Offering documents, USCIS compliance issues
Oct 05, 2015
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Kurt Reuss
Kurt Reuss
Kurt Reuss is a registered securities broker who has been specializing in EB-5 since 2012. He offers advice on investment structuring and market conditions related to EB-5 investments.

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Multipliers: 2007 vs 2010 Inputs

Rohit Kapuria: I’ve got a question for the economists regarding the issue of 2007 data versus 2010 data. Now that the BEA has indicated that they’re going to update the numbers later this year, and afterward the methodology they’re proposing, do you foresee a significant difference in terms of what the new data is going to be for job creation? From my perspective, 2007 has usually resulted in more jobs, but I have always been worried about a deal that uses 2007 data because, at this point it’s eight years old versus 2010 multipliers. For 2015, what are your expectations in terms of how that’s going to impact the job count?

Michael Kester: Whenever we’ve seen a study using RIMS II, we understand that the model is based on 2010 prices, which RIMS II was built on. Now, RIMS II is supposed to be updated later this year and will be based on 2013 prices. Whenever we’ve come across a study that still uses 2007 multipliers, I’ve thought that they’re a bit outdated, yet we haven’t really seen USCIS question those, yet. But I think, as Rohit mentioned, with an updated RIMS II coming soon, the 2007 data will be older in comparison.

If you do see a study that’s using 2007 multipliers I’d definitely have to question the economist who put the study together. As far as anticipating how the 2010 data is going to differ from the 2013 data, it’s tough to tell, but I wouldn’t expect the changes to be drastic. Again, we’re getting down to regional levels of data, and each region has multipliers that can vary drastically within the same industry, as we’ve often seen. It’s tough to kind of make any predictions.

In any event, I wouldn’t expect the changes to be huge. It’d be region-specific, as all these studies are based on region-specific multipliers.

Kevin Wright: I’ve seen USCIS come back and question 2007 data on certain projects and I’ve had to go back and update to 2010. I’ve never seen it go the reverse way. The numbers tend to be higher with 2007 data than they did with 2010. 

I recently had a case that was a bit of a dilemma regarding the issue of using 2007 or 2010. We had thirty (30) I-526’s approved using 2007 data, and then the cost of the project went up and they wanted to do a phase II right afterwards.

Well, in phase II we did a preliminary analysis and used 2010 data, because we had shifted to using the newer data moving forward. As it turned out, just by updating the data from 2007 to 2010, and though there was several million dollars more in spending, we actually saw a decrease in the total job count. Unfortunately, in that case, it resulted in the developer not being able to do his phase II, but at the same time USCIS did approve all of those I-526s with the 2007 data.

What I’ve noticed is that it tends to depend on which adjudicator you pull. Some of them are okay with 2007, and some of them seem not to be and will, right off the bat, tell you to update your data. I see variable results with that.

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