Md. projects seek foreign dollars from would-be immigrants

U.S. program gives investors leg up on green cards

October 01, 2011|By Michael Dresser, The Baltimore Sun

The private developers of two high-profile state projects are seeking financing through a visa program that lets wealthy foreigners go to the front of the line for green cards and possible U.S. citizenship in return for a $500,000 investment.

Developers of the Seagirt Marine Terminal expansion and the proposed $1.5 billion office-retail-residential complex at State Center — projects in which state government agencies are key partners — are attempting to use the program to raise money in such countries as South Korea and China, where immigrants face long waits to enter the United States through conventional channels.

Also seeking financing though the federal EB-5 visa program are the company building the $1 billion slot machine and entertainment palace at Arundel Mills and the developer of a proposed $1.5 billion waterfront community in Baltimore's Westport area.

The EB-5 program — established by Congress as a job-creation measure under President George H.W. Bush in 1990 — has critics, including some who say it allows the wealthy to jump the queue and in effect buy American citizenship. As use of the program has grown in recent years, some say it needs greater oversight.

But the visa program also has staunch defenders in both parties who call it a useful tool for attracting talented people and their capital to the United States, creating jobs in the process.

"EB-5 investment is a win-win-win on so many levels," said Joseph Weinberg, development president of the Cordish Cos., developer of the Maryland Live! Complex at Arundel Mills. "Having wealthy persons move to the U.S. and then create more jobs with new investment is great for the U.S. and Maryland economies. It is fantastic for Maryland to attract overseas capital rather than it going to other states and countries."

But state Sen. Nancy Jacobs, a Harford County Republican, said she finds the program troubling. The Senate minority leader said she would like to see the General Assembly bar the use of such funds for state-backed projects but doubts that will happen.

"That just sounds like we're selling citizenship," she said. "It doesn't pass the smell test. It seems like we're turning this country over to the Chinese."

The program, lightly used for most of its existence, has gained popularity in recent years as banks have become more reluctant to lend even to established developers. It allows immigrants who invest $500,000 to $1 million in projects that create jobs — a minimum of 10 jobs per investor — to get preferred consideration for visas and, after two years in the United States, permanent resident status.

The number of visas issued through the program has grown to about 2,500 a year, federal officials say. But the EB-5 program still represents less than 1 percent of U.S. immigrants who go on to receive green cards each year.

A Washington immigration lawyer who is helping to seek investors for the Seagirt and State Center projects said Maryland has lagged in tapping into the program.

"Many states and municipalities … are using it as a really valuable economic tool," said David M. Morris, whose private DC Regional Center has put together investment offerings for the Seagirt and State Center projects.

Morris said EB-5 funds would not be the primary source of financing for either project and that both could go forward without immigrant investors. The advantage of EB-5 money, he said, is that it could be raised at a lower cost than other funds because the investors are not necessarily seeking the highest returns.

Topping these investors' priorities, he said, are securing visas and making sure the projects create the number of jobs required for the investors to acquire their green cards — a vital step for those who choose to apply for U.S. citizenship. "The investors need to find projects they feel will satisfy that," Morris said.

The Maryland Department of Transportation, which has played a lead role in both the Seagirt and State Center projects, had no say in the decision to seek EB-5 visa financing, said spokesman Jack Cahalan.

"The private developer is responsible for financing the private components of that project, and the state plays no role in that process," Cahalan said.

He said that in the case of State Center, where the state and city are supporting a move to replace the crumbling Preston Street office complex with a mixed-use development, his agency knew that lead developer Ekistics LLC intended to seek such financing.

He said there is no mention of EB-5 financing in the agreement creating the public-private partnership between the state and Ports America Chesapeake for the construction of a new 50-foot-deep berth at the Seagirt Marine Terminal. But he noted that Ports America, which has a 50-year lease to run the facility in return for an eventual investment of up to $1.8 billion, is a private entity.

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