Hotels Growing in Popularity with use of EB-5 Financing

(Source: Ali Brodie, Greenberg Traurig)  Although the program has been around for a number of years, it is only recently that EB-5 financing has become popular for hotel development with major flags including Marriott, Starwood, Hyatt, and Hilton successfully utilizing this alternative form of financing.  With traditional construction financing difficult to obtain, many hotel developers have turned to EB-5 financing, realizing its benefit as both a creative way of attracting financing from foreign investors, and marketing hotel brands internationally.  Hotel developers favor raising capital through the EB-5 program as it is considered a relatively cheaper source of financing, frequently offering returns of less than 4%, when compared with higher interest rates on debt and other riskier forms of financing.  From the investor’s perspective, the United States is attractive because of its political and economic stability, healthcare, and educational opportunities for children.  The investors, the majority to-date being Asian, are primarily concerned with obtaining a green card through investing in a regional center project that creates the requisite 10 new jobs per investor and will return their funds (capital at risk) within 5 years, not necessarily with the return on investment.   Many investors select EB-5 regional center hotel projects because they identify with the property operated by an internationally recognized hotel brand, and they see the increasing profitability and stability of the U.S. hotel industry.  We suggest the following tactics for EB-5 hotel developers to make your project competitive: It is critical to obtain strong branding by associating with a brand that is recognizable in the investor’s home country.  This adds to the credibility of the project.  Investor’s favor investments with brands which are both familiar and prestigious. Similar to hotel branding is the developer’s track record.  Investors have to trust the developer of the project investment.  Experienced developers should provide investors with information relating to past successes in order to gain investor trust. Ensure that your project is located in a Targeted Employment Area (TEA).  The TEA designation allows the qualifying investment to be reduced from $1 million to $500,000.  The majority of EB-5 projects being marketed to investors are at the $500,000 threshold, and to be competitive in the marketplace, it is crucial that the hotel project be located in a TEA. Geographic location of the project should also be considered, understanding that investors often times will invest in projects located in cities that are centers of commerce, appealing, and easy to visit.  The capital stack must include more than just the EB-5 funds.  Investors like to see that the developer has some skin in the game.  Likewise, projects that have too much EB-5 financing are perceived as riskier in the event the developer is unable to raise the required amount of EB-5 capital. Job creation is critical to the investor being able to obtain a permanent green card.  The developer should work closely with an economist to determine the projected job creation and the corresponding number of investors allowed for EB-5 funding.  Each investor is required to create 10 full-time jobs.  It is always recommended to create more jobs than required in order to have a job creation cushion. Every investor will want to understand the exit strategy associated with their investment.  While EB-5 financing can count as a meaningful part of the capital stack, it is important that the EB-5 funds are used appropriately in accordance with requirements established by the U.S. Citizenship and Immigration Services.   Article here: http://www.eb5investors.com/

NYSERDA - Thousands of new construction and major renovation projects

With the wave of high temperatures and humidity across New York State, the New York State Energy Research and Development Authority has urged the public to continue to take steps to reduce energy use.

Thousands of new construction and major renovation projects have now benefited from the hundreds of millions of dollars in capital cost incentives provided by the NYSERDA NCP.  How the Program's capital incentives encourage improved building energy efficiency performance is reasonably well understood.  Sometimes less well understood is the role played by our Outreach Project Consultants (OPCs).

To follow-up on my last information update, here is a short list of some of the services our OPCs provide:

1.          An OPC (one of our architects or engineers) reviews applications for accuracy and may assist with an application's completion.
2.          OPCs work with stakeholders and their design teams to develop a program participation plan that best fits the needs of each project.
3.          An OPC also will schedule and participate in Scoping Meetings, which define what is to be included as part of the project.
4.          An OPC coordinates the activities of the Technical Assistance (TA) providers, should that option be chosen.
5.          Reviews technical assistance scopes of work
6.          Identifies opportunities with the applicant and may conduct LEED® charrettes
7.          Promptly and effectively responds to applicant questions and requests for assistance
8.          Our OPCs services are 100% free of charge.

Please remember that your help is important to making sure that the Consolidated Funding Application (CFA) process is done early enough in the project cycle for your clients to take full advantage of the NCP.

NYSERDA Website - http://www.nyserda.ny.gov/

Contact: Jim Bittker for more information on NYSERDA @ 585-943-7604 or email:jbittker@spc-ny.com

EB-5 Immigration Investor Program Visa Details

[Source: State Department/USCIS/Washington Post]

The visual graph represents the total amount of EB-5 visas that have been issued since the inception of the the program back in 1992. The United States has issued more than 29,000+  EB-5 visas which has created over 50,000+ new US jobs and generated $6.8 billion in investment through the EB-5 program to date. From 2008 to 2013 (current) more than 70% of the issued visas were generated during this time frame. The year 2012 was the most productive year of the EB-5 program since 1992 and 2013 looks out grow the previous year visas.

For more information on the USCIS EB-5 Immigration Investor program, investment options, or basic program knowledge:

CONTACT EMPIRE STATE EB5 REGIONAL CENTER TODAY!

2815 Monroe Avenue, Suite 2100

Rochester, New York 14618

Tel: (866) 763-6515

                                              EMAIL HERE or WEBSITE HERE

EB-5 Job Creation: Do Construction Jobs Count???

The question of do construction jobs count arises quite often when discussing how the EB-5 program must create U.S. jobs for the usage of the investment through foreign nationals for development projects. Construction jobs that entail over 30 hours per work week for several years would fall within the meaning of “continuous” and therefore count toward the EB-5 job creation requirement. The article below, in short, explains how construction jobs are considered "full-time" under the EB-5 Immigration Investor program.

[Source: EB5 Exclusive] Article HERE -  EB-5 Job Creation: Do Construction Jobs Count???

Contact Empire State EB-5 Regional Center TODAY to discuss the EB-5 Program