Case 1:11-cv-0 1287-RWR Document 1-1 Filed 07/15/11 Page 215 of 223 U.S. Department of Homeland Security P.O. Box 301 I l Laguna Niguel, CA 92607-01 I I u:s. Citizenship and Immigration ServicesDate: i4AY 2 4 2011Keith C. MeltzerC! 0 Victorville Regional Center14343 Civic DriveVictorville, CA 92392 File: WAC 11 034 50524 (I-290B) RCW 10 319 10251 W09 000160 (Regional Center Proposal)Petitioner: Victorville Regional Center NOTICE OF DECISIONThe petitioner filed Form I~290B, pursuant to 8 CFR 103.5(a) on November 20, 2010. USCIS terminatedthe Victorville Regional Centers ("VRC") designation as a regional center under the Regional Center PilotProgram ("Pilot Program") pursuant to Title 8 of the Federal Regulations (8 CFR) 204.6(m)(6) on October20,2010.In accordance with 8 C.F.R. 103.5(a), the motion is granted. 8 CFR 103.5(a)(l)(iv) provides that the foefiling of a motion does not stay the execution of any decision in a case. The users decision to terminatethe VRC s status as a regional center remains unchanged. Please see the enclosed attachment. This decisionwill nowr~f Adminim.Uvo Appo.ili ><"iewRosemary Langley MelvilleDirectorcc: Paul W. Virtue, Esq. wvvw.uscis.gov
Case 1:11-cv-01287-RWR Document 1-1 Filed 07/15/11 Page 216 of 223Victorville Regional Center/RCW103191025 1/W09000160/WAC1103450524 (MTR)Page 2This Notice is in reference to the motion to reopen filed on November 20, 2010. USCIS terminated theVictorville Regional Centers ("VRC") designation as a regional center under the Regional Center PilotProgram ("Pilot Program") pursuant to Title 8 of the Federal Regulations (8 CFR) 204.6(m) (6) on October20, 2010.On December 14, 201 0 USCIS issued a request for evidence ("RFE"). On March 7, 2011, USCIS received aresponse to the RFE. A complete review of the record of proceeding in this matter, including the evidencesubmitted with the motion and in response to the RFE does not establish that the VRC is eligible fordesignation as a regional center.While the motion meets the motion filing requirements at 8 CFR 103.5(a), 8 CFR 103.5(a)(l)(iv)provides that the fJ.ling of a motion does not stay the execution of any decision in a case. The USCISdecision to terminate the VRCs status as a regional center will remain unchanged. However, this decisionwill now be certified to the Administrative Appeals Office ("AAO") for review.Viability ofEB-5 Capital Investment Opportunities with respect to the Capital Investment and JobCreation:Southern California Logistics Airport ("SCIA") Industrial Wastewater Treatment Facility ("IWWTF")On motion, the VRC submitted a new economic analysis based upon the RIMS II econometric model. Thiseconomic analysis asserts that 512 permanent jobs will be created by the construction of the wastewatertreatment facility using a "capital spending multiplier" approach. The capital spending mulliplier approachcalculates the total number of jobs created based upon estimated total expenditures of $57.89 million forthe IWWTF project (see Exhibit 4, Section 1 Executive Summary of the MTR). The $57.89 million inconstruction costs is described by capital expenditure Vithin the economic analysis.The new economic analysis submitted on motion appears to be statistically sound. However, the evidenceprovided with the motion did not show how the construction costs of$57.89 million were derived in lightof the previous wastewater facility construction cost estinJates in the record of: • $30 million as reflected in the original economic analysis submitted with the regional center proposal dated January 8, 2009 by Dr. John Husing (see Exhibit E, Page 2 of the Economic Impact of EB-5 Limited Partnership Investments of the MTR), and; • $46.52 million according to the business plan submitted in response to the first Notice to Intent To Terminate dated May 4, 2010 (see Page 7, SCLA IWWTF Business Plan dated June 29, 2010 under Tab "IWWTF Business" of the MTR).Further, a detailed timeline with actual/projected completion dates for the construction of the IWWTF andassociated improvement projects was not submitted. In addition, it was unclear as to whether theadditional capital expenditures noted in the motion could be reasonably associated with the construction ofthe IWWTF, or that the expenditures would be incurred within a reasonable timeline to provide for therequisite job creation for EB-5 purposes.Also, a description of the source(s) of the non EB-5 funds used to capitalize the additional expenditures forthe IWWTF was not provided. Finally, a description of the timing and path of the non EB-5 capital was notprovided. Such evidence was requested in the notice dated December 14, 2 010.ATTACHMENT 1-171
Case 1:11-cv-01287-RWR Document 1-1 Filed 07/15/11 Page 217 of 223Victorville Regional Center/RCWI 0319102511W09000 160/WACll 03450524 (MTR)Page 3In response, the VRC provided exhibits F-1 through F-16 to summarize the expenditure of funds forvarious projects at the SCIA. Also provided was a timeline (Exhibit A) that indicated which projects wouldbe commenced upon receipt of EB-5 funds from individual investors that did not provide timelines for theactual project activities, a construction summary of project activity (Exhibit B), a monthly expendituretimeline for the IWWTF (Exhibit C), a business plan of November 20 1 0 (Exhibit D), and the Evans CarrollEconomic Study of November 2010 (Exhibit E). Construction and Capital Improvements (Off-Site Infhlstructure) ofthe IWWTFThe VRC estimates $57.89 million in construction costs which includes approximately $30 million for theconstruction of the IWWTF and $2 7. 89 million in off-site infrastructure expenditures. The $2 7. 8 9 millionin off-site infrastructure expenditures are stated in the motion to be integral to the operation of theIWWTF.Table #1 contains the estimated IWWTF construction costs expenditures as outlined in the motion:ATTACHMENTI-!7!
Case 1:11-cv-01287-RWR Document 1-1 Filed 07/15/11 Page 218 of 223Victorville Regional Center/RCWI 0319102511W09000160/WAC11 03450524 (MTR)Page4A careful re·view of the documentation of record regarding the Eastside Backbone Improvement Project(Project# 75504), (Exhibit F-8 of the evidentiary response to the motion) reveals that the project does notappear to be related to the IWWTF and therefore, the expenditures for the project cannot reasonably beassociated with the construction, operation, and subsequent capital improvements of the IWWTF.Eastside Backbone Improvement Project is described as an "underground substructure and cabling from thepick up point at Hangar #4 (at the SCLA Airport formerly George Air Force Base) to a site electrical servicepick up point within the existing easement" (see "description" at Exhibit F-8). The "project will serve asprimary power for plant operations, replacing construction power supplied by generators" (see "note" atExhibit 8). Construction is currently ongoing as of February 18, 2011 with an estimated completion inMarch 2011. Further, the project will be funded using $712,351 in Victorville Water District LoanProceeds and $930,000 in Economic Development Administration (EDA) grant funds (EDA Grant# 07-49-05631).A review of EDA Grant Award Modification letter (EDA Grant #07-49-05631) of September 20, 2010addressed to the City of Victorville indicates that $1 ,0 70, 17 5 in grant funds were remaining from theoriginal grant award amount of $3,588,900. This letter further states that the "City (of Victorville) hasidentified a need to provide electrical infrastructure to various areas within the (former George AFB)Airport in order to enable future commercial development" utilizing "these remaining funds" (see EDAGraut Modification letter dated September 20, 2010 in Tab F-8 of the evidentiary response).If the City of Victorville intends to use a portion of its capital funding to finance future commercialdevelopment at the SCLA, then the funds cannot be reasonably attributed as expenditures for capitalinfrastructure improvements to the IWWTF. Further, corroborating evidence was not submitted toestablish a nexus between this claimed improvement project and the operation of the IWWTF.Thus, the Eastside Backbone Improvement Project does not appear to be a project that can reasonably beattributed to the IWWTF construction or to subsequent capital improvements to the IWWTF within theVRC. This project does not appear to directly relate to the IWWTF and the claimed expenditures in thisproject that are required to realize the requisite level of job creation for the EB-5 investors. The inclusionof the Eastside Backbone Improvement Project in the listing of capital expenditures for the IWWTF appearsto be an attempt on the part of the VRC to overstate the aggregate amount of capital expenditures for theIWWTF. This casts doubt! on the reliability and sufficiency of the remaining evidence that was submittedin support of the MTR2.This concern is accentuated by the fact that many of the prospective projects that can reasonably beassociated with the IWWTF, lack any discernable source of funding in order for these projects to come tofruition, and thus create the requisite number of jobs within a reasonable period of time after the EB-5investors admission to the United States as conditional permanent residents.1 Doubt cast on any a.spect of the petitioners proof may, of course, lead to a reevaluation of the reliability and sufficiency of the remaining evidenceoffered in support of the visa petition. Matter ofHo, 19 I&N Dec. 582, 591 (BIA 1988)2 It is incumbent upon the petitioner tu resolve any inconsistencies in the record by independent objective evidence, and attempts to explain orreconcile such inconsistencies, absent competent objective evidence pointing to where the truth, in fact, lies, will not suffice. Matter ofHo, 19 I&NDec. 582, 591-92 (BrA 1988)ATTACHMENT l-l7l
Case1:11-cv-01287-RWR Document1-1 Filed0?/15/11 Page219of223Victorville Regional Center/RCWl 03191025 I/W09000160/WAC11 03450524 (MTR)PageSTable #2 contains the estimated funding sources for the IWWTF construction costs expenditures asoutlined in the motion:ATIACHMENT l-171
Case 1: 11-cv-01287-RWR Document 1-1 Filed 07/15/11 Page 220 of 223Victorville Regional Center/RCW103191 0251/W09000160/WAC1103450524 (MTR)Page 6The chart below illustrates that the source of the capital funding as stated in the motion letter conflicts withthe funding sources and amounts itemized within the actual motion Exhibits in the charts above.Funding Source AmountVictorville Water District Short-Tenn Construction Loan $44,091,226EDA Grant# 07-49-05631 $ 2,752,405EPA Grant# XP-96941001-0 $ 1,111,300Dr. Pepper Snapple Group Water Connection Fee $ 299,617Dr. Pepper Snapple Group Sewer Connection Fee $ 810,000HDPP Connection Fee $ 1,294,200Air Force MCCA Water Connection Fee $ 260,000Air Force MCCA Sewer Connection Fee $ 19,125Air Force MCCA Water Connection Fee $ 32,000Victorville Capital Improvement Funds (Exhibit F-1 0 & F-11) $ 3,031,436To Be Determined (TBD) (Exhibits F-3, F-15, & F-16) $ 4,184,979Total $57.886 288The VRC claims that $25 million in EB-5 investor funds will be used first to refmance a portion of the$44,091 ,226 Victorville Water Distrkt short-term construction loan and the amounts remaining that werenot funded with grants or connection fees. The record does not show the source of funds for therepayment of the rest of the short-term construction loan. As noted above, it is not apparent how EB-5investor capital will be legitimately utilized to finance the Eastside Backbone Improvement Project (Project# 75504) given that this project does not appear to be a viable regional center capital improvement projectunder the auspices of the IWWTF for this regional center.Finally, the record is not clear as to how EB- 5 investor capital can be associated with capital investmentactivities relating to the Drying Beds Project (see Exhibit F-3 the evidentiary response), the FBOP LiftStation (see Exhibit F-5), and the two Reclaimed Water Projects (see Exhibit IS and Exhibit 16 of theevidentiary response), given that their funding sources have yet to be determined. The VRC estimates that$5,267,296 (see Exhibit B of the evidentiary response) will be needed to fund these projects but as the Cityof Victorville lacks any source of funding for these projects, they do not appear to be feasible projects forthe foreseeable future. As such, it is not reasonable to include these expenditures in the IWWTF project forthe purposes of EB-5 job creation. Simply going on the record without submitting documentary evidenceto show the source of capital funding is insufficient for meeting the burden of proof. 3Thus, the evidence of record fails to establish that the IWWTF involves legitimate capital expenditures ofsufficient magnitude to serve as the basis for the inputs into the RIMS II econometric model, in order tosupport the estimate that through these aggregate expenditures at least 500 jobs will be created for VRCs50 prospective EB-5 investors.For the reasons noted above, the VRC has not demonstrated that EB-5 capital investments in the construction,operation, and subsequent capital improvements of the IWWTF will create the requisite 500 direct or indirectjobs for 50 prospective EB-5 investors. Therefore, the USCIS decision to tenninate the VRCs status as a3 Simply going on record without supporting docmnentary evidence is not sufficient for purposes of meeting the burden of proof in theseproceedings. See Matter ofTreasure Craft of California, 14 I&N Dec. 190 (Reg. Comm. 1972).ATTACHMENT 1-171
Case 1:11-cv-01287-RWR Document 1-1 Filed 07/15/11 Page 221 of223. . Victorville Regional Center/RCW1031910251/W09000160/WAC11 03450524 (MTR) Page 7 regional center is affirmed on motion. Because of the complexity of the issues involved, this decision is certified to the AAO in accordance with 8 CFR 10 3.4. AITACHMENT I-171