EB-5 Lawyer Alert #2: Update On California TEA Designation Procedure

Previously published in Hotel Online

Update on California's EB-5 policy regarding designation of Targeted Employment Areas or TEAs.

California adopted a new TEA policy as of April 30, 2012 which my partners Catherine Holmes and Victor Shum wrote about a few days after publication. (See: EB-5 ALERT: California's new TEA approach will discourage EB-5 investment in California.)

Last Friday, Catherine and Victor met with the California Governor's office to discuss concerns they have raised along with those of the EB-5 community. They appreciated the seeming responsiveness of the Governor's office and the meeting bodes well for the outcome. Ultimately, the test of the Governor's office will be in the approach that California takes on designating TEAs, but here is an update on what transpired.

EB-5 ALERT: UPDATE ON CALIFORNIA'S NEW TEA DESIGNATION PROCEDURES FOR EB-5 GOVERNOR'S OFFICE WORKING WITH STAKEHOLDERS TO ADDRESS CONCERNS WITH NEW PROCEDURES

by

Catherine DeBono Holmes and Victor Shum | Hotel Lawyers

In California, the Governor's Office is talking with EB-5 stakeholders about concerns with the new procedure for designating TEAs or Targeted Employment Areas.

On May 18, 2012, we met with Brook Taylor and Mather Kearney of the California Governor's Office of Business and Economic Development (known as "GoBiz"), to discuss our suggestions for refining the new procedure announced by the State of California for designation of "Targeted Employment Areas" or "TEAs." Economists Jeffrey Carr and Ashleigh Sewell of Economic and Policy Resources, Inc., also participated in the meeting by telephone.

As our readers know, our concern with the new California TEA designation procedure that became effective on May 1, 2012 is that it does not allow designation of TEAs within dozens of cities throughout California, including San Francisco, San Diego, San Jose and Anaheim, that do not qualify on a city-wide basis. In our meeting last week, the representatives of the Governor's Office expressed a willingness to work with stakeholders in the EB-5 program to address these concerns. The Governor's Office also made clear that the State of California strongly supports investments for projects throughout California using the EB-5 immigrant investor program and that the change in procedure was based on policy and resource considerations, not on a desire to reduce the ability of cities and project owners to obtain EB-5 financing.

The goals of California's new procedure...