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HomeMy Public PortalAbout07) 7F TC Trade Mission Trip to ChinaCity Council January 17, 2012 Page2 7. On November 10, 2011, Mayor Chavez, at the request of Randy Wang and Howard Poyourow, prepared a welcome video for EB-5 potential investors for the Project. 8. In November 2011, Randy Wang and his consultant team attended three EB-5 workshops in China (i.e., Shanghai, Nanjing and Beijing) and met with approximately 200 potential EB-5 program investors for the Project. The video was well received by potential EB-5 investors in China; however, they would have preferred to speak with the Mayor in person. 9. On November 23, 2011, Randy Wang and Howard Poyourow submitted plans to the City for the Project. 10. In early December, Mayor Chavez received an invite to accompany Randy Wang and his team on their second trip to Shanghai and Nanjing, China in mid- February to attend two critical EB-5 investor workshops and to also meet and greet approximately 200 potential investors. 11. On December 15, 2011, Mayor Chavez met another group of potential foreign investors for the Project. 12. On January 9, 2012, the City Manager met with Randy Wang and Howard Poyourow to obtain an update regarding their progress in securing EB-5 investors for the Project. They disclosed that they have 23 executed agreements and another 10 investors that remain very interested in the Project. ANALYSIS: EB-5 Immigrant Investor Program Summary Below is a summary of the EB-5 Immigrant Investor Program that has been prepared from various sources. The fifth employment-based preference ("EB-5") immigrant visa program encourages qualified foreign investors to invest in the United States (US) in exchange for permanent residency in the US. This program is currently underutilized . For example, of the 10,000 EB-5 visas available last year, the United States Customs and Immigration Service ("USCIS") only issued 4,218 visas . The following list provides a summary of the program's three key features: • Under the basic program, an alien investor must make a capital investment of either $500,000 or $1,000,000, depending on if the investor invests in a ''Targeted Employment Area" (''TEA"), in a new commercial enterprise located in the United States . The enterprise must directly create or preserve at least 1 0 full-time jobs for qualified US workers A Targeted Employment Area is an area with an unemployment rate that is at least 150% of the national average. If the foreign investor invests in a non-TEA, the City Council January 17, 2012 Page 3 investor must contribute the standard threshold m1n1mum of $1 ,000,000. If the investor invests in a TEA, the investor need only invest $500,000 to be eligible for the EB-5 visa; • Under the Regional Center Pilot Program, foreign investors must still complete the basic program requirements by investing either $500,000 or $1 ,000,000 in a new commercial enterprise. However, unlike the basic program, under the Regional Center Pilot Program, the new commercial venture does not need to directly create the 10 jobs required by the basic program. Instead, the commercial venture need only show that the investment indirectly created or preserved 1 0 jobs; and • To create a Regional Center, an individual or entity must file a Regional Center Proposal with USCIS to request approval of the investment proposal and the designation of the applying entity as a Regional Center. The entity applying for Regional Center status must maintain at least $100,000 in capital before the USC IS will award Regional Center status. There are currently 90 Regional Centers operating in 34 states. USCIS awards the vast majority of utilized EB-5 visas to alien investors who have invested in a Regional Center. Gateway at Temple City EB-5 Immigrant Investor Program Update Over the 15 months since the Gateway at Temple City project was designated as an EB-5 eligible project by the United States Customs and Immigration Service under the name of California Pacific Group Regional Center, they were able to secure funding commitments from 23 investors (i.e., $11.5 million) and they have 10 other investors that are seriously interested in this project. This project needs a total of 40 investors (i.e., $20 million) in order to bring it to fruition, which means that there is a need for anywhere from seven (i.e., assuming the 10 seriously interested investors sign agreements) or possibly 17 new investors if the 10 potential investors drop out. Next month, Randy Wang and his team will make a second trip to Shanghai and Nanjing, China in mid-February and they have requested that Mayor Chavez attend these two critical EB-5 investor workshops to meet and greet approximately 200 investors. Clearly, the objective is to find and secure the remaining EB-5 potential investors for the Gateway at Temple City project, and Mayor Chavez's attendance would go a long way in showing potential investors that the City is serious about having this project developed concurrently with the "Rosemead Boulevard Safety Enhancements and Beautification Projecr later this year. CONCLUSION: In light of Randy Wang's significant progress in securing 23 out of the 40 EB-5 investors needed for The Gateway at Temple City project, it would be in the City's best interest to make a minimal investment to have Mayor Chavez attend the upcoming EB-5 workshops in Shanghai and Nanjing, China, with a goal of securing the remaining EB-5 investors needed to fully fund this important $20 million project in a down economy, especially when national banks are not readily providing commercial construction loans. City Council January 17, 2012 Page4 FISCAL IMPACT: On June 28,2011, the City Council approved the Fiscal Year (FY) 2011-12 City Budget which included funds for the City Council to attend training workshops and conferences throughout the year. Hence, if the City Council were to approve this travel request, there would not be an impact on the City Budget because the City Council Fares & Subsistence (Account 4420) has sufficient budget savings to cover the estimated $3,000 to $4,000 for air fare, hotel and meal expenses. ATTACHMENTS None.