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Economic Development in St. Louis

Jun 29, 2015
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Laura Hughes is a project manager who is acutely aware of the fact that time is money. She immediately went to work for a public-private partnership after law school at the Gateway EB-5 Investment Center. EB-5 is a United States visa program that entitles foreigners to obtain a permanent visa in exchange for an investment in certain economic development projects. She acts as a matchmaker for foreign investors and local real estate developers. From due diligence to navigating regulations, she uses her pre-law and legal experience to help her city prosper. Laura is a graduate of St. Louis University School of Law.

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Speaker 1:

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Speaker 2:

From LawHub, this is I Am The Law, a podcast where we talk with lawyers about their jobs to shed light on how they fit into the larger legal ecosystem. In this episode, Kimber Russell interviews a project manager who does economic development with foreign investors and local real estate developers.

Speaker 1:

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Kimber Russell:

Today we are joined by Laura Hughes, who is a 2014 graduate of St. Louis University School of Law. Laura pursued a JD for a second career. Prior to law school, she actually spent 17 years with Sprint where she worked in a whole bunch of different roles including project management. Recently, Laura has even obtained a real estate license. So you have been extremely busy doing a lot of different things for a long time. Tell us about what is project management and what that meant for you.

Laura Hughes:

The principle behind project management is balancing three areas that includes the costs, the budget, and the time for a project.

Kimber Russell:

Could you give us an example of a kind of project that you really excelled in when you were at Sprint?

Laura Hughes:

I was responsible for providing responses to RFPs. That particular piece of site management, it involved a great deal of zoning and understanding what type of requirements were necessary for cell tower location. Say for example, a customer wants to use cell phone service. Before they'd actually use their service or we convert them to the Sprint network, we'd actually go out and verify that the site was prepared properly to receive cellular service.

Kimber Russell:

So that sounds like it has a nice confluence with what you're currently doing now. You are currently at the World Trade Center in St. Louis. Can you tell us a little bit about what that means?

Laura Hughes:

The World Trade Center in St. Louis is actually a sister or partner to the other World Trade Centers, more famously the World Trade Center in New York. The regional center that I'm a part of, it's called Gateway to the Midwest Investment Center. Our Gateway to the Midwest Investment Center manages international investments into local real estate development projects.

Kimber Russell:

Your exact title is kind of a mouthful. It's EB-5 project manager. What does that mean? What is EB-5?

Laura Hughes:

Immigration and Customs Services has categories of visas, and EB stands for employment base. So EB, standing for employment base category five visa is an exchange of a visa for foreign investment into a local development project.

Kimber Russell:

So these are limited time visas to allow foreign investors to come into the country and operate in a different way than they normally would were they not a part of this program?

Laura Hughes:

Actually, they're permanent visas. So in exchange for the investment, at the end of the project, the immigrant investor has an opportunity to remain in the United States.

Kimber Russell:

Permanently. Wow, so that's a great inducement for foreign development.

Laura Hughes:

That's an excellent opportunity for our local developers to have an infusion of capital from a foreign investor.

Kimber Russell:

Now, I know a lot of visa programs have quotas or lotteries. How does that operate for the EB-5 Program?

Laura Hughes:

Immigration and Customs services allots 10,000 visas per country, so the quota each year is approximately 10,000.

Kimber Russell:

That doesn't sound like a lot really.

Laura Hughes:

That's a huge amount of visas and opportunities if you look at the number of development projects that become available for an investment of foreign currency.

Kimber Russell:

What are the requirements in order to obtain one of these visas?

Laura Hughes:

To qualify for the EB-5 Program, we have what's called a targeted employment area. It's based on the census tract calculation. So say for example, most urban areas within the city, there's a huge amount of unemployment. What Immigration and Customs Services is trying to do with the EB-5 Program is increase jobs. So as long as that particular development project increases 10 or more jobs, it qualifies for $500,000 of foreign investment.

Kimber Russell:

My question is, how do foreign investors find out about these opportunities?

Laura Hughes:

There's a huge market. There are a great number of broker dealers that participate in tons of conferences and events that provide tons of information about EB-5.

Kimber Russell:

What is your role in all of that? Are you sort of the matchmaker, the person that's going out and pitching the availability of these visas and these opportunities to foreign investors?

Laura Hughes:

Exactly. So this kind of ties back to my role and my passion for real estate. I have an opportunity to work with a great number of developers that are interested in, say for example, taking advantage of a rehabilitation project that turns into mixed-use development. I would go after those particular developers. If they're in my targeted employment area, an area that suffers for a high amount of unemployment, I would assist that developer in positioning his project so that he could qualify for foreign investment.

Kimber Russell:

So yeah, that leads us into what a day in the life of an EB-5 project manager is like. So say, what would a typical, and I'm sure each day is very different, but what would some typical things be that you might do on any given day?

Laura Hughes:

Working with a developer to draft or revise a business plan, to analyze a feasibility study, to look at budgeting and cost analysis to make sure that the due diligence on a particular project is going to meet the investor requirements. So the majority of my day, if I'm not interacting with someone from the legal community, that being a securities council or an immigration attorney, I am working on some piece of drafting or revising to help manage the project.

Kimber Russell:

I'm interested in how you nurture relationships with new clients. First of all, where do you specifically go to find clients?

Laura Hughes:

Definitely a great deal of networking. I spend a lot of time at city council meetings. I spend a lot of times at community meetings, and I honestly spend a lot of times on the internet learning about new opportunities that are potentially projects here in St. Louis.

Kimber Russell:

If I understand correctly, the projects that really are the ones that you're going to be targeting are ones that need capital infusion and might not otherwise be able to get it from domestic sources?

Laura Hughes:

That's correct. Most of the projects that are successful do have an opportunity to take advantage of commercial lending. However, if they are in an area that is meeting my criteria in terms of high amount of unemployment, I offer that developer an opportunity to receive the foreign investment at a lower cost of capital than he would have an opportunity via just a regular commercial lender.

Kimber Russell:

So it sounds like it's a really attractive option, especially for developers who are really trying to get out there and create new opportunities in these specifically targeted regions.

Laura Hughes:

More so it gives a developer an opportunity to become a little bit more vested in our local development. What I mean by that is they have an opportunity to impact someone's life by offering them the opportunity to obtain their citizenship here in the United States.

Kimber Russell:

On the other side of that, I'm sure not every client or potential client is going to be one that would be an optimal client.

Laura Hughes:

Absolutely. Because if the project as a whole does not produce at a minimum 10 jobs and it's not located in an area that needs those particular jobs, then that particular project would not qualify.

Kimber Russell:

Are there projects that might otherwise qualify? Say they do provide the requisite amount of jobs and they're in the targeted area, but for other reasons funding doesn't go through. Does that ever happen?

Laura Hughes:

I have tons of projects that are going to be successful and that they're great opportunities and great projects. But I'm trying to sell a project overseas to, say for example, an investor that has never stepped foot in the United States. So that investor has to rely very heavily on what's out there on the internet and the success of prior projects in that particular industry. So say for example, hotel development, that tends to be a very secure investment for foreign investor that has never taken advantage of an international opportunity.

Kimber Russell:

Ultimately though, is it your choice to accept who is put forward for some of these development funds?

Laura Hughes:

The investor is the one that has the final decision. I just position the project and put it in its best light such that it matches apples to apples, prior projects that have been successful with EB-5.

Kimber Russell:

So you are kind of like a matchmaker. You've got the bride and the groom, the developer and the funder, and determining, "Well, I think you guys would be great together." But ultimately they have to decide to make the match, right?

Laura Hughes:

Correct. That's a great way of putting it.

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Kimber Russell:

You mentioned there's a lot of internet searching and that certain parties who've never been to the United States are depending heavily on what they can find online. What is the due diligence on your behalf that you undertake to help this process along?

Laura Hughes:

I can say that due diligence definitely is a buzzword throughout the industry that has a variety of meanings. But specifically at the regional center, we do the very first level on the developer side in vetting out that developer, making sure that they have risk and contingencies built into their plan to ensure the success of the project. Equal amounts of due diligence take place on the investor side where broker-dealers vet out the source of funds and make sure that the investor is, how can I put it, transparent in terms of their endeavors here in the United States.

Kimber Russell:

That leads me to a question that might be a little uncomfortable. But when you're dealing with foreign entities, there is a question of potential corruption. How do you overcome that in your position?

Laura Hughes:

Every three years, the EB-5 Program has to come up for re-designation. At this point, September 30th is our deadline for some type of proposed revision to take place in terms of the EB-5 industry. So right now, there's bipartisan efforts to review the current process for EB-5 to address a lot of what the media has perceived as fraud that associates with EB-5.

Kimber Russell:

So you mentioned the perceived media account. What's your real take on that? What do you think the media isn't quite getting right?

Laura Hughes:

Of course, anytime you're dealing with investments, there's great opportunity for fraud. But when certain individual may present information that's not accurate or they're not entirely honest with their again endeavors, I think it's unfair to tarnish the entire EB-5 reputation based on the acts of a certain individual. So when you google EB-5, tons of information comes up that says there have been multiple opportunities where investments have gone south and the investors have lost their shirt, stolen dreams of EB-5 visas.

With any investment opportunity, there's always going to be risk. I believe especially with the multiple layer of the due diligence and the high scrutiny that's being placed on the regional centers, I believe that we are doing a very good job of being compliant and meeting all of the Immigration and Customs Services requirements to make sure that we're vetting the source of funds. That we're providing solid projects that will produce the required number of jobs and more importantly create opportunities in areas that have been hardest hit by unemployment.

Kimber Russell:

Is there a potential that the political will would shift to defund this program?

Laura Hughes:

I believe as passionate as myself and all of the other EB-5 advocates are, I doubt that that would happen because the program is so popular. So when you have huge stories that have proven to produce jobs in surpass of their original estimate, it's a great opportunity again for both the developers and the investors.

Kimber Russell:

Now, with all of this happening, I'm sure on a day-to-day basis there are some struggles. What are some of the biggest headaches you encounter during your job?

Laura Hughes:

The multiple layers of compliance. There's so many steps, sub-steps that I need to take, and they're constantly changing. The securities laws is one of the huge endeavors that we have to consistently comply with. Making sure that although we're not brokering a particular deal, but all the documents that we're managing through the regional centers are compliant.

Kimber Russell:

I kind of want to circle back now and talk a little bit about how you came to this position because we know you've always been really interested in real estate, and you've got a lot of project management experience. But how did you get this specific job so close to graduating from law school?

Laura Hughes:

I was very fortunate to receive an email over the Christmas holiday entering my final semester of my third year of law school. The opportunity read, "Do you have a passion for real estate and project management and international background?" It sounded like they were reading a script from my resume. So as a result, I applied over the Christmas holiday, and I believe started as early as like New Year's Eve working on researching EB-5 opportunities here locally.

Kimber Russell:

So it sounds to me like part of your real passion comes to really being able to reinvigorate your community and to give opportunities that people might not otherwise have.

Laura Hughes:

I love economic development. I like that they take the buildings that are on the National Registry and restore them as opposed to just tearing them down. There's a whole industry out there that's dedicated to that, and I absolutely love it. St. Louis right now, unfortunately, you hear about Ferguson, that's all you hear about. I want to want to be in the news for another reason. I want to be in the news because I'm giving someone an opportunity. I'm taking advantage of restoring an old building. I'm giving something life. I'm bringing it back.

Being born and raised in St. Louis, to drive around and see a lot of the just magnificent structures that just need a little bit of love to them. So you mentioned me being the matchmaker, this gives me an opportunity to find a bride for a groom or a groom for a bride. It gives me an opportunity again, being born and raised here in St. Louis, to see us grow, see us be a part of something new and exciting.

Speaker 1:

I Am The Law is a LawHub production. Don't forget to subscribe and rate this show on your favorite podcast app. Thank you to our presenting sponsor, Blueprint LSAT Test Prep. Thank you also to our other sponsors, LSAT Lab, Vermont Law and Graduate School, Seton Hall University School of Law, Penn State Dickinson Law, Cardozo Law, and Baylor Law.

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