Green Cards Creating American Jobs
Vol. 11
February 2012
Page
What is a Regional Center? What does Hollywood Regional Center (HRC)do?
The HRC was approved July 28th this year. A regional center is a government-approved entity, usually corporate, that oversees investments through the EB-5 program for a particular industry in a particular geographic area.
In terms of jobs and tax revenue, can you give me some numbers on the impact the HRC has on Los Angeles?
Just on the development of the regional center itself, we expended close to $250,000 on local vendors for various things, everything from legal services to printing. Definitely, the creation itself has an economic impact.
Obviously, the projects that are going through the regional center have an impact as well. The first project, SeeGames, intends to bring in $20 million to the Hollywood area. According to the economic study, it will result in about 2,400 jobs. All of these jobs are going to be skilled positions in the tech industry.
What is your role with HRC?
My role as director is akin to that of a compliance officer. I’m a hybrid between business manager and a legal compliance officer. On the project side I make sure that the project is a viable business investment for investors. Then I look to see if it’s going to actually create jobs and is otherwise EB-5 compliant. One of the things about EB-5 is that the money doesn’t come in quickly. It takes time to set up a project in compliance with EB-5. Funding is usually in escrow until 526 approval, so there is a nine-month to one-year wait before the investment money gets to the business. Usually, I look for a project that either doesn’t require money that quickly or has other financial sources.
I look at all the components of business to make sure it’s not just financially savvy, but also that it meets all the eligibility requirements of EB-5. From the investor’s standpoint, I make sure HRC is maintaining compliance for each investor, so that each investor is meeting immigration requirements. Due to of conflict of interest, I don’t handle 526 cases. Thus, I make sure to work with attorneys who have been hired to do the 526s on behalf of HRC investors. I make sure they have everything they need. I make sure that we outsource and get forensic CPAs to do source of funds reports. My job, generally speaking, is more administrative than legal for HRC.
How does HRC continue to protect itself legally?
It’s an issue of compliance. We want to make sure the money is being used for its purported purpose. We want to make sure the project managers who want to build a relationship with HRC are as transparent as possible, so that we are confident when we go out and market this project on behalf of investors. We can say “we’ve seen the financials, we’ve seen the business, and we know what’s going on.” This is the main way to keep HRC out of trouble.
In the end, it comes down to assuring investors that there’s financial viability in the project and making sure the project uses the money for its purported purpose. I get the quarterly reports and make sure everything’s legitimate.
What does the current project entail?
The main project is SeeGames, which is looking to raise $20 million in capital. It is the development and distribution of online video games that have Hollywood IPs. The first game that’s slated to be developed with EB-5 money is Men in Black 3. After that, the remake of Total Recall; and then we have Waterworld, War of the Worlds, and a couple of other new titles like Holyland, which is an Old Testament video game.
What are the major benefits you think HRC will bring to Hollywood?
We’re looking to try and keep within the secondary industry of the Hollywood entertainment industry. We basically monetize existing franchises and IPs in different ways. In the past, the company has done touring with Titanic and Star Trek, taking sets and props on tour as a mini theme park based around these Hollywood IPs. We’re essentially doing the same thing in an online video game.
The types of jobs coming to Hollywood are creative and skilled. We need designers, developers, beta testers, and customer service people. We need engineers to maintain the game and to interface in real time with the users to make sure the game stays new. After playing a game for a certain period of time, users want to explore new challenges. So once the game goes active, we need people to continue to design and write new parts of the game.
The HRC is a marriage between the tech and entertainment sectors, which is unique to the EB-5 universe. We’re hoping to bring in a lot of skilled workers which means we can pay higher salaries. The economic benefit will spread out to the community as HRC workers patron local shops, bars, etc. The HRC is looking to make a fiscal and economic impact in these ways.
What, if any, would you say have been the primary barriers to creation of HRC?
The primary barrier was the ambiguity in regulations in creating a regional center. Some of that has already been addressed by current USCIS director, Alejandro Mayorkas. The EB-5 program has really been underutilized since its inception, so it doesn’t have a lot of regulation. It had loose procedures, and there was no real consistency in the way things were adjudicated.
One of the greatest barriers was trying to educate USCIS in what we were trying to do. Most EB-5 projects are real estate based and concern the creation of hotels, strip malls, etc. We were really left-field. The biggest challenge was having USCIS understand that these kinds of jobs are real. This took a bit of convincing. It usually takes take eight months for a regional center to get approved. HRC took thirteen. Persistence and patience was key.
How do you think the current EB-5 law should be improved?
There has been slow, herculean effort to try and clarify these regulations. What we’re really hoping for is consistency. In the past, of two applications that were essentially the same, one would get approved and the other denied, and it would be unclear as to why.
There should be premium processing to speed up the petition process so that it does not take six months. An exemplar petition should be made available, where if one project is approved, then all projects of that type should also be approved. There shouldn’t be a fresh adjudication every time.
There needs to be clarification of what constitutes a targeted employment area (TEA). Currently, it’s either a political or geographic area, so you can either go with a district (political) or an area from a certain mountain to a particular river (geographical).
With the increasing number of regional centers and projects, more clarity and transparency in the process, more than ever, is needed.
Is there anything you would like to add?
The EB-5 is a pilot program established over 20 years ago. It is due to sunset next year, and there is no guarantee that it will be extended. It needs to be extended or permanently put in place. If the pilot program legislation is introduced into Congress by itself, then it will probably enjoy bipartisan support. However, if people attach other immigration based programs, then it becomes controversial. Thus, there’s a great lobbying effort going on right now that’s pushing for it to go through as a standalone bill and greatly increase its chances of passing.
The upshot of the EB-5 program is that there is great synergy. It’s basically an economic development program that has a fairly large immigration overlay. It tries to develop disenfranchised communities, in an organic fashion. It’s not the government forcing businesses into these areas. It’s people already in the business world seeing a business opportunity and then bringing in foreign money. The EB-5 program costs nothing to the taxpayer because the regional center and the project development is all funded by private money. For all of the projects, all of the capital coming in is international money.
Where EB-5 is going, I see great partnership possibilities between the government and these projects. Government agencies can make it easier to get licenses. The city can stream-line certain procedures and green-light permits faster. The government can give tax credits. For example, the new San Antonio Regional Center in TX is owned by the city. The city made the application so the city is the regional center. They understand that this can be a great partnership between private and public interest for economic development.
People think of the EB-5 program as primarily an immigration program, which it is, but it’s more than that. Knowledge of immigration law by itself is insufficient for EB-5 work.
In this economic environment, it doesn’t make any sense to let go of this program.
About the Interviewee:
A. Mina Tran has been an attorney for thirteen years, currently limiting her practice to immigration law. Tran is a founding partner with the full service immigration law firm, Palmer & Tran, LLP in addition to her work as Director of Hollywood Regional Center. She obtained her Bachelor of Arts degree as an English major with honors from Boston College and received her law degree from UCLA School of Law.
Tran serves on the Board of the Long Beach Grand Cru, a charitable organization supporting Legal Aid as well as volunteers for several non-profit legal organizations. She also founded the legal information website, DigitalAttorney.com, where she currently serves as Chief Operating Officer.
Tran has spoken on issues of small business management, immigration law, EB-5 issues and workers’ compensation law at Whittier Law School and UCLA School of Law. She has been a guest lecturer at California State University, Los Angeles on immigration business visas. In addition to her practice, Tran has been an adjunct professor at Santa Ana College teaching Immigration Law in the paralegal program and business legal environment.
Telephone Interview with A. Mina Tran, Partner, Palmer & Tran, LLP (Nov. 29, 2011).
Vol. 11
February 2012
Page
What is a Regional Center? What does Hollywood Regional Center (HRC)do?
The HRC was approved July 28th this year. A regional center is a government-approved entity, usually corporate, that oversees investments through the EB-5 program for a particular industry in a particular geographic area.
In terms of jobs and tax revenue, can you give me some numbers on the impact the HRC has on Los Angeles?
Just on the development of the regional center itself, we expended close to $250,000 on local vendors for various things, everything from legal services to printing. Definitely, the creation itself has an economic impact.
Obviously, the projects that are going through the regional center have an impact as well. The first project, SeeGames, intends to bring in $20 million to the Hollywood area. According to the economic study, it will result in about 2,400 jobs. All of these jobs are going to be skilled positions in the tech industry.
What is your role with HRC?
My role as director is akin to that of a compliance officer. I’m a hybrid between business manager and a legal compliance officer. On the project side I make sure that the project is a viable business investment for investors. Then I look to see if it’s going to actually create jobs and is otherwise EB-5 compliant. One of the things about EB-5 is that the money doesn’t come in quickly. It takes time to set up a project in compliance with EB-5. Funding is usually in escrow until 526 approval, so there is a nine-month to one-year wait before the investment money gets to the business. Usually, I look for a project that either doesn’t require money that quickly or has other financial sources.
I look at all the components of business to make sure it’s not just financially savvy, but also that it meets all the eligibility requirements of EB-5. From the investor’s standpoint, I make sure HRC is maintaining compliance for each investor, so that each investor is meeting immigration requirements. Due to of conflict of interest, I don’t handle 526 cases. Thus, I make sure to work with attorneys who have been hired to do the 526s on behalf of HRC investors. I make sure they have everything they need. I make sure that we outsource and get forensic CPAs to do source of funds reports. My job, generally speaking, is more administrative than legal for HRC.
How does HRC continue to protect itself legally?
It’s an issue of compliance. We want to make sure the money is being used for its purported purpose. We want to make sure the project managers who want to build a relationship with HRC are as transparent as possible, so that we are confident when we go out and market this project on behalf of investors. We can say “we’ve seen the financials, we’ve seen the business, and we know what’s going on.” This is the main way to keep HRC out of trouble.
In the end, it comes down to assuring investors that there’s financial viability in the project and making sure the project uses the money for its purported purpose. I get the quarterly reports and make sure everything’s legitimate.
What does the current project entail?
The main project is SeeGames, which is looking to raise $20 million in capital. It is the development and distribution of online video games that have Hollywood IPs. The first game that’s slated to be developed with EB-5 money is Men in Black 3. After that, the remake of Total Recall; and then we have Waterworld, War of the Worlds, and a couple of other new titles like Holyland, which is an Old Testament video game.
What are the major benefits you think HRC will bring to Hollywood?
We’re looking to try and keep within the secondary industry of the Hollywood entertainment industry. We basically monetize existing franchises and IPs in different ways. In the past, the company has done touring with Titanic and Star Trek, taking sets and props on tour as a mini theme park based around these Hollywood IPs. We’re essentially doing the same thing in an online video game.
The types of jobs coming to Hollywood are creative and skilled. We need designers, developers, beta testers, and customer service people. We need engineers to maintain the game and to interface in real time with the users to make sure the game stays new. After playing a game for a certain period of time, users want to explore new challenges. So once the game goes active, we need people to continue to design and write new parts of the game.
The HRC is a marriage between the tech and entertainment sectors, which is unique to the EB-5 universe. We’re hoping to bring in a lot of skilled workers which means we can pay higher salaries. The economic benefit will spread out to the community as HRC workers patron local shops, bars, etc. The HRC is looking to make a fiscal and economic impact in these ways.
What, if any, would you say have been the primary barriers to creation of HRC?
The primary barrier was the ambiguity in regulations in creating a regional center. Some of that has already been addressed by current USCIS director, Alejandro Mayorkas. The EB-5 program has really been underutilized since its inception, so it doesn’t have a lot of regulation. It had loose procedures, and there was no real consistency in the way things were adjudicated.
One of the greatest barriers was trying to educate USCIS in what we were trying to do. Most EB-5 projects are real estate based and concern the creation of hotels, strip malls, etc. We were really left-field. The biggest challenge was having USCIS understand that these kinds of jobs are real. This took a bit of convincing. It usually takes take eight months for a regional center to get approved. HRC took thirteen. Persistence and patience was key.
How do you think the current EB-5 law should be improved?
There has been slow, herculean effort to try and clarify these regulations. What we’re really hoping for is consistency. In the past, of two applications that were essentially the same, one would get approved and the other denied, and it would be unclear as to why.
There should be premium processing to speed up the petition process so that it does not take six months. An exemplar petition should be made available, where if one project is approved, then all projects of that type should also be approved. There shouldn’t be a fresh adjudication every time.
There needs to be clarification of what constitutes a targeted employment area (TEA). Currently, it’s either a political or geographic area, so you can either go with a district (political) or an area from a certain mountain to a particular river (geographical).
With the increasing number of regional centers and projects, more clarity and transparency in the process, more than ever, is needed.
Is there anything you would like to add?
The EB-5 is a pilot program established over 20 years ago. It is due to sunset next year, and there is no guarantee that it will be extended. It needs to be extended or permanently put in place. If the pilot program legislation is introduced into Congress by itself, then it will probably enjoy bipartisan support. However, if people attach other immigration based programs, then it becomes controversial. Thus, there’s a great lobbying effort going on right now that’s pushing for it to go through as a standalone bill and greatly increase its chances of passing.
The upshot of the EB-5 program is that there is great synergy. It’s basically an economic development program that has a fairly large immigration overlay. It tries to develop disenfranchised communities, in an organic fashion. It’s not the government forcing businesses into these areas. It’s people already in the business world seeing a business opportunity and then bringing in foreign money. The EB-5 program costs nothing to the taxpayer because the regional center and the project development is all funded by private money. For all of the projects, all of the capital coming in is international money.
Where EB-5 is going, I see great partnership possibilities between the government and these projects. Government agencies can make it easier to get licenses. The city can stream-line certain procedures and green-light permits faster. The government can give tax credits. For example, the new San Antonio Regional Center in TX is owned by the city. The city made the application so the city is the regional center. They understand that this can be a great partnership between private and public interest for economic development.
People think of the EB-5 program as primarily an immigration program, which it is, but it’s more than that. Knowledge of immigration law by itself is insufficient for EB-5 work.
In this economic environment, it doesn’t make any sense to let go of this program.
About the Interviewee:
A. Mina Tran has been an attorney for thirteen years, currently limiting her practice to immigration law. Tran is a founding partner with the full service immigration law firm, Palmer & Tran, LLP in addition to her work as Director of Hollywood Regional Center. She obtained her Bachelor of Arts degree as an English major with honors from Boston College and received her law degree from UCLA School of Law.
Tran serves on the Board of the Long Beach Grand Cru, a charitable organization supporting Legal Aid as well as volunteers for several non-profit legal organizations. She also founded the legal information website, DigitalAttorney.com, where she currently serves as Chief Operating Officer.
Tran has spoken on issues of small business management, immigration law, EB-5 issues and workers’ compensation law at Whittier Law School and UCLA School of Law. She has been a guest lecturer at California State University, Los Angeles on immigration business visas. In addition to her practice, Tran has been an adjunct professor at Santa Ana College teaching Immigration Law in the paralegal program and business legal environment.
Telephone Interview with A. Mina Tran, Partner, Palmer & Tran, LLP (Nov. 29, 2011).