Hundreds of investors – hoping to become U.S. residents by funding expansion of one of Western North Carolina’s largest sports facilities – may miss out as a key entity wrangles with immigration officials over an unpaid annual fee.
A local economic-focused group, called the Appalachian EB-5 Regional Center, assembled foreign investors who would receive a green card in exchange for funding the Tryon International Equestrian Center in Polk County.
But in June, federal immigration officials told the center it could lose its right to operate because leaders failed to pay a $20,000 annual fee required by a change in regulations in 2022. The center pushed back, filing a lawsuit alleging it did not have proper notice of the fees and due dates.
The visa program, known as EB-5, allows non-residents to obtain U.S. permanent residency by investing $1 million into a new American business projected to create at least 10 new jobs. The program, which began in the 1990s, also allows green-card hopefuls to invest $800,000 if the investment is in rural areas, like Tryon.
New businesses can also team up with government-designated regional centers, like the Appalachian center, to create a pool of investors to fund large projects. The center pooled more than $200 million to fund the Tryon Equestrian Center.
According to allegations filed in the complaint last month, shutting down the center would not only put the monetary investment at risk, but it could jeopardize the creation of thousands of jobs.
Leveraging funds for citizenship opportunities
The EB-5 visa is a way for wealthy people from foreign countries to expedite obtaining a visa — a drawn-out process that could otherwise take almost a decade, according to Bernard Wolfsdorf, an immigration lawyer and former president of the American Immigration Lawyers Association.
The investments, made mostly by Indian and Chinese residents, must be made before investors can apply for an EB-5 visa.
Even the expedited process may be slow. After the investments are made, it could still take years before United States Citizenship and Immigration Services (USCIS) issues an investor a green card.
If a regional center has its government designation terminated, investors still waiting on their visas would need to restart the application process at another regional center.
In the case of the Appalachian Regional Center, investors could pull their money from the Tryon equestrian center project and move it into a capital project in another part of the country.
Investors looking for regional centers to invest with would also be less likely to choose Appalachian if the entity is in legal limbo, Wolfsdorf said.
"What if you were about to send in your check for $800,000 and you just heard the regional center you are going to send it to lost its license? What are you going to do with that? You're not going to send it in, right?" Wolfsdorf said.
The center's attorneys argued that the stakes are high for the entity, which was founded in 2011 by Andrew Dover.
“The Appalachian Regional Center will go out of business without its designation. It is like taking a liquor license away from a liquor store; it cannot operate. Thus, Appalachian Regional Center's interest here is nothing short of its existence,” according to the lawsuit.
Both USCIS and the Appalachian center agree that the legal issues stem from a policy change introduced two years ago.
A ‘good-faith mistake’?
In 2022, Congress established a new EB-5 integrity fund – aimed at combating rampant fraud in the investor visa program.
The regulation required regional centers with 20 or more investors to pay an annual fee of $20,000 to the government. To enforce payment for the new integrity fund, Congress required USCIS to impose penalties for regional centers that did not pay fees. If the payment was made within 30 days of the deadline a “reasonable penalty” will be imposed, according to the act. After 90 days of nonpayment, the center’s designation would be terminated.
That’s exactly what happened to about 100 regional centers around the country, including the Appalachian Center.
Attorneys for the center argued that a confusing sequence of deadlines led to “a good faith mistake based on its counsel’s interpretation” of the USCIS provisions.
USCIS implemented the policy requiring fees in March 2022 and required payment on October 1, the start of the 2023 fiscal year.
Because of confusion surrounding the new policy, the government pushed back the deadline several times, finally settling on Oct. 1, 2023 – the same day the payment for the 2024 financial year was due.
In early October 2023, Appalachian Regional Center paid the 2024 fiscal year fee, but did not pay the 2023 fiscal year fee, according to court records.
The Appalachian Regional Center did not dispute that it failed to pay the 2023 fee but said it did not get adequate notice of the problem.
“Neither the Appalachian Regional Center nor their attorney received any notice of untimely payment or nonpayment for the fiscal year 2023 payment,” the lawsuit reads.
In late June 2024, USCIS issued the regional center a Notice of Intent to Terminate – a move that the business said came “out of the blue.”
There was “no opportunity to cure such oversight,” lawyers for the regional center argued.
In the legal filings, lead attorney Brad Banias said the business is willing to pay the fee immediately as well as a “reasonable penalty.”
The center asked the court for an order to prevent the immediate termination of the center's designation. Chief Judge Martin Reidinger of the U.S. District Court in Western NC denied the temporary injunction, saying the case will proceed.
In court records, USCIS said they have no intention of terminating the center's designation during the legal process, essentially pausing any action until the case is closed.
'Nothing short of its existence'
If the center shuts down, not only could investors lose their immigration status, but hundreds of millions of dollars in investments in Western North Carolina could evaporate, according to the lawsuit.
“Everyone is hopeful that a common-sense policy change will resolve this for everyone across the country,” Sharon Decker, president of the Tryon Equestrian Partners Carolina Operations, told BPR in an email.
The lawsuit points out that over the last decade, the center brought $207 million in investments to Western North Carolina, supporting the creation of 8,100 jobs.
The center started with a project to raise $84 million to build a new hospital in Winston-Salem, and then moved to gather funds from 385 foreign investors for the construction and operation of the Tryon International Equestrian Center and Resort.
USCIS expedited by the project, approving investors in 90 days rather than their standard time frame of 40 months, according to court documents. More than 280 people invested $800,000 or more each in the equestrian facility for the opportunity to get a green card.
The project, initially completed in 2014, used more than “60 companies and subcontractors, employed over 700 people, moved two million cubic yards of earth, built miles of sidewalks and roads, installed miles of cabling, built 6 barns containing 800 horse stalls and close to 100 structures including 3 bedroom homes, retail structures, office complexes, and much more,” according to the equestrian center’s website.
The equestrian center created a total of 4,717 jobs as of 2019, according to a 2019 report from Barnhart Economic Services. Construction projects are ongoing, including a new hotel.
“Tryon International is continuously moving forward, from new buildings and accommodation options to new events and programming,” according to the website.
A bellwether case in Montana?
The Appalachian Regional Center is not alone in its struggle to retain its status with USCIS.
In late July, the Northern Rockies Regional Center, a Montana center which failed to make a timely payment, won a temporary injunction blocking USCIS from terminating its government designation.
Banias, the lead attorney for the Appalachian center, also served as lead counsel on the Montana case.
The Northern Rockies center argued that its missed payment was caused by a change in ownership which took place in May 2024. USCIS approved the ownership change without notifying the new owners of the missed payment, according to reports.
While the judge rejected the center's argument that USCIS had not provided enough notice of the late payment, he found that the government was “internally inconsistent” on payment deadlines in 2023.
Banias hopes for a similar result in North Carolina.
Editor's note: This story has been updated to clarify the status of the regional center.
