Tamarack Resort: A Compelling Rural EB-5 Project

Tamarack Resort is a master-planned, all-seasons resort being developed by MMG Equity Partners (MMG). This project includes world-class amenities and is America’s only ski, golf, and lake resort. It offers 1,100 skiable acres with 50 runs, an 18-hold championship golf course, and a full-service 200-slip marina. Tamarack Resort is located north of Boise, Idaho, near Lake Cascade.

In this article, we discuss how Tamarack Resort is one of the most compelling rural EB-5 projects available today.

Overview of the Tamarack Resort EB-5 Project

Secured Loan Structure. The Tamarack Resort EB-5 investment is structured as a secured loan. The loan is secured with a pledge of 100% equity in the project company and senior mortgages on Tamarack Resort property.

Individual Four-Year Loan Term. Tamarack Resort features a shorter than average four-year loan term. Each EB-5 investor has his or her own loan term that is independent from any other investor.

Rural TEA Designation. The project is in a rural targeted employment area (TEA). By investing in a rural TEA project, EB-5 investors are able to invest $800,000 instead of $1,050,000. They also receive priority I-526E petition processing and gain access to rural set-aside visas. The rural EB-5 visa category makes up 20% of all EB-5 visas.

Significant Job Creation. Development of Tamarack Resort has already resulted in the creation of over 2,336 jobs for EB-5 investors. Far more jobs have already been created than are needed to meet EB-5 requirements.

Strong Sales. To date, 103 of the project’s 128 condominium units have sold at an average price of over $1 million.

Excellent Developer Track Record. The project is being developed by MMG, a privately owned real estate investment group with experience in the resort market.

Independent EB-5 Oversight. EB5AN controls the project’s regional center sponsor and the general partner of the EB-5 fund. EB5AN is 100% independent from MMG. Independent EB-5 project oversight helps prevent conflicts of interest from arising between the developer and the parties involved in the EB-5 investment, which reduces EB-5 investor risk.

I-526E Approval Refund Guaranty. If USCIS denies an EB-5 investor’s Form I-526E petition, the project provides for faster repayment of an the investor’s $800,000.

Job Creation Guaranty. The developer has provided a guaranty that all EB-5 funds will be spent on qualifying EB-5 costs.

With these features, Tamarack Resort is a best-in-class rural EB-5 project that stands out in the market today. Following is a more detailed discussion of these top features.

Understanding EB-5 Investment Financial Risk

To qualify for a U.S. Green Card, an EB-5 investor must make an at-risk investment. To be considered “at risk” by USCIS, the full $800,000 investment must be subject to loss. In practice, the at-risk requirement means that no EB-5 project can be 100% risk free.

The EB-5 program’s at-risk requirement does not mean the level of risk to EB-5 investors has to be high. Despite this fact, many EB-5 projects are more risky than they need to be, and many EB-5 investors are not aware of how risky these projects are.

Most projects fail to offer even basic financial protections, which means more risk for EB-5 investors. Understanding risk, then, is vital. Projects with higher financial risks are more likely both to lose EB-5 investor funds and to cause investors to have their immigrant petitions denied.

Following are some basic features offered by lower-risk EB-5 projects:

Secured Loan Structure. Most EB-5 loans are unsecured. This means they are not backed by any sort of collateral. If a borrower cannot repay an unsecured EB-5 loan when it is due, EB-5 investors are unlikely to get their money back. But when an EB-5 loan is secured, for example by a mortgage on project property, EB-5 investors are protected in the event the borrower fails to repay the loan. Of course, the value of a mortgage is based on the value of the property. If the property value is sufficient to cover the loan, the mortgage minimizes risk for EB-5 investors.

 
Financial Transparency. Anyone who is considering an investment should be able to review documents that verify a project’s financial claims. A project that says it has sales should give investors access to sales data. An EB-5 project that is hesitant to provide financial statements may be hiding facts from investors. Such projects should be regarded with extreme caution.

 
I-526E Approval Refund Guaranty. When an EB-5 investor’s Form I-526E petition is denied, he or she is not necessarily refunded right away. Depending on the terms of an investment, a denied investor may have to leave his or her funds invested for several years. However, the best EB-5 projects guarantee to refund denied investors sooner than would normally be possible.

 
Individual Loan Term. Most EB-5 loans have a single maturity date that applies to all EB-5 investors. For most loans, the term does not start right away—specific conditions must first be met. As a result, a loan’s term may not start for a year or more after the first EB-5 investor invests. The best EB-5 loans, however, are structured in a way that each investor has his or her own individual loan term that starts when he or she invests in the project. Under this structure, each investor can know from the very start when his or her funds are supposed to be repaid.

 
Clear Exit. The “exit,” which is when and how investors are repaid, is a key risk factor to research. For an EB-5 loan, the principal plus any accrued interest is due at the end of the loan term plus any optional extensions. The actual repayment of the loan, however, relies on the success of the project. If a project fails to earn a profit or is unable to refinance its debt, it may not be able to repay the loan on time. A developer’s track record and loan security are important factors when determining how likely a loan is to be repaid when due.

 
To avoid high-risk projects, EB-5 investors must do their own due diligence. While the EB-5 program requires projects to transparently disclose risks, few EB-5 projects and regional centers treat transparency as one of the fundamental rights of EB-5 investors. As a result of this mindset, most projects and regional centers take a bare-minimum approach to transparency. Such projects and regional centers will not provide information unless they are required to do so.

Every project has its own unique risks. EB-5 investors should do careful research and weigh all project risks before they invest. By understanding project risks and asking good questions, EB-5 investors can make informed investment decisions.

Understanding the Rural TEA Designation

What Qualifies as a TEA?

A TEA is an area that either has a high unemployment rate or is rural. For an area to be a rural TEA, it must not be within a metropolitan statistical area (MSA) or within a city that has a population of 20,000 or more.

Benefits of Choosing a Rural TEA Project

EB-5 projects that are located in rural TEAs offer EB-5 investors several major benefits.

First, the standard EB-5 investment amount is $1,050,000. However, those who invest in TEA projects enjoy a lower minimum investment amount of only $800,000.

Second, rural TEA investments qualify EB-5 investors for special reserved EB-5 visas. Currently, these set-aside visas are not affected by backlogs (i.e., visa retrogression), which means rural visas are available for EB-5 investors from anywhere in the world. Even investors from countries like China and India, which have high demand for EB-5 visas, are not facing backlogs for rural EB-5 visas. In practice, this means that rural EB-5 investors often can immigrate to the United States sooner than those seeking unreserved visas. Under the EB-5 Reform and Integrity Act of 2022, 32% of all annual EB-5 visas are reserved; 20% are reserved for rural TEA investors.

Third, rural TEA investments qualify EB-5 investors for priority Form I-526E processing. With priority processing, the I-526E petitions of investors in rural projects are processed first by USCIS. Priority processing can result in wait times of just months instead of years.

Evaluating Rural EB-5 Projects

EB-5 investors should research projects before investing. Basic due diligence can help investors avoid high-risk projects, improving their chances of financial and immigration success.

One of the most important areas of research for an EB-5 investor is the project’s developer.

The developer should have an experienced team that has succeeded at similar projects.

The developer should have its own money invested in the project. If the developer has nothing to lose, it is less motivated to succeed. Too little developer equity means more risk to EB-5 investors.

Similarly, if EB-5 funds will be used to replace developer equity, developer risk is being passed on to EB-5 investors. EB-5 investors should avoid projects in which EB-5 funds will be used to reduce developer equity.

In addition to examining the developer, an investor should look at a project’s regional center sponsor. A reputable regional center will be led by professionals with extensive experience and in-depth knowledge of current EB-5 regulations and policies. To avoid any conflicts of interest, the regional center and developer should be independent from each other.

The EB-5 Reform and Integrity Act of 2022 added certain compliance and reporting requirements and made other changes to the program. USCIS has not yet issued comprehensive guidance on these changes. As a result, EB-5 investors should look for a competent regional center that can navigate policies as they are updated. An inexperienced or poorly managed regional center means significant risk for EB-5 investors.

Tamarack Resort Is a Best-in-Class Rural EB-5 Project

Tamarack Resort is a compelling rural EB-5 project with best-in-class features that limit the financial and immigration risks faced by EB-5 investors. The project is already under development with significant job creation to date. EB-5 investors enjoy individualized loan terms, loan security, and more. With these features and more, Tamarack Resort is one of the highest-quality, lowest-risk rural EB-5 projects available today.

100% Equity Pledge and Mortgages

The Tamarack Resort EB-5 loan is secured with a 100% equity pledge and senior mortgages on project property. With this loan security in place, the EB-5 loan is much more likely to be repaid, which provides EB-5 investors with significant financial safety.

Individual Four-Year Loan Term

The project’s loan is split into a tranche for each EB-5 investor. Each tranche has its own term of four years independent from the terms of all other investors tranches. Not only is a four-year term shorter than typical, but loans with individual terms are rare in the EB-5 space. A shorter loan term means limiting the duration the EB-5 investor’s funds are at risk. And an individualized term means clarity with regard to the timing of repayment.

Rural TEA Designation

The project is in a rural TEA. Rural TEA designation allows EB-5 investors to invest $800,000 instead of $1,050,000, grants priority Form I-526E processing, and gives access to the 20% rural set-aside visa category.

Significant EB-5 Job Creation

As discussed earlier, one of the key requirements of the EB-5 program is that each EB-5 investment must create at least 10 qualifying jobs for U.S. workers. As a regional center project, Tamarack Resort can count both direct and indirect jobs created by construction spending.

To support 100 EB-5 investors, the project needs to create 1,000 jobs. However, Tamarack Resort has already created 2,336 qualifying jobs, which means enough jobs have already been created for all EB-5 investors. With these jobs already created, immigration risk for EB-5 investors is significantly reduced.

Strong Sales to Date

A total of 103 of the project’s 128 village condominium units (~80%) have sold at an average price of over $1 million.

Experienced Developer

MMG is a private real estate investment group focused on the acquisition and long-term ownership and development of commercial properties. MMG’s current portfolio includes over 35 properties that encompass approximately 2 million square feet. MMG’s portfolio of previously owned properties includes ski resort retail centers at Blue Mountain Village, Village at Copper Mountain, Village at Snowshoe Mountain, and Village at Stratton.

An Independent Regional Center with a Proven Record

EB5AN is the regional center sponsor for Tamarack Resort. Since EB5AN is 100% independent from MMG, it is able to prioritize the interests of its EB-5 investors without conflicts of interest. EB5AN has facilitated over $1.0 billion in EB-5 investment, with total project development costs of over $4.1 billion.

EB5AN has helped more than 2,300 immigrant investors from over 60 countries through its low-risk, high-quality investment opportunities. All adjudicated regional center sponsored projects offered by EB5AN have received USCIS approval.

I-526E Approval Refund Guaranty

Tamarack Resort features an I-526E approval refund guaranty from the developer. As described above, this guaranty helps investors recover their $800,000 more quickly if their Form I-526E petitions are denied by USCIS.

Job Creation Guaranty

The developer has guaranteed that it will spend all proceeds of the EB-5 loan on qualifying EB-5 expenses. With this guaranty, EB-5 investors in Tamarack Resort can be confident that job creation is based on qualified spending.

Tamarack Resort: A Unique, Low-Risk Rural EB-5 Project

No EB-5 project is 100% risk free. While financial and immigration risks are part of the EB-5 program, EB-5 projects do not have to be high risk. Tamarack Resort offers investors a low-risk option.

The Tamarack Resort project is being developed by an experienced developer with a proven track record. The project has been structured with EB-5 investors in mind. It offers them a high-quality, lower-risk option full of best-in-class safety features.

For more information on the Tamarack Resort project or other available EB-5 projects, please schedule a one-on-one call with EB5AN.