A Texas nonprofit is suing the U.S. Department of Homeland Security, accusing the federal government of improperly approving an immigration-funded project in South Texas.
The lawsuit — naming DHS Secretary Jeh Johnson and Leon Rodriguez, director of the U.S. Citizenship and Immigration Services, as defendants — asserts that a hotel-convention center venture in Laredo should not receive discounted funds via the EB-5 visa-investor program.
The suit was filed Tuesday in U.S. District Court in Brownsville by Urban Equality NOW, which tracks economic development policies and projects.
Under EB-5 rules, foreign nationals can obtain U.S. green cards by investing $500,000 in job-creating projects located in Targeted Employment Zones plagued by high jobless rates. But the hotel’s census tract has an unemployment level of just 1.4 percent.
To meet the TEA threshold, the developer strung together 190 economically stressed census tracts in what the lawsuit calls “gerrymandering.”
The lawsuit cites similar tactics by high-end developers on Manhattan’s “Millionaire’s Row.”
“Congress tasked DHS and USCIS with the ultimate responsibility for ensuring that immigrant investors who seek TEA-supported green cards do so by actually investing in areas experiencing high unemployment,” the lawsuit states.
“The collective failure to do so deprives residents in these areas of the full benefit of the laws designed to assist them,” according to the court filing, which noted that USCIS imposes an annual cap on investor visas.
In approving expanded economic boundaries, immigration officials broadened the Laredo project’s fund-raising prospects. The TEA designation halves the buy-in cost for EB-5 applicants, who otherwise would have to invest $1 million in non-TEA areas to obtain a green card.
“This is a wonderful and very positive opportunity for the community,” said Laredo City Manager Carlos Villarreal.
The Laredo TEA spans 200 miles along the Gulf Coast. The zone was created by Civitas Laredo Regional Center, a public-private partnership.
By aggregating 190 census tracts across five counties, the Laredo project compiled an overall unemployment rate of 12.18 percent – just above the required TEA threshold of 12.15 percent.
Urban Equality NOW, based in Brownsville, which is inside the TEA, says that city will not benefit from the Laredo project.
“Residents have a right to expect that benefits (from the EB-5 program) will be in accordance with congressional intent,” said Mike Coles, the attorney representing UEN. “What we have here is lax enforcement at best.”
David North, policy analyst at the Center for Immigration Studies, applauded the lawsuit.
“It is good news that someone has finally taken the EB-5 program into court regarding the economic gerrymandering that supports the location of these alien investments in affluent areas. These funds should go to genuinely depressed parts of the country, such as elsewhere in the Rio Grande Valley,” North told Watchdog.org.
Speaking generally, Shae Armstrong, an attorney with the More American Jobs Alliance, said, “Egregious TEA gerrymandering in Texas and elsewhere is an obvious abuse of EB-5 regulations. It is a slap in the face to ethnically diverse residents of actual economically distressed communities.”
Neither DHS nor USCIS could be reached by deadline.
Civitas Capital Group CEO Dan Healy did not respond to Watchdog’s requests for comment. Healy also serves on the board of the EB-5 advocacy group, IIUSA, and as chairman of its Best Practices Committee, he wrote a 2014 article, “Self-Regulatory Procedures Increase Transparency.”
Kenric Ward writes for the Texas Bureau of Watchdog.org. Contact him at [email protected].