Tenant Occupancy Update

Today, during a Conversation with the Director scheduled on short notice, USCIS Director Mayorkas provided insight into the agency’s current perspective on the “tenant occupancy” issue that has introduced extraordinary uncertainty into pending and future EB-5 adjudications. The “tenant occupancy” issue, in summary, refers to questions raised by newly hired USCIS economists as to whether it is reasonable for the economic models used by Regional Center-based projects to include jobs that will be created by independent businesses leasing commercial premises developed with EB-5 funds.

Director Mayorkas did not provide any clarification as to the substance of the agency’s current position on these issues. The Director’s central message was twofold: (1) USCIS does not believe the recent questions regarding tenant occupancy methodology represent a change in policy; and (2) the agency’s intent is to adhere to a policy of deference to prior adjudications where the predicate facts underlying the previous determinations have not materially changed.

In connection with the deference policy, Director Mayorkas expressed interest in considering whether there could be changes in the facts relating to a given project that would not necessarily be material to the determination of whether the economic model was reasonable (or as expressed by the Director, whether a “new project” using a “previously approved economic methodology” might not change the “predicate facts” leading to the reasonableness determination. When presented with examples of RFE’s or NOIR’s seemingly issued in contradiction to the “deference policy,” Director Mayorkas invited stakeholders with adjudications that seem inconsistent with the policy to submit their specific concerns to headquarters via the Office of Public Engagement (“OPE”) email address: public.engagement@uscis.dhs.gov. Similarly, the Director invited stakeholders to submit via the OPE their specific concerns about RFE’s that lack clarity or request information or data that is not or could not reasonably be accessible or obtainable.

In light of the consensus among all participants, including the Director, that the goals of predictability and transparency would best be served by an opportunity for public engagement with the USCIS economists, the Director committed to scheduling such an engagement at the earliest practicable opportunity. He did not anticipate that opportunity would or could be made available prior to the agency’s imminent deadline for many (or all) recipients to respond to “tenant occupancy”-related RFE’s. Director Mayorkas did leave open the possibility that the agency could extend the deadline for response, but he clarified that no such extension would be granted without a clear agency directive to that effect.

Finally, the Director articulated the goal that an engagement with USCIS economists would result in the publication of a “Tip Sheet,” designed to provide practical guidance to applicants that would serve the universal goal of predictability in adjudications. (We do wonder why the Director seems to view the idea of an engagement with the economists as novel, given that nearly all of the extensive commentary published or articulated in the wake of the mass tenant occupancy RFE’s expresses confusion about what specifically the USCIS economists think they are asking for.)

Disturbingly, the Director revealed that the agency has significant concerns about fraud and misrepresentation in EB-5 petitions and applications, and that it is engaging enforcement authorities to assist in maintaining the integrity of the program. We applaud the agency for ensuring that the EB-5 program is reserved for those who are genuinely serving its goals of providing regional economic growth and sustainable employment for U.S. workers. We also recognize that some of the risks of abuse could be lessened with modifications to the petition processes currently prescribed by the regulations. For example, the potential for misrepresentation relating to project details and projected or actual job creation could be greatly curtailed if the projects themselves had legal standing (and therefore control) to make representations about the new commercial enterprise/job creation in connection with the I-526 or I-829.

It was clear at the conclusion of the meeting that there were no new insights to be gleaned regarding what USCIS economists might accept as “reasonable methodologies” where tenant occupancy issues are involved; however, it was clear that the agency continues to be interested in fostering predictability in the program and engaging in meaningful dialogue where adjudication standards seem to conflict with contemporary business realities.