The EB-5 visa investment program faces an uncertain future when it officially expires April 28.
Currently, the much-debated program allows foreign investors to place up to $1 million in a job-creating U.S. venture in exchange for a green card.
But such abuses to the program as the lack of a uniformed strategy for assessing the actual benefits or risks of fraud have left it vulnerable to heavy criticisms from the Government Accountability Office.
A 2013 report by the Department of Homeland Security also came to similar conclusions about the program being susceptible to various forms of corruption.
Miramar-based developer and Riviera Point Development Group president and CEO Rodrigo Azpurua has made heavy use of the program in the countless ventures he has been apart of.
But even as its overall popularity has continued to rise, Azpurua has always been strategic in his use of the program, making sure to always keep the amount of the EB-5 capital he uses proportionally in check.
In the 27 years since legislation was passed legalizing the program, Riviera Point has built 1.2 million square feet of commercial real estate financed with EB-5 funds. In each of those instances, Azpurua has also made certain to keep the developments under $30 million and his use of EB-5 funds at no more than half of his capital stack.
Larry J. Behar, senior attorney and managing partner of the Fort Lauderdale-based Behar Law Group, told the Florida Record that Azpurua's strategy of limiting his project size and the amount of EB-5 capital used is smart.
“The program is in flux right and it’s a day-to-day thing as to what will happen,” he said. "When your capital stack is supported by legislation that could easily change, you have to be strategic in your investments.”
Among the proposals now being discussed as potential safeguards to fraud are increasing the investment threshold now required to up to $1.35 million in areas of high unemployment and to as much as $1.8 million from $1 million in all other areas.
Presently, Azpurua and Riviera Point are working on a pair of hotel projects in which EB-5 funding are being sought. If the law changes in late April, as many suspect it might, investors are desperately hoping that deals they have already negotiated and petitions they’ve already filed will be grandfathered in.
“The program will survive in one form of another,” he said. “It has been a net profit to the bottom-line of treasury. It’s created thousands of new jobs and generated billions in added capital.”
As it is, EB-5 funding is being used for practically every kind of construction, projects ranging from high-end condominiums to small-scale restaurant chains.
And at the end of the day, Behar doesn’t expect that to change much.
“I think the program is here to stay,” he said. “It’s become a vital tool for helping developers.”