Immigration experts expect that to change in 2013, as applications from China threaten to push approvals above the cap. That would trigger limits on the number of EB-5 visas that could go to China, since per-country caps automatically go into effect once the overall limit is reached on a single visa category. That could complicate EB-5 projects as the pool of potential Chinese investors shrinks to those admitted under the cap.
While getting an EB-5 project approved in Washington takes time, the real crunch comes in the two years when the ventures must create the jobs tied to the visas. At the start of the two years, investors receive a temporary green card. At the end of the two years, if the jobs have been created and still exist, investors receive permanent green cards -- a crucial step that puts citizenship within reach. Investors face deportation if immigration officials conclude there aren't 10 jobs to match each visa.
The stakes are high for EB-5 projects. With hundreds of such projects competing for a limited pool of deep-pocketed foreigners willing to invest, the pressure is on to promise sure-fire job creation in the United States.
"In China, in particular, it's like snake-oil salesmen. It's crazy the promises being made," said Jose Latour, a Miami immigration lawyer who helps raise EB-5 cash and is a partner in the venture that backed a limestone mine in Martin County, Fla. Not all foreign investors "are so rich they can lose half-a-million bucks. There are a lot of families who have been destroyed. There is a lot of greed that is happening."
Immigration lawyers and others involved in EB-5 projects said wealthy foreign residents often will gift the EB-5 money to adult children who attended college in the United States and want to stay there to work. In China, brokers play key roles in matching projects with investors for a commission on the deal. In the Astor Hotel venture, each investor pays $550,000 -- $500,000 toward the hotel expansion and $50,000 as a transaction fee.
As for the Astor investors, Hart said he's lined up foreign residents for about half of his slots: two from Venezuela, two from Colombia, three from Mexico and one from Canada. He's expecting to round out the offering with investors from China.
Hart and his partners hope to raise $8 million from 16 foreign investors, meaning the Astor expansion must claim 160 new jobs to justify the visas. About 100 will be employed by the Astor, and 60 jobs will be claimed as created indirectly by construction work and the money that flows out from the Astor itself.
The $8 million infusion would fund most of a $10 million redo at the Astor, which is located a few blocks back from the beach. Hart is partnering with the existing operator to renovate and relaunch the Astor, and he is promising new jobs from almost every inch of the 1936 hotel.
"This is not a full-service hotel. Right now, there is no room service. There is no concierge," he said. "That's all going to change."
At the valet stand outside, Hart pictures two cars with drivers ready to ferry guests wherever they want. In the upscale Italian restaurant off the lobby, dei Frescobaldi, continental offerings will be replaced with full breakfast service. An idle bar off to the side will be converted into an all-night diner.
And for guests interested in al fresco dining, they can head up to the roof. Now, it's just a shabby expanse of HVAC equipment with partial ocean views; Hart and partners want to add a rooftop pool and restaurant. A name change is in the works, too: the New Astor Hotel and Spa. And while there's no space for a spa right now, the Astor plans to sacrifice one of its 42 rooms to create one.
Hart said there wouldn't be the pressure to add so many new employees at the $400-a-night Astor if not for the EB-5 investors. "We need to maximize the amount of jobs," he said."
But Hart insists the ambitious plans will work well for a hotel market where rates are at record levels. "We're doing a complete renovation, and we're doing a complete transformation," he said. The aim is to earn a four-star ranking, but Hart said, "We're hoping for five stars."
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