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DISSECTING THE STANDARD REGIONAL CENTER APPROVAL NOTICE                           By Joseph P. Whalen (May 6, 2012)A lot o...
investments will be made; the “kinds of commercial enterprises” in which thepooled investments will be made; the accepted ...
 EMPLOYMENT CREATION:I appreciate the following standard blurb within this standard section.   “Immigrant investors who f...
 DESIGNEES RESPONSIBIUTIES INHERENT IN CONDUCT OF  THE REGIONAL CENTER:Originally, INS did not define any responsibilitie...
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Dissecting the standard Regional Center Approval Notice

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Dissecting the standard Regional Center Approval Notice

  1. 1. DISSECTING THE STANDARD REGIONAL CENTER APPROVAL NOTICE By Joseph P. Whalen (May 6, 2012)A lot of thought and a great deal of fine-tuning went into the wording of the basicRegional Center Approval Notice’s language. An even greater amount of specificwordsmithing goes into the real things based on the actual evidence presented.Lately, some practitioners have tried to challenge the wording and meaning of theApproval Notices. Some have tried to read things in, some try to read things out,and some just try to warp the English language beyond comprehension. It seemsworth the effort to discuss this subject matter. Preliminary Matters and/or Executive SummaryThe Notices start out with some standard preliminary legalese citing the statutorybasis for the request. They then specify the type of application that the Noticeaddresses such as: an initial request for designation; or an amendment to theiroperating parameters or scope of the Regional Center (geography/industries/reasonable methodologies/investment structure and/or instruments, etc...); or aproject-specific I-526 Exemplar (submitted as an I-924 amendment). For the morein-depth requests, especially for older Regional Centers with a longer history, somevery specific (and sometimes complicated and/or convoluted) procedural history ispresented.Based on its review and analysis of the request for designation of.... -OR-Based on its review and analysis of the request to amend the previous] [NAMEDRegional Center’s] business plan, and/or job creation prediction/projectionmethodology, and supplementary evidence, the U.S. Citizenship and ImmigrationServices (USCIS) [approves OR amends] the designation of the Regional Center asdescribed below. In accepting the [proposed plans OR amendment], USCIS hasupdated its records of your Regional Center approval/designation as to: geographicarea, and/or, economic impact and/or job creation prediction/projectionmethodology, and/or business plan(s) to encompass this approach and/or changerelative to the investment plan(s) presented. Standard Headings, Most Notable Features & BlurbsWhile it is true that the individual Notices are intentionally crafted with specificity,they are also somewhat formulaic by design. The Approval Notice spells out theapproved operational parameter as to the defined geographic area in which Page 1 of 4
  2. 2. investments will be made; the “kinds of commercial enterprises” in which thepooled investments will be made; the accepted “reasonable methodologies” forcalculating job creation and other “positive economic impacts”; investmentstructures, and usually specific references are made to the standardized transactiondocumentation that was put forth for review. In other words, the Approval Noticeinforms the applicant of the approved scope of their Regional Center.  GEOGRAPHIC AREA: The size and composition of the defined area has deeper implications than the novice knows. Economies differ based on the characteristics of the defined area. Physical size is only one factor to consider. A large sparsely populated rural area is quite different from a small densely populated urban area, which is different still from a suburb, a mountain town, a beach resort, or a desert retirement community. The practical consideration is the expense, time, and effort needed to compose a proposal and accompanying economic analysis than encompasses all of the variations. An overly large and diverse proposed geographic area can be too expensive to document when first getting started.  FOCUS OF INVESTMENT ACTIVITY: Building on the previous consideration and pondering all the variables involved in even a single “kind of commercial enterprise” in which to invest and then thinking about addressing all the variables across each type of area encompassed and you can get dizzy. If your chosen geographic area encompasses six distinct types of economic communities, how expensive would it be to study each type of business across each type of economic zone? Ultimately, whatever was put forth and was found acceptable will be spelled out. I appreciate the following standard language. “If any investment opportunities arise that are beyond the scope of the approved industry clusters, then an amendment would be required to add that cluster. Aliens seeking immigrant visas through the Immigrant Investor Pilot Program may file individual petitions with USCIS for these commercial enterprises located within the approved Regional Center area.” This same section lists the blurb about $500,000 is the minimum in a TEA, otherwise it is $1,000,000. Page 2 of 4
  3. 3.  EMPLOYMENT CREATION:I appreciate the following standard blurb within this standard section. “Immigrant investors who file petitions for commercial enterprises located in the Regional Center area must fulfill all of the requirements set forth in 8 CFR 204.6, except that the petition need not show that the new commercial enterprises created ten new jobs indirectly as a result of the immigrant investors investment. This determination has been established by way of USCIS’ acceptance of the final economic analysis that is contained as part of the approved Regional Center proposal and its indirect job creation model and multipliers contained within the final approved Regional Center application package. Rather, the investor must show at the time of removal of conditions that they performed the activities described in the model and on which the approved methodology is based.”That last sentence speaks to a “back-end” burden of proof. The investor withthe help of the Regional Center, must submit evidence to substantiate thefulfillment or accomplishment of the previously stated or predicted conditionsprecedent to the job creation. These were some of the assumptions stated up-front that would serve to support the job creation predictions or projections. Forexample, “the leasing of XXX square feet of YYY “type of” our newly createdor renovated “commercial space” would be able to support ZZZ newly createdjobs .....”. During the I-829 proceeding, the evidence must show that XXX wasleased, specifically for YYY purpose, in order to support a finding-of-fact thatZZZ jobs were created. Additionally, IF those newly created jobs wereaccepted as input data as “direct jobs” in an economic model, then thatunderlying job creation would then also support additional jobs creation as wasstated up-front and accepted as a reasonable methodology. Additional Guidelines for individual Immigrant Investor’s Visa Petition (I -5 26):Basically, this section just gives a laundry list of documents that have beenvetted and found EB-5 compliant. This was the part of the proposal in Izummithat spawned the original “material change” prohibition. These items are in thenature of highly detailed, precisely worded contracts and/or other legalagreements. Additionally, these documents spell out the intended anticipatedmoney pathways. Don’t mess around with the money pathways! Page 3 of 4
  4. 4.  DESIGNEES RESPONSIBIUTIES INHERENT IN CONDUCT OF THE REGIONAL CENTER:Originally, INS did not define any responsibilities for the Regional Centers andlook at how well that worked out! The Program imploded and was stagnant foryears. When the Program had new life breathed into it, Regional Centerswanted more guidance on their responsibilities. In response there was perhapstoo much information requested. However, that giant list of information didserve a purpose; it made everybody think about the pertinent issues. Those earlycategories of information to track inspired the I-924A. Of course, the I-924Aneeds work and is undoubtedly under review. I would be shocked if it were notunder serious review.In conclusion, the Regional Center Approval notice needs to describe thegeographic area covered, the specific industries or types of businesses approvedfor investment and make specific reference to the job projection and economicimpact model and/or methodology that was submitted and reviewed foracceptability. The written Approval Notice needs to inform the Regional Centerof its recordkeeping and reporting responsibilities and prohibition againstmaking substantive material changes to previously submitted-and-reviewedstandard written business documents and/or investment instruments anticipatedto be submitted with individual investor petitions. The notice needs to advise ofconsequences of substantive material changes in projects and/or business plansand the need to remain within the approved scope and parameters of theRegional Center in order to allow EB-5 alien participants to continue to countindirect jobs. Page 4 of 4

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