Thursday, 27 October 2016 15:12
By Rick Moriarty – Journalist, Syracuse.com
Syracuse, N.Y. — A Syracuse company is crediting some of its business and employment growth to a little-known federal program that gives green cards to foreigners who invest in American companies in areas with high unemployment.
Philip VanHorne, president and CEO of the energy marketer BlueRock Energy Inc., said the company has raised $2 million in capital from four Chinese investors since August 2014 and hired 40 people as a result of the investments.
“It’s allowed us to grow,” he said. “It’s allowed us to hire people, to expand outside of New York.”
VanHorne, former president of Niagara Mohawk Power Corp.’s energy marketing business, founded BlueRock in February 2003. The company buys electricity and natural gas from producers and resells them, at negotiated rates, to about 20,000 business and retail customers in New York, Pennsylvania, Connecticut and Massachusetts (it plans to enter the New Jersey market by Jan. 1).
In January of this year, BlueRock expanded into solar energy. It sells and leases electricity-generating solar panels to homeowners.
VanHorne, 63, began the company in his home in Liverpool and then moved it to a small office in Salina. In 2007, the company moved to Franklin Square as one of the first tenants of The Foundry building. It employed 10 people at the time.
Needing capital to grow beyond New York, VanHorne turned to the federal government’s EB-5 Immigrant Investor Visa program, created by Congress with bipartisan support as part of the Immigration Act of 1990 to stimulate the U.S. economy. The program grants permanent residence (a green card) to foreign nationals who invest $500,000 in U.S. businesses in high-unemployment areas.
The businesses must create at least 10 full-time jobs in the United States for each $500,000 investment. They have two years to create the jobs after receiving the investment, and they must retain the jobs or the foreign investors could lose their green cards.
VanHorne said he learned about the program from John O’Shea, CEO of Global Alliance Securities LLC in New York City, an investment adviser to BlueRock.
Each of the four Chinese investors has invested $500,000 in BlueRock and received green cards to live and work in the United States. (None of them work at BlueRock.)
The investors also received a small equity position in BlueRock.
BlueRock, in turn, has hired 40 people as a result of the investments and now employs a total of 75, including 52 in Syracuse. The jobs include a senior vice president, sales, marketing and customer service positions.
The company has twice made Inc. Magazine’s list of the 5,000 fastest growing companies in the country (in 2013 and 2015).
Though not well known among the general public, the EB-5 program is known among developers and business owners looking to raise capital for their projects and businesses.
Approximately 10,000 foreign investors a year have obtained green cards through the program. In the last couple of years, the program has proven particularly popular among Chinese investors — so much so that it has created a backlog in processing applications for green cards at the U.S. Citizenship and Immigration Services, the agency that oversees the program.
Critics say the program is a way for wealthy foreigners to, in effect, buy U.S. citizenship. The program has also come under criticism in some circles for benefiting development projects in wealthy areas that qualify as “targeted employment areas” under the EB-5 program because they are located next to low-income census tracts. The targeted areas are determined by each state.
In BlueRock’s case, however, the program has worked as intended by helping the energy company create jobs in the city of Syracuse, designated by New York state as a targeted employment area, VanHorne said.
To compete with the estimated 200 other energy services companies in its market territory, BlueRock advertises heavily online, on radio, through social media and via sponsorships with sports teams, including the Buffalo Bills, Brooklyn Nets, New York Islanders, Syracuse Chiefs and Syracuse Crunch. (Unlike some of its competitors, BlueRock does not engage in telemarketing.)
VanHorne said he has used the $2 million raised from the Chinese investors to increase the company’s marketing, buy software needed to manage the company’s expanding operations and pay employee salaries.
The company’s growth is forcing it to depart Franklin Square for a larger office on the 8th floor of Barclay Damon Tower in downtown Syracuse.
VanHorne said the new office (which has 14,000 square feet of space compared with the 9,000 square feet it has in Franklin Square) will open in March. It will have room for 80 employees. VanHorne said he expects to fill all of that space within three to five years as the company continues its expansion into more states and grows its recently launched solar power business.
And he’s not done raising money through the EB-5 program. He met in New York City Wednesday with another potential foreign investor. He declined to say what country the person is from. “We’re actively looking for more investors,” he said. “They don’t have to be from China. That’s just the way it’s worked out, but we’re not limited to China.”