Get the latest and most useful updates on overseas careers, immigration, travel and visas here.

Visa for foreign investors spurs investment in Alabama

Posted on October 13, 2014
Comment (0)
Share :

Sheldon Day spends a lot of his time trying to convince Chinese investors to come to his small town. Increasingly, they just want to know if the place is for real.

Day is mayor of Thomasville, a city of 4,000 people in rural Clarke County. It’s just up the road from Pine Hill, where a Chinese-owned copper tubing plant opened earlier this year, hiring 300.

Day wants more. He says he’s working on several local projects, including a medical center, that could be funded by overseas backers. Lately, he said, those investors have begun fly over and check out the projects in person — to make sure they’re not just a green card scam.

“They do come to the community, just to make sure there’s a viable project,” Day said.

Those investors are part of an economic boomlet that grew out of America’s economic collapse in 2008. For decades, the federal government has offered wealthy foreigners a fast track to permanent U.S. residency if they’ll invest at least $1 million in a venture that creates at least 10 jobs in the U.S. In rural or high-unemployment areas, including much of Alabama, the threshold is only $500,000.

Applications for those visas — known as EB-5 visas — have skyrocketed in the past five years, driven almost exclusively by investors from China. Their interest has played a sizable, though often unseen, role in new business enterprises in Alabama.

Skyrocketing interest

The EB-5 program began in 1990, when lawmakers decided to offer a limited number of visas to investors as a way of stimulating jobs. Up to 10,000 investors per year could apply for temporary green cards by investing in a job-producing project. In two years, if they could show the investment created 10 jobs, the green card became permanent.

For nearly 20 years, only small numbers of investors used the program, most of them from Taiwan and Hong Kong. After 2008, interest in EB-5 surged, driven almost entirely by Chinese investors. According to a Brookings Institution study, fewer than 500 Chinese nationals sought EB-5 visas in 2007. By 2012, there were 5,000 applications from China. In the 2014, the program hit its 10,000-visa limit for the first time.

Immigration lawyer Boyd Campbell says the rise of the program is due to simple supply and demand. After a long spurt of double-digit economic growth, China is home to a new class of millionaires and billionaires. U.S. developers, eager to get new projects off the ground, are still having trouble finding capital.

“Banks just aren’t lending,” Campbell said.

Insurance policy

CP Homes, a Dallas-based company, has invested $96 million in EB-5 investors’ money in Alabama in the past two years, said Ron Rohde, general counsel for the company.

That money went into Country Place Senior Living Centers, a chain of assisted living facilities with branches in five Alabama cities. There are plans to build 12 more, Rohde said.

Rohde said communities tend to welcome the investment, because it’s a needed service provided on a small scale.

“If we were doing a big hotel in D.C., there might be some objections,” he said. “It’s harder to cry out against a single building in Winfield.”

Rohde said the company is committed to working long-term in Alabama. But it’s likely the investors themselves may never live here.

EB-5 investors aren’t required to live in the communities where they invest, federal officials say. Campbell, the Montgomery attorney, said some EB-5 investors stay in China, hanging on to their green cards as an insurance policy in case of a political upheaval.

“I think they’re aware that there were periods in their history where millions of people were killed,” he said. “They want to be ready to pack up and leave if they need to.”

Most investors, Campbell said, are families with school-age kids, who want to get their offspring into American universities.

New centers

Campbell is himself a major player in Alabama’s EB-5 market. Before the Chinese boom, he started America’s Center for Foreign Investment, a Montgomery-based business that helps American developers and EB-5 investors find each other.

Campbell says his company has brought in $30 million in new investment over the past several years. Some of that was through work with CP Homes. Campbell said he’s also brought investors to a company with operations in Russellville and Andalusia that builds hurricane-resistant homes.

Campbell’s operation is one of 10 “EB-5 regional centers” the federal government has approved to set up EB-5-funded projects in Alabama. When Campbell started in 2006, his center was the only one in the state. Nationwide, there were fewer than 50 centers before the 2008 recession. Now there are hundreds.

Still more are in the wings. Mobile lawyer Hunter Adams filed paperwork earlier this month to create the Bay Pointe EB-5 Regional Center — an operation that, if it gets federal approval, would recruit overseas investors for a hotel project somewhere on the Gulf Coast.

Adams said his clients aren’t from China, but he was reluctant to talk in greater detail.

No clue

In 2013, Princeton Baptist Medical Center in Birmingham completed a 90,000-square-foot expansion, complete with 16 new surgery suites and a two-story chapel.

At the time the project was completed, hospital officials said the $57 million expansion created 545 jobs during the three years of its construction. Few asked where the money for the expansion came from, but nearly half of it, $25 million, was from EB-5 investors.

Those investors were primarily from China, said Ross Mitchell, Princeton’s vice president of external affairs. Mitchell said he didn’t know the identities of the individual investors.

EB-5 may have played a role in a much more-publicized development project. When Golden Dragon Precise Copper Tubing, a Chinese-owned company, agreed in 2011 to open a plant in rural Wilcox County, one of the poorest counties in the nation, state officials hailed the development as a sign that Alabama could still land a major employer. The Golden Dragon plant opened earlier this year, putting 300 people to work.

When the plant was announced, developers told the press that as much as $30 million of the $100 million cost of construction could come from EB-5 investors.

Whether that investment actually came through isn’t clear. The Star’s attempts to contact Golden Dragon president Li Changjie through company officials in the U.S. were unsuccessful. Staff at the plant say they simply don’t know how much EB-5 money was involved in the Wilcox County facility.

“I don’t have clue,” said Bill Bolton, human resources director for the plant.

Double message

These days, foreign investment projects like Golden Dragon figure prominently in political advertisements. Four years ago, the airwaves were filled with candidates’ promises to curb immigration.

In 2011, Alabama passed an immigration law that required police to detain immigrants who couldn’t show proof, on demand, that they were in the country legally. Courts gutted most of the law, and immigrant advocates decried it as a burden on legal immigrants and minorities.

Day, the Thomasville mayor, didn’t like it much either.

“I felt like, if anything, we’re sending people a double message,” he said. “We want your money, but we’re trying to get rid of immigrants.”

Over the past few years, Day has made several trips overseas to attract investors to tiny Thomasville. State officials supported those efforts, he said.

Day said the lure of permanent resident status isn’t the main driver of foreign investment. Rising incomes in China and the need to manufacture near the consumer — thus avoiding tariffs — are bigger factors.

Still, he has led EB-5 investors on tours of Thomasville, largely because those investors want to be sure proposed projects there are for real, and not a scam.

“When they’re interested, they’ll send people to vet the projects,” he said.


The rapid growth in EB-5 centers has left some would-be investors burned. In August, a federal grand jury indicted Anshoo Sethi, director of a Chicago EB-5 center, on fraud charges. The indictment claims Sethi tried to raise $160 million from 290 Chinese investors for a convention center project, falsely telling those investors that he had government financing and agreements with major hotel chains.

“The biggest threat to the EB-5 program is wannabes,” Campbell said.

Investors also seem eager to set up their own EB-5 centers, cutting out the middleman altogether. CP Homes, the assisted living company, got approval to open its own EB-5 center in August. And Campbell once sold 80 percent of his EB-5 center to Hybrid Kinetic Motors, a company that planned to use foreign investment to build an automotive factory in Baldwin County.

Campbell later bought the center back again. According to court documents, the U.S. Department of Treasury ordered Hybrid Kinetic’s owners to divest themselves of the EB-5 center for “unspecified national security reasons.” Campbell said federal officials thought one company’s Nevada businesses was “too close” to an Air Force base.

“Almost everything out of the federal government today is national security,” he said.

Alabama officials, on the other hand, seem less squeamish about the EB-5 center’s business dealings. Earlier this year, the state Legislature passed a joint resolution commending Campbell’s center for bringing new jobs to the state.

Foreign investment has grown so much, Campbell said, that there’s “stuff flying over my head that I don’t even bother to catch.” Just how much business he’s missing, he doesn’t really know.

“EB-5 is inscrutable,” he said. “It’s the biggest thing out there that nobody knows about.”

For more news and updates, assistance with your visa needs or for a Free Assessment of your profile for Immigration or Work Visa’s just visit

Share :

More Posts

Submit a Comment

Your email address will not be published.

eighteen − six =




Follow Us

We want to hear from you!