Rural area means any area not within either a metropolitan statistical area (as designated by the Office of Management and Budget) or the outer boundary of any city or town having a population of 20,000 or more. Page 15 of 19
  16. 16. Targeted employment area means an area which, at the time of investment, is a rural area or an area which has experienced unemployment of at least 150 percent of the national average rate.The regulation at 8 C.F.R. § 204.6(G)(6) states that: If applicable, to show that the new commercial enterprise has created or will create employment in a targeted employment area, the petition must be accompanied by: (i) In the case of a rural area, evidence that the new commercial enterprise is principally doing business within a civil jurisdiction not located within any standard metropolitan statistical area as designated by the Office of Management and Budget, or within any city or town having a population of 20,000 or more as based on the most recent decennial census of the United States; or (ii) In the case of a high unemployment area: (A) Evidence that the metropolitan statistical area, the specific county within a metropolitan statistical area, or the county in which a city or town with a population of 20,000 or more is located, in which the new commercial enterprise is principally doing business has experienced an average unemployment rate of 150 percent of the national average rate; or (B) A letter from an authorized body of the government of the state in which the new commercial enterprise is located which certifies that the geographic or political subdivision of the metropolitan statistical area or of the city or town with a population of 20,000 or more in which the enterprise is principally doing business has been designated a high unemployment area. The letter must meet the requirements of 8 C.F.R. § 204.6(i).Initially, the applicant asserted that "certain census tracts within theregional center territory will qualify as targeted employment areas." Theapplicant indicated that immigrant investors would invest $500,000 in Page 16 of 19
  17. 17. TEAs and $1,000,000 in non-TEAs. The remaining examples in the applicants statement, h o w e v e r , all involve a n i n v e s t m e n t o f $ 500,000, s u g g e s t i n g t h a t t h e p r o p o s a l contemplates investments in TEAs. Dr. [REDACTED] asserts that the proposed regional center would encompass a mostly rural area that includes "four" Metropolitan Statistical Areas (MSAs) and four Micropolitan Statistical Area. In fact, the geographical limits include six MSAs: Spokane, Yakima, Portland- Vancouver-Beaverton, Longview, Lewiston and Wenatchee. FN2 These six MSAs cover eight of the 26 counties within the geographical limits of the proposed regional center. Of the remaining counties, the record contains no evidence regarding the population of these counties. FN2 See http://vvww.whitehouse.govIsites/default/files/omb/assets/bulletins/b10 -02.pdf.The extremely major flaws in misidentifying and miscountingMSAs, coupled with totally unrealistic expectations and grandiosespeculation were the final nails in this coffin. Simple basic fact-checking would have been nice. USCIS (at CSC and AAO) willcheck your facts and assumptions so it is better for you to do thatBEFOREHAND. Major league flaws in simple basic facts willdraw even deeper scrutiny than usual and that is true across-the-board with USCIS for everything. As eight of the 26 counties fall within an MSA, they cannot be considered rural. Without city and town population data for the remaining counties, the petitioner cannot establish these counties contain rural areas as defined at 8 C.F.R. § 204.6(e). The petitioner initially submitted a list of unemployment rates for all 26 counties in 2007, four of which were at or above 150 percent of the national rate. None of the counties within an MSA had an unemployment rate at or Page 17 of 19
  18. 18. above 150 percent of the national rate. In response to the directors request for additional evidence, the applicant concedes that while the unemployment rate in many of these counties exceeds the national rate, none of them have unemployment rates at or above 150 percent of the national rate in September 2009. While the state has purportedly designated some of the counties as "distressed areas," there is no evidence the state has designated them as targeted employment areas pursuant to the requirements set forth at 8 C.F.R. § 204.6(i) and based on qualifying unemployment rates. The AAO reiterates that in September 2009, none of the counties had an unemployment rate at or above 150 percent of the national rate.How did I put it previously? Back in May4, I wrote: “It would also be incumbent upon the Regional Center to invest the needed resources in creating a sufficiently variegated overall Regional Center business plan that is well supported with exemplar projects and economic analyses with reliable and credible job projections based on a valid econometric model. In essence, the more successful Regional Center is going to be one with a large library or catalog of “USCIS-vetted” exemplar project plans and economic analyses. This previous point is where a broad, credible, comprehensive business plan that is wide- ranging in scope and breadth submitted at the Regional Center (RC) Proposal (I-924) stage is critical. If a RC asserts a flexible investment approach and builds such flexibility into its written supporting documentation with a certain amount of specificity sufficient to put USCIS on notice, then shifting from one vetted “actual” project to another project based on a “previously vetted exemplar” project remains a possibility. Preserving such flexibility is not a simple task.” [Emphases added] In light of the above, the applicant has not demonstrated that any of the areas within the geographical limits of the proposed regional center territory constitute targeted employment areas as defined at 8 C.F.R. § 204.6(e).4 The Application For A Regional Center Invites Material Change To Perfect That I-924: The Role OfTransparent Complexity In Preserving Investment Flexibility at: http://www.ilw.com/articles/2011,0525-whalen.shtm Page 18 of 19
  19. 19. Thus, without additional evidence, even if USCIS approved the proposal, the minimum investment amount would be $1,000,000. For the above stated reasons, considered both in sum and as separate grounds for denial, the proposal may not be approved. ORDER: The appeal is dismissed.This and much more is available at: http://www.slideshare.net/BigJoe5 andespecially see my premier EB-5 power point presentation at:http://www.slideshare.net/BigJoe5/essentials-of-a-regional-center-proposal-public-copy while it remains available online. Page 19 of 19

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