The ticket to building a new basketball arena in downtown Sacramento?

It could be a green card.

A little-known federal program that offers green cards to wealthy immigrants who invest in job-creating enterprises could become an important piece in the financing package for the proposed $387 million arena.

The immigration program, known as EB-5, wouldn't pay for the whole project and is just one of several revenue sources advocated by Mayor Kevin Johnson's arena task force. But the amount of EB-5 money "can be substantial," said Dan Barrett, a Manhattan Beach sports-finance consultant advising the Sacramento arena effort.

The program has been around for about 20 years and has encountered some controversy. But it's also generated huge sums of capital and is becoming increasingly popular as conventional financing remains tight.

Developers of a new NBA arena in Brooklyn, N.Y., raised $249 million from EB-5 investors to finance improvements near the arena. Immigrants have committed around $80 million to a hotel in downtown Los Angeles.

In the Sacramento area, a company raised $18 million from EB-5 investors to help transform McClellan Air Force Base into a business park.

The company that raised the money for McClellan's improvements, CMB Export LLC of Rock Island, Ill., says the Sacramento arena could be a match for immigrant investors.

"We've looked at it," said Kraig Schwigen, the company's senior vice president. "It would be a great undertaking as an EB-5 project."

The program offers immigrants a fast-track method of obtaining green cards to establish permanent residence. They have to invest $500,000 in businesses that create or preserve at least 10 full-time jobs in rural or high-unemployment areas.

Schwigen said immigrant dollars were responsible for at least 529 jobs at McClellan. The $18 million went toward roads, sewers and building improvements.

"The EB-5 program was certainly a help," said Frank Myers, senior vice president at the business park.

The program can offer a relatively cheap source of capital. Investors often will accept a lower return because their main interest is the green cards, Schwigen said.

"What they're really looking to get is a green card and a path to citizenship," said Chris Lehane, executive director of the mayor's arena task force.

The task force has until next March to complete a financing package or risk losing the Sacramento Kings to another city. Money from EB-5 would be one of several funding sources.

Perhaps more importantly, EB-5 cash could soften political resistance to one of the key funding strategies advocated by the task force.

The task force has proposed selling several city-owned land parcels, perhaps raising tens of millions of dollars. Some City Council members oppose that, partly because real estate prices are so low.

The EB-5 money could remedy that, Barrett said.

The consultant said immigrant dollars could be used as a short-term bridge loan. That would help jump-start arena construction until the market recovers and the city can sell the land at better prices.

An entire industry has sprung up around EB-5, with companies that specialize in marketing the program to immigrants and bundling their dollars together. CMB Export, the company that found money for McClellan, says says it has raised a total of $350 million for projects throughout California.

The program carries few guarantees for immigrants. If their investment is approved, they are eligible only for a "conditional" green card, good for two years. If the business flops, they could lose their money and a shot at a permanent green card.

"If the project fails, and it fails within three or four years of their investment, they won't get their green card," said Robert Gafney, a San Francisco immigration lawyer who deals with EB-5.

Some deals have soured.

Last year the U.S. Citizenship and Immigration Services, which oversees EB-5, terminated a program that raised $7.5 million to build a wastewater treatment plant in Victorville.

Officials in the Southern California desert town said the treatment facility enabled Victorville to lure a Dr Pepper Snapple bottling plant and 300 jobs. But the federal agency said it wasn't convinced of the connection between the jobs and the EB-5 investments.

As a result, the city is refunding all the investors' money, said Keith Metzler, Victorville's economic development director. He said only one of the investors ever got a green card – a conditional green card at that, not a permanent card.

Metzler said the termination has caused the city other problems as well. But Victorville isn't giving up on EB-5. It's suing the federal government in an effort to get the program reinstated.

"It is a good program," Metzler said. "It serves a financing need, especially for public works projects."

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