As development continues to boom in The Woodlands area, local officials say interest in the Immigration Investor Program is increasing. Also known as EB-5, the program for foreign investors was established by Congress in 1992 in an effort to stimulate job creation and capital investment. The program is garnering increased interest in The Woodlands area as regional investment centers offer another funding resource in a time of heavy development.



"[The EB-5 program] has brought us an entirely different financing tool for projects that we haven't seen before until the immediate past," said Gil Staley, CEO of The Woodlands Economic Development Partnership. "As an economic developer, we are very excited about that. It is keenly important to us to see a more diversified group of investors that want to invest in our community."



Through the program, a number of EB-5 visas are set aside for foreign investors in exchange for either a $500,000 investment in new commercial enterprises located in Targeted Employment Areas, or a $1 million investment in a non-targeted area, according to the U.S. Citizenship and Immigration Services.



Along with their investments, the program also requires the enterprises to create 10 full-time jobs for qualifying U.S. workers within two years of the time the investor is admitted into the U.S. as a condition of permanent residence in the country, according to USCIS.



Local projects



Several development and real estate ventures in The Woodlands area have established EB-5 regional centers in an effort to bring foreign investment to the area. Among those regional centers recruiting investors are the Greater Houston Investment Center, the Crown Point Regional Center and the Star of Texas Regional Center.



"Investment centers are like the hub, a middle of a wheel in which the spokes are the investor, the investment banker, the project company, and the USCIS," said Joseph Penbera, chairman of the Greater Houston Investment Center. "Another thing that the center does is it works with the Office of Financial Asset Clearance and the Treasury Department to make sure that the money is traceable, that it is not coming from blood diamonds, cocaine or whatever."



The Best Development Company is developing the Woodlands Gate project, a mixed-use development with 220 multifamily units and 17,000 square feet of retail space located along Hwy. 242 and FM 1488, said Jose Villamediana, BDC owner and Greater Houston Investment Center founder and principal. Villamediana said BDC is also developing three other future projects in The Woodlands area.



The EB5 Crown Point Regional Center has one ongoing project, an approximate 150-room hotel project, located near the intersection of I-45 and Robinson Road, estimated at about $25 million, in Oak Ridge North, said Jay Cadena, EB5 Crown Point Regional Center vice president.



While Oak Ridge North city officials said they are unaware of any EB-5 investments included in the hotel project, Cadena said the center has gathered several letters of intent from potential EB-5 investors to help fund the $25 million project and aims to gather up to ten $1 million EB-5 investors.



"The developer is requesting that we help them find EB-5 investors," Cadena said. "Right now at this stage we have prospects, nobody has committed on that particular hotel. There is another piece of land next to it that is another development that we are negotiating that is also looking for EB-5 investors. There is no EB-5 money committed at this time in any of those projects, however we are actually discussing with prospects for both hotels."



MGD International has partnered with Houston-based Star of Texas Regional Center to draw foreign investment primarily from China into The Woodlands area, said MGD International CEO J.P. Li.



The organization is working to align up to 20 investors for a commercial real estate project near the ExxonMobil campus, Li said. While no location has been selected, the project could include two 150,000-square-foot office buildings.



The development is expected to cost about $35 million for each building, Li said, and has investor commitments covering 60 percent of the cost. The remaining 40 percent will be funded through private equity and traditional financing.



Foreign interest



Officials said foreign investment in The Woodlands area has increased in recent years, but there has been a shift from primarily Mexican nationals to Chinese nationals, Staley said.



"Dating back just a few years, it was truly Mexican nationals that we were seeing," Staley said. "We all know the reasons that they were trying to leave Mexico and come to the U.S. and bring their families, and certainly The Woodlands was identified as a fantastic opportunity for them."



Staley said the community is now seeing more diversity in its investors.



"We have Chinese nationals looking very seriously at projects here in The Woodlands area to qualify perhaps for EB-5, but [also] simply just investments," he said. "It's bigger than just simply the road to citizenship—it's a good investment."



MGD International was previously interested in establishing its own regional center to draw the growing number of Chinese investors to The Woodlands area as Chinese nationals compose 80 percent of EB-5 program applicants, Li said.



Li said recent changes in Chinese government leadership have alarmed Chinese business owners, many of whom are diversifying and transferring assets overseas.



"I think the changing of government leaders in China is increasing the demand of people [who] want to come here," Li said. "A lot of older leaders in different regions are getting swapped out with new ones, so that is affecting a lot of businesses, especially business owners. In recent years we have seen some instabilities, with the real estate market in China, for example, going through a bubble period right now."



Stability of the U.S. dollar also appeals to potential investors looking to protect their assets in a more stable U.S. economy, said Pete Garcia, director of the United States Mexico Chamber of Commerce Gulf Coast Chapter.



"As wealth has begun to happen in China at a rapid pace, a lot of people there prefer to invest their money outside of the country," Garcia said. "It's really the lack of confidence in their own currency."



Asociacion de Empresarios Mexicanos



As foreign nationals continue to move into The Woodlands, associations such as The Asociacion de Empresarios Mexicanos have formed to support foreign entrepreneurs.



The Asociacion de Empresarios Mexicanos, or the Association of Mexican Entrepreneurs, in The Woodlands was established in May 2012 by a group of Mexican nationals to support business and Mexican entrepreneurs in The Woodlands and Greater Houston area. The Woodlands is one of five Texas chapters of the association, which was founded in San Antonio in 1996, and now has chapters across the country.



AEM The Woodlands President Carlos Gutierrez said many entrepreneurs are drawn to The Woodlands because of its proximity to Houston, its accessibility from Mexico and its high quality of life.



"[The Woodlands] has everything you need," he said. "The closeness of The Woodlands to Houston itself, its very close when you compare it to other places in Mexico. One of the best advantages is that you get a chance to live in a great place and you have your kids in great schools, you have your business up and going, you have beautiful homes. There are a lot of things The Woodlands, in particular, has to offer."



The United States Mexico Chamber of Commerce director Pete Garcia said many Mexican nationals are moving to The Woodlands largely because of years of violence by drug cartels in Mexico.



"The situation and violence in Mexico is the No. 1 reason why people are moving here," Garcia said. "They have been moving here for a long time, but most of the homes used to be up in Lake Conroe. With the situation [in Mexico], they are saying 'You know what, I think I will take the wife up there.' The husband still goes back and forth to take care of his business in Mexico."



Former AEM president Fernando Salazar, a civil engineer from Monterrey, Mexico, said he moved his family to The Woodlands in 2010. Salazar said he chose The Woodlands as a great place to raise his family and is considering opening up a local business.



"I have my own company in Mexico," Salazar said in Spanish. "My business is still over there, my house is still over there, and we are initiating a business here. We have many options."



Salazar said Mexican nationals also benefit from doing business in both countries as they are in unique positions to understand business culture and needs on both sides of the border.



"There is a lot of opportunity to do business between both countries," Salazar said in Spanish. "I believe the Mexican community that lives here can benefit from the best of both worlds. We know how business is done over there and how it is done in the United States."



Editor's note: Portions of interviews for this story were conducted in Spanish and translated into English.