Demystifying Economic Reports with Kimberly Atteberry

22 Feb Demystifying Economic Reports with Kimberly Atteberry

The economic side of EB-5 can be confusing and complex. Today, Mark and Mona are joined by Kimberly Atteberry, President of Vermillion Consulting, to explain when and why economic reports are required in the EB-5 process. They cover the difference between urban and rural TEAs, the perceived risk of being among the last investors to a project, and the benefits of using the Regional Center model for a standalone project.



In a perfect world, the TEA process would be simple and straightforward. In fact, if Kimberly Atteberry had her way, everyone would work from a single data set, confident that when they put together a TEA, it would be acceptable to USCIS as well as our legislators. In reality, the economics of EB-5 are incredibly involved, and it is often necessary to enlist the help of an economist to navigate the complexities of the industry.


Kimberly is the President of Vermillion Consulting, a full-service firm that helps organizations in the public and private sectors leverage the benefits of EB-5. Vermillion provides expert advice on project feasibility, EB-5 compliant structure, job creation methodology and TEA analysis. Kimberly is uniquely qualified to offer guidance around the EB-5 program, having served as Chief Economist of USCIS from 2009 to 2011.


Today, Kimberly joins Mona and Mark to discuss what makes the economic side of EB-5 so complex, explaining how adjudications shift over time. Kimberly addresses the risk of being among the last investors to sign on to a project, describing how projects that establish a buffer protect investors and reduce the risk. Mona and Kimberly cover when you need to submit an economic report and the value of using the Regional Center model on certain standalone and entrepreneurial projects. Listen in to understand the difference between urban and rural TEAs and learn why a vibrant area like Manhattan qualifies as a target employment area.



The Complexity of EB-5 Economics

  • There is no textbook to guide the EB-5 industry, so all parties are trying to figure out what USCIS wants to see and determine what makes a good submission. Kimberly recommends providing the most important information USCIS will need to make an informed decision about your project.
  • Adjudications can shift over time. For example, USCIS used to allow projects to count jobs that were created before EB-5 investors were brought in, but things have changed.


The Risk of Coming in Last

  • Some immigration lawyers caution their clients against being the last investor to a project regardless of the circumstances. While it is true that the first jobs are attributed to the first investor, it isn’t always a bad idea to sign on to a project late in the game.
  • Investors should be very aware of the anticipated number of jobs a project will create, the number of investors involved, and the timeline for job creation. The best EB-5 projects establish a significant buffer to protect investors, arranging for more than the 10 jobs required.


Using the Regional Center Model for Standalone Projects

  • Kimberly does recommend spending the money on an economic report if you hope to count jobs other than direct full-time qualifying jobs. Projects do generate jobs beyond the people working directly for an organization, and the documentation of those jobs is easier when you leverage the Regional Center model.
  • Economic modeling allows you to employ a variety of inputs: On the development side, you can use any qualified building expenditures to calculate construction-phase impacts. On the other side, operational impacts can be calculated with either operational revenues or direct jobs.
  • Investors from countries in retrogression would benefit from utilizing expenditure and revenue inputs rather than direct job inputs. It is extremely important for those investors to ensure that job creation is taken care of early on and be certain they have the necessary documentation when they finally reach the I-829 milestone.


When You Need an Economic Report

  • Economic reports are used in the case of I-924 Exemplars, I-526 filings and annual I-924A filings for Regional Centers. Kimberly also recommends filing a separate economic report for the I-829 filing to communicate that jobs really were created and bridge the gap between what was approved in the past and what USCIS understands now.


Targeted Employment Areas

  • Many question how a vibrant area like Manhattan qualifies as a TEA. Kimberly explains that there are pockets of unemployment north of Central Park, and projects on the south side of the island are a short commute for those who are willing, able and available to work.
  • To qualify as a rural TEA, the county must be outside of any county included in a metropolitan statistical area and also be outside the boundaries of any town of 20,000 or more. Urban TEAs are based on high unemployment levels, calculated by aggregating census tracks or census block groups. Each state has its own requirements and data sets.
  • The newly proposed legislation includes a rural carve-out allocating additional visas to investors in rural projects. This would most affect China and other countries that are likely to fall into retrogression like Vietnam and India.


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