Death of Green Card Program Could Halt Brownfields Projects

By Sylvia Carignan

Growing foreign investment in U.S. brownfields redevelopment projects may drop dramatically with the end of a decades-old green card program.

Investors who buy brownfields to redevelop them, and generate jobs at those sites, may be eligible for green cards under the Immigrant Investor Program, also known as EB-5. The program was created in 1990 by an act of Congress.

The program is set to expire at the end of April, unless Congress renews it, which could have a significant impact on the revitalization of U.S. brownfields.

Ending the program would be “devastating,” to foreign investment Toby Rittner, president and CEO of the Council of Development Finance Agencies, told Bloomberg BNA in an email.

“(EB-5) has infused billions into economic development at no financial cost to the federal government. Should the program expire, foreign investors will simply go elsewhere,” he said in an email. “In terms of brownfields, it simply removes another financial resource available to our industry, sadly.”

Dan French, CEO and founder of Brownfield Listings, an online marketplace for real estate redevelopment, told Bloomberg BNA that foreign investment in brownfields would increase if the EB-5 program was expanded.

Several senators and representatives—Sen. Chuck Grassley (R-Iowa), Sen. Dianne Feinstein (D-Calif.), Sen. Patrick Leahy (D-Vt.), Rep. Bob Goodlatte (R-Va.) and Rep. John Conyers (D-Mich.)—wrote a letter to Senate and House majority and minority leaders April 6 to oppose EB-5’s renewal.

The program is “riddled with fraud and raises national security concerns,” they wrote. The program’s purpose, directing investment to high unemployment and rural areas, has been forgotten, they wrote, and has become the subject of “rampant abuse.”

Fueling a ‘Redevelopment Renaissance’

Jeff Telego, president of Risk Management Technologies Inc. and RTM Communications Inc., said there has been an uptick in contaminated real property transactions, even as demand for real estate may be starting to flag.

Brownfield sites are “the most significant untapped resource for redevelopment in this country,” Telego said.

Brownfields are properties that are ripe for redevelopment but have been affected by environmental contamination or have fallen into disuse. Thousands around the country have been cleaned up and redeveloped with the help of Environmental Protection Agency grants and municipal funds, but Telego estimates thousands still remain.

According to French, foreign investors are most interested in brownfields sites in major U.S. markets.

That kind of investment is “more fuel for the redevelopment renaissance already well underway in the U.S.,” French said, but investors’ interest is difficult to measure on a large scale.

Of all brownfields properties, many of the simplest ones to remediate have been cleaned up and redeveloped with the help of federal grants, leaving complex, expensive properties behind. Local governments often are unable to remediate those sites because of the higher costs.

Since simple properties are becoming scarce, foreign investors—many from China, Russia and the Gulf states—have been taking on more risk and potentially more reward with complex properties, Telego said.

Rittner said foreign investors aren’t looking specifically for sites that qualify as brownfields.

“I would argue … that the investor is less interested in the project because it is a brownfield but rather because the projects that tend to go onto brownfields are transformative. They bring loads of jobs through clean-up, construction and post-development occupancy,” he told Bloomberg BNA in an email.

According to Greenberg Traurig attorney Kate Kalmykov, foreign investors may become eligible for green cards after their commercial real estate development project generates at least 10 permanent full-time jobs through construction and operations.

Future Federal Assistance Uncertain

Telego said that because the Trump administration is interested in backing infrastructure development, brownfields could get a boost, but federal support for brownfields has become uncertain under the president’s budget proposals.

Documents released earlier this year have indicated President Donald Trump’s administration wants to slash the superfund budget by 30 percent, and would leave $75 million for the EPA’s Brownfields Program. The program currently is funded at $250 million annually.

Two new House bills have proposed at least $250 million and $300 million annually to re-authorize the Brownfields Program (see related story).

For More Information

The senators' letter is available at

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