Question:

It is important because if the job creating enterprise or regional center project is located within the TEA, the investment amount is reduced to $500,000 from $1,000,000.

It is important because if the job creating enterprise or regional center project is located within the TEA, the investment amount is reduced to $500,000 from $1,000,000.

For those interested in an example of the mechanics of how state agencies exercise their state government’s delegated authority of designating high unemployment areas, California's standards are illustrative. The Business, Transportation and Housing Agency (the state agency responsible for TEA designation) will only grant a TEA designation request based on the following: “The … the selected areas [must] cover political subdivision or recognized geographic subdivision boundaries. That would be the basis of designation pursuant to federal law. A political subdivision within a city would be a city council district or perhaps a planning district. Some political unit that is used to administer the function of the city government. A geographic subdivision would be some area that is geographically distinct. Or at least an area that is recognized in the city like a community district. … Or for example [city] communities … that probably have distinct geographic boundaries and descriptions. What is also [needed] is any justification or reasoning how these projects will affect employment in the desired area. We understand that the projects will generate jobs in general, but the purpose of the TEA designation would be that it will generate jobs in that area and improves the employment numbers there.”

A Targeted Employment Area ("TEA") is contained within a Metropolitan Statistical Area ("MSA") that has an unemployment rate 150% of the national average. In order to qualify for a reduced $500,000 EB-5 investment, the project must be within a TEA, an area outside an MSA, or a rural area with less than 20,000 residents.

A targeted employment area ("TEA") is a geographic area that has an unemployment rate 50% higher than the national average unemployment rate. It is important because the minimum amount of capital investment in a TEA is $500,000, not $1,000,000.

A targeted employment area is defined as a high unemployment area (1 1/2 times the nation average) or rural area. If the investment is in a TEA, the investment required is reduced from $1 million to $500,000.

A target employment area must be located in an area that has less then 20,000 residents or an area that has a current unemployment rate of 150% higher than that of the national average. This is important because it reduces the investment threshold from $1 million to $500,000 so long as the new commercial area is located in a target employment area.

Although the benefits of locating a project in a TEA are obvious, the TEA factor can be a double-edged sword in certain cases. A TEA carries with it a connotation that there is less spending and economic activity in the area in which the project is located, and can be viewed as especially detrimental if the target market of the project’s goods and/or services is centralized in an area where spending is generally down, creating the impression of a stagnant market area.

If you have not already seen it EB-5 info.com has posted some recent articles relating to TEA which are very important in understanding how best to work with them and issues that everyone should be concerned with.

A Targeted Employment Area (TEA) which is either in a high unemployment area, (calculated as an area with an unemployment rate that is at least 150% of the national average), or a Rural Area (RA), is important in and of itself, as far as an investor is concerned, in regards to the legal allowance of a reduced investment amount of $500,000. If a project is not in a TEA, as declared by the Labor office that the Governor of the State where the project is located, the required investment amount is $1mm.

Congress has reserved 3,000 of the 10,000 EB-5 visas for EB-5 investors who invest in TEAs, however this does not mean that there are only 3,000 for investors who invest in TEAs.

A TEA can be a single census tract, a contiguous grouping of census tracts, up to an entire Metropolitan Statistical Area.