The Value Of EB-5 Funding, As Told By Paramount Miami Worldcenter’s Daniel Kodsi
Though Congress extended the EB-5 visa program early this month until Dec. 9 with no reforms, most industry professionals are confident changes will be enacted next year to bring balance to the controversial program.
EB-5—which offers Green Cards to foreigners who invest $500k to $1M in the US—has faced a lot of criticism.
The program is recognized as a great way to stimulate economies, boost job growth and ultimately get large projects off the ground without spending taxpayer dollars.
But on the flip side, the program has been accused of having too many loopholes that open doors to fraud. Some opponents believe the program poses some homeland security risks by streamlining immigration for wealthy foreigners.
EB-5 is meant to give visas to foreigners who invest in rural and high-unemployment areas, but lawmakers say the bulk of EB-5 funds go into affluent areas.
Daniel Kodsi (pictured), an advocate of the EB-5 visa program and the development CEO of Paramount Miami Worldcenter, tells Bisnow though some aspects of the program can stand to be revamped, most of the controversial elements discussed have been grossly exaggerated.
“We encourage modifications to the EB-5 program that create a watchdog system for fraud and waste while simultaneously nurturing this highly successful foreign investment program,” Daniel says. “But ultimately it comes down to the investors. Eighty percent of EB-5 investors are Chinese and are used to living in urban areas. Most of the landscape in China is urban, so I think they’re just more comfortable investing capital [in these kind of projects].”
Founded in late 1990, the EB-5 visa program has created more than 35,000 jobs in 2015 alone, boosting the US economy by $8.7B, Daniel says. EB-5 funding is behind some of the country’s biggest projects, like Related's Hudson Yards and Forest City Ratner's Atlantic Yards/Pacific Park in New York, the Wharf in Washington, DC, and Paramount Miami Worldcenter in Miami.
“The largest beneficiary of EB-5 capital has been Hudson Yards in New York, the largest development in the country,” Daniel tells us. “I’m developing Paramount, which is a part of the second-largest urban development in the country.”
Not just an advocate in theory, Daniel has made several trips to China to meet with and learn from investors participating in the program. Just under 10% of Daniel’s $500M Paramount Miami tower was funded through the EB-5 program.
"Through the EB-5 program Chinese investors are coming to the US with investment capital and with their families," Daniel tells us. "...The people I have met have already proved they are productive business people in China, what they now seek is the American dream."
The tower includes one of the world’s largest private urban amenities decks—featuring walking paths, garden bungalows and resort-style pools all looking over the promenade. The tower includes 513 residences and features Feng Shui design to attract Chinese investors.
“Miami has lately been on the Chinese radar. They typically go to Los Angeles and New York, but are now seeing Miami as a great alternative with better potential upside,” Daniel says.