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October 8, 2010
The phantom 69.5 acres of collateral offered to Chinese investors in the "Brooklyn Stadium and Infrastructure Project" EB-5 funding scheme
Atlantic Yards Report
According to the English translation of a chart (below) given to green card-seeking Chinese investors by marketers for the New York City Regional Center, the "first collateral is the development rights to the 3,025,654 square-feet land the project will develop."
Nearly the same phrase (3,025,654 square feet of land) appears in the machine translation version of key facts provided to attendees at an October 11 investment seminar.
That could lead innocent investors to conclude that, should their investment not be returned in cash, they'd get a piece of about 69.5 acres.
Not at all.
The "land" is vertical, not horizontal
They would get a portion of 3,025,654 square feet of vertical development rights, achievable only by building residential and office towers over 15 or so acres.
That's a far more complicated proposition. To unlock the value of the development rights, such investors likely would have to partner with a sophisticated developer, like Forest City Ratner.
And Forest City Ratner would take a fee, thus diminishing the value of the collateral. As Michael D.D. White writes in Noticing New York:
If Ratner doesn’t return the their money the booby prize for the Chinese is that Ratner gets to keep their money!
NoLandGrab: It's becoming a sad joke that, as Norman Oder dutifully peels away the layers of Bruce Ratner's increasingly rotten green cards-for-cash onion, the mainstream media and elected officials keep their heads planted firmly in the sand.
Posted by eric at October 8, 2010 10:41 AM