December 28, 2011
The New York Times, Editorial
The Times has a big, fat blind spot and it obscures 22 acres in Prospect Heights.
The federal government’s investor visa, created in 1990, gives foreigners a chance at green cards if they invest $1 million to build a business in the United States that creates at least 10 jobs. Investing in an area with high unemployment would cut that price in half.
The program, known as EB-5, has led foreigners to invest in projects around the country, like factories, resorts, shipyards and other enterprises in designated poor areas in need of jobs. A report in The Times last week found that EB-5 applications have nearly quadrupled in two years, to more than 3,800 in the 2011 fiscal year.
But the program has spawned cynical practices that are stretching the rules and violating the spirit of the law. Some participants in New York, the report found, are pouring money into development zones that are misleadingly labeled as high-unemployment areas to qualify for the lower $500,000 investment threshold, but are not poor or underdeveloped.
For example, a $750 million office tower in the mid-Manhattan diamond district has raised 20 percent of its financing through the EB-5 program. This was made possible through a trick of mapmaking in which state officials counted the number of unemployed people in the census tract next door, which includes Times Square, to justify calling the whole area a high-unemployment zone.
Likewise, the gerrymandered lines of the development zone in Lower Manhattan near Wall Street skirt the wealthy enclaves but cross the East River to enfold a public-housing project in Brooklyn. Visa-seekers have used this district in three separate projects to qualify for the $500,000 discount.
NoLandGrab: Is it just coincidence that The Times fails to mention the grandaddy of EB-5 abuse, their development partner Bruce Ratner's Atlantic Yards?
Well, it's good that the Times is taking EB-5 issues seriously, but it's glaring that one of the key projects to take advantage of this gerrymandering, the Atlantic Yards project, went unmentioned. (Is that the "spirit of the Times," channeled through the publisher, a former business partner with Atlantic Yards developer Forest City Ratner?)
It's also notable that the Times does not recognize that the intent of Congress--to create jobs--is subverted in other ways, such as giving immigrant investors credit for jobs created by money contributed by taxpayers, or by allowing dubious calculations of indirect job creation.
MichaelBenjamin2012's Blog, Using Poor NYers as window dressing…Again! – UPDATED
Projects such as Atlantic Yards, the Battery Maritime Building, and the International Gem Tower have used questionable maps and the EB-5 program to attract foreign investors. Blogger Norman Oder and Reuters have revealed that manipulation of the program extends beyond deceptive zoning districts to misrepresentations and flat-out lies told to potential Chinese and Korean investors.
Posted by eric at December 28, 2011 11:02 AM