Virginia Beach company wins EB5 designation
The Virginia Atlantic Regional Center (VARC), based in Virginia Beach, said Monday that its application for designation as an EB5 Regional Center has been approved.
Currently, there are more 200 EB5 regional centers operating in 40 states. This is the first designation for a regional center in southeastern Virginia, and the federal program is expected to open up a new source of funding for real estate projects.
The designation by the U.S. Citizenship and Immigration Service (USCIS) opens the door to foreign capital investment and lending for the development of commercial real estate projects in the metropolitan areas of Virginia Beach and Richmond and in Currituck County, N.C.
Beach Development Group, a veteran-owned, Class A contractor and development company in Virginia Beach, will manage the VARC. “This is a very big day for us as we have been working tirelessly for almost two years to bring this opportunity to the region,” company President Kathy Owens said in a statement. “It’s about time we leveled the playing field when it comes to foreign direct investment into Virginia.”
The VARC’s initial EB5 project is Asia Town; a 10.6-acre, mixed-use, Asian-themed development in Virginia Beach designed to provide shops, restaurants and services representative of the continent of Asia. Owens says her company plans to break ground within six months.
Owens’ company filed its application in 2011. The EB5 program provides visas to foreigners who invest at least $1 million in ventures that create or preserve at least 10 full-time jobs for U.S. workers within two years after the immigrant achieves conditional residency.
To encourage foreign investment in the U.S. economy through the EB-5 category, Congress created an EB-5 Regional Center Pilot Program in 1992. A Regional Center is a private enterprise/corporation or a regional governmental agency with a targeted investment program within a defined geographic region. The region that will be served by VARC includes the Virginia counties of Sussex, Dinwiddie, Amelia, Cumberland, Powhatan, Chesterfield, Prince George, Charles City, New Kent, King and Queen, King William, Hanover, James City, Caroline, Louisa, Goochland, Surry, Isle of Wight, York, Gloucester and Matthews and Currituck County, N.C.
The Virginia cities are: Williamsburg, Poquoson, Newport News, Norfolk, Virginia Beach, Suffolk,, Chesapeake, Portsmouth, Hampton and Richmond.
In addition to meeting investment requirements, the immigrant investor must pass the same immigration hurdles as other foreigners wishing to obtain a green card or citizenship in the U.S.
The Association to Invest in the USA (IIUSA), a national industry trade association of active Regional Centers and other service providers, estimates that since 2003, the centers have invested more than $3.1 billion of foreign capital in the U.S. economy, creating over 65,000 jobs for U.S. workers.
According to Owens, the EB5 program has been used successfully for real estate projects across the country. In New York City, for example, with $60 million raised through EB-5 in 2009, the Navy Yard was able to leverage an additional $81 million from the city, state and federal governments to expand a 215,000-square-foot green manufacturing center, construct an 89,000-square-foot industrial building and complete other infrastructure improvements.
The program also has sparked controversy, most recently during the election of governor-elect Terry McAuliffe. His attempted and unsuccessful use of EB-5 funding to start GreenTech Automotive, an automobile manufacturing facility in Mississippi that has not lived up to its promotion as a new major employer, drew heavy criticism from his Republican opponents.
Owens says the designation is good news for Virginia. “We have met with many businesses and developers throughout Virginia desiring to utilize EB5 funding to start or expand their businesses,” she said. “We are ‘open for business’ now for the projects and businesses that meet our funding model and EB5 program requirements. ”