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February 14, 2011
Bait-and-switch on EB-5: FCR may use immigrant investor funds for housing, not arena, but says "we don't know" where money would go (Is this legit?)
Atlantic Yards Report
Forest City Ratner is playing "who's on first?" when it comes to the funds it's trying to raise via the hawking of green cards.
The saga of Forest City Ratner's attempt to raise $249 million from green card-seeking Chinese (and Korean) millionaires under the EB-5 program has reached a new level of absurdity, in which the developer and its allies have offered three separate explanations of how the money might be spent on Atlantic Yards.
This casts further doubt on the logic that each $500,000 investment would create ten jobs, as required under the federal immigration program.
And it suggests a bait-and-switch presented to the potential investors and possibly to the federal government.
Where would it go?
The destination for the funding keeps changing.
Remember, potential investors in the "Brooklyn Arena and Infrastructure Project" were promised glitz: they were told they were investing in an arena, infrastructure, and a railyard, even though the New York City Regional Center admitted to Reuters that the pitch was misleading.
FCR executive MaryAnne Gilmartin told the Wall Street Journal that the money would be used for the railyard, and maybe to pay off a land loan. I pointed to evidence that suggests the $153 million land loan would take precedence.
For housing?
At the Atlantic Yards District Service Cabinet meeting last Thursday, another explanation surfaced.
City Council Member Letitia James asked if the proceeds from the EB-5 program would be used for the financing of Building 2, the first planned (but stalled) tower, or for something else.
"We don’t know where those proceeds are going to go," Forest City executive Bruce Bender responded. "It’s a big project.”
Posted by eric at February 14, 2011 10:35 AM