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We're looking at whether a federal program is working as advertised. The EB-5 visa offers a green card to foreigners who invest at least a half-million dollars in approved projects in the United States. Congress now wants to know if this program is serving its purpose, which is to help create badly needed jobs. For the moment, the program is clearly helping commercial building developers, who have found an attractive low-cost way to finance new real estate ventures. Here's NPR's Greg Allen from Miami.
GREG ALLEN, BYLINE: Of all the projects in Miami being built with foreign capital, this might be the most unusual. On the waterfront, green parrots roost in palm trees at the site where a 1,000-foot observation tower is planned. It's called SkyRise Miami and will include a restaurant, a nightclub and a ride to the 650-foot drop. Developer Jeff Berkowitz says it's being partly financed through EB-5 visas.
JEFF BERKOWITZ: We're in the process of raising $270 million from 540 investors.
ALLEN: In Miami, attorney Ronnie Fieldstone says he's working with 15 projects now, all looking to EB-5 visas to attract financing. Although EB-5 visas were created in the 1990s, it wasn't until 2009 that the program really took off. It was during the recession and financial crisis, Fieldstone says, when developers ran out of sources for cash.
RONNIE FIELDSTONE: You couldn't even think of financing a condominium project or an office building because the money just dried up. But the foreign capital became more available at very affordable cost.
ALLEN: Under the EB-5 program, foreigners who invest at least a half-million dollars in a project approved by the federal government qualify for permanent U.S. residency. Each investment must create at least 10 jobs. The program was designed to encourage job creation in rural communities and targeted employment areas, neighborhoods where unemployment is 150 percent above average. But in Miami and many other cities, EB-5 visas are now commonly used in downtown areas where unemployment isn't high. That's because developers are allowed to include employment data from other nearby neighborhoods. Fieldstone says it really shouldn't matter that EB-5 projects are going up in upscale downtown areas.
FIELDSTONE: Go a mile away, and you'll see high unemployment. Where are the employees coming from? When you look at the job creation and you have major pockets of a high unemployment in these inner city areas, so EB-5 really plays into that very nicely.
ALLEN: The EB-5 program is slated to expire at the end of this month, and Congress is considering some key changes. The amount of the required investment may be raised from $500,000 to at least $800,000. Measures are being discussed to step up background checks on investors and to crack down on fraud. Iowa Republican Sen. Charles Grassley's concerned about where the vast majority of EB-5 projects are located.
CHARLES GRASSLEY: What's happened here is the original intent of high unemployment and rural areas has been compromised away from the way the law's been carried out.
ALLEN: One proposal being considered would prevent developers from including data from other nearby neighborhoods in order to qualify as a targeted employment area. The projects could still qualify for EB-5 but would require a much larger investment. For Attorney Ronnie Fieldstone and the downtown developers he works with, that could potentially dry up a lucrative source of financing.
FIELDSTONE: It could be devastating. If it gets too expensive, city projects are going to get hurt.
ALLEN: Eighty-five percent of EB-5 visas are currently going to investors from China. Foreign investors have grabbed up all 10,000 visas available in each of the last two years, and there's currently a long waiting list. Greg Allen, NPR News, Miami.
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