A Washington company has just completed a $48 million state bond purchase to help pay for the replacement for the aging State Route 520 floating bridge. In return, its 95 foreign investors, mostly Chinese, will receive visas to live and work in the United States.
The innovative deal is believed to be the first time that the federal government’s Immigrant Investor Program (also known as EB-5) has been used to fund a public infrastructure project.
Mike Maddox of the Washington Regional Center, the company that set up the deal, says, “Purchasing bonds for the 520 bridge makes sense not only for our local community here in Western Washington but also for our investors from all around the world.”
The EB-5 program was set up in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Applicants are required to invest at least $1 million (or $500,000 in rural areas or regions of high unemployment) in a business that creates 10 or more full-time jobs and lasts for at least two years.
Although simply buying government bonds does not create any jobs, the Washington Regional Center project commissioned an economic study that counted the jobs expected to be generated over the bridge’s construction and 60-year-plus lifetime. The study also helped earn the project a "high unemployment area" designation from the state.
The EB-5 program requires that foreign investors’ money is at risk for a full two years (often stretching to three or four in practice) before they qualify for permanent residency. “One of the things we determined our investor wanted was security, and what’s more secure than government bonds?” says Mattox. “But we demonstrated bonds that had failed, where investors had lost their money. That met the criteria for investment risk.”
U.S. Citizenship and Immigration Services approved the groundbreaking deal in February. Mattox marketed the program worldwide over the summer and finalized the purchase of bonds last week. The foreign investors can now complete their immigration paperwork and could be moving to the U.S. within months.
“These are people who have really done well, coming over to start companies, create new jobs and buy homes,” says Mattox. “It helps everybody when they bring their wealth to America.”