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Kicking the can: EB-5 extended again; still lacks permanent legislation

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The federal EB-5 program has been extended yet again, this time until Sept. 30.

The visa program was again included in the larger federal spending package that President Trump signed Friday, averting another partial government shutdown.

EB-5 gives foreign investors the opportunity to obtain a green card if they invest at least $500,000 in a development project and create at least 10 jobs. It has received a number of short-term extensions over the past three years, with Congress unable to agree on a more permanent measure.

EB-5 faces a number of pressing issues, including weakening demand from Chinese visa seekers — who comprise a large share of the applicants — because of increasingly long wait times. Just 617 new EB-5 immigration petitions were filed with United States Citizenship and Immigration Services in the third quarter of 2018, the lowest quarterly figure in at least five years, according to data released by USCIS.

The program has been credited with creating hundreds of thousands of jobs and contributing billions of dollars to help finance large-scale commercial projects.

But notable fraud cases involving EB-5 projects have also surfaced.

One of the most high-profile EB-5 projects came to a halt in October in New York. Investors walked away from their plans to build a massive Ferris wheel in Staten Island, a project that attracted 412 EB-5 investors. It marked one of the largest EB-5 failures yet.

In Chicago, a group of Chinese investors sued Symmetry Property Development in February to return some $50 million invested in a failed River North tower project.

JDS Development Group’s Michael Stern recently said EB-5 may be in its “last cycle,” and predicted the current spate of lawsuits will be the first of many. “I think that the wave of litigation is just starting,” he said in October during The Real Deal Miami Showcase and Forum.

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