3-25-13 St. Louis Post-Dispatch
by Tim Logan
St. Louis is ready to open its doors to immigrant investors.
The region last week won State Department approval to take part in the federal EB-5 Visa program, which offers green cards to foreigners who invest in U.S. companies and create jobs here.
St. Louis, St. Louis County and St. Charles County are banding together to form a so-called “regional center” that will market St. Louis-area projects overseas.
Under the program, immigrants are eligible for temporary U.S. residency in exchange for a $1 million investment, or $500,000 in neighborhoods with high unemployment — mostly in north St. Louis and North County. If the company then creates 10 jobs within two years, that residency can become permanent.
It’s a way to draw foreign capital to markets that need it, said Denny Coleman, president of the St. Louis County Economic Council and of the newly-formed Gateway EB5 Investment Center. The center will find local projects that want to tap overseas investment, particularly in real estate and biotech, and then market them.
“Right now we’re bringing together a pipeline of projects in the tri-county area that have a need for capital and interest in exploring EB-5 investment,” Coleman said.
EB-5 visas have existed for 20 years, but they have surged in popularity lately, as more cities look to tap the program and growing numbers of Chinese investors.
Nationwide, there are at least 213 regional centers like the one just set up here, up from 72 in 2009.
And the 3,677 preliminary visas issued in the 12 months ending Sept. 31 was more than twice as many as any year prior.
But there have also been bumps in the road.
The program has a relatively low success rate and occasional reports of fraud.
One of the highest-profile EB-5 debacles came in 2011 in Moberly, Mo., where a California man, Bruce Cole, tried to use the program to draw investment in Mamtek Inc.’s now-defunct sweetener plant. Cole now faces criminal theft and fraud charges in Randolph County.
Organizers of the local center have studied centers in other regions, said Tim Nowak, president of the World Trade Center St. Louis.
And they will closely vet applications, both from projects and from investors, he said. That should make it more successful in the long run.
“Investors will see this center as one with a great deal of oversight,” Nowak said. “I think that thoughtfulness will play to our advantage.”
And, he said, the project should help continue to place St. Louis on the map as a place that welcomes immigrants.
“It’s a small tool but a very important one in our overall effort to make ourselves a more attractive region to foreign nationals,” Nowak said.