By Doreen Hemlock, SunSentinel
8:01 p.m. EDT, April 12, 2013
Looking for cash to expand, restaurant chains in South Florida are turning to foreign investors who want to call the United States home.
Sonic Hamburgers was one of the first chains in South Florida to capitalize on the so-called EB-5 visa program that offers employment-based visas to qualified foreigners, their spouses and children under 21. It began luring EB-5 investors to the area about two years ago, said attorney Fred Burgess, a principal with Exclusive Visas of Weston, a consulting firm that specializes in EB-5 programs.
Among the latest chains to join the EB-5 push: the South Florida franchise holder for Twin Peaks, a sports bar and grill that will compete with such chains as Hooters, Burgess said.
Perhaps most successful so far is the franchise group bringing Voodoo BBQ of New Orleans to South Florida. They’ve lured 10 investors through the EB-5 program — or a total of at least $5 million — to help finance four locales, including the newly opened Pembroke Pines spot and three more being developed. Plus, they’re nearly finished an offer with 10 more investors — for $5 million more — to fund four more locales, said Burgess.
EB-5 investors in the new Voodoo BBQ locales hail from China, Canada and Nigeria, among other countries. “We had visa approvals for the project in as little as five months,” said Burgess.
The New Miami Subs Grill, based in Fort Lauderdale, also has started to reach out to EB-5 investors in China and elsewhere, said Fort Lauderdale immigration lawyer Larry Behar, who leads a team of 12 nationwide specialized in EB-5 visas. And he’s on the EB-5 trail for a group expanding their high-end restaurants, which already include Scarpetta at the Fontainebleau Miami Beach resort.
The U.S. government launched the EB-5 program in 1990, but few investors used it at first. Attorneys complained of hefty paperwork, bureaucratic delays and tough requirements for a minimum $1 million investment.
But the program has picked up steam in recent years, partly because investors now can qualify for a resident’s “green card” with a smaller outlay: $500,000 in an area deemed economically disadvantaged. The government also sped up processing and extended the program through Sept. 30, 2015, attorneys said.
The upshot: The government approved 3,677 of the EB-5 visas for investors – not counting their spouses and children – in the year through Sept. 30, 2012. That’s up from 1,563 approved in fiscal 2011 and 1,369 approved in fiscal 2010, according to reports from the U.S. Citizenship and Immigration Services.
Approved investors can live anywhere in the United States and can bring their spouse and children under 21.
Restaurant groups are jumping on the EB-5 bandwagon for several reasons: Many find it hard to get funding from U.S. banks after the recession. And they find officials more easily approve their visa requests since their business and job model is straightforward, even in areas with high unemployment, lawyers said. Franchises also are attractive for investors, since they tend to succeed at a higher rate than stand-alone businesses.
Still, some immigration critics, including as the Federation of Immigration Reform, have decried the EB-5 plan. They’ve argued that foreigners shouldn’t be able to buy their way into U.S. residency and “pay to play.”
But supporters call the program a “win-win,” spurring U.S. jobs at a time when U.S. credit remains limited and demand for U.S. residency is high. Foreign investors must meet stiff requirements, including background checks that show no criminal record.
Burgess is traveling in the United Arab Emirates and India this month to meet with potential EB-5 investors.
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