EB-5 is nothing new. It was created by Congress when it enacted the Immigration Act of 1990. It isn’t a knee-jerk reaction to the immigration reform debates raging countrywide. The change here had to do with Lansing’s rising unemployment, not a ploy to make a cheap buck — at least not overtly.
When Bob Trezise, president and CEO of the Lansing Economic Development Corporation, said he wants to find one to three $500,000 investors by the end of the year, I think he was actually trying to find a silver lining. I’m cool with that part, but I don’t think Lansing’s new designation will do much to help the region.

As the EB-5 designation suggests, there are four other employment-based criteria used for granting green cards. Among those other four categories are criteria pertaining to people with exceptional abilities, advanced degree holders, professionals, physicians and multinational managers or executives.
This makes the fifth designation, in my opinion, the easiest designation to qualify under. While all others require proof of awards and service over the course of a lifetime, EB-5 requires money. There is the 10-job creation requirement, but the Lansing State Journal includes the wording “direct or indirect full-time jobs.”

That suggests some ambiguity in how those jobs can be defined. The requirement does, however, attempt to set some standards by limiting investment to specific sectors, such as mixed-use development, hospitality and tourism, manufacturing and warehousing, information technology, biotechnology and high technology, as well as higher education.

These designations don’t make an argument against assertions that an investor could come in, create a few minimum wage jobs and receive a green card for their troubles. Although some fields, such as biotechnology and information technology, have areas in which workers receive a decent income, there are also sectors where the opposite is true. Investing $500,000 for a call center isn’t exactly the best kind of business. Sadly, even that kind of investment could be hard to come by.

If someone were to invest $500,000, it would be for the skills and experience with which the populace is already endowed. Unfortunately for Lansing — and Michigan in general — those skills revolve around unskilled labor, and that labor can be done on the cheap elsewhere. Investing in higher education, particularly in re-education, would be a good business investment for Lansing. However, even Michigan legislators seem reluctant to do that. So it probably wouldn’t bode well for anyone attempting to solicit foreign contributions.

The heart of the problem is this: No one will want to invest here until we do first. Gary McRay, president of Foster, Swift, Collins & Smith, P.C., sums it up this way: “It’s not easy because you’re competing with EB-5 centers that are on the west coast and in California and other places like that which have a better profile than Michigan.”

It is difficult to attract any person, much less rich investors, to Michigan. I would wager the only way we could, would be through incentives that don’t benefit the state in the long run.
EB-5 isn’t completely a bad idea. But it also is not one businesses should think is going to work for investments. Until Michigan figures out how to sort out education and other infrastructure, we won’t have the human capital or stability to attract significant foreign investment.

David Barker is the State News opinion editor. Reach him at barkerd@msu.edu.