Phoenix Mart Project: Casa Grande’s Job Creation
Phoenix Mart Project
With the clamor that most are demanding the government create jobs, and the political pundits on either side debating whether it is even possible, one program, wholey governmental, has created permanent jobs, the EB-5 Immigrant Investor Program. It has created more than 31,000 permanent jobs for American workers and resulted in more than $1.5 billion in foreign investment in the United States economy. For over 20 years, it also has brought more than 3,000 foreign investors into the U.S. with green cards as permanent residents.
EB-5 is being used in the Phoenix Mart Project planned on Casa Grande’s eastern edge, where developer AZ Sourcing LLC of Scottsdale intends to build a 1.5-million-square-foot “sourcing center” offering spots for up to 2,000 vendors to present their products for sale to mainly wholesale buyers in six basic product groups: women’s, men’s, youth, auto, food, and home and hotel.
Uunder strict provisions, foreign business people can use their investment as a ticket into the U.S. by obtaining permanent resident status.
- First, they must make a minimum investment of a half-million dollars since the funding district including most of Casa Grande, Eloy and Stanfield qualifies as a rural area with unemployment at least 150 percent of the national average, the minimum investment would be $1 million, without that designation.
- Second, investors have two years from approval of their application in which to create 10 jobs for workers who are US citizens and part of the workforce.
Many Chinese are investors in Phoenix Mart, formally known as Central Arizona Regional Center. Roughly 300 of them have put up their $500,000 for the opportunity to come to Casa Grande when the sourcing center opens. The developers hope that will be in late 2012. The center is to be built on 505 acres that AZ Sourcing purchased northwest of the intersection of Florence Boulevard and Toltec Buttes Road (just east of Overfield Road).
The program gives qualifying investors a conditional green card if the application known as I526 is approved. The investors then have two years to meet the other requirements of the EB-5 program, mainly creating a minimum of 10 jobs each, before they can seek permanent green cards via an I829 application.
Approval is far from a sure thing, although more than 3,000 foreign investors have gained permanent residency in the 21 years since the program began as an effort to boost foreign investment in the U.S. while creating jobs for Americans,.
Statistics provided by U.S. Customs and Immigration Services, a division of the Department of Homeland Security, show that barely one in five people who made an initial application has gained permanent residence. Customs statistics through March of this year show that a total of 15,320 foreign investors have applied for the initial, conditional green cards. Of those, 8,709 were approved, though some applications were still being considered. The processing time for I526 applications is about five months, a Customs spokeswoman said.
Of those who were approved for the conditional green cards, only 6,222 have applied for permanent residency within two years. Again, some applications are still under consideration. Other investors are somewhere in their two years of temporary status and still have time in which to file, so that number will rise.
Just 3,293 have been approved, though some are still under consideration, Of the 6,222 applications for permanent residency that Customs had received through March.
That means that, to date, about 3,300 foreign investors of an initial 15,320 applicants have achieved permanent residency status under the EB-5 program. Presumably, some others from that group of 15,000-plus eventually will be approved as applications are filed and processed.
While barely more than 20 percent of the initial EB-5 applicants have gained permanent residency to date, it doesn’t mean Phoenix Mart will be an empty shell in two years because all the foreign investors were sent home when they couldn’t meet the requirements for a permanent green card. Customs doesn’t track percentages by project, but obviously some projects are more successful than others. If a project flops, all of the initial foreign investors may go home within two years because none could meet the requirements. If a project is successful, nearly all would meet the requirements and gain permanent status.
Even if all 300 foreign investors failed, the project has room for 2,000 vendors and the remaining 1,700 spots would go to business people already in this country.
“They’re interested in investing and staying here; that’s one of the motivations in this kind of investment,” said Marie Sebrechts, regional spokeswoman for the Customs agency.
“[Approval for the conditional green card makes investors a] lawful resident worker. After two years, they apply to take the conditions off and make it permanent. An Immigration Services officer considers [the application] and will look to see if they’ve met the conditions.”
Immigration Services officers consider applications through “conducting interviews and security checks, reviewing applicants’ files and applying regulations, precedent and judicial decisions, policies, operating instructions and intelligence information in reaching decisions about that application,” Sebrechts said. Officers have in-depth investor and EB-5 training, along with training on the different aspects of immigration law.
The main condition is creating or retaining a minimum of 10 jobs for workers already in the U.S. legally. Since Phoenix Mart is a new project, it likely doesn’t involve any jobs that would be retained so all 10 jobs for each investor should be new in the local economy. Sebrechts said the EB-5 guidelines do allow “sharing” those jobs — in other words, the 300 investors combined will have to be able to show that they created 3,000 jobs, but they don’t have to be able to individually identify 10 specific jobs that they created.
She said that Arizona has an extra layer of protection to ensure the jobs go to legal workers since E-Verify is required in the state. E-Verify is an Internet-based system that compares information from an employee’s Employment Eligibility Verification to data from U.S. Department of Homeland Security and Social Security Administration records to confirm employment eligibility.
Customs doesn’t track the total number of jobs created, Sebrechts said, so the 31,160 is a minimum based on each investor approved for permanent residency having created 10 jobs. Some may have created many more.
Likewise, the $1.5 billion invested under EB-5 is based on each investor’s applying the minimum required investment. The total could be considerably higher.