The EB-5 Reform and Integrity Act of 2022 brought many changes to the EB-5 program. For the latest information, please click here.
Over the last two weeks, USCIS has begun issuing Requests for Evidence on pending regional center applications and exemplar I-526 petitions that involve “tenant occupancy models”.
These Requests for Evidence articulate a new USCIS policy to discredit any employment creation from leases to tenants in many cases.
In order to meet USCIS’ new standards, developers will need to prove excess demand for the specific types of tenants. As part of the documentation, marketing studies, occupancy studies or other data-based assessments will have to be presented to show that there is a lack of unique or specialized business space that constrains the tenant from commencing or expanding its business. Documentation of low vacancy rates for specific space together with proof of businesses seeking to expand and upward wage and rental pressures that are likely to be attracted to the proposed space will become critical. The jobs that become located within the tenant space will have to be shown to be the result of an expansion in specific services driven by the project as opposed to simply tenants relocating from other space to the new space. If this can’t be done, or if insufficient jobs will result from this analysis, the project can’t move forward with EB-5 funding unless sufficient indirect construction jobs are created.
USCIS is unlikely to change its new position, at least absent successful litigation. Therefore, the big issue is when and how this new policy will be applied. As Chairman of the EB-5 Committee of the American Immigration Lawyers Association, I hope to be meeting with senior U.S. government officials with the goal of having this policy apply prospectively only and not to previously approved regional centers, pending I-924 applications, pending exemplar I-526 petitions, pending investor I-526 petitions or even new I-526 petitions where other investors have already invested in a project. The USCIS position on the application of this new policy is not yet clear, although the RFEs are clearly being issued to pending I-924 applicants.
This is a critical issue, and we expect to provide further updates as developments merit.