EB5 Investors Magazine Volume 5, Issue 2 - Page 91

TOP ECONOMISTS SCOTT W. BARNHART Florida Atlantic University. The firm has used RIMS II and IMPLAN input-output models to estimate the job creation impacts in support of I-924 regional center applications, I-924A and I-829 job reporting for dozens of regional centers resulting in more than 450 job creation and TEA reports submitted to USCIS in the EB-5 program. To date, the firm has analyzed a wide variety of projects, from destination resort hotels to large strategic infrastructure projects, with capital expenditures of more than $14.45 billion with associated gross revenues of $9.72 billion and job creation estimates of over 260,000 jobs. President Barnhart Economic Services LLC S cott W. Barnhart is president of Barnhart Economic Services LLC, a consulting firm that employs three PhD economists specializing in EB-5 and non-EB-5 economic job creation studies, business plans and TEA designations. Barnhart is also a co-owner of Florida First Regional Center and an associate professor of finance and the program director of the Certified Financial Planner program at WHAT TRENDS ARE YOU SEEING IN THE EB-5 INDUSTRY? We have seen a good number of non- traditional projects including: franchise restaurant chains, marine ports, power generation (electrical, solar and biomass), manufacturing facilities and oil production. Restaurants have large multipliers, in the range of 25-30 jobs per $1 million of gross revenue, but they don’t always have real estate assets as collateral as many lease space. On the other hand, manufacturing employment area analyses and regional center business-operations plans. Carr has lectured on issues related to EB-5 economic and job impact studies and EB-5 project business plans throughout the United States and China. He was a member of the “Best Practices Committee” for IIUSA in 2013 and has since 2014 been a member of the IIUSA Public Policy Committee. WHAT TRENDS ARE YOU SEEING IN THE EB-5 INDUSTRY? JEFFREY CARR President & Senior Economist Economic & Policy Resources J effrey Carr is president and senior economist of Economic & Policy Resources and has more than 35 years of experience as an economist, business plan writer and analyst. At EPR, Carr has completed more than 225 assignments under the EB-5 program in 46 states and territories. These include economic-job impact studies for regional center applications and investor petition filings, EB-5 project business plans, targeted As visa numbers become a larger issue for the industry, we are seeing mostly smaller projects, with their attendant smaller EB-5 capital raises, coming into the EB-5 marketplace. New projects also appear to be trending more toward niche or special markets that are of more interest to potential investors outside of the Chinese mainland. This is likely to continue until a direct or indirect solution to the visa number problem for mainland Chinese EB-5 investors is found. Project developers also seem to be looking more closely into projects that are located in rural areas. has smaller multipliers, but typically has real estate and other assets in the case of default. For some such non-traditional projects there is no real estate to seize if a default occurs, yet other assets have been pledged as collateral. ARE YOU SEEING ANY SIGNS THAT THE COMMUNITY ARE STARTING TO ADJUST TO POSSIBLE TEA CHANGES? Project managers ask about “potential new” TEA areas thinking that certain locations carry advantages. We are examining this to better advise our clients on what to look for in newly-defined urban distressed locations. Regarding reforms, I wish to see visa numbers expanded or not count family members. Adjudication should also be sped up. The current rate of up to two years prohibits credible business decision- making. Finally, I know the original intent of the law, but TEAs should be eliminated or abolished. A luxury hotel in a rural or very high unemployment area may not be profitable. However, the jobs will be created regardless of location and hotel staff typically commute from lower-income neighborhoods. ARE YOU SEEING ANY SIGNS THAT THE COMMUNITY ARE STARTING TO ADJUST TO POSSIBLE TEA CHANGES? Since the Depar tment of Homeland S e c u r i t y ’s p u b li c a ti o n fo r d r af t regulations, it has become common for prospective EB-5 projects to evaluate TEAs based on both current law and at least one alternative set of prospective TEA rules, usually the most restrictive of