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When Donald Trump took office this year, he promised ruthless governmental efficiency.
But an investor tied to a Chelsea condo project is claiming in a lawsuit filed against Department of Homeland Security Secretary Kristi Noem and the United States Citizenship and Immigration Services office that it can hardly get an email back.
The lawsuit was filed by an entity raising EB-5 funds for Legion Investment Group and AVRS Partners’ 83-unit luxury development at 550 West 21st Street.
The complaint names the USCIS-designated regional center facilitating the EB-5 investment into the project among the defendants. The regional center, which is responsible for sponsoring job-creating projects into which EB-5 investors can participate, filed an I-965F application with USCIS on July 3, which has been pending for over three months, according to the lawsuit.
The goal of the project was to raise anywhere from $60 million to $80 million in EB-5 funding, which would be converted into mezzanine debt that would help fully fund the over $320 million project, according to the I-965F application filed in court.
Investors seeking to participate in the program, which provides a pathway to citizenship for those investing at least $800,000 in a qualifying project focused in a rural or high-unemployment area, must submit their own petitions to the government along with their financial contributions. The petitions can only be submitted once USCIS approves the I-965F application, which includes documentation showing that the project complies with EB-5 requirements.
Because of the delays, it has been a “struggle to convince investors” that the regional center’s application and investor petitions will be approved when the government has yet to rule on the initial application, “many months after filing and long after” other projects secured approval, according to the complaint.
Regional centers have not reported any broad changes in application processing time, according to Aaron Grau, executive director of Invest in the USA, the non-profit trade group for the EB-5 Regional Center Program. “There could be some unjust delays, but we’re not hearing anything on the macro level,” he said.
What the lawsuit means for the project at 550 West 21st Street is not clear.
The capital stack was also projected to include $117.5 million in equity and a $155 million construction loan, according to the application. Legion and AVRS just closed on the construction loan last week from the real estate investing arm of Eldridge Capital Management.
The application specified that the EB-5 loan proceeds would be used to fund the costs and expenses of construction, as well as potentially reimburse qualified bridge capital.
Representatives from Legion Investment Group and the EB-5 lender did not respond to a request for comment.
After an email follow-up inquiring on the status of the application on Sept. 26 from an attorney for the regional center, the immigration office responded: “This case is with an Immigrant Investor Program officer. We appreciate your patience.”
But the investor in the West 21st Street project blames the delays on the “[d]efendants’ policy decisions to under-staff the USCIS Immigrant Investor Program Office.” No official numbers have been published on staffing cuts at USCIS, and the office did not return a request for comment.
“USCIS is probably understaffed to begin with,” Grau said, noting that application times are often context-dependent.
The department could be facing changes after Trump in September rolled out a “Gold Card” visa program, in which individuals can pay $1 million to receive U.S. residency. Commerce Secretary Howard Lutnick previously told reporters the Gold Card would replace existing employment-based visas, EB-1 and EB-2, that allow foreign nationals with extraordinary or exceptional abilities to seek permanent residency.
He added that other visa green card categories will likely be suspended after a trial period, making the Gold Card, and another more expensive and more flexible Platinum Card, the main vehicle for entry into the country.
Trump first floated the Gold Card as a replacement for the EB-5 program in February. Created in 1990 to incentivize foreign investment into job-creating projects, then-President Joe Biden extended the program in 2022 until 2027.
The White House’s comments about immigration pathways have been a surprising boon to the EB-5 program, spurring “additional conversation and interest around EB-5,” said Grau.
