Resort Draws Investors With Immigrant Visa Program
Snow is plentiful, but working capital is always hard to come by in Jay -- a hardscrabble corner of Vermont.
But Jay Peak, a popular resort just two miles from Canada, is cashing in using mountains of money from overseas.
"We've raised almost $200 million of equity capital to transform Jay Peak from a winter-only ski resort to a true 52-week-a-year resort facility," says Bill Stenger, the owner of the resort.
As American banks are keeping a tighter grip on their wallets, more and more equity capital is coming through another door -- from wealthy immigrants. In return for investing in an American enterprise that creates jobs, thousands of foreigners are getting green cards.
In addition to about 80 well-groomed trails at Jay Peak, there's a snazzy hotel, an ice arena and a golf course. Construction has also begun on a huge water park with a retractable glass dome that will keep it toasty in the winter.
Stenger proudly points to about 50 local workers, employed by the resort, operating American-made Caterpillar tractors.
"They were all born and raised in this area -- went to North Country High School, the career center, some to Vermont Tech, and now they are working at Jay Peak building this facility," he says.
A U.S. Investment Opportunity That Creates Jobs
Some of the work is being paid for by investors like Anthony Korda, a British lawyer who participated in the EB-5 visa program. The program, which was established by Congress in 1990, enables foreigners who are willing to invest at least $500,000 in U.S. businesses to obtain a green card.
Korda invested the minimum $500,000 in Jay Peak, creating at least 10 jobs.
The feds took a few months to trace the source of Korda's foreign money, and conducted background checks before issuing his green card. Now, he is an immigration lawyer in Naples, Fla., who connects other foreign investors to the EB-5 program -- and he's building a stylish new house in his adopted home.
"The EB-5 program has given us a new life and, yes, it's given me a new business to go into," Korda says. "And it's an interesting one, too."
Interesting, because he helps clients from all over the world find the best, safest American projects to invest in.
Nationwide Investment Centers Fill A Lending Void
There are about 80 regional EB-5 centers nationwide, including one that covers the whole state of Vermont. Korda says the centers are popping up all over the place, now that equity capital isn't easy to get from American banks.
But processing the visas can take months or even years, so investors are rushing to get in the pipeline for one of the regional centers before the scheduled sunset date in September 2012.
"Unless Congress does renew the program permanently or again for a lengthy period, it starts to lose its appeal," Korda says.
Overall, there are 10,000 visas set aside for the EB-5 program -- a quota that is rarely met. Half are for investors who go through regional centers and invest a minimum of $500,000 in existing businesses. The other 5,000 visas are set aside for entrepreneurs who want to start their own business, however, this requires a minimum investment of $1 million.
To keep investors coming confidently into EB-5, its many bipartisan supporters are already trying to drum up congressional support for its renewal. They know that if it gets attached to a controversial immigration bill, it could get bogged down and expire.
The investors who have climbed aboard have brought more than $1 billion into American businesses, generating tens of thousands of jobs. That's a point EB-5 cheerleaders will make, if they are faced with opposition from anti-immigration groups. Copyright 2011 Vermont Public Radio. To see more, visit http://www.vpr.net.