SHOVEL READY

The Leahy-Grassley EB-5 Regional Center (“RC”) extension bill S. 1501 permits (if enacted as drafted) filing an exemplar 924/526 before September 30 (when the current statute expires).  In doing so, the RC will lock in for a project the $500,000 instead of the new bill’s $800,000 minimum investment amount, and the Targeted Employment Area (“TEA”).  Under current USCIS policy, to file an exemplar, a project must be “shovel ready.”  On the April 22, 2015 USCIS stakeholder call, I asked for clarification about what USCIS expects to show a project is “shovel ready.”  The following are my questions and USCIS’s economist’s answers:

Martin Lawler Question:  The 924 exemplars are taking about a year to process. This requires a lot of planning by the Regional Centers.  Can you expand a little bit and explain what you expect to see to show that the project is “shovel ready” for an exemplar filing?

Answer:  In regard to the 526s, as you know you can file a project on a 526 or on a 924 exemplar.  Our processing times are not where we want them, and we are moving towards improving that processing time.  As far as the specifics on the 526 or 924 project, we look at those evaluating them with the same criteria, so a project presented with a 924 gets the same analysis as a 526.  Does that answer your question?

Martin Lawler Question:  What I was looking for is some guidance on what you expect with an exemplar to show it is “shovel ready.”  It is my understanding that you cannot file an exemplar until your project is “shovel ready.”  Now I know that a trucking company has different criteria from a hotel, but do you expect a use permit?  I know you need a Matter of Ho business plan, you need an economic study…but as far as the project, how far along does the project have to be to be “shovel ready”?  How ready is ready I guess is what I’m asking.

Answer:  That’s a very good question which requires a very complex answer, which I can’t give.  I can give you some general ideas.  This will vary significantly depending on the type of project.  If you are looking at a construction project as you mentioned, then yes, we look for the permits to be in place, we look for the contractors to be engaged, the commitment letters from any additional lending besides the EB-5 – those types of evidence to indicate that you do have the sources available to begin the project immediately.  Again, that would vary greatly on whether you are looking at a construction project or some other kind of project.  Each type of industry would have its own particular criteria, so we would look at that individually.

The Leahy-Grassley S. 1501 bill does not use the phrase “shovel ready.”  Since the advantages of the $500,000 investment and TEA are so great, if possible, projects should file an exemplar before September 30th.  I hope this helps in understanding the USCIS rules for when an exemplar can be filed.