December 7, 2010
As FCR pitches Chinese investors seeking green cards, ESDC admits EB-5 arena funds not needed; is this legit if money's supposed to create jobs?
Part 3 of a series
Atlantic Yards Report
Nearly 500 Chinese millionaires, hoping for green cards and starry-eyed at the thought of pro basketball, may hold the key to developer Forest City Ratner's (FCR) progress with the Atlantic Yards project. Potential investors have been attending investment seminars in China like the one October 19 (promoted below); such sessions continue through December 19.
However, as detailed below, the effort to raise $249 million tests the spirit and perhaps the letter of an obscure but newly popular federal law that grants fast-track green cards in exchange for job-creating investments.
Rather than use investors' money as seed money or matching funds, as in some other EB-5 projects, it seems that Forest City Ratner would in large part simply be trading higher-cost financing for a no-interest loan.
Thus, it wouldn't create new jobs, even if it may fit within the loose strictures of the federal law, in which the total sum of money must generate 4980 jobs, ten per investor.
Should such tactics--essentially endorsed by the state, city, and Borough President, who have joined in project promotion--pass muster, they invite an absurd process: any developer might save hundreds of millions of dollars, substituting cheaper capital for existing capital, claiming it creates jobs because it's tied to a project with existing, committed investment.
That would help monopolize a limited federal resource--visas for job creation--while skirting the goals of the immigration program.
The "Brooklyn Arena and Infrastructure Project," a $1.448 billion subset--the arena, plus infrastructure and a new railyard--of the $4.9 billion Atlantic Yards project, has never been approved by any official body nor previously announced before the effort to solicit immigrant investors.
It is apparently formulated to generate--at least on paper--the necessary number of jobs.
It prominently features the Barclays Center arena, as in the graphics above and below, but the pitch involves some dodges:
- the arena, though the prime attraction, is already funded
- the role of government is exaggerated
- the chance of not getting green cards is dismissed
- the risk regarding the investment is downplayed
And the public officials promoting the effort may be helping Forest City Ratner above all else.
Posted by eric at December 7, 2010 11:27 AM