Garcia Trujillo has partnered with the Regional Center of South Florida to tap an alternative capital source for investments in South Florida. The US government created a visa classification in 1990, revised in 1993 categorized as Employment-based, category 5” or “EB-5” wherein “Immigrant Investors” can earn permanent US resident status through investment in job-creating US enterprises. Immigrant Investors may fund and operate their own businesses or, alternatively, take a hands-off approach and channel their investment through a “regional center” certified by the U.S. Department of Homeland Security. Functionally, Garcia Trujillo structures the investments that the Regional Center of South Florida makes while the regional center executes the required legal documentation and maintains compliance with EB-5 program rules.
Additional information on process, regulations and timelines is available at the website of our partner: [hotlink] Regional Center of South Florida.
Capital for US Businesses
The EB-5 program channels foreign capital into job and commerce creating activities in the United States. As a large element of the appeal to Immigrant Investors is obtaining US permanent residency, the terms of EB-5 investments often compare very favorably with other sources of financing. EB-5 investments are often structured as interest-only debt instruments with a balloon payment at the end of year five. The investments offer competitive and sometimes below-market interest rates to the borrower. Covenants and representations imposed on the borrower tend to be less onerous than those demanded by other lenders.
Recipients of EB-5 investment funds deal only with the Regional Center and do not have to maintain or manage contacts with the Immigrant Investor sources of funds. All the legal paperwork and EB-5 program compliance activities are managed by the Regional Center with the cooperation and input of the borrower.
Notable EB-5 Investments
Some of the more noteworthy EB-5 funded investments to date include:
- Time Warner borrowed $100 million in EB-5 funds to partially fund the production of a movie
- Lionsgate Studios borrowed $66 million in EB-5 funds and $50 million in two separate offerings to underwrite movie production
- Pennsylvania Convention Center Authority borrowed $125 million as part of the financing package to expand the Philadelphia Convention Center
- University of Pittsburgh Medical Center borrowed $70 million toward the construction of a healthcare facility
- Comcast Corporation borrowed $26 million to finance the construction of its headquarters
- Sugarbush Resort (Vermont) borrowed $40 million to finance the construction of three retail/hotel-condo buildings
Beyond South Florida
Garcia Trujillo’s familiarity with the EB-5 process enables us to seek EB-5 funding opportunities through other regional centers outside of South Florida as well. The management quality of EB-5 Regional Centers varies considerably and many regional centers have very narrow industry approvals from the U.S. Department of Homeland Security such that they can only consider investing in a very specific type of business. Garcia Trujillo advises clients on the EB-5 opportunities that may be appropriate for them and will work to execute appropriate transactions.