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MichiganChange Region > comments
Michigan looks to Asia, Middle East in bid to lure foreign investors, job creators
on April 13, 2014 at 7:07 AM, updated April 13, 2014 at 8:06 AM
LANSING, MI -- Michigan's new status as a federally designated center for an increasingly popular investor visa program -- just the second of its kind in the nation -- will uniquely position the state to attract foreign capital and create local jobs, according to experts and stakeholders.
United States Customs and Immigration expedited and approved Michigan's application to run its own EB-5 Regional Center, the Snyder administration announced this week, citing support from the governor, the state's entire Congressional delegation and Detroit Mayor Mike Duggan.
The federal EB-5 visa program is designed to attract "entrepreneur aliens" by offering them a green card in exchange for domestic investments that produce at least 10 new jobs in the U.S.
Immigrants can qualify by devoting $500,000 to a project in a high-unemployment or rural area, of which there are 433 in Michigan, or $1 million in a more affluent part of the state.
"This approval is an important step in helping harness top talent and international direct investment into the state to continue and accelerate Michigan's comeback," Gov. Rick Snyder said in a statement. "Our state needs outstanding talent to help drive the new economy. Immigrants are net job creators. In return, Michigan offers a wonderful place to live, work, play and raise a family."
Michigan is already home to a handful of EB-5 Regional Centers, mostly privately-run, that are set up to connect immigrants with investment opportunities. While there may be some deals in development, those centers have not actually completed a single project in Michigan since the program launched in the 1990.
WHAT IS EB-5?
EB-5 is an employment-based visa program for permanent immigrant workers that started in 1990.
Beginning in 1992, the federal government launched a pilot program authorizing EB-5 Regional Centers, which help connect immigrants to investment opportunities in the United States.
The federal government currently caps the visa type at 10,000 per year, but that limit has never been reached.
To qualify, an immigrant must:
• Invest a minimum of $500,000 in a project within a high-employment or rural target area
• Invest a minimum of $1 million in any other part of the country
• Create or preserve at least 10 full-time jobs for qualifying U.S. workers within tw0 yearsU.S. Citizenship and Immigration Services
Vermont, which began operating its own regional center in 2006, has reportedly seen $600 million in EB-5 investments since then, and Michigan is hoping to follow its lead. The center will allow officials to coordinate potential projects across the state and instill confidence in investors, according to Dan Healy, CEO of Civitas Capital Group.
"Anytime you have a state government making the kind of commitment that Governor Snyder and the state of Michigan is making, that gets noticed in the marketplace, for sure," Healy said.
"Michigan is fast-developing a reputation for thinking outside of the box when it comes to these kind of public-private initiatives. Those ideas are going to be generated in the short-term and the state government's commitment to it's overall success is going to be very important."
Civitas runs eight EB-5 Regional Centers, including one in partnership with Dallas, where Healy said foreign investment helped breathe new life into a former casket factory on the city's south side, which has was redeveloped as a 76-room boutique hotel.
The project coupled $5.5 million from 11 foreign investors with municipal grants and federal tax credits, and it hints at similar possibilities for Detroit or other urban centers in Michigan.
"It's not only created jobs at the hotel -- ultimately it will be responsible for more than 150 jobs over a period of two years -- but it's also served as a catalyst for that entire neighborhood, which was the idea," said Healy.The NYLO Dallas South Side boutique hotel was redeveloped using EB-5 investments.Civitas Capital Management, LLC | Courtesy Photo
The EB-5 visa program, streamlined in 2011, has seen significant growth in recent years. In fiscal year 2013, nearly 6,500 foreign investors applied for visas under the program, according to The Wall Street Journal. As of September, USCIS had approved 3,696 of those applications and denied 942.
In fiscal year 2012, immigrants invested approximately $1.8 billion through EB-5 Regional Centers, according to the Association to Invest in the USA, a non-profit trade group. Those investments supported an estimated 33,134 jobs.
Once up and running, Michigan's center could generate $30-$50 million a year in new private equity and create 600 new jobs for local residents, according to Scott Woosley, executive director of the Michigan State Housing Development Authority.
Woosley is also president and CEO of the newly-formed Michigan Community Development Corporation, which will house the State of Michigan EB-5 Regional Center. Joe Borgstrom, who has overseen downtown revitalization and brownfield redevelopment programs for the MSHDA, will work as center director.
Immigrants who win an EB-5 visa or green card are not required to live in the same state as they invest in, but Michigan officials are already promoting the state as a place to invest -- and to raise a family.
"The pitch is that we don't just want your money, we want you here," Borgstrom told MLive, noting he has traveled to China, Turkey, Egypt and Saudi Arabia to begin discussions and gauge interest from potential investors. "We find a lot of value in having a large immigrant population in the state."
Chinese nationals are by far the most active participants in the foreign investor program, having obtained roughly 90 percent of all EB-5 visas issued last year, and Metro Detroit's growing Asian population could make it an attractive landing spot for new entrepreneur immigrants.
Michigan is also looking to tap investors in the Middle East and has already produced an Arabic brochure.
"One of our strongest selling points is we have one of the largest concentrations of Arabs outside of the Middle East," Borgstrom said, referring to Dearborn. "That creates a lot of connections, and there's a lot of interest there. One of the things we tend to lose sight of is that the United States is still the gold-standard for places to live."
Snyder, calling himself the most pro-immigration governor in the country and earning national attention in the process, has promoted several strategies for attracting legal immigrants and foreign investors to Michigan.
He recently signed an executive order to create the Michigan Office for New Americans. He asked the Obama administration to earmark 50,000 EB-2 visas for Detroit over the next five years and led the push for the EB-5 Regional Center.
"This is going to be a great opportunity to chalk up a win for the comeback state," said Healy, echoing one of the governor's mantras. "EB-5 is very much a real program that has real potential in the context of what Michigan's trying to accomplish."
The Detroit Chinese Business Association will host an "EB-5 Immigration Investment Opportunities for Michigan Conference" on April 23 in Bloomfield Hills. Speakers include Borgstrom, Michigan Office of New Americans Director Bing Goei and representatives from Civitas Capital Group.>
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