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Wed May 16, 2012
Columbia lawyer seeks to bring “immigrant investors” to mid-Missouri
When it comes to jobs in Missouri, Karla Klingner Diaz believes that immigration is not the problem -- but rather the solution.
Diaz is an immigration lawyer who recently formed the Liberty Tri-State Regional Center in Columbia. The company wants to join a federal program called EB-5 that links foreign investors with U.S. businesses.
“I’ve been familiar working in the EB-5 program for some time and had been watching it successfully work mostly on the coastal areas, east and west coast, and I thought this could be a really good opportunity for the Midwest,” Diaz said.
Here’s the way it works: Immigrants get a green card, and the United States gets jobs. Foreigners who want to immigrate invest at least half-a-million dollars in a U.S. business to create 10 new jobs. If these requirements are met, the investor gets a green card.
Less than one percent of green card holders use the EB-5 route, but this little-known program is growing rapidly. Since the financial crisis four years ago, the number of EB-5 visas issued annually has quadrupled to 3,500.
The top source of these unique, EB-5 investors is China. The top reason -- education. Diaz says university spots in China are hard to come by:
“Right now there’s 28 million eligible college-age students with only 5 million slots available. Families are having to seek educational opportunities elsewhere in the world for their child,” Diaz said.
On the surface, the EB-5 program sounds win-win. But the result for Missouri has been mixed so far. Missouri only has two approved EB-5 centers, and one them was Mamtek -- which spectacularly failed. Last year, the collapse of the Mamtek artificial sweetener project in Moberly left the city with an empty shell of a factory and a downgraded bond rating.
Ann Lee is a China scholar at New York University. She’s studying the EB-5 program. She says weak oversight has resulted in project failures like Mamtek.
“Not all EB-5 operators are bad, but the bad apples can taint an entire program, an entire industry, and then everyone suffers,” Lee said.
Although the Mamtek project failed, EB-5 proponents believe the program holds promise for Missouri as long as new projects are properly vetted. Missouri businesses are continuing to eye the immigration program as a creative source of funds. The most ambitious plan? One entrepreneur Eric Chen plans to build an entire manufacturing town from scratch using Chinese investors’ money, and he’ll name this rural Missouri town “Shanghai”.
“Have some Chinese investors come over here, set up the factories. Then, they can make some products made in U.S.A. and ship back to China,” Chen said.
Here in Columbia, business consultant Terence Crouch is preparing far-flung trips to recruit investors for Diaz’s Liberty Tri-State Regional Center. Crouch says the program’s main draw is its ability to create jobs.
“If you view the current economic and political climate, anything that is going to create good, long lasting jobs in the United States – and I think this program does – is going to continue,” Crouch said.
As for Diaz, she believes they’re at the beginning of something big.
“When we started working on this, there were very few in the Midwest in general. It’s definitely becoming a program that more people are becoming aware of,” Diaz said.
Diaz expects the Liberty Tri-State center to be federally approved in coming months. If it is, mid-Missouri could become the newest destination for foreign investors.
This story is part of The China Connection a multimedia project exploring various economic, educational and cultural links between Missouri and China.