Regional center historical stats: approvals trending down, terminations up

  • Posted on January 17, 2020 | Updated on January 21, 2020 | 5 min read

IIUSA has issued a report reviewing historical regional center numbers. The graphs show us approvals hit a high in 2013 and then started falling; conversely, terminations started to rise dramatically in 2014. Incomplete 2019 numbers actually show far more terminations than approvals — a first according to the data in the report.

Growth for the economic growth program

IIUSA’s report on regional center historical stats reveals a program that has expanded greatly over the years. The EB-5 regional center came into being in 1992 to advance U.S. economic growth with foreign investment. Since its inception, the program has brought in over $33 billion in capital and has helped create over half a million fulltime U.S. jobs.

Evidence of this growth can be seen in the recent flood of approvals. In 2008, less than 50 regional centers existed. 2018 saw a historical high of 880. The five years of 2012-2016 saw almost 750 new regional centers approved. As of September 2019 (the most recent numbers of the report), 822 regionals centers are approved.

Where are the most regional centers found?

While regional centers serve almost every state in America, they are not distributed evenly and certain areas have far more than others depending on the EB5 investment projects in the region. Here is a list of the top-10 states when it comes to regional state numbers:

  1. California: 203
  2. New York: 112
  3. New Jersey: 87
  4. Florida: 75
  5. Texas: 83
  6. Pennsylvania: 70
  7. Washington: 62
  8. Connecticut: 59
  9. Nevada: 32
  10. Georgia: 30

The Golden State, obviously, has far more regional centers than any other state. Additionally, with the exclusion of Texas, the top four states are coastal or very close.

Approvals & terminations: a negative trend

While the EB-5 green card program has grown exponentially, not all the numbers speak to positivity. In fact, in the past several years approvals have started to significantly drop with terminations soaring. 2013 was a banner year with well over 200 approvals and just a few terminations. While 2014 saw almost as many approvals, the terminations began to creep up. This trend would continue and hit a negative milestone in 2017: more terminations than approvals. 2018 saw a few more approvals than terminations but in 2019 (note that the report does not seem to have full 2019 stats) 75 regional centers were terminated, versus only 6 new approvals. The pendulum has swung from the positive — lot of approvals and very few terminations, to its diametric opposite. A new high in lows, for the industry.

Where are the terminations happening?

With California leading the way in terminations, followed by New Jersey, New York, and Texas, one might suspect that terminations happen at a fairly typical industry-wide rate state by state. Not exactly. New York is the second-leading state with recent approvals but has the lowest termination percentage of the five top states. The IIUSA report doesn’t detail all of the state-termination percentages but the case of New York clearly shows that not all regions have the same chance of termination.

Why are the terminations happening?

IIUSA was able to review 111 regional center termination letters, a fairly healthy sample size. 42% were terminated for no activity indicated on their annual I-924A report to U.S. Citizenship and Immigration Services (USCIS); 28% were actually terminated because they failed to file an I-924A; and 5 terminations resulted from enforcement from the Securities and Exchange Commission (SEC). No activity, a failure to maintain proper record keeping, and fraud or negligence. Based on the EB5 industry news, clearly, many regional centers are flawed operations that are either incompetent or downright criminal.

What is an investor to think?

Approvals and terminations are not random occurrences. And there are state-by-state trends for growth and termination. With terminations rates at an all-time high, and new regulations making Targeted Employment Area (TEA) designation more challenging than ever, the selection of a regional center should be a well-informed decision.

Read the entire IIUSA report

  
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