New “Operational Guidance” on EB-5 Adjudications Involving Tenant OccupancyPosted: May 11, 2012
USCIS has released Operational Guidance dated May 8, 2012 relating to the application of its deference policy in EB-5 adjudications involving “the tenant occupancy methodology.” EB-5 practitioners are still puzzling over the agency’s policy change regarding whether an EB-5 project may be credited with job creation by tenant businesses occupying commercial space developed with EB-5 funds, and this new guidance offers nothing new on the substantive issues. Instead, it is framed as clarification of the agency’s “deference policy,” but raises many more questions than it answers.
The agency offers two examples of when deference would be provided to a previous determination that an economic methodology or a business plan was reasonable. The first example is so narrowly drawn that it appears no deference will be offered unless the Regional Center approval included authorization for a specific, shovel-ready, actual project. (And then, only with respect to that project, but not with structurally identical subsequent projects in different locations.) The second example involves a standalone, “direct” EB-5 enterprise where there is no regional center and thus no economic methodology involved. (How does this illustrate the application of the deference policy in the tenant occupancy methodology context?)
In sum, this new guidance offers little in the way of comfort to developers caught off guard by changing USCIS policies, and it makes clear that optimism in the wake of the Director’s recent assurances about the agency’s deference policy may have been misplaced.