A Carson City program that matches job-creating businesses in need of capital with foreign investors who want a U.S. visa is beginning to fill its pipeline of projects.
Nevada State EB-5 Regional Center, one of 700 regional centers across the country, works under the umbrella of a federal program established in 1990 to encourage foreigners to invest in the United States.
But Nevada State EB-5 Regional Center is one of only two in the country established as a nonprofit, says Administrator Lynn Beteag.
And the two agencies that oversaw creation of the EB-5 Center — the Hop and Mae Adams Foundation and the Northern Nevada Development Authority — wanted the Carson City program to be developed cautiously.
Some for-profit EB-5 Regional Centers have drawn controversy, and one of them in South Dakota is such a mess that it’s potentially affecting the outcome of a U.S. Senate race.
Beteag spent the better part of the last year working with a cadre of 16 consultants nationwide to devise the operating rules of the Nevada State EB-5 Regional Center — going so far as to meet ISO standards.
“The chances of any errors taking place should be as close to zero as you can get,” says Beteag. “We have taken a very conservative approach.”
Now she is focused on developing a pipeline of projects that could be funded by visa-seeking foreign investors.
The regional center’s focus is job creation in Carson City as well as Douglas and Lyon counties, although it can look at projects in neighboring counties that create employment in its core area.
Industries that are getting a particularly close look include real estate development (that’s Beteag’s professional background), manufacturing and agriculture.
One real estate development company currently is working with Nevada State EB-5 Regional Center on a project that would create 90 jobs.
Although the center keeps the names of companies secret, Beteag describes it as “a very established developer with 30 years of experience.”
EB-5 isn’t easy money.
Applicants will typically pay $110,000 to $150,000 to prepare stacks of paperwork — including business plans and economic analysis documents in the specific format required by federal authorities.
Nevada State EB-5 Regional Center, meanwhile, gets a piece of the interest on the project funds held in escrow, using the money to support its own operations.
Nor is EB-5 fast money.
The process of winning approval of a project for possible EB-5 funding is painstaking, So is the work to line up a foreign investor. Investors need to put up at least $500,000 to earn a visa.
Most likely, Beteag says, EB-5 investments will be just one slice of the financial package — a package that also includes traditional debt and equity financing — for job-creation projects in the region.
Nevada State EB-5 Regional Center currently can handle about three proposals at a time.
To begin filling that pipeline, Beteaq is meeting with groups of lenders and pitching Nevada State EB-5 Regional Center at trade shows such as the recent Manufacturing in Nevada Conference in Sparks.
“Our mission is jobs, job, jobs,” she says. “And to create jobs, we need project developers.”