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How should a regional center lease itself out?

What are the best practices for a regional center leasing itself to a developer? What are the issues, pitfalls, and exposures, both with legality and compliance? How does USCIS look upon a regional center that leases itself out? What are the disadvantages to leasing out a regional center?

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    Shahzad Q Qadri

    RC Creator
    Answered on

    This a loaded question and requires an in-depth analysis and discussion. While there are pitfalls, if done correctly, it can be advantageous. We are happy to discuss this opportunity with you.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    There is no such thing as best practices for a regional center leasing itself to a developer. Start by working with an EB-5 immigration attorney who can help you ascertain what you are looking for in a regional center leasing arrangement. The main thing you and your attorney need to concentrate on is the need to do a due diligence review on the regional centers you are considering, so that you can make an informed judgment that is in your best interest. The agreement for a leasing arrangement usually tends to be on a case-by-case basis, and may even vary between a regional center working with multiple developers on an EB-5 project. A memorandum of understanding filled with various legaleses is a common tool used by most regional centers leasing themselves to developers and, as a matter of fact, the regional center is likely to dictate the terms. USCIS is open for leasing arrangements, as long they are in compliance with requirements of EB-5 rules and regulations. There are disadvantages in three respects: 1) the terms of leasing may not be amenable to easy modification, if at all; it would be at the grace of the partnership that controls the regional center. In essence, caveat emptor, be on notice that you, as the lessee, won''t be in position to change the terms of lease. 2) reputational issues can become an issue of contention with the regional center, if either the execution is not going well or the leasing regional center does not feel it is in its interest to continue the relationship, and 3) lastly, potential for litigation is high; for instance, if there is any inkling of major financial loss on the project. So, weigh your plan against your ability to manage the project before you expose yourself to litigation. Advisably, read the fine print of the leasing agreement before proceeding further, and get good legal counseling.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Leasing a regional center requires the services of an experienced EB-5 immigration attorney who can advise you on the pitfalls and the requirements. You have to weigh all of the costs and benefits of your particular situation to determine what the best option is for your case.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    The best practice is to retain an attorney with experience in this type of transaction (like our law firm). A solid memorandum of understanding and operating agreement may be necessary, and you will have to negotiate the fees paid by the project to utilize your regional center designation for their project. USCIS should simply consider the new project as just another new project that your regional center is covering.

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    Ed Beshara

    Immigration Attorney
    Answered on

    The regional center, through the assistance of its experienced EB-5 attorney, will enter into a memorandum of understanding with the project. There will be a need for the regional center to use its due diligence in reviewing the EB-5 compliance of the project, its legally correct marketability, and the reviewing the credibility of the project principals. In addition, the regional center will review the financial and business viability of the project to determine the predictability of the investors obtaining their unconditional permanent residency in a few years time.

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    Rohit Kapuria

    Immigration Attorney
    Answered on

    These are great questions, but also very detailed. Depending on your regional center''s geographic scope and the number of other regional centers approved for the same area (your competitors, so to speak), your marketability will vary. If you are the only game in town, and developers are clamoring for EB-5 funds, you are certainly in a good position. Regarding your questions, there are multiple legal issues (some immigration and some corporate and securities) as well as business considerations. USCIS has not traditionally frowned on regional center rentals. In fact, it is quite common to have such arrangements. As long as the regional center fulfills its due diligence and immigration responsibilities, it is usually in good shape. As for disadvantages, the regional center name is attached to the particular project. As a result, if you fail to properly conduct due diligence on the developer, and investors are harmed in the process, your regional center''s name and reputation will suffer. Not to mention the regional center may be liable in certain situations. I would be happy to offer you a complimentary consultation to further discuss.

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