As developer Jeff Berkowitz awaits permits before breaking ground on a Coral Gables retail complex along US 1, he also awaits approval for an EB-5 visa immigrant investor program he is pursuing to fund his project.
The program requires foreign investors to spend at least $500,000 in a commercial enterprise and create a minimum of 10 jobs in exchange of the opportunity to get a green card.
“It’s a wonderful program,” said Mr. Berkowitz, president of Berkowitz Development Group. “It encourages foreign investment to create jobs, which we all desperately need.”
According to the US Citizenship and Immigration Services, 2,608 petitions were filed during the first three quarters of fiscal 2011 nationwide, up from 1,955 filings during fiscal 2010. The number of applicants has been rising since Congress created the program in 1990 to stimulate the economy through capital investment by international investors.
“A huge number of developers are starting to understand the advantages of ED-5 and are flocking to file a center application,” said Miami attorney Roger Bernstein, co-founder of Bernstein, Osberg-Braun & de Moraes.
While investors may find projects on their own, most investors go through a government-designated regional investment center, he said. These centers are approved to receive money from international investors.
Currently, Mr. Berkowitz’s project application with a regional center is pending for approval from the US Citizenship and Immigration Services. He’s seeking $50 million for his 330,000-square-foot Gables Station project through the program. The rest of the money for the shopping center is to come from the company’s own equity and a construction loan.
Once approved, Mr. Berkowitz said, he can start recruiting investors through a network of accountants and attorneys throughout Asia, Europe and Latin America. He hopes to break ground in the first quarter of next year.
According to Mr. Bernstein, the visa program is estimated to bring to the US $1.2 billion and create more than 25,000 jobs this year.
A number of projects funded through the program are in the works in South Florida at any given time, he said. He is currently working with a regional center on several projects, he said, but he would not provide further details.
Mr. Bernstein said he expects the number of ED-5 petitions to be greater in years to come because the approval rate has been increasing, with 82% of petitions filed being approved so far this year, according to the US Citizenship and Immigration Services.
Once potential investors see that the majority of ED-5 petitions are approved, he said, they might grow more confident in investing in the US. Also, the government is looking into reducing application processing times, he added, making it more appealing to apply.
Right now, each step of the process takes about six months, he said, except for a two-year waiting time before investors can apply for a permanent US residency.
Each year the government allocates 10,000 EB-5 visas, but according to Mr. Bernstein, the number of applicants has never even come close to that figure.
Attorney Ira Kurzban, partner of Kurzban, Kurzban, Weinger, Tetzeli & Pratt PA of Miami, has also noticed the construction industry becoming increasingly interested in the EB-5 program.
One sign that shows how more and more people are interested in the EB-5 visa, he said, is that in the 1990s there were 10 to 20 regional centers. Today, there are over 180.
“It’s become much more popular given the state of the economy,” he said. “It’s become quite a big thing. Part of it is that obtaining residency has become more difficult.”