City documents place total at $30 million, $46 million, $58 million
January 18, 2011 5:16 PM
VICTORVILLE • A federal agency is questioning the price of Victorville’s wastewater treatment plant, with documents showing three different totals that range from $30 million to nearly $58 million.
U.S. Citizenship and Immigration Services raised the dispute in a recent letter to the city, responding to Victorville’s appeal of the agency’s decision to terminate the local EB-5 visa investor program.
Victorville’s EB-5 Regional Center was approved by USCIS in June 2009, allowing the city to solicit $500,000 loans from foreign citizens who would then be put on the fast-track to citizenship. But USCIS terminated the EB-5 program in late October, citing concerns over whether the city was satisfying the agency’s requirement that each loan create at least 10 permanent jobs.
The city told USCIS it planned to use $25 million in EB-5 loans to help fund construction of its wastewater treatment plant, which was needed to lure Dr Pepper Snapple Group’s bottling hub to Southern California Logistics Airport.
An economic analysis on the project submitted to USCIS by John Husing in January 2009 lists construction costs for the plant at $30 million. This is the same price staff presented to City Council in June 2008, when the group unanimously voted to proceed with the project.
However, a business plan sent to USCIS May 4, 2010 in response to the agency’s first notice of intent to terminate the EB-5 program listed total construction costs at $46.52 million. This is the same price listed along with the dozens of change orders that have appeared on city agendas over the last two years.
Then, in the city’s Nov. 16 motion for USCIS to reconsider its precedent-setting decision to terminate the program, Victorville offered a new economic analysis to explain how the wastewater plant would result in 512 permanent jobs. And while the agency acknowledges in its letter that the analysis “appears to be statistically valid,” it questions why Victorville used a $57.89 million figure for construction costs in that study.
The city has declined to discuss its appeal of the EB-5 termination, citing potential litigation. But when the Daily Press has raised concerns over different price figures for the wastewater project in the past, city staff has stated that $30 million was for the plant itself while higher price tags that have popped up include different levels of related infrastructure.
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Brooke Edwards may be reached at (760) 955-5358 or at bedwards@VVDailyPress.com.