agenda city of watsonville city council/redevelopment agency meeting

the Watsonville Census Tracts have current unemployment rates in excess of 150% of the
state average.
The funds generated from EB-5 investments can be used in remarkably flexible ways. Funds
can be used for infrastructure projects, direct investment in buildings, investment in business
ventures, investment in parking structures, and any other type of investment that has the ability
to create 10 jobs per $500,000 invested.
In order to access the funds from an EB-5 investment group, a city or county must be a part of
a “Regional Center” that has created an investment pool from foreign nationals seeking an EB-
5 Visa. Currently, there is no regional center that includes Santa Cruz County. The California
Sunshine Regional Center (CSRC) is being formed to fill that gap. The California Sunshine
Regional Center is in the process of developing an application to the USCIS to be the
designated regional center for Santa Cruz, Merced, Santa Clara, Alameda, Contra Costa and
San Joaquin Counties. In order to receive designation, the proposed regional center must
receive support from local jurisdictions that have a substantial need for investments in job
creating activities. As such, the California Sunshine Regional Center has asked that
Watsonville be one of the jurisdictions in support of their application. The California Sunshine
Regional Center’s current draft application includes a number of specific projects in
Watsonville, including the Sakata Lane Business Center, the former Indalux manufacturing
facility, Manabe-Ow industrial park, unspecified Downtown Watsonville projects and
unspecified investment in broadband construction projects in Watsonville.
A provision in the current EB-5 law allows jobs that are created as an indirect result of
investment to be counted as jobs created by the program. This provision is a pilot program
and is currently scheduled to sunset in September of 2012. CSRC is requesting that the City
of Watsonville support this application now so that investors may be able to use these relaxed
rules for counting job creation prior to the scheduled sunset of the current pilot program. This
will make it easier for Watsonville based projects to receive funding through the EB-5 program.
The California Sunshine Regional Center is also being supported by the City of San Pablo
which also has several job-creating projects that are potentially ready to proceed. The CSRC
is likely to add projects and local jurisdictions as their application proceeds and after the
application is approved. In order to receive any funding from the program, participating
jurisdictions must execute a Memorandum of Understanding with the regional center. Being
an early supporter and having specific Watsonville projects identified in the application to
USCIS will make it more likely that the projects in the city receive funding. The projects
specified in the MOU are not guaranteed funding under this program, and other projects within
Watsonville will be eligible for funding on a case-by-case basis depending on their size and
viability. City Council will have an opportunity to support additional projects for funding in the
future and as each project is considered for funding the City Council will have the opportunity
participate in the joint venture agreement with CSRC and the project proponent. This does
not, in any way, require that the City be an applicant or financially participate in any project, it
simply requires that the City authorize a project to be considered for EB-5 funding.
Page 2 of 3
Kurt Overmeyer 6/1/2011 5:24:48 PM
M:\RAHD\AGENDA\2011\6-14-2011\EB-5\EB-5 Regional Center Support__Revised.doc