Tuesday, December 27, 2016

New Hospital and Medical District planned for New Caney

Valley Ranch Medical District, a new 186-acre master-planned health and wellness epicenter, has plans to fill a void in the historically “medically underserved” community of East Montgomery County, officials said.

The medical district will be constructed within the 1,400-acre master-planned community of Valley Ranch located near the intersection of the Grand Parkway and Hwy. 59.

“As one of the fastest-growing corridors and at a critical location, the need for new facilities is immediate and the potential for a higher density of health care than our plans is quite realistic,” Signorelli Company Marketing Coordinator Alyssa McGuire said.

McGuire said the Signorelli Company, the project’s developer, is in the process of installing road and utility infrastructure for the development. The company issued a request for proposals to academic and health systems in November and plans to select Phase 1 partners over the next three months. Construction on the district’s buildings will begin as facilities are designed and permitted.

A projected completion date for the medical district has not been released, she said.

Additional health care resources are needed as the population of the Lake Houston area north of Kingwood continues to grow, said Rick Hatcher, president of the East Montgomery County Chamber of Commerce.

“The fact that we have two major hospitals in this area and more medical options coming—with this being another viable option—has a great impact,” Hatcher said. “More people creates more need.”

The new medical district will have more than 1 million square feet of health care developments and provide care for the residents in East Montgomery County and the Hwy. 59 corridor, who have limited options, McGuire said. It is anticipated to offer a broad range of specialties including cardiology, orthopedics and oncology, as well as women’s and children’s specialties, and primary care.

The medical district could also provide an economic boost, Hatcher said.

“It will be a great impact; anytime a big industry enters our market, every dollar is turned over seven times,” he said. “Anytime you have facilities like that, it provides a greater opportunity to attract new businesses.”

Compared with a similar-sized corridor, Hwy. 59 between the Grand Parkway and Beltway 8 has two hospital systems, while I-45 has 14 hospitals between Conroe and FM 1960.

“The medical district will have major impacts to the surrounding community from substantial job growth to tax base supporting Montgomery County and local schools to creating another anchor and regional draw,” McGuire said.

Additional reporting by Chris Shelton

Monday, December 19, 2016

Expansion of US disclosure requirements will impact foreign investors - the future of money laundering and tax enforcement

The United States is turning its attention to activities by foreign investors who use US trusts, limited liability entities, and other investment structures to conceal the ownership of criminal proceeds or foreign tax evasion. For both legitimate and illegitimate reasons, investors have historically sought to shield their identities by forming certain types of US entities. The following new measures will require such entities to disclose beneficial ownership information. This information may lead to investigations and prosecutions for money laundering, domestic and international tax evasion, and other illicit financial activities.

First, in January 2016, the Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury Department charged with safeguarding the financial system, issued two highly publicized Geographic Targeting Orders (GTOs) to combat illicit activity in the Miami-Dade County and Manhattan real estate markets. These GTOs require certain US title insurance companies to identify beneficial owners of entities for all-cash real estate purchase in Miami when the purchase price exceeds $1 million, and in Manhattan when the purchase prices exceeds $3 million. The government announced this as a pilot program to gain insight into the use of high-end real estate investments to conceal assets. In July 2016, FinCEN extended the time period for the original GTOs, and extended the scope to include real estate transactions above certain dollar thresholds in all five boroughs of New York City; in Broward and Palm Beach counties; in Los Angeles, San Francisco, and San Diego, California; and in San Antonio, Texas.

Second, FinCEN finalized new rules, known as the customer due diligence (CDD) rules, that require covered financial institutions, which include banks, brokers, and mutual funds, to obtain information concerning the beneficial owners of accounts held by entities. Under the CDD rules, these financial institutions are required to identify natural persons who own 25 percent or more of an entity that owns a US financial account or who have "significant responsibility" to control such an entity.

Third, in May 2016, the Treasury Department proposed regulations that, if promulgated, would impose new disclosure obligations on single-member limited liability companies (LLCs) owned by foreign persons, a type of entity that historically has been largely invisible to the government for reporting requirements. Under the proposed regulations, a single-member LLC would be required to identify its beneficial owner to the Internal Revenue Service annually on IRS Form 5472. This entity would also be required to report each related party with which it had a "reportable transaction," which is defined broadly to include almost every type of business transaction.

Notably, the US government may seek to bring money laundering charges for activity in the US that furthers foreign tax evasion. In Pasquantino v. United States, 544 U.S. 349 (2005), the Supreme Court upheld convictions under the wire fraud statute for carrying out a scheme in the US to evade Canadian taxes. The same reasoning may support a money laundering charge. While prosecutions under Pasquantino have been infrequent, current trends in government investigations indicate that the government may turn to this prosecutorial tool going forward.

Source: DLA Piper LLP - Kathy Keneally