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September 11, 2012
New video exposes the Culture of Cheating: Markowitz admits Brooklyn is not "1000 percent behind Atlantic Yards," as he told Chinese investors, but asserts, jocularly, it's "980 percent"
Atlantic Yards Report
Remember how Brooklyn Borough President Marty Markowitz made a video in the fall of 2010, claiming that Brooklyn was "1000 percent behind Atlantic Yards?"
Such misleading support helped Forest City Ratner raise some $228 million in cheap capital from immigrant investors via the federal government's EB-5 program, an effort I've been dissecting for two years under the rubric "Anatomy of a Shady Deal."
Well, I finally got Markowitz to explain himself--sort of--and he admitted he was wrong, though not by much.
Valuable help
Markowitz's shilling, as well as cheerleading from city and state officials, helped the developer save tens of millions of dollars from 456 investors, given that the would-be immigrants, who park $500,000 in a purported job-creating enterprise in exchange for green cards for themselves and their families, care little about earning interest.
The middleman--in this case a federally-authorized investment pool called the New York City Regional Center--loaned the money to Forest City at below-market interest, and gets to keeps the spread.
The loser? The public, since the intent of the law is to create new jobs, not simply to increase the profits of a developer by allowing it to substitute cheaper capital for existing capital, as seems to be the case here.
Thus Markowitz's role also highlights my new, ongoing Culture of Cheating series that aims to provide a framework for viewing the Atlantic Yards saga.
Posted by eric at September 11, 2012 11:57 AM