More American Cronyism – U.S. Government Selling Visas to Fund Luxury Apartment Buildings

Merging, on paper, the affluent midtown neighborhood and the struggling one uptown placed Hudson Yards in a community with an overall high unemployment rate, positioning developer Related Cos. to gain low-cost financing from foreigners seeking green cards.
The program through which that happens, known as EB-5, enables foreign nationals to obtain U. S. permanent-resident status by putting up money for new business ventures that create American jobs. It gives ventures in high-unemployment and rural areas a special status to encourage investment. But as the program’s popularity has soared in recent years, the bulk of immigrant investment is going to projects that are located, like $20 billion Hudson Yards, in prosperous urban neighborhoods.
At least 80% of EB-5 money is going to projects that wouldn’t qualify as being in Targeted Employment Areas without ‘some form of gerrymandering,’ estimates Michael Gibson, managing director of USAdvisors.org, which evaluates projects for foreign investors.
Increasingly, the money appears to be flowing to the flashiest projects, which the investors often see as safest, EB-5 professionals say. Among those getting EB-5 money are an office building set to host Facebook Inc. near Amazon.com Inc.’s Seattle headquarters, a boutique hotel in high-end Miami Beach, and a slim Four Seasons condo-hotel in lower Manhattan that sports a penthouse with an asking price above $60 million. In all of them, geographic districts were crafted to include higher-unemployment areas.

This post was published at Liberty Blitzkrieg on Sep 11, 2015.