The City of Brownsville and the Public Utility Board are raising the millions required to fund a new gas-powered electric plant by hiking utility rates over the next six years and into the foreseeable future.
Included in the funding will probably be the floating of millions in bonds to pay for the multi-million dollar project that will give the PUB ownership (?) of about 200 MW of the 800 MW plant production.Now, the Resaca City to the north – San Benito – in partnership with Las Vegas, Nev.-based Telemark Development Group and PowerCom, is set about to procure enough electric power to handle its needs for the next 10 years with a plan that won't cost the city one thin dime or necessitate the skyrocketing of utility rates for its residents.
At the same time, the city and the development group are partnering with the international law firm Dentons US LLP of Palo Alto, Calif., to attract investors from Mexico using the EB-5 Employment Creation Program.
Under this program, the United States offers investors, their spouses and unmarried children under the age of 21 the opportunity to become permanent residents by creating or saving 10 jobs for U S workers through investment.
"We're building a power plant with the City of San Benito that will take care of its needs for the next 10 years," said Peter Del Mastro, a representative of the Telemark Development Group. "It's not going to const the city any money and we will attract investors from Mexico under the EB-5 employment creation immigration plan."
Del Mastro said the city was reaching out to investors from Mexico who were willing to invest $500,000 in the power plant project. He said they envisioned attracting a minimum of 14 Mexican investors who would be eligible for permanent residency under the U.S. Immigration law. The total cost of the plant is estimated at $225 million.
According to Matthew Schultz, a senior partner with the Dentons Law Firm, there are two types of EB-5 programs. The first was created by Congress in 1990 and is a permanent law with no expiration. The second was created in 1992 and is commonly called “pilot program” or “regional center.”As the name suggests, pilot program is not a permanent law. It is a temporary law that expires. The pilot program has expired and been regularly renewed every few years. The current pilot program law expires in 2015.
In general, both traditional and pilot EB-5 programs require a minimum $1,000,000 investment.
To encourage job creation in targeted employment areas (“TEA”), Congress lowered the investment requirement to $500,000. TEAs are generally either areas with higher than normal rates of unemployment or areas defined by the government as rural. Both traditional and pilot program EB-5 can be $500,000 investments in TEAs.
San Benito, and most cities in the Rio Grande Valley, fall within the TEA designation.
There has been much interest generated in the San Benito venture as can be witnessed by the sponsorship of the EB-5 Conference "Immigration Through Investment" slated for Thursday, July 18, from 1:30 to 4:30 p.m. at the San Benito Library at the corner of N. Sam Houston and Rose.
The State of Tamaulipas, Matamoros and the City of Valle Hermoso are co-sponsoring the event.
Mexican investors have been fleeing the endemic violence in northern Mexico and South Texas but except for small enterprises seem to have skipped over the area to go to bigger cities like San Antonio and Houston. City of San Benito planners and officials hope that the prospect of making a return on their investment and also acquiring permanent residence in the United States will encourage participation from Mexican investors.
Schultz writes that although some of the requirements for traditional and pilot program EB-5 are the same, there are important differences. The choice of what type is best often varies upon the needs of the individual investor and the investment project. His paper compares traditional and pilot program EB-5.
For example, the Pilot Program EB-5 expires and the traditional EB-5 favored by the power plant developers is permanent. The temporary nature of the pilot program law is a concern for regional centers authorized for pilot program. Investors are often concerned about whether the law will continue long enough to immigrate through a pilot program investment. This concern is especially acute ever time that pilot program nears expiration. Unless the individual investor's immigrant petition is granted before the pilot program law expires, the petition will be denied and the chance to immigrate through the investment lost.
This uncertainty makes many investors reluctant to invest in pilot program type EB-5 projects. That makes it harder for business developers to raise financing in pilot program type projects. In contrast, traditional type EB-5 is a permanent law that does not expire. Investment petitions based on traditional type EB-5 projects can continue to be processed without the law expiring.
Regardless of what program is used for projects such as the San Benito Power Plant, both traditional and pilot programs require the creation or preservation of at least ten full-time equivalent jobs for US workers. EB-5, Schultz said, is the the employment-creation visa, not the investment visa. Creating jobs is key to approval of permanent residence through EB-5. This is true regardless of whether the investment realizes a profit or loss.
For their part, Telemark/PowerCom favor traditional EB-5 programs because it is simpler and faster for the government to process. The project is smaller and involves fewer investors. It is easier and faster to organize all of the investors needed to complete the project. It is easier to prove the jobs created using the direct employment payroll records of the company. No government pre-approval or economist report is needed to file.
Since the investment is located in a TEA that allows the minimum $500,000 investment, the project is scalable in that it is designed to proceed with one investor to create 10 new jobs and be able to add new investors and 10 new jobs/investor. This is because of the service industry nature of the business. Telemark/PowerCom is a telecom infrastructure company that hires US workers to install and maintain electrical and communication networks for utilities and the military.
New investment allows the acquisition of new equipment and materials, and the hiring of new staff. With new staff, the company can take on new installation and service agreements. All of the jobs created are direct hire jobs by the company, which means that payroll tax and other employment records are readily available to prove jobs created when it is time to remove the conditions on residence after two years. The success of the EB-5 Telemark/PowerCom project is the fast processing by the U.S. Citizenship and Immigration Services and the American consulates.
In addition, other advantages of using the traditional EB-5 program is that it does not require any government pre-approval for specific types of job creation, does not require a business plan unless all of the jobs were not created prior to filing the immigrant visa petition, does not require economic analysis by federal economists, and that projects involving a single investor or a very small group of investors generally move through the immigration process faster than projects that involve large or very large groups of investors.
This last factor is important, the Dentons law firm says, because because most projects need a specific amount of investment from immigrant investors in order to hire all of the US workers and do business, including construction, if any. Until the project receives enough investor funding to proceed, the success of the project is in jeopardy, as is the immigrant petition of the individual investors.
Organizers are hoping the conference will attract investors and other interested persons from throughout South Texas and northern Mexico. Del MAstro, representing the Telemark Development Group and Schultz, representing the international law firm, will be on hand to meet with conference participants.
This uncertainty makes many investors reluctant to invest in pilot program type EB-5 projects. That makes it harder for business developers to raise financing in pilot program type projects. In contrast, traditional type EB-5 is a permanent law that does not expire. Investment petitions based on traditional type EB-5 projects can continue to be processed without the law expiring.
Regardless of what program is used for projects such as the San Benito Power Plant, both traditional and pilot programs require the creation or preservation of at least ten full-time equivalent jobs for US workers. EB-5, Schultz said, is the the employment-creation visa, not the investment visa. Creating jobs is key to approval of permanent residence through EB-5. This is true regardless of whether the investment realizes a profit or loss.
For their part, Telemark/PowerCom favor traditional EB-5 programs because it is simpler and faster for the government to process. The project is smaller and involves fewer investors. It is easier and faster to organize all of the investors needed to complete the project. It is easier to prove the jobs created using the direct employment payroll records of the company. No government pre-approval or economist report is needed to file.
Since the investment is located in a TEA that allows the minimum $500,000 investment, the project is scalable in that it is designed to proceed with one investor to create 10 new jobs and be able to add new investors and 10 new jobs/investor. This is because of the service industry nature of the business. Telemark/PowerCom is a telecom infrastructure company that hires US workers to install and maintain electrical and communication networks for utilities and the military.
New investment allows the acquisition of new equipment and materials, and the hiring of new staff. With new staff, the company can take on new installation and service agreements. All of the jobs created are direct hire jobs by the company, which means that payroll tax and other employment records are readily available to prove jobs created when it is time to remove the conditions on residence after two years. The success of the EB-5 Telemark/PowerCom project is the fast processing by the U.S. Citizenship and Immigration Services and the American consulates.
In addition, other advantages of using the traditional EB-5 program is that it does not require any government pre-approval for specific types of job creation, does not require a business plan unless all of the jobs were not created prior to filing the immigrant visa petition, does not require economic analysis by federal economists, and that projects involving a single investor or a very small group of investors generally move through the immigration process faster than projects that involve large or very large groups of investors.
This last factor is important, the Dentons law firm says, because because most projects need a specific amount of investment from immigrant investors in order to hire all of the US workers and do business, including construction, if any. Until the project receives enough investor funding to proceed, the success of the project is in jeopardy, as is the immigrant petition of the individual investors.
Organizers are hoping the conference will attract investors and other interested persons from throughout South Texas and northern Mexico. Del MAstro, representing the Telemark Development Group and Schultz, representing the international law firm, will be on hand to meet with conference participants.
9 comments:
Juan im quite surprised by this new plant since AEP has an older plant in place there in san benito and they dont even use it anymore, my guess its just cheaper to build a new one then refurbish an older plant, i think th ename of that old plant was "las Palmas" well im quite sure the citizens of brownsville have alot of extra cash to pay teneska and the mayor pipe dreams to build a new plant in brownsville at taxpayers expense we are definitely SCREWED. DC
Two points:
If a Mexican wants to live in San Benito just pay a pollero a thousand bucks and done. Forget the half million.
The absolutely pendejisimo PUB assholes are betting the future price of natural gas will stay low. Very bad bet as the US will exporting liquid NG like crazy very shortly and the US will be paying WORLD prices for NG which are closer to $10 than the US price of $4. But who gives a fuck when you can screw the public dumb asses....
Interesting concept. Not a better way to process ill-gotten proceeds and acquire US citizenship than this program. They're looking for 14 investors at $500,000 each to raise $7,000,000 for a $225,000,000 project? That's 3%. Where does the remaining $218 Million come from?
Is this the "manufacturing opportunity” that will be discussed by the city commission and EDC behind closed doors this evening? How convenient that such a meeting would be scheduled immediately following the EB-5 Conference. One agenda item for this meeting is to discuss “potential financial incentives” the city can offer. Supposedly, the EDC will borrow money to purchase land to gift the “manufacturing opportunity.”
Interesting, too, that Valle Hermoso would be involved. It was the mayor of Valle Hermoso, after all, who accompanied the SB mayor and city manager to China.
With several communities around SB planning a similar project, why is SB seemingly the only one taking advantage of the EB-5 program? Sure, judging by their track record, one could say SB is the Valley leader in innovative thinking and progressive management. Or, one could say that SB management has certain friends who know how to exploit immigration laws to help their foreign friends circumvent requirements and expedite citizenship.
Welcome to Cameron County investors. Where not only justice is for sale, we can now add citizenship.
The city government of San Benito is the most corrupt in the Valley. You can bet palms are already being greased for this project to move forward.
San Benito secured power for the next ten years? What did they do, buy a gas-powered generator at Sam's and 5 gallons of unleaded?
The EB-5 program is being used a lot in Hidalgo County. Right now they are putting together 14 Mexican Nationals that will each contribute $500,000.00 to build a 7 Million dollar hotel on McAllen city property next to the McAllen Convention Center. They are also working with a group from China that want to establish EB-5 residency in the US by investing in some projects of the McAllen EDC. When was the last time you heard of the Brownsville EDC working with foreigners through the EB-5 program???
With now four (4) new power plants being planned for the valley who needs all this power. It can't be consumed locally. Tenaska still does not know what it will do with the rest of the 800 megawatts of power it is building for Brownsville. Also Brownsville is building a new gas line all the way to McAllen for over $100,000,000 when a local gas provider has offered to cut that cost by a third. PUB does not want to hear it. Is this for exporting gas like it says above? Who is going to inherit it? Tenaska? Who in Brownsville has the balls to come up with this deal? Nobody. But in Dallas, there is Tenaska. Why is PUB being so secretive about its power plant?
Why is PUB being so secretive about its power plant?
Because they are using a secret formula that will use a flux capacitor to generate 1.21 jiggawatts of power which will allow everyone in town to time travel BACK to the FUTURE, so we can all be amused and amazed by the assholes of the past that brought this shithole to the current state of being!
Or maybe they are just trying to figure a clever scheme so Muffy Wickett and her band of merry minions at United Way can continue to bleed out the community in the name of the poor!
"Del MAstro, representing the Telemark Development Group and Schultz, representing the international law firm, will be on hand to meet with conference participants."
Be very cautious investing in any project Del Mastro is involved in. One of his business partners was convicted in real estate scam in China (http://blog.gulflive.com/mississippi-press-news/2012/05/former_saint_jeffrey_walker_se.html). Del Mastro and his other partner were investigated but could not be brought to court.
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