Diminishing returns
Imperial Center of Heber investor sues Pacificland
LOS ANGELES — Chan Law Firm of New York City, which specializes in corporate and immigration law, has filed a lawsuit against Pacificland International Development Inc. in connection with Imperial Center of Heber, which was seized by Imperial County in May as part of a separate and ongoing loan default case.
The law firm represents Yueqi Cui, a Chinese citizen, according to court documents filed on Aug. 15 in the Superior Court of California, County of Los Angeles. Cui was one of several investors who provided about $500,000 to Pacificland International Development Inc., as part of the United States Citizenship and Immigration Services EB-5 Immigrant Investor Program.
Chun Nan Lo, Pacificland chief executive officer, also is named in the lawsuit filed on behalf of Cui.
Under the EB-5 program, foreign entrepreneurs, along with their spouses and unmarried children under age 21, are eligible to apply for a green card allowing permanent residence in the United States if they make a minimum investment in a commercial enterprise in the United States and plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers.
The required minimum qualifying investment to be eligible for EB-5 is $1 million, or $500,000 in a high unemployment or rural area such as Imperial County.
Cui, although having met the minimum qualifying investment requirement for the EB-5 program, was denied a green card because the property she is invested in through Pacificland is now in receivership.
“Our client was denied because the project, the business plan that was submitted, has numerous inconsistencies,” Min Chan, Chan Law Firm managing partner, told Imperial Valley Press over the phone from her New York office on Tuesday. “Basically, in order for the project to be viable, you need to have an EB-5 compliant business plan, and when an immigration officer reviewed the petition, it seemed to be inconsistent in numerous instances. We are trying to figure out a way to cover her initial investment amount.”
Pacificland defaulted on a $2 million loan in May, after which Imperial County Superior Court Judge Jeffrey Jones granted the county a temporary order allowing it to take possession of assets at Imperial Center used as collateral for the loan. The deadline to make the first payment was April 1.
Imperial Center, located on the northeast corner of the intersection at State Route 111 and East Heber Road, currently consists of an Arco gas station, convenience store, event center, retail store, four restaurants and 80 acres of land zoned for housing development.
On May 11, the county filed a legal complaint against Pacificland and its chief executive, James Lo, after the developer failed to make the first payment to the county on the $2 million loan, which came out of the Community Benefit Program. The benefit program was developed in an effort to maximize the benefits of solar energy development in Imperial County while assisting community improvement projects for residents.
The loan to Pacificland International was unanimously approved by the Board of Supervisors on April 4, 2017. Lo asked the board in November to extend the payment deadline to April 1, but failure to make that payment resulted in the May 11 filing of the complaint.
Also in May, the county sought to accelerate payment of the remaining balance of a previous infrastructure loan of $2 million issued in 2009 to Pacificland.
In his May 24 order, Judge Jones appointed Los Angeles-based court receiver Kevin Singer to oversee the receivership process, which included the acquisition of record books, contracts, banking records and other documentation pertaining to assets.
The court also granted a temporary restraining order to “relinquish and turn over immediately possession to the Receiver, all assets of the Defendants comprising the Receivership Estate, both real and personal property, tangible and intangible property, including, but not limited to, electronic files and records.”
The ongoing litigation has been discussed at length by the Imperial County Board of Supervisors in numerous closed sessions. For the ongoing litigation with Imperial County, Pacificland and Lo are being represented by attorney Ping Shen. According to Shen, Lo has invested more than $80 million in the property and was expected to sell the land to a new investor for more than $100 million.
A large proportion of that money in turn was supplied by several EB-5 investors, Chan said.
“Basically [Lo] has gotten money from EB-5 investors, and I think — I don’t know the exact amount — but I think it’s about $60 million,” she said. “Now, these EB-5 investors are getting their visas denied because of project deficiency. I think the EB-5 program is great as long as the various players comply with the law and what it requires. At this point, we just want to make sure the Imperial project is meeting is requirements with respect to the immigration laws so that the investors are protected.”
Chan Law firm has been in communication with Imperial County officials and Singer about the issue, Chan said.
“We are just trying to figure out where the investment money has gone to and if there is any way our client can recoup their initial investment into the project,” she said.