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December 9, 2011

The Bed-Stuy Boomerang: how state officials gerrymandered a map to help Forest City Ratner recruit immigrant investors and save big (and how the EB-5 program is riddled with such practices)

Atlantic Yards Report

Just when you think the Atlantic Yards green-cards-for-cash scheme couldn't get any more crooked, Norman Oder unearths a crooked map.

Public officials have done much to help developer Forest City Ratner (FCR) recruit Chinese investors to provide a $249 million low-interest loan in exchange for green cards--and now there's new evidence.

We knew that officials from New York City, New York State, and Brooklyn wrote letters to the United States Citizenship and Immigration Services (USCIS), the federal agency overseeing the EB-5 Immigrant Investor program, to get Atlantic Yards approved as an investment vehicle.

And we knew that Empire State Development Corporation official Peter Davidson joined a road show in China to hype the project before potential investors, misleadingly claiming that Atlantic Yards "will be the largest job-creating project in New York City in the last 20 years."

Now, evidence suggests that two New York State agencies helped gerrymander a map of Brooklyn unemployment--beginning at the Atlantic Yards site (in blue) in Prospect Heights, omitting more affluent census tracts nearby, and extending east to encompass poorer tracts in Bedford-Stuyvesant. (I'm dubbing the map "The Bed-Stuy Boomerang.")

The map ensured that the promoters of the EB-5 project could tell the needed 498 immigrant investors that the project was located in a Targeted Employment Area, featuring high unemployment. That meant investors had to put up only $500,000, rather than $1 million.

By getting this EB-5 project off the ground, the state helped FCR save more than $140 million, by my estimate, on a $249 million loan.

And it could help the New York City Regional Center (NYCRC), a private investment pool federally authorized to attract purportedly job-creating investments, reap some $50 million.

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NoLandGrab: Hello, New York Times, HELLO! While you're devoting an entire Sunday magazine to Hollywood, you're missing out on rampant fraud and abuse being perpetrated on behalf of your "business partner."

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For those unfamiliar with the nuances of Brooklyn geography, the left end of what Oder calls "the Bed-Stuy Boomerang" is mostly old warehouses along the Long Island Rail Road tracks. The right end, meanwhile, loops up into Bedford-Stuyvesant — and not its rapidly gentrifying western edge, but the still-impoverished middle. Neatly omitted, meanwhile, are the largely affluent brownstone blocks of Fort Greene to the project's north, Park Slope to the southwest, and Prospect Heights to the south.

Posted by eric at December 9, 2011 12:01 PM