You may have trouble realizing that both trade papers cited below are describing the same EB-5 project, a proposed port near where the Mississippi meets the Gulf of Mexico.
It would be built for the next generation of huge ocean-going ships. It would facilitate the transfer of freight from these behemoths to smaller ships, some of which would travel up the river. Its initials, LIGTT, stand for Louisiana International Gulf Transfer Terminal.
EB-5 is the immigrant investor program; an alien with half a million to spare can buy into a DHS-approved (but not guaranteed) project and, if all goes well, get a family-sized set of green cards after two years.
The immigration bar’s online trade paper, Immigration Daily, breathlessly regards LIGTT as the greatest thing since sliced bread. The January 15 issue proclaimed:
The EB5 world starts changing, as of today. … Firstly, the largest Regional Center ever approved is in the market for investments as of this week. … Let’s begin with the jobs: 34,000 in Louisiana [alone]. … Annual revenues for LIGTT once fully constructed are expected to be in the billions. … The names involved with LIGTT include Bechtel, Patton Boggs, and Dentons — a pedigree unmatched in the EB-5 space.
Bechtel is the construction giant and the Boggs of the lobbying firm Patton Boggs is Tommy Boggs, the son of late Louisiana House members Hale and Lindy Boggs (and sister of ABC News personality Cokie Roberts). I assume that Dentons is the big international law firm, not the fondly remembered kids pajamas with the drop seats and footsies of the same name.
The Immigration Daily editorial continues:
However, it is not size alone that makes LIGTT a game changer for EB5, there is a second reason. LIGTT appears to have a high degree of sensitivity to compliance with American law, and hence will likely not do business the way it has so far been done in China. LIGTT now joins several smaller pioneering Regional Centers struggling with bringing compliant practices into the EB5 world. Should all these RCs, including LIGTT, succeed in bringing U.S.-law-compliant practice to EB5, the entire EB5 ecosystem will be forced to adjust to the new rules of compliance.
See this blog for more on how the Chinese government is cracking down on the sometimes shady characters in the EB-5 business.
Another trade paper, American Shipper — perhaps closer to the water than to the ways of Washington — has a quite different take on the big proposed port.
The monthly’s February cover story was titled “Is LIGTT legit?” and points out that the proposed port, unlike every other port in the United States, would be built on swamp and submerged land half a dozen miles from the nearest road or railroad and would thus be totally dependent on ship-to-ship transfers.
The land (i.e., marsh) itself belongs to the state of Louisiana and, according to the magazine:
It is worthwhile to note that the state is not spending one dime on LIGTT. Rather, officials seem to be taking a hands-off approach that gives private investors leeway to proceed and would only involve the state if they can produce a successful terminal.
That quote is from another American Shipper article on the project that is largely pay-blocked online. It continues:
So how does this play out? The pre-construction work, consulting studies, and preparation of permit applications will create dozens of jobs in the short-term, which meets the government’s requirements for job creation under its special visa program. That’s far short of the tens of thousands of direct and indirect jobs LIGTT is supposed to claim, but it complies with the law. … So the LIGTT developers and consultants make a handsome profit, the foreign investors gain U.S. residency, and the project eventually fades away.
Harvey told me over the phone that the American Shipper article “conflicts with reality”, but I have yet to see a detailed response from LIGTT.
There is another problem with the proposal to fund the port-to-be with EB-5 investors’ funds that neither Harvey, norAmerican Shipper, nor Immigration Daily mentioned, and that is the mathematics involved.
The EB-5 program has been limited to no more than 10,000 visas a year since its founding in the 1990s. The program, which is clumsy to operate, has never reached that ceiling, but may do so this year given the Obama administration’s relentless promotion and re-design of the scheme.
But the math is such — given the family provisions built into the law — that 10,000 EB-5 visas equals about 3,000 half-a-million investments, or a grand total intake of no more than $1.5 billion a year for all EB-5 projects in the whole country.
The investment needed for LIGTT is $1.3 billion, so its promoters would have to secure nearly a year’s worth of EB-5 investments, nationwide — in competition with hundreds of other regional centers — in order to make it work. A tall order.
Now the 10,000 ceiling is set by Congress, so that could change. But even the gung-ho, let’s-enlarge-every-conceivable-immigration-flow authors of S.744 have not suggested an expansion of the program big enough to easily build a port at the edge of the Gulf of Mexico. That bill calls for — a typical sleight of hand — not counting relatives in the distribution of the 10,000 EB-5 visas. That would produce, at most, about 7,000 more investments a year without dislodging the nominal 10,000 ceiling.
But S.744 is unlikely to go anywhere this year. Further, with about 80 percent of the EB-5 investors coming from China, and that nation banning public promotion of the program, $1.3 billion for any single project is going to be very hard to raise, no matter how attractive a port without land connections would be.
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