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EB-5 visas used in financing Boston development raise eyebrows

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Who benefits?

Echelon Seaport

Some recent high-profile developments in Boston such as Fenway’s Pierce Boston and the Seaport’s Echelon have used a 27-year-old federal visa program that essentially trades foreign investment for green cards.

Foreigners who invest at least $500,000 in a U.S. business that creates at least 10 jobs are eligible for the most investor-friendly form of the so-called EB-5 program. The only thing is that the business—or real estate project—must be in an area with an unemployment rate 1.5 times the national average.

And there’s the catch: Per the Globe’s Tim Logan, developers in Boston are basically cobbling together oddly shaped tracts of land that skirt wealthier areas and engulf less affluent ones to hit that magic unemployment rate and therefore qualify to offer the EB-5.

So, for instance, Cottonwood Management, the Echelon Seaport’s developer, used areas of Roxbury, Dorchester, and Mattapan in crafting a successful EB-5 application that likely saved the firm “tens of millions of dollars in financing costs,” according to Logan.

It’s all perfectly legal—Massachusetts signed off on Cottonwood’s map—but it does beg the question of just how many jobs these projects create in the less affluent areas their EB-5 applications say they’re connected to.

The feds will be re-examining the EB-5 program’s parameters when its current iteration expires next month. Stricter requirements for developers, including tighter mapping, could result. Stay tuned.