July 31, 2015
July 30, 2015
July 29, 2015
Anatomy of a Successful EB-5 Expedite Request
We are often asked by regional center clients if there is any way to speed up the EB-5 application process, either at the I-526 stage or the I-924 stage. USCIS will expedite either Form I-924 or Form I-526 if the application meets the USCIS “expedite criteria.” The expedite criteria are:
Severe financial loss to a company or individual;
Extreme emergent situation;
Nonprofit status of a requesting organization in furtherance of the cultural or social interests of the United States;
Department of Defense or national interest situation (Note, the request must come from an official US government entity and state that the delay will be detrimental to the federal government);
USCIS error; and
Compelling interest of USCIS.
In the EB-5 context, usually the two criteria that are used to expedite EB-5 applications are severe financial loss to a company and a national interest situation. We have been successful in the right situations using both criteria to expedite applications.
Severe financial loss can be used if the developer is losing a significant amount of capital in the course of waiting for the EB-5 application(s) to be adjudicated. Some key factors may be: (1) whether senior or mezzanine financing that has been secured is at risk due to the delays in obtaining EB-5 financing; (2) whether other pieces of the capital stack are expiring or backing up against a deadline for securing the EB-5 financing; (3) whether a significant amount of interest expense is being incurred by the developer as a result of carrying senior, mezzanine, or bridge financing while the project waits for EB-5 financing; (4) whether the developer can continue to carry those financing costs; and (5) whether the whole project is in jeopardy as a result of the delay in securing the EB-5 financing and the accruing financing expenses for the other parts of the capital stack. Note, however, that if the developer has chosen to leave the money in escrow while I-526 petitions are adjudicated, it may be a significant hurdle for the expedite request because oftentimes USCIS says the developer has chosen to delay access to the capital, and therefore, expedite is inappropriate. There must be a detailed discussion of the severe financial loss supported by evidence to back up each claim.
National interest expedite requests also have been successful for EB-5 purposes. If the project has some element of national security or is in the national interest (such as an infrastructure project), USCIS will expedite the application if the expedite request is supported by another federal government agency, or sometimes a State. This requires having another federal agency involved in the expedite request by writing letters of support and also contacting USCIS on the applicant’s behalf. This criteria also must be submitted with detailed evidence of why the project is in the national interest, along with the letters from the other federal agency supporting the expedite request.
Another interesting strategy for an expedite request is to focus on the situation of a particular investor or group of investors and their circumstances. This works at the I-526 stage where individuals already have invested in the project. One investor may have an extreme emergent situation (such as a fear of persecution in a foreign country, similar to an asylum claim) or a humanitarian situation (the investor or his or her family member may have a serious medical condition that requires an immediate move to the U.S. for medical care). Extensive evidence must be submitted with the expedite request. However, this is an attractive option when a single approval or a small number of approvals can trigger release of money from escrow for all investors. For example, a project structure may allow for the release of some percentage of each investor’s capital contribution after the first I-526 approval. In that scenario, having just one approval can be critical to obtaining the EB-5 financing. Selecting the right investor to expedite is key.
What if your application is well beyond USCIS “normal” processing times? There are many I-526 and I-924 applications pending beyond the processing times posted on the USCIS website; many have had requests for evidence and remain pending for months after the responses were submitted to USCIS. In our experience, expedite requests claiming “USCIS error” for delayed processing are mostly unsuccessful unless coupled with another criteria for expedite such as severe financial harm. In this instance, it may be more effective for the regional center to contact its local Congressman to inquire about the status of the applications. Usually, the Congressional offices receive more accurate and detailed updates on the status of pending applications as compared to responses received from USCIS by the applicant through its own inquiries.
In all of these situations, one thing remains the same: an extensive amount of documentation must be submitted with the expedite request. Any assertions as to the financial loss or national interest of the project must be supported by extensive evidence, such as letters from other financers in the project, evidence form other government agencies, etc. Many times the expedite request is just as large as the EB-5 application, containing reams of evidence in support of the request. Greenberg’s experienced EB-5 attorneys can assist you in developing the best arguments and evidence in support of the expedite request. Additionally, most successful expedite requests also have a lobbyist who worked behind the scenes to involve the right political support for the expedite request and the project. Greenberg Traurig is uniquely equipped for this task, as our firm offers lobbying services to clients. Contact our EB-5 team today for a consultation.