Along with implementing a cluster-based growth strategy and supporting the growth of inner city businesses, ICIC finds that improving the local business environment is a key driver of urban revitalization in America’s inner cities. Building a strong business environment creates opportunities for entrepreneurs and jobs for inner city residents and establishes inner cities as vital to the local economy.
Infrastructure improvement is an important component of developing a more competitive location for businesses and the EB-5 program could be used to finance infrastructure development. For the past year, ICIC has studied how EB-5 can be used for impact investing in America’s inner cities. On July 1, ICIC will release the findings from that research in Increasing Economic Opportunity in Distressed Urban Communities Using EB-5.
EB-5, created by the U.S. federal government in 1990, gives foreign investors opportunities to lend capital for projects supporting local investment and job creation in exchange for an expedited green card process for the investor and their immediate family. The Association to Invest in the USA’s recent impact report estimated a total EB-5 investor impact of $3.39 billion and 42,000 jobs in 2012 alone. ICIC recently published a blog that discusses the EB-5 program in greater detail.
The Brooklyn Navy Yard Development Corporation has used over $100 million in EB-5 financing, and other funding sources, to renovate buildings to house new and growing businesses. This infographic highlights the process of using EB-5 for Brooklyn Navy Yard’s first EB-5 funded project. The project, officially known as Brooklyn Navy Yard Development Fund II, LLC, funds infrastructure improvements at the Navy Yard and the rehabilitation of the Green Manufacturing Center, which was touted by The City University of New York (CUNY) Chancellor and New York City Regional Council Co-Chair Matthew Goldstein as “a crucial piece of the twenty-first century infrastructure needed to support environmentally sustainable advanced manufacturing in New York City.”
Here are some important highlights of the process:
The CMB Regional Centers in California also use EB-5 funds for infrastructure improvements. CMB is one of the nation’s oldest Regional Centers and focuses on building new infrastructure on closed military bases, such as on the former McClellan Air Force base in Sacramento and the former Norton Air Force Base in San Bernardino, to set the stage for their redevelopment. According to Kraig Schwigen, Senior Vice President of World Wide Operations at CMB Regional Centers, “When investments into infrastructure are made (especially into roads, water, sewer and other public improvements) they are made with the philosophy that ‘if you build it, they will come’ which blends very well with EB-5 and the expectations of EB-5 investment. EB-5 investment requires new job creation. Investments into infrastructure pay immediate benefits in the way of job creation as well as long term job creation benefits.”
Kraig and David Ehrenberg, President and CEO of the Brooklyn Navy Yard Development Corporation, will join ICIC at our convening on July 1 entitled “Impact Investing in Inner Cities: Putting Foreign Capital to Work Through EB-5”, at which key leaders from the EB-5 and investment communities will gather at Harvard Kennedy School to discuss strategies to strengthen EB-5’s utilization as an economic development tool.