1/25/26 – One in every five Texans lives in a floodplain, according to the first Texas State Flood Plan. We have the second highest number of repetitive loss properties in the country, according to the Insurance Journal. And 30 states have populations smaller than the number of people living in Texas floodplains.
The number of floodplain dwellers in the San Jacinto watershed alone exceeds the entire populations of 15 states and the District of Columbia. And it’s not all because of rainfall, flat land, or our proximity to the Gulf. Government secrecy compounds those issues.
Purpose of FOIA and TPIA
While governments at all levels pay lip service to transparency, the reality can be quite different. Journalists and concerned citizens frequently have their Freedom of Information Act (FOIA) and Texas Public Information Act (TPIA) requests denied. Usually, the denials occur when they might embarrass someone in government. Yet that’s exactly why those two acts were passed decades ago. And that’s why we need to rededicate ourselves to openness.
State, County, Municipal Examples
Let me give you three recent examples.
Scarborough Land West of Kingwood
A Dallas-based company called Scarborough bought 5,300 acres at the confluence of Spring, Cypress and Turkey Creeks where they join the San Jacinto West Fork. Virtually all the land is in floodplains or floodways. The developer says the State of Texas is his partner.
Land purchased by Scarborough last year. All but the dark gray areas within the red are in floodplains or the floodway.
The Texas School Land Board invested an undisclosed amount of money for undisclosed terms in the development of the property.
The state has rebuffed attempts to discover why it is investing in the development of such dangerous property.
The Texas General Land Office oversees the School Land Board but has refused to clarify media requests and repeatedly appealed FOIA requests to Attorney General Ken Paxton. Paxton keeps finding reasons to avoid compliance with the spirit of the law.
The state even refused a request from a Texas representative. They demanded the lawmaker sign a non-disclosure agreement. The lawmaker found it so onerous, he said he refused to sign it.
Paxton has announced his intention to run for the U.S. Senate. And Dawn Buckingham, GLO Commissioner is running for re-election.
Harris County Flood Maps
The term “caveat emptor” (buyer beware) goes back 2,000 years to Roman times and became firmly embedded in English Common Law during the Middle Ages.
For people to know whether they’re buying land in a floodplain, they need access to current flood maps based on the best available information. But 8.5 years after Hurricane Harvey, Harris County Flood Control District has not released updated flood maps – effectively keeping buyers in the dark about their flood risk.
HCFCD has repeatedly ignored media requests for the new flood maps. The cover story is that their contract with FEMA prohibits release of the flood maps before FEMA vets them. But the County refuses to produce the contract. And other counties throughout Texas routinely publish “draft” maps, with the understanding that they are subject to revision by FEMA.
Romerica Land in Kingwood
Several years ago, Romerica bought more than 300 acres between Kingwood Lake and the San Jacinto West Fork. Virtually all of it lies in floodplains or floodways.
Yet the company has persisted in trying to develop it.
First, they wanted to build 25- to 50-story high rises around a marina that would hold boats too big to float on the West Fork.
Then, they wanted to build luxury homes on stilts, even though homes built on 25 foot stilts had already flooded.
Recently, they announced plans to build a 500,000 square foot, two-hotel complex surrounded by 125 luxury, 8,600 square foot villas.
Even though the most recent plan is on Romerica’s highest ground, the swampland still floods badly and repeatedly.
Location of Romerica’s proposed new development in May of 2024
When Sylvester Turner was Mayor, he reportedly instructed Public Works not to approve any building permits for the property. Turner had personally seen how badly that area flooded.
But now Houston Public Works has approved a preliminary drainage survey for the two hotels (including a Fairmont) and 125 massive villas.
Refusing my FOIA request was hilarious. In their letter to the AG, an assistant City Attorney cited information I didn’t even request to enhance her chances of keeping the study secret. Public Works even refused to supply a copy of the drainage analysis to Houston City Council Member Fred Flickinger.
I have obtained similar drainage studies from Harris, Montgomery and Liberty Counties without such objections.
Illusion of Transparency
Usually, when people have nothing to hide, they quickly volunteer information. When they withhold information, they might have a valid reason. More likely, in my experience, they may have something to hide.
FOIA was passed in 1966 to shift the presumption of government information from secrecy to disclosure. Its core purpose was to give citizens, journalists, and Congress a legal mechanism to see how the government actually operates—rather than relying on voluntary or selective releases.
Before FOIA, government information was disclosed at agency discretion. After FOIA, disclosure became the default.
FOIA passed because Congress concluded that a rapidly expanding federal bureaucracy had become too secretive, too insulated, and too powerful—and that democracy required legally enforceable transparency, not voluntary disclosure.
Newspapers across Texas demanded reform. Voters were openly angry. Lawmakers feared losing office. Reform candidates surged in the 1973 elections. But according to many journalists and activist groups, transparency laws were imposed on a system that never truly wanted them.
Texas recently required creation of a searchable database of letter rulings under House Bill 3033, but as of January 23, 2026, Paxton’s office had only gotten up to 2023. None of the PDFs would open. And HTML files were unavailable.
Screen capture from Rulings website. Site froze when I tried to open first PDF.
According to his office, Paxton received 40,000 appeals of open records requests in 2023 alone. So, there’s no way to determine whether Paxton’s office exhibits a systematic bias for or against TPIA requests. However, 40,000 is a shocking number. It shows how frequently local and county jurisdictions want to keep matters secret.
Why This Matters for Floodplain Development Issues
Texas adopted transparency laws in 1973 for the same reason they matter today:
Decisions affecting land, money, and power tend to drift toward secrecy without legal force.
In floodplain development, appeals of FOIA and TPIA requests commonly cite the privacy of developer studies as the reason for not releasing them. But in my humble opinion once a government official stamps such a study “approved,” the public should have the right to see the basis for the approval. Anything less is government by secrecy.
In the case of flood safety, such secrecy can destroy lives, homes, and life savings. And the statistics in the first two paragraphs of this post prove it.
Posted by Bob Rehak on 1/25/2026
3071 Days since Hurricane Harvey
The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2018/07/HumbleFloodFromHCFCD-e1761946748900.jpg?fit=1100%2C821&ssl=18211100adminadmin2026-01-25 19:49:152026-01-29 06:39:39How Government Secrecy Contributes to Flooding
In fairness, before getting into concerns, let me state several things about the plans.
The consulting engineer clearly labeled the drainage analysis as preliminary.
Each page of the drainage analysis contains a disclaimer that says, “Note: The drainage plan is conceptual in nature and the final drainage design shall be in conformance with the latest City of Houston Infrastructure Design Manual.”
Page 3 states that:
All structures will have an elevation two feet above the 500-year flood level.
All proposed structures will be built on piers to reduce the need for fill.
Dirt excavated from detention ponds will be hauled away from the site.
Questions Raised by Plans
However, the preliminary drainage analysis raised more questions than it answered. For instance:
It did not claim “no adverse impact” downstream. Why?
The drainage impact analysis was dated 2/19/25 and approved by the City’s Floodplain Group on 3/3/25. Why the long delay before making them public?
Why deny me the analysis, but give it to Bloch?
A Public Works employee told me the plans were based on new, post-Harvey flood maps. But Page 2 states that they’re based on 2007 maps.
With that in mind, the 2007 maps show virtually all of the proposed development in the 100-year floodplain. How much of that is now in the floodway? Neither Public Works, nor Harris County Flood Control District will reveal the new flood map for this development. Why the secrecy?
The drainage analysis does not show roadways or trails which have the ability to back water up into existing neighborhoods. Why?
The drainage analysis does not consider water draining into the area from Trailwood, Kingwood Lakes, Kings Forest or Kingwood Drive. Why? These wetlands already serve a flood-mitigation purpose that will likely be destroyed.
The drainage analysis conflicts with promotional literature provided by the developer. The literature, for instance shows the road network being built up to 60 feet and pedestrian paths being built up to 71 feet.
Ground level varies throughout the development. According to the USGS National Map, it averages about 50 feet, ranging down to 46. So how much fill would it take to raise the roads 10-15 feet?
Elevation profile of Romerica land from USGS National Map shows average height of about 50 feet.
The general plan shows approximately 6,000 feet of roadway, with the streets alone being 60 feet wide . (6000L x 60W x 10H = 3.6 million cubic feet.) That’s 133,333 cubic yards of fill. Yet the analysis claims they need only 16,966 cubic yards of fill. And they won’t be getting it from the detention basins, because they say they’re hauling all that off.
So, how are they accounting for another 100,000+ cubic yards of fill? How will they raise the streets?
Next, where is the outflow analysis for the detention basins? None is provided. So, we can’t see whether they are adding or subtracting to flood peaks.
Dubious Benefit of Detention in Floodplain
And then there’s the biggest question of all. Will flood-plain detention that quickly goes under water in floods provide any flood-reduction benefit?
Floodplains already serve as stormwater storage during floods. FEMA considers floodplain storage already “spoken for.”
Still, detention basins are allowed in floodplains with certain provisions. Harris County requires basins to drain by gravity. But the bottom of these basins is 10 feet below the level of adjacent Kingwood Lake and 4.5 feet below the level of Lake Houston. So gravity alone will never drain these ponds in a flood. Pumps would be required. And electricity is often knocked out in floods.
What the Romerica Property looked like in the May 2024 flood. Water rose to treetop level.
And if new basins fill at the same time as the river, it provides zero peak flow reduction. That is why claimed floodplain detention is often illusory. Especially when the pre-/post- runoff ratio will increase almost 4X (Page 5).
Flickinger Wisely Pulls Variance Approval from Planning Commission Agenda
The City of Houston Planning Commission was scheduled to review a variance request today for Romerica. However, City Council Member Fred Flickinger wisely requested deferral of consideration until 2/5/26. That should give us more time to sort out these inconsistencies.
The variance request has to do with not connecting the east-west street to other streets on the east. That’s because there are no streets in that area. A Kingwood Country Club golf course surrounds Romerica’s property in that direction.
The delay gives us extra time to examine the rest of their plans.
Posted by Bob Rehak on 1/22/2026
3068 Days since Hurricane Harvey
The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2026/01/20240504-DJI_20240504090422_0214_D-2-copy.jpg?fit=1100%2C619&ssl=16191100adminadmin2026-01-22 21:47:302026-01-23 10:41:17Romerica’s Preliminary Drainage Analysis Raises Many Questions
1/21/26 – EB-5 visas are a special type of visa designed to attract foreign investment in American infrastructure projects and create American jobs. They put foreigners with approximately a million dollars to invest at the front of the immigration line. I asked ChatGPT, “What happens if you get an EB-5 visa, but then the project you invested in never gets built?”
Fictional AI image created by ChatGPT
That opened up a Pandora’s box. Evidently, the U.S. Customs and Immigration Service (USCIS) and Securities & Exchange Commission (SEC) encounter this problem frequently. Here’s what I learned after a day of online exploration.
What Happens If Project Is Never Built?
For applicants, the consequences depend on where they are in the EB-5 process and why the project failed. The outcome can range from merely losing their investment to losing immigration benefits or both.
EB-5 is not a “pay-for-visa” program. USCIS requires:
Capital to be “at risk”
It must create at least 10 qualifying U.S. jobs per investor
Those jobs must actually be created, not just planned.
If the project is never built, job creation almost always fails — which is fatal to the visa.
ChatGPT
What happens to the visa depends on how the project fails and at which stage. There is no automatic protection. Approval of an EB-5 petition does not guarantee the success of the business or the return of capital. And the U.S. government does not underwrite or insure EB-5 investments.
Project failure is far more serious than in ordinary real-estate investing. EB-5 investors can lose both their investment AND their visa.
Red Flags in EB-5 Offerings
According to ChatGPT, these red flags appear repeatedly in failed EB-5 cases/projects.
“Job Cushion” Based Only on Future Projections
A legitimate EB-5 project should show at least 20-30% excess jobs based on hard construction costs alone. Danger signs include that cushion relying on future operations, such as a “Phase II.”
Developer with No Completed U.S. Projects
EB-5 visas are based on execution, not vision. USCIS does not care about renderings, master plans, press releases, or “international experience.” They only care whether buildings were actually built, certificates of occupancy were issued and operations began. Many EB-5 failures reportedly trace directly to “First U.S. Project.”
Vague Exit Strategy
EB-5 investors are almost always unsecured, subordinated, and last in line. Beware of phrases in promotional literature, such as “Sale Expected.” Repayment risk for investors may be extreme.
Floodway/Floodplain Location
A project located in a floodway or floodplain faces extraordinary engineering uncertainty. If construction is not feasible due to regulatory barriers, USCIS can later characterize the project as not viable from inception.
Refusal to Release Drainage Impact Analysis
If the project fails, this can become a material omission under federal securities law.
A Maze of Shell Companies
A complex web of LLCs and offshore entities may obscure ownership, transfer of funds, and transparency, especially if some entities are offshore or owned by foreign nationals.
Major Hotel-Chain-Involvement Claimed
Major hotel chains do not attach their names casually to projects. Saying major hotel chains are involved is a very common misrepresentation in EB-5 disputes. Brand usage without authorization has appeared repeatedly in prior SEC enforcement actions. Demand to see a signed letter of intent from any hotel chain touted as part of a project.
Why Hotels?
Hotels create not only construction jobs, they create permanent operational jobs, too – housekeeping, front desk, food & beverage, maintenance, management and more. This creates what EB-5 insiders call a “job factory.” Few other types of assets offer this.
Jobs can be modeled and assumed before anything is built. Reality is only tested years later…if the project gets built.
Hotels are also easy for foreign investors to understand. The psychological simplicity is powerful. But in the absence of a signed management agreement, beware.
Moreover, hotels are capital intensive, accommodating large numbers of EB-5 investors per project.
Finally, hotels can mask fatal land-use problems. EB-5 developers often propose them on floodplain land and wetlands, which conventional lenders avoid, but which foreigners may not understand.
A luxury hotel can be proposed almost anywhere on paper. And the difficulty of such sites can obscure the ultimate pending failure for years.
SEC and DHS investigators call this model “the hotel shell.” It’s a known “failure architecture.”
How Developers Can Quietly Fail EB-5 Projects
Most EB-5 projects do not collapse dramatically. They reportedly begin and then fade out according to a common pattern:
Promotion with a glossy website, roadshows, and a conceptual master plan. Capital is raised before execution risk is visible.
As time passes, investors are told of minor delays related to infrastructure costs, drainage requirements, off-site mitigation, and rising construction costs.
The capital stack breaks (the order in which money is repaid if something goes wrong). EB-5 money alone cannot carry the project as lenders withdraw, interest rates rise, appraisals come in low, or construction bids exceed the estimate.
Then silence! No press releases. No construction start. Updates stop. Investors receive only quarterly status letters. This phase can last years.
Finally, the USCIS deadline arrives. No construction. No jobs. No recovery of investment. And visa revocation.
To Verify Whether Developers Have Actually Completed Projects
Do not rely on marketing materials. Do your own due diligence.
Ask for Certificates of Occupancy from previous projects. Crosscheck those with county appraisal records. Check improvement values, year built, and square footage. If improvement value is near zero after several years, the project has not been built.
Look for building-permit close outs. If permits remain open for years, that’s a red flag.
Check for litigation. Search federal courts, bankruptcy courts and securities litigation. EB-5 failures often involve investor lawsuits, SEC actions and receiverships.
And finally look for consistency of the developer’s track record. Be wary if completed projects are small (or overseas), but proposed projects are grandiose.
Posted by Bob Rehak on 1/21/2026 based on ChatGPT responses to multiple questions
3067 Days since Hurricane Harvey
The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2026/01/20260121-Failed-EB5-Investment.jpg?fit=1100%2C733&ssl=17331100adminadmin2026-01-21 20:05:212026-01-21 20:39:33Red Flags for EB-5 Visa Applicants, Projects
How Government Secrecy Contributes to Flooding
1/25/26 – One in every five Texans lives in a floodplain, according to the first Texas State Flood Plan. We have the second highest number of repetitive loss properties in the country, according to the Insurance Journal. And 30 states have populations smaller than the number of people living in Texas floodplains.
The number of floodplain dwellers in the San Jacinto watershed alone exceeds the entire populations of 15 states and the District of Columbia. And it’s not all because of rainfall, flat land, or our proximity to the Gulf. Government secrecy compounds those issues.
Purpose of FOIA and TPIA
While governments at all levels pay lip service to transparency, the reality can be quite different. Journalists and concerned citizens frequently have their Freedom of Information Act (FOIA) and Texas Public Information Act (TPIA) requests denied. Usually, the denials occur when they might embarrass someone in government. Yet that’s exactly why those two acts were passed decades ago. And that’s why we need to rededicate ourselves to openness.
State, County, Municipal Examples
Let me give you three recent examples.
Scarborough Land West of Kingwood
A Dallas-based company called Scarborough bought 5,300 acres at the confluence of Spring, Cypress and Turkey Creeks where they join the San Jacinto West Fork. Virtually all the land is in floodplains or floodways. The developer says the State of Texas is his partner.
The Texas School Land Board invested an undisclosed amount of money for undisclosed terms in the development of the property.
The Texas General Land Office oversees the School Land Board but has refused to clarify media requests and repeatedly appealed FOIA requests to Attorney General Ken Paxton. Paxton keeps finding reasons to avoid compliance with the spirit of the law.
The state even refused a request from a Texas representative. They demanded the lawmaker sign a non-disclosure agreement. The lawmaker found it so onerous, he said he refused to sign it.
Paxton has announced his intention to run for the U.S. Senate. And Dawn Buckingham, GLO Commissioner is running for re-election.
Harris County Flood Maps
The term “caveat emptor” (buyer beware) goes back 2,000 years to Roman times and became firmly embedded in English Common Law during the Middle Ages.
For people to know whether they’re buying land in a floodplain, they need access to current flood maps based on the best available information. But 8.5 years after Hurricane Harvey, Harris County Flood Control District has not released updated flood maps – effectively keeping buyers in the dark about their flood risk.
Houston Chronicle investigative reporter Yilun Cheng found that 65,000 homes have been built in Houston floodplains since Harvey. That number will also certainly grow when the County eventually releases new flood maps.
HCFCD has repeatedly ignored media requests for the new flood maps. The cover story is that their contract with FEMA prohibits release of the flood maps before FEMA vets them. But the County refuses to produce the contract. And other counties throughout Texas routinely publish “draft” maps, with the understanding that they are subject to revision by FEMA.
Romerica Land in Kingwood
Several years ago, Romerica bought more than 300 acres between Kingwood Lake and the San Jacinto West Fork. Virtually all of it lies in floodplains or floodways.
Yet the company has persisted in trying to develop it.
Even though the most recent plan is on Romerica’s highest ground, the swampland still floods badly and repeatedly.
When Sylvester Turner was Mayor, he reportedly instructed Public Works not to approve any building permits for the property. Turner had personally seen how badly that area flooded.
But now Houston Public Works has approved a preliminary drainage survey for the two hotels (including a Fairmont) and 125 massive villas.
Public Works also recommended a plat variance that could limit emergency access. And Public Works denied my FOIA request for Romerica’s drainage analysis and asked the Attorney General (AG) to support their denial. Regardless, I obtained a copy through another resident that Public Works gave the study to.
Refusing my FOIA request was hilarious. In their letter to the AG, an assistant City Attorney cited information I didn’t even request to enhance her chances of keeping the study secret. Public Works even refused to supply a copy of the drainage analysis to Houston City Council Member Fred Flickinger.
I have obtained similar drainage studies from Harris, Montgomery and Liberty Counties without such objections.
Illusion of Transparency
Usually, when people have nothing to hide, they quickly volunteer information. When they withhold information, they might have a valid reason. More likely, in my experience, they may have something to hide.
FOIA was passed in 1966 to shift the presumption of government information from secrecy to disclosure. Its core purpose was to give citizens, journalists, and Congress a legal mechanism to see how the government actually operates—rather than relying on voluntary or selective releases.
Before FOIA, government information was disclosed at agency discretion. After FOIA, disclosure became the default.
FOIA passed because Congress concluded that a rapidly expanding federal bureaucracy had become too secretive, too insulated, and too powerful—and that democracy required legally enforceable transparency, not voluntary disclosure.
TPIA passed in 1973 in direct response to the Sharpstown Stock Fraud Scandal. It involved so many officials that public trust in government collapsed. At the time, Texas governments considered transparency a courtesy, not a right.
Newspapers across Texas demanded reform. Voters were openly angry. Lawmakers feared losing office. Reform candidates surged in the 1973 elections. But according to many journalists and activist groups, transparency laws were imposed on a system that never truly wanted them.
Texas recently required creation of a searchable database of letter rulings under House Bill 3033, but as of January 23, 2026, Paxton’s office had only gotten up to 2023. None of the PDFs would open. And HTML files were unavailable.
According to his office, Paxton received 40,000 appeals of open records requests in 2023 alone. So, there’s no way to determine whether Paxton’s office exhibits a systematic bias for or against TPIA requests. However, 40,000 is a shocking number. It shows how frequently local and county jurisdictions want to keep matters secret.
Why This Matters for Floodplain Development Issues
Texas adopted transparency laws in 1973 for the same reason they matter today:
In floodplain development, appeals of FOIA and TPIA requests commonly cite the privacy of developer studies as the reason for not releasing them. But in my humble opinion once a government official stamps such a study “approved,” the public should have the right to see the basis for the approval. Anything less is government by secrecy.
In the case of flood safety, such secrecy can destroy lives, homes, and life savings. And the statistics in the first two paragraphs of this post prove it.
Posted by Bob Rehak on 1/25/2026
3071 Days since Hurricane Harvey
The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.
Romerica’s Preliminary Drainage Analysis Raises Many Questions
1/22/26 – Despite the City of Houston appealing my FOIA request for Romerica’s drainage impact analysis to the Texas Attorney General, this morning the City emailed both the analysis and a new general plan for Romerica’s proposed floodplain development to another Kingwood resident, Chris Bloch. Bloch shared his copies with me and they raise many questions.
First, Some Disclaimers
In fairness, before getting into concerns, let me state several things about the plans.
Questions Raised by Plans
However, the preliminary drainage analysis raised more questions than it answered. For instance:
Ground level varies throughout the development. According to the USGS National Map, it averages about 50 feet, ranging down to 46. So how much fill would it take to raise the roads 10-15 feet?
The general plan shows approximately 6,000 feet of roadway, with the streets alone being 60 feet wide . (6000L x 60W x 10H = 3.6 million cubic feet.) That’s 133,333 cubic yards of fill. Yet the analysis claims they need only 16,966 cubic yards of fill. And they won’t be getting it from the detention basins, because they say they’re hauling all that off.
Next, where is the outflow analysis for the detention basins? None is provided. So, we can’t see whether they are adding or subtracting to flood peaks.
Dubious Benefit of Detention in Floodplain
And then there’s the biggest question of all. Will flood-plain detention that quickly goes under water in floods provide any flood-reduction benefit?
Floodplains already serve as stormwater storage during floods. FEMA considers floodplain storage already “spoken for.”
Still, detention basins are allowed in floodplains with certain provisions. Harris County requires basins to drain by gravity. But the bottom of these basins is 10 feet below the level of adjacent Kingwood Lake and 4.5 feet below the level of Lake Houston. So gravity alone will never drain these ponds in a flood. Pumps would be required. And electricity is often knocked out in floods.
And if new basins fill at the same time as the river, it provides zero peak flow reduction. That is why claimed floodplain detention is often illusory. Especially when the pre-/post- runoff ratio will increase almost 4X (Page 5).
Flickinger Wisely Pulls Variance Approval from Planning Commission Agenda
The City of Houston Planning Commission was scheduled to review a variance request today for Romerica. However, City Council Member Fred Flickinger wisely requested deferral of consideration until 2/5/26. That should give us more time to sort out these inconsistencies.
The variance request has to do with not connecting the east-west street to other streets on the east. That’s because there are no streets in that area. A Kingwood Country Club golf course surrounds Romerica’s property in that direction.
The delay gives us extra time to examine the rest of their plans.
Posted by Bob Rehak on 1/22/2026
3068 Days since Hurricane Harvey
The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.
Red Flags for EB-5 Visa Applicants, Projects
1/21/26 – EB-5 visas are a special type of visa designed to attract foreign investment in American infrastructure projects and create American jobs. They put foreigners with approximately a million dollars to invest at the front of the immigration line. I asked ChatGPT, “What happens if you get an EB-5 visa, but then the project you invested in never gets built?”
That opened up a Pandora’s box. Evidently, the U.S. Customs and Immigration Service (USCIS) and Securities & Exchange Commission (SEC) encounter this problem frequently. Here’s what I learned after a day of online exploration.
What Happens If Project Is Never Built?
For applicants, the consequences depend on where they are in the EB-5 process and why the project failed. The outcome can range from merely losing their investment to losing immigration benefits or both.
EB-5 is not a “pay-for-visa” program. USCIS requires:
What happens to the visa depends on how the project fails and at which stage. There is no automatic protection. Approval of an EB-5 petition does not guarantee the success of the business or the return of capital. And the U.S. government does not underwrite or insure EB-5 investments.
Project failure is far more serious than in ordinary real-estate investing. EB-5 investors can lose both their investment AND their visa.
Red Flags in EB-5 Offerings
According to ChatGPT, these red flags appear repeatedly in failed EB-5 cases/projects.
“Job Cushion” Based Only on Future Projections
A legitimate EB-5 project should show at least 20-30% excess jobs based on hard construction costs alone. Danger signs include that cushion relying on future operations, such as a “Phase II.”
Developer with No Completed U.S. Projects
EB-5 visas are based on execution, not vision. USCIS does not care about renderings, master plans, press releases, or “international experience.” They only care whether buildings were actually built, certificates of occupancy were issued and operations began. Many EB-5 failures reportedly trace directly to “First U.S. Project.”
Vague Exit Strategy
EB-5 investors are almost always unsecured, subordinated, and last in line. Beware of phrases in promotional literature, such as “Sale Expected.” Repayment risk for investors may be extreme.
Floodway/Floodplain Location
A project located in a floodway or floodplain faces extraordinary engineering uncertainty. If construction is not feasible due to regulatory barriers, USCIS can later characterize the project as not viable from inception.
Refusal to Release Drainage Impact Analysis
If the project fails, this can become a material omission under federal securities law.
A Maze of Shell Companies
A complex web of LLCs and offshore entities may obscure ownership, transfer of funds, and transparency, especially if some entities are offshore or owned by foreign nationals.
Major Hotel-Chain-Involvement Claimed
Major hotel chains do not attach their names casually to projects. Saying major hotel chains are involved is a very common misrepresentation in EB-5 disputes. Brand usage without authorization has appeared repeatedly in prior SEC enforcement actions. Demand to see a signed letter of intent from any hotel chain touted as part of a project.
Why Hotels?
Hotels create not only construction jobs, they create permanent operational jobs, too – housekeeping, front desk, food & beverage, maintenance, management and more. This creates what EB-5 insiders call a “job factory.” Few other types of assets offer this.
Jobs can be modeled and assumed before anything is built. Reality is only tested years later…if the project gets built.
Hotels are also easy for foreign investors to understand. The psychological simplicity is powerful. But in the absence of a signed management agreement, beware.
Moreover, hotels are capital intensive, accommodating large numbers of EB-5 investors per project.
Finally, hotels can mask fatal land-use problems. EB-5 developers often propose them on floodplain land and wetlands, which conventional lenders avoid, but which foreigners may not understand.
A luxury hotel can be proposed almost anywhere on paper. And the difficulty of such sites can obscure the ultimate pending failure for years.
SEC and DHS investigators call this model “the hotel shell.” It’s a known “failure architecture.”
How Developers Can Quietly Fail EB-5 Projects
Most EB-5 projects do not collapse dramatically. They reportedly begin and then fade out according to a common pattern:
To Verify Whether Developers Have Actually Completed Projects
Do not rely on marketing materials. Do your own due diligence.
Posted by Bob Rehak on 1/21/2026 based on ChatGPT responses to multiple questions
3067 Days since Hurricane Harvey
The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.