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April 15 2014


Lawler & Lawler has prevailed in a very important regional center test case in which the USCIS held that guest expenditures in the local area outside of the hotel can be used to calculate job creation. This is one of the first cases approved since the USCIS restricted counting indirect jobs 2-1/2 years ago for hotel guests and project tenants. Hotel guest spending was, however, discussed by the USCIS in response to a question I posed at the February 26, 2014 stakeholder meeting.

Our client focuses on the development, construction and operation of hotels in California. The approval is for an I-526 exemplar for a hotel project. We proved that jobs are created when hotel guests spend money in the area outside the hotel for food, entertainment, transportation, retail sales and so forth.

These jobs are in addition to others typically counted for a regional center project, such as operations jobs at the project itself (hotel employees); jobs created by suppliers to the hotel (furniture manufacturers), and induced jobs created when the employees spend their wages (for groceries).

Pent-up demand was a necessary component of the decision which limits guest spending to that by guests who could not be accommodated elsewhere in the market area due to excess demand for hotel rooms. Excess demand was established in part by an extensive hotel market analysis.

Before issuing the approval, the USCIS issued one request for evidence (RFE), two requests for clarification (a new kind of request USCIS has started issuing via email), and held a teleconference with the USCIS adjudicator and economist.