RFEs, I-924s, CSC... The jargon and acronyms of EB-5 may seem confusing for new regional center applicants ? especially when those applicants end up waiting longer than they ever anticipated to receive their approvals.
And with reports of a number of applicants facing long hold times after responding to an RFE, there has been speculation that internal conflicts at USCIS are partly to blame.
After the agency's publication of a letter addressing tenant occupancy in regional center economic analyses, many EB-5 stakeholders are wondering whether the delays are connected to tenant-related job counting. At least one pending regional center applicant believes that they are and offers evidence to support that contention.
Removing tenant occupancy projects
For clarification on the issue, we interviewed a principal at an EB-5 regional center whose approval is still pending after he responded to an RFE last fall. The applicant requested that we use neither his name nor the name of his regional center prior to his receiving an official approval.
This applicant watched others who filed around the same time he did receive their approvals and sent an inquiry to USCIS to see why his application remained in pending status. The agency issued a vague "excuse," he told EB5info. It seems that an issue pending at headquarters was the source of his application's delay.
The applicant's RFE sought information about tenant occupancy. His strategy now, he says, is to remove any project that includes tenant occupancy and seek approval that way. Otherwise, he worries that his application will be subject to even more delays ? possibly even a denial.
"Any new job is a good thing for this country," he argues. It doesn't matter whether they're indirect, induced, or "due to tenant occupancy." New jobs have a positive impact on the U.S. economy, says the applicant, and the apparent opposition by USCIS to some tenant occupancy arrangements only hinders job creation via foreign direct investment.
The result of poor regional center proposals?
In response to USCIS' letter about tenant occupancy, former agency adjudicator-turned EB-5 consultant Joseph Whalen, who is showing up more and more often on this blog due to the sheer volume of EB-5 related commentary he publishes, posted an article calling the message "strange."
"[I] wonder why it was sent," says Whalen. He speculates that "a huge number of piss-poor Regional Center Proposals were filed in a mad rush in an attempt to beat the I-924 Fee."
Whether that is the case or not, the possibility warrants consideration. After all, the agency's tenant-occupancy letter noted the following:
- Several I-924 applications used a tenant-occupancy methodology, which seeks credit for jobs created by tenant businesses leasing space in developments funded with EB-5 capital.
- USCIS uses a "fact-specific" analysis to determine whether it is "economically reasonable" to count tenant-related jobs for a given project.
- A case-by-case adjudication process governs all decisions, including decisions made for projects that utilize tenant-occupancy methodologies.
If the agency really did receive a number of applications it considers sub-par, could it have issued the letter as a word of caution to future regional center applicants? What's more, is th
is the reason so many applications relying on tenant job creation have been on hold?
"USCIS never consulted outside economists or EB-5 lawyers before releasing this memo," he opines. "The RFEs followed rapidly, and predictably show a shocking lack of knowledge about state and federal securities laws."
Whether USCIS is able to resolve this issue remains to be seen. In the meantime, it continues to be a source of immense frustration for regional center applicants and their attorneys.