Avoiding a NOID for Mixed-Use Community Plan

A new regional center client approached our law firm seeking assistance with a response to a Notice of Intent to Deny (“NOID”) that its investors had received. The project at issue was associated with the development of a large mixed-use, community master plan that was to be developed, through several tranches, over the coming decade. It also involved a well-known project developer and was a prominent real estate project in a big city.

All the investors were at risk of receiving I-526 denials. At the heart of the NOID was an option presented to investors that USCIS interpreted as “an arrangement for the exchange of real estate in return for the petitioner’s capital contribution.” Such an interpretation means that the arrangement violates a pivotal finding under Matter of Izummi. We made several arguments explaining why USCIS’s interpretation of the language, contained in the documents, was inapposite and not comparable to the circumstances presented under Matter of Izummi. We also presented clear arguments demonstrating that the investors’ investments were truly at risk and that the project’s offering complied with EB-5 requirements. Last, we restructured some of the offending clauses and made a strong argument that such changes were not material under EB-5 law. Based on our response, USCIS approved the investors’ petitions and a number of investors have gone on to file their respective I-829 petitions.

The regional center has since raised millions of dollars through several other tranches related to the Master Plan project. The EB-5 funds, stemming from these tranches, have been used to create thousands of jobs for US workers and have been applied to a mass scale development that has been a boon to the city’s residential market.