Cleveland International Fund (CiF) was founded in 2009 and has raised and invested more than $240 million into an array of large-scale projects concentrated in Cleveland, Ohio. CiF focuses primarily on financing projects relating to commercial development, mixed-use construction and the healthcare sector. The EB-5 program is sanctioned by the U.S. government. CiF CEO Stephen Strnisha answered some questions about CiF and the EB-5 program in general.

Q. Greater Cleveland has benefitted significantly from a large infusion of foreign investments via Cleveland International Fund, which is an EB-5 Regional Center. Do you expect Congress to reauthorize the EB-5 program? 

A. The current program was set to expire on September 30 of this year, and we just got word yesterday that the House Appropriations Committee is introducing legislation that includes a temporary extension authorizing the EB-5 Regional Center Program. While this extension is temporary, it gives EB-5 partners renewed opportunities to push for a long-term reauthorization of the program after the elections.

Congress will once again extend the program past that date as it has consistently done throughout the program’s life dating back to 1992. A long-term reauthorization appears to depend on resolving other immigration-related issues at the same time. There are some encouraging signs Congress’s lame duck session after the mid-term election and before the end of the year may hold promise for resolving some disputes in the immigration arena. Such a development would present the best opportunity to achieve a long-term authorization accompanied by beneficial program reforms.

Q. In 2017, you wrote a column for Forbes suggesting improvements for the EB-5 program. Among those were incenting EB-5 funds to flow to projects in economically ailing urban and rural areas, and not limiting investment by capping the program’s visa limit at 10,000 each year. Have those improvements been made?

A.  Those suggestions are some of the reforms and improvements we would like to see accompany a long-term reauthorization of the program. Based on recent industry discussions, these views are shared by the industry as a whole, particularly the idea that there is clearly demand for additional visas which would immediately bring more investment dollars for job-creating developments into the U.S. As to what changes would be best in terms of redirecting more EB-5 investment to higher distressed urban and rural areas, there still remains some disagreement. In general, however, there is growing consensus within the industry for some modifications that will put areas like Ohio in a slightly better competitive position relative to projects from better known big cities.

Q. Can you describe specifically how Cleveland International Fund has benefitted Greater Cleveland?

A. CiF has helped fund millions of dollars of successful, completed projects in Northeast Ohio and has been a crucial partner with developers and healthcare systems as they emerged from the 2008 recession. To date, we have invested more than $240 million of EB-5 funds from foreign investors into the Greater Cleveland area as part of projects totaling $2.4 billion and which created more than 15,000 jobs.

Q. Have trade tensions between the United States and China – which is home to many CiF investors – had any effect upon CiF?

A.  Private relations between individuals in China looking to immigrate and invest in the U.S and those entities such as CiF which look to assist them with both remain very good. Our larger issue in pursuing this continued interest has nothing to do with trade disputes, but has much to do with the current 10,000 visa limit, which cannot accommodate the demand from interested Chinese investors. That demand has been so great over the last several years that it has not only absorbed the annual amount available for Chinese investors but has created a backlog with approved investors, who now have to wait for several years before they can receive a green card and enter the U.S. The result is funding delays for bringing in foreign capital that will help grow our economy and even longer delays for Chinese individuals and their families who provide those funds and want to come to America with their considerable talents that can clearly contribute to our economic growth now and through their future generations. 

Q. What are the top three countries in terms of numbers of investors in Cleveland International Fund?

A.  For most of the program’s life, the largest number of investors by far have come from China. This has been followed over the last several years by Vietnam and India. With the backlog referenced in the previous answer, the China market has basically stopped in terms of new investment, as has Vietnam which falls into the same category. This means the current market for EB-5 investors covers a much wider group of countries which, in addition to India, consists mainly of South Korea, Taiwan, Brazil and various Middle Eastern countries.

Q. While there are other EB-5 Regional Centers across the country – including in New York and elsewhere on the East Coast – many foreign investors seek out Cleveland International Fund. Why is that?    

A.  Despite the considerable competitive advantage that large projects from well-known U.S. cities have in foreign markets, CiF has more than held its own in gaining the confidence of and ultimately securing investment dollars from foreign investors for its projects. What has stood out notably in that success is the high quality of the projects we seek to assist and our demonstrated track record in achieving the goals investors seek from EB-5. Specifically, our investors have a 100% approval rate from the government with their EB-5 applications. We have an excellent success rate in paying back investors in a timely and responsible fashion. As of this summer, we have paid back $104.5 million to investors in our first two projects: University Hospitals’ system-wide expansion and the first phase of the Flats East Bank development which included the E&Y Tower and an Aloft Hotel

Q. Why do we keep going through these temporary renewals of the EB5 program and what is the long-term future of the program?

A.  While EB-5 has had and continues to have bipartisan support as an immigration program, it has become entangled in the broader and contentious arena of immigration reform. Despite attempts to separate out what is, in the scheme of things, a small portion of the immigration pool on the basis of EB-5’s clear economic benefit to the country, the program remains a hostage to the current political deadlock surrounding immigration. For the record, other non-controversial immigration programs have had to deal with the same difficulty of managing through a series of short-term extensions. The promise for the future remains the fact that EB-5 continues to be renewed regularly without interruption. Also, more and more communities are experiencing and understanding the benefits of a capital source that is often times critical to whether an important development project happens or not. CiF is committed to staying the course through this period and sees EB-5 remaining an important source for critical economic development projects in the future.