South Florida developer Rodrigo Azpúrua says EB-5 is “good for the United States,” as it “creates jobs, with no cost for the taxpayers.”
Later this week, the US Congress is likely to extend the EB-5 visa program, which allows qualified foreign investors to get green cards and pathway to citizenship, for another six months. Since its inception in 1990, tens of thousands of foreign nationals — a vast majority of whom are Chinese citizens — have obtained US permanent residence cards through this program. However, a number of scandals in recent years has resulted in greater scrutiny of the program among federal legislators. In Washington, there’s near unanimous consensus on the need for reforming EB-5. A few lawmakers are even calling for its elimination altogether.
Real estate developers are the ones who have benefited most from the EB-5 capital. Last week, The American Bazaar spoke to South Florida developer Rodrigo Azpúrua, the founder, president and CEO of Riviera Point Development Group.
The Miramar, FL, -based company has raised more than $55 million in EB-5 funds since 2012 and developed nearly 1.2 million square feet of commercial real estate financed with overseas capital. It has financed construction of three completed suburban office buildings in Doral and Miramar in South Florida. Among projects under construction are an upscale Radisson Red Hotel Miami Airport in Miami, which will be funded with $11.5 million from 23 EB-5 investors, and a La Quinta Inn & Suites in Orlando.
Riviera Point has helped 172 EB-5 investors and their family members to obtain green cards, according to Azpúrua, who has also authored a book, Real Estate Development and EB-5 Visas. which is available on Amazon.
Here are the edited excerpts:
What is your background? How long have you been in business?
I am originally from Venezuela, and I moved to the United States in 2001. I started my company in 2007. We have been using EB-5 since 2012. We are in real estate with special focus on office space and hotels.
What share of your capital is coming from EB-5 investors? What are nationalities of your investors?
At the beginning, it was 100 percent. Then we reduced that to 80 percent. For our next development in Orlando, only 33 percent of our capital is from EB-5 investors. Rest of the money is raised through either equity or conventional bank loans.
Because we are based in South Florida, we have a lot of South and Central American investors. Our first project was a mix of South American and Chinese investors. That changed subsequently. Now it is a mix of South American and European investors. Many are from Venezuela, where there has been a political turmoil, followed by Colombia, Argentina and Mexico.
There are several bills before Congress that call for reforming the EB-5 program. What are your thoughts on the current legislative activities?
There are a lot of bad actors in the industry. There have been quite a few scandals around the EB-5 project because there is not enough regulation. Some of these new bills that have been proposed give a lot of clarity and benefits to the industry. So we are looking forward to it.
[At the moment,] the law requires a $1 million investment to qualify [for the program]. When a project is located in Targeted Employment Area, it is lowered to $500,000. The new bill is supposed to increase that amount. There are many rumors about the amount. But we are waiting for the bill.
There was a suggestion that EB-5 should be terminated entirely. What is your take on that?
The truth is that EB-5 is very important for the country. The ultimate purpose of [EB5] is to create jobs, for the greater good of the economy of the United States. Many hardcore nationalists [who are opposing EB-5] believe that they are serving American interests. It is far from that. The true strength of the country is diversity of cultures, and diversity of ideas. EB-5 is giving opportunity to budding entrepreneurs capital; it creates jobs, with no cost for the taxpayers. It is good for the United States.
When you apply for the EB-5 investor visas, what are the main challenges? What’s it that the USCIS is looking at mainly?
One of the reasons we have a 100 percent approval rate so far is because we check whether our investors qualify before they send the applications. The main challenge is to show that their funds are coming from legal means, and not from illegal sources. We do some due diligence and once we prove that, then we accept their investments. We qualify them, before we get their money.
How important is EB-5 to the economy?
EB-5 is about smart, purpose-oriented money for creating jobs. The only reason why the United States was able to recover from the Great Recession in 2008 is because the whole country was focusing on jobs creation. There is no other way to improve the economy — you have to create jobs. So everything that results in jobs creation got to be the priority of every government, politician and local leader.
EB-5 investor visa program being extended by one week (April 28, 2017)