The Detroit Chinese Business Association (DCBA) proudly hosted an event on Wednesday, April 23rd sponsored by Steven Tobocman of Global Detroit. The program highlighted upcoming investment opportunities in the state now that Michigan has been named only the second state in the nation to sponsor immigrant investors with a statewide EB-5 visa center conceived and managed by state government. Developers, business owners, finance professionals and others packed the Iroquois Club in Bloomfield Hills to network and learn more about the program which has been a phenomenal success in bringing immigrants and their capital to Dallas and other cities to fund real estate projects, create jobs for the local economy and generally spur economic development. The short program answered many questions and informed the audience on the potential of the EB-5 program as another economic tool to help spur additional economic development in the area and across the state.
After a short networking period and greetings from Milan Stevanovich, Executive Director of the DCBA, Rafael Anchia was introduced as the Founder and Managing Director of Civitas Capital. Mr. Anchia outlined the opportunities and challenges available with the EB-5 program, which he described as a viable capital financing alternative for developers and businesses.
Civitas Capital (CC) operates 8 regional centers around the US with pending applications in many more cities. It has almost $500 Million EB-5 assets under management and has been successful in attracting capital from 25 countries. CC’s Dallas headquarters has 40 employees from around the world, speaking 13 separate languages and having a combined 130 years of investment experience. Civitas has become experts at attracting foreign private investment funds structured to meet requirements of the US Citizenship and Immigration Service’s (USCIS) EB-5 Immigration Investor Program.
Joe Borgstrom, new director of the state’s EB-5 Regional Center, laid out the Governor’s vision of how this center can meet its immediate goals of $30 Million in EB-5 investments and creation of 600 + jobs. To explain, the EB-5 Immigration Visa Program involves foreign investment in new commercial enterprises or real estate projects, with a minimum $500,000 commitment in a Targeted Employment Area (TEA) or $1,000,000 investment in non-Targeted Employment Area. These investments must create 10 new jobs within a two year time span in order for a foreign investor and their family to receive their permanent green cards. It is believed there are 433 Targeted Employment Areas in Michigan, virtually covering the entire state for qualification of the programs’ smaller $500,000 investment.
Because the federal program has been a target for fraud, misinformation and increasingly high costs of doing business, Mr. Borgstrom stressed the center’s emphasis will be on compliance for the EB-5 program in the following ways: Investor verification; Filing Compliance with the federal government; Investor Reporting and Investor Relations. Due to the fact the Michigan State Housing Authority (MSHA) has always been heavily involved in federally funded housing programs, understands the relationships with both developers and those who finance such projects and has been involved in compliance for such projects, it appears to be the proper agency to ensure the integrity of the EB-5 program for this state regional center.
Mr. Borgstrom also commented on how this program is such a good fit for Michigan, as it currently has 25,000 foreign university students that should be considered top candidates for EB-5 visas. There’s no secret Michigan wishes to retain the young talent graduating annually from its universities and if these graduates stayed in Michigan and brought their families and capital here under the EB-5 program, that could lead to population gain, significant job growth and substantive economic development for Michigan.
In January, Governor Rick Snyder created the Michigan Office for New Americans and hired Mr. Bing Goei as its first Director. Governor Snyder is focused on making Michigan a more welcoming state for immigrants that wish to take part in the American dream. The office was established to help grow Michigan’s economy through the attraction and retention of global talent while promoting the entrepreneurial spirit of our immigrant communities. Rick Snyder has been quoted stating: “The key that made us successful in the past is going to be the key to our future … and that’s immigration”.
Mr. Goei provided several facts indicating how many of our advanced STEM degrees and high tech startups are held by foreign born students and immigrants. While there are other immigration options available, the EB-5 program appears to have the largest impact for the state’s economic development and provides a permanent visa solution to an immigrant and their immediate family. Bing stated Governor Snyder’s five year plan is to create 50,000 visas for highly skilled, entrepreneurial immigrants to live, work and play in Detroit. The state also wishes to reform the federal immigration law so that individual family members would not be counted against the fiscal year employment based visa allotment. This would further spur economic development and add additional strength to the program.
Governor Snyder appears to be “pulling out the stops” on making Michigan one of the most entrepreneurial states in the country, taking a page from our past in what made this state so great in the last two centuries. First it was Michigan’s natural resources (timber, iron ore, fresh water) and then our inventors (Ford, Edison, etc.) which made others around the world take notice. Many believe Michigan needs to “go back to the future” and provide the best environment for invention and the entrepreneurial spirit in order to succeed in the knowledge based economy. Time will tell whether the EB-5 program is a success in Michigan as it is elsewhere. No matter what, those involved in helping Michigan retool for the future need to be supported and applauded.
ROBERT E. MATTLER, Associate Broker, Attorney and LEED AP BD+C, is Director of Green Brokerage at Armada Real Estate Services in West Bloomfield, Michigan. He speaks and writes about emerging green real estate issues and economic development in Michigan and elsewhere. Mr. Mattler is also senior correspondent for www.greeningdetroit.com For more information, contact Bob at Armada Real Estate (248) 855-1221; or by e-mail: email@example.com