By KELSEY SWANEKAMP
Buffalo Law Journal

Buffalo might soon see an influx of funds from foreign investors into the United States. The city now has a regional center to channel funds from foreign investors wishing to immigrate in exchange for investing $500,000 or more in projects that create U.S. jobs.

Known as the EB-5 visa category, short for "fifth employment-based preference," the program offers green cards to potential immigrants who will invest the required funds and create 10 or more jobs for Americans.

The Buffalo center, which operates from 300 Delaware Ave., was started by four shareholders who received federal approval in February.

The regional centers began 15 years ago as a pilot program, one that Congress has since reauthorized for short-term periods. Through them, investors can pool their funds and take a hands-off approach on project development.

Cornell University Law School professor Stephen Yale-Loehr testified before the U.S. Congress on July 22 about the benefits, setbacks and possible improvements of the current immigrant investor program.

He hopes to convince lawmakers to make the program permanent, because until that happens, he says, foreign investors will be hesitant to participate.

The new center

A second regional center in Syracuse serves upstate New York, and a third center is located in New York City. Throughout the United States, there are about 60 approved centers - including those in Washington, D.C., San Francisco and Colorado - with another 40 applications pending approval.

To become a certified regional center, an enterprise, corporation or regional government body must submit an application to the U.S. Citizenship and Immigration Services detailing the proposed economic impact of the center. The process takes about 6 months.

The Buffalo Regional Center is modeled after an EB-5 center in Seattle, said shareholder Bill Reich, a Buffalo immigration attorney.

His partners in the venture are Moises Sudit, a professor of engineering at the University at Buffalo; Western New York developer Elliot Lasky, president of North Forest Development Corp.; and Henry Liebman, a lawyer connected with the Seattle regional center.

Reich, a lawyer with the firm Serotte Reich Wilson LLP, declined to reveal how much money each has invested in the center's startup. He said the team hopes to identify a workable project within four months, after which they will recruit EB-5 investors.

The center will focus on renovating existing structures for commercial and residential use, he said. "This will rejuvenate the city," he said. "It will be part of the renaissance."

Yale-Loehr said that the EB-5 program can be especially important during a recession. "It's hard to find domestic money for investment because of the credit squeeze," he said. "This is an economic stimulus at no cost to the U.S."

Who wants in

Yale-Loehr said most interest in the program comes from countries like India, China and Korea, where citizens face visa backlogs that make it difficult to come to the U.S.

While the EB-5 visas don't reduce the number of other visas available to non-investor immigrants, they are also exclusive to the wealthy, said Sophie Feal, the supervising immigration attorney with the Volunter Lawyers Project of Buffalo.

"In a capitalist society, investor money is what we value. People with money are valued," she said. "Hopefully, Congress will also value the working class who are willing to give their labor."

In his testimony last month, Yale-Loehr discussed the economic impact of existing EB-5 programs. One such project is a $26 million, 156-room hotel across from the Children's Hospital in Aurora, Colo., an area described in his testimony as being devoid of hotels. The hotel, when completed, will provide 200 jobs.

However, Yale-Loehr testified, of the 10,000 green cards available for EB-5 immigrants, less than one-tenth are used - only 806 in 2007. This underutilization could be due to difficulty in qualifying for the EB-5 green cards and a hesitancy on the part of foreign investors because of frequent changes in immigration policy.

One investor's experience

Eric Canal-Forgues, a French attorney, immigrated to the U.S. using an investor visa in November 2008.

"The system is attractive but marred with some uncertainties," he said. For Canal-Forgues, it took one year to complete the necessary applications and another to schedule an interview with the American Consulate in Paris.

Next July, Canal-Forgues must begin another process to prove that his investment did create 10 jobs. Through an EB-5 center in Philadelphia, he's involved in the construction of Comcast Corp. headquarters there.

"People need to know that it takes time to document the petition," he said.

Yale-Loehr believes the program is inadequately publicized overseas. In contrast to the U.S.'s $1 billion in foreign investor funds through EB-5, Canada has received the equivalent of $5.6 billion U.S.

Yale-Loehr hypothesizes that this disparity may be due to better publicity of the program on the part of the Canadians.

The U.S. foreign-investor program, he said, "has not achieved its potential."

The EB-5 visa program

• History: The EB-5 visa category was created by the Immigration Act of 1990. The Immigrant Investor Pilot Program was created in October of 1992.

• Requirements: Potential immigrants must invest $1 million or more in an enterprise to create at least 10 jobs for Americans. Immigrants involved in the pilot program need invest only $500,000 through a certified regional center in areas with high unemployment.

• Regional centers: Any public or private organization that receives federal certification through the EB-5 program and focuses on economic growth in a specific region.

• By the numbers: 10,000 green cards are available each year, with 3,000 reserved for immigrants in the regional center pilot program. In 2005, only 346 of the cards were awarded. In 2007, 806 EB-5 visas were granted.