Operated by the Vermont Agency of Commerce and Community Development, the Vermont Regional Center is the only state-operated EB-5 regional center in the country. The rest – 846 regional centers across the country – are privately operated. Under the federal EB-5 program, foreign investors can invest $500,000 in projects in special “Targeted Employment Areas” like rural Vermont and receive a permanent residency visa in the United States.
Earlier this week, the Vermont Department of Financial Regulation released a report detailing the results of its review of the Vermont Regional Center. The report was ordered by the governor’s office following allegations of fraud at Jay Peak EB-5 projects under the VRC’s jurisdiction. In the report’s executive summary, Vermont Commissioner of Financial Regulation Michael Pieciak recommended “winding down the VRC over time” with the eventual closure of the regional center to be completed after existing projects, which include Mount Snow’s $52 million West Lake and Carinthia projects, are completed. “An orderly wind down will allow the VRC to meet its existing obligations and put the state on a path toward eventually closing the VRC.”
In contrast, the notice issued by the US Citizenship and Immigration Service recommends the immediate termination of VRC. The USCIS notice, which includes a report on their investigation of the VRC’s operations, concluded that the regional center does not fulfill its mandate of “promoting economic growth, including increased export sales, improved regional productivity, job creation, or increased domestic capital investment.” Vermont has 30 days to submit a rebuttal to the USCIS.
Mount Snow officials declined to comment on the proposed closure of the VRC. And, according to Pieciak, Mount Snow has submitted an application to the USCIS to operate their own EB-5 regional center, but the USCIS has not issued a decision on the application yet.
Even if the Mount Snow regional center is approved, however, under current rules, jurisdiction over their current West Lake and Carinthia projects would not transfer. If the VRC is closed immediately, as recommended by the USCIS, it’s unclear how the current projects may be affected.
“I don’t think we know what it means yet,” said Rep. Laura Sibilia, who is also director of regional economic development strategies and programs for the Brattleboro Development Credit Corporation. “Mount Snow has the biggest ongoing project, so there’s significant local interest. The importance of the EB-5 investment program to the Deerfield Valley is understood by the administration, and it’s my sense that it’s supported.”
Pieciak says the immediate closure of the VRC would have a negative impact on current projects such as Mount Snow’s, and he says it would be irresponsible to close the center before the projects are completed. “That’s why we recommended the gradual wind down of the center with the idea that current projects had to be completed,” he says. “If they were to just turn the keys off at the regional center, some projects might have to refund investors’ money. It would have a tremendous impact.”
Although he expects the state will be able to negotiate a satisfactory closure deal with USCIS, Pieciak says the state will utilize all of the tools at its disposal to advocate for a more orderly shutdown if necessary, beginning with the USCIS rebuttal process.
“We have 30 days to submit our rebuttal, and we intend to push vigorously push back on their conclusions, then USCIS will make a final determination,” Pieciak says. “If that’s counter to our request, then we have the ability to file an appeal, and there are two layers of appeal. In the event the appeals end in a negative decision, it could go to federal court. There’s a lot more process here, and the regional center would remain open during all of that time.” Pieciak says he’s confident the VRC will remain open until the current projects are completed.
Mount Snow has also announced their intention to fund other large master plan projects through the EB-5 immigrant investor visa program. Both the state report and the USCIS notice suggest future EB-5 projects can be administered elsewhere. “Peak Resorts’ next EB-5 project will build new residential units at Mount Snow, but it will not work with the (VRC). Instead, Mount Snow will form its own regional center,” according to the USCIS, referencing a Vermont Digger article. “Peak Resorts executive Dick Deutsch reportedly ‘told investors that he wanted to divorce Mount Snow’s projects from the state’s EB-5 troubles’ which he thought led to a delay in getting their EB-5 funds released.”
Pieciak says Vermont businesses pursuing EB-5 funding will be able to find a private regional center, or like Mount Snow, apply for their own.