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October 6, 2010

State agency says Bruce Ratner used federal program to finance Atlantic Yards project, Nets arena

NY Daily News
by Michael O'Keeffe

A state official says funds Nets minority owner Bruce Ratner raises for the Atlantic Yards through a federal program that grants green cards to foreign investors will not create any new jobs beyond those already forecast for the $4.9 billion project, which includes a $900 million arena for the Nets.

Elizabeth Mitchell, a spokeswoman for the Empire State Development Corporation, said Ratner turned to the EB-5 program because it will save money on Atlantic Yards financing.

"If this financing was not available - or if Forest City Ratner is not as successful as we hope in raising funds under this program - then Forest City Ratner will need to raise funds from other sources to facilitate build-out of the entire project," Mitchell said in an email.

"It's ridiculous to think that Forest City Ratner can't fulfill its obligation to build a new rail yard without this money," said blogger Norman Oder, whose Atlantic Yards Report serves as a clearinghouse for information about the Brooklyn project. "It looks like an effort to save money on financing. Parent Forest City Enterprises has more than $467 million in cash and credit capacity, according to its 9/8/10 earnings release. If it had to spend the money, it would."

[Center for Immigration Studies Fellow David] North said Ratner probably isn't breaking any rules by tapping into the pay-to-stay scheme for cut-rate financing because the program's rules are vague. But he does object to granting residency to anybody who can write a $500,000 check.

"It shows the artificiality of the program, since these jobs would be there anyway, no matter where the funding comes from," North said. "I think the whole program is a terrible idea."


Related coverage...

Atlantic Yards Report, Daily News: ESDC admits "green cards for investors" program won't create any new jobs

Despite a phenomenally dull (and misleading) online headline, there's some important news in a Daily News article today headlined State agency says Bruce Ratner used federal program to finance Atlantic Yards project, Nets arena.

The headline in print is far more forceful: "Ratner plan Nets critics: Insist fund is about money grab, not jobs."

The news is not that, to finance a required new railyard, Ratner is trying to use a program that provides immigrants and their families green cards if they invest $500,000 to create or retain ten direct or indirect jobs.

The news is that the Empire State Development Corporation (ESDC) admits that the investment "will not create any new jobs beyond those already forecast."

I'm not so sure the rules aren't being broken. They sure look like they're being stretched.

After all, the whole effort is accompanied by astounding and misleading public relations, starting with the presentation of the project as coupled with the Nets and the NBA.

And it's clear that this is violating the spirit (if not the letter) of the law, given that Congressional backers all say it's about job creation, not job retention.

The role of the press

Credit the Daily News, in the person of Sports I-team reporter Michael O'Keeffe, for following up. It should be a big news story, but apparently no one else was interested.

The New York Post has written twice about the Marty Markowitz angle. The Wall Street Journal ran a softball story at the start, with no follow-up.

The Times has been silent. So has the Observer.

Develop Don't Destroy Brooklyn, Ratner's Attempt to Raise Cheap Atlantic Yards Cash Seems to Violate Federal Green Card Program

The Empire State Development Corporation admits that Bruce Ratner is misusing the federal EB-5 program which gives out green cards to foreign lenders in return for loans that create jobs or "retain jobs that would be lost without their money."

According to the ESDC, Ratner's attempt to use the program to raise nearly $250 million from Chinese lenders will not create any new jobs and is not needed to retain jobs.

NetsDaily, Controversy Continues to Roil Ratner Trip to China

Barclays Center, the first element in the project, is fully funded, but Ratner is seeking funds to finance the rebuilt railyard next door and pay off a loan on a piece of property outside the arena footprint. He's doing so under a controversial program that offers investors green cards in return for $500,000 in financing...and the middleman he's using to attract investors is using the Nets' visit to promote the effort.

The controversy has attracted so much attention that Brooklyn Boro President Marty Markowitz, an Atlantic Yards supporter, has decided not to accompany Ratner to Beijing.

NoLandGrab: Correction — the Barclays Center is allegedly fully funded.

Posted by eric at October 6, 2010 9:47 AM