The Daugaard administration approved four projects in the past two years for a recruiter to seek foreign EB-5 investors. The approval letters were released Monday. The most recent was dated July 23.
That latest approval came just two months before the Daugaard administration severed its contract with the longtime recruiter, South Dakota Regional Center in Aberdeen.
SDRC had been used for years by the Rounds and Daugaard administrations for all EB-5 administration and marketing on behalf of state government.
Financial dealings of Northern Beef Packers' plant — largely funded by the EB-5 program through the SDRC — are being investigated by federal authorities. The Governors Office of Economic Development, which had contracted with the SDRC until severing ties Sept. 19, is also being investigated by state and federal authorities, Daugaard said.
The EB-5 program allows foreign investors who pay $500,000 apiece to receive permanent visas to live in the United States if federal qualifications are met. A regional center for EB-5 purposes must receive federal approval.
Examples of South Dakota projects funded at least partially through EB-5 investments in the past decade include:
- the Northern Beef Packers plant.
- numerous dairies.
- the Dakota Provisions turkey processing plant at Huron.
- the Deadwood Mountain Grand hotel, casino and event center.
- the NextEra Energy Resources wind farm in Day County.
- the Deer Creek generation plant of Basin Electric Power Cooperative in Brookings County.
- and the Iberdrola Resources wind farm known as Buffalo Ridge II in Brookings and Deuel counties.
The NextEra, Iberdrola and the latest version of Dakota Provisions projects were approved in 2012 for recruitment of EB-5 investors. Dakota Provisions also received EB-5 investments during the Rounds administration.
The latest project to receive state approval was Dakota Natural Meats, a proposed pork-processing plant. Its location hasn’t been announced. Incorporation papers show its organizers are three men from Flushing, N.Y.
The business arrangement between SDRC and state government took effect in December 2009 and was supposed to run through June 30, 2014.
A specific reason wasn’t given publicly for the September termination of the SDRC contract.
Asked Monday about how approval for recruitment could be given for a project in July and the recruiting contract cut off two months later, Daugaard spokesman Tony Venhuizen said, “I cannot comment at this time.”
SDRC president Joop Bollen of Aberdeen traveled the world promoting EB-5 investments in South Dakota.
The four project requests in 2012 and 2013 came from Bollen via SDRC and were approved by Pat Costello, state commissioner of economic development.
The contract required that SDRC receive state approval before seeking EB-5 investments for a project. Costello canceled the contract Sept. 19.
Bollen has been involved in international trade matters from Aberdeen since at least 1995, when he formed a nonprofit corporation with Northern State University officials.
He formed SDRC in 2008 to serve as the EB-5 agent for South Dakota, after South Dakota received federal approvals for expanded uses of the EB-5 investments.
South Dakota’s recruitment of EB-5 investors has received much more public attention in recent months, following the financial failure of the Northern Beef Packers project and the gunshot death last month of Richard Benda.