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The abdication of government: BP Markowitz and the ESDC's Davidson will flack Ratner's project in China, but won't comment on job claims

Also see coverage of a very misleading website promoting the project, the need for transparency on job claims, and video of a NYCRC official's astounding claims about the project.

For all the evidence that Atlantic Yards is more a private-public development than a public-private one, the latest twist--the effort to trade green cards for 498 Chinese investors (and their families) in exchange for $500,000 each--amps up the evidence.

The willingness of Brooklyn Borough President Marty Markowitz and Empire State Development Corporation (ESDC) Executive Director to pitch the project in China next week without saying (or knowing?) anything about the promised jobs suggests that project proponents have managed to rent government for private interests.

It's ridiculous to think that, without $249 million in low-cost financing from Chinese investors to build a new railyard, 7606 jobs would be saved.

Similarly, it's ridiculous to think that Forest City Ratner can't fulfill its obligation to build a new railyard without this money. It's simply a business proposition-a deceptive one that relies on the arena and team to raise money for another part of the project--to save money on financing.

No transparency

Markowitz's spokespeople simply wouldn't answer questions about how many jobs would be associated with this investment and why this specific investment is needed to create jobs.

(Markowitz is still waiting for a ruling from the New York City Conflicts of Interest Board regarding his planned trip, which would be paid for by the New York City Regional Center (NYCRC), the private firm delegated to manage such investments.)

ESDC spokeswoman Elizabeth Mitchell said that I should pose my questions about job creation to the NYCRC.

The NYCRC has not responded to my queries. Nor is it obligated to do so. So any public oversight of this important immigration issue gets very, very difficult.

Federal delegation, preposterous job claims

On the macro level, the federal government's EB-5 visa program authorizes regional centers to collect the investments, process the applications, and "prove"--via economic modeling--that each person's investment would create or retain ten direct or indirect jobs.

An investment of $249 million would have to create or retain 4980 jobs. The NYCRC is claiming 7696 jobs would associated with this investment, as seen on this website promoting an October 12 event.

That's preposterous.

After all, most of the permanent jobs associated with the $4.9 billion project would come from an unrelated office tower and associated building services and retail jobs associated with the residential towers, all of which are separate from the "project" and none of which are guaranteed.

The EB-5 investment is supposed to last two years. Yes, construction jobs can be included, but even using the Empire State Development Corporation's generous analysis, there would be at best 3070 construction jobs over that period.

And while it's permissible under federal regulations to claim that jobs are "retained" if not "created," in this case, it would be an enormous stretch to claim that jobs associated with arena construction depend on this investment.

FCR has its own very strong incentives to get the arena built, notably a $200 million-plus naming rights agreement with Barclays Capital. The money from Chinese investors would not be used for the arena, which would require the most amount of workers.

As I explain (here and here), the projections by the NYCRC are out of line with even the ESDC's generous estimates.

Markowitz evades

At a meeting September 29 on the Barclays Center public plaza, I tried to buttonhole Markowitz and ask him about his potential trip to China. I had in my hand a printout of the graphic at top.

As the photo (part of a set) by Tracy Collins suggests, Markowitz was not very receptive. He quickly moved away.

ESDC response

Taxpayers, not the NYCRC, are paying for Davidson's trip. Mitchell told me:
Peter Davidson will be in China for eight days, participating in the agenda determined by the Regional Center on behalf of New York State. Empire State Development will be paying for the trip. The exact cost has not been determined. This project has been a priority for the State from its inception, and ESD wants to be helpful in articulating the merits of the project. To that end, ESDC is committed to assisting our private partners secure the financing they need to ensure the project’s completion.

The $1.448 billion number is in reference to only the arena, infrastructure and rail yard, which are being marketed by the Regional Center in China. As you know, the project in its entirety includes the other elements as laid out in the GPP [General Project Plan]. With respect to your additional questions, we encourage you to pose your questions regarding the EB-5 protocol and job creation criteria to the Regional Center.
(Emphasis added)

How are we sure that Forest City Ratner needs this financing or simply wants it? Even if the ESDC wants to assist in such a plan, shouldn't it vet the plan?

Shouldn't it ask FCR for evidence of hardship? Shouldn't it ask to check the job numbers?

Note that, when Davidson appeared last January at a state Senate oversight hearing on ESDC operations regarding eminent domain--notably the Columbia University and Atlantic Yards cases--he was utterly silent.

Yes, he had only been in the job a few months. But it's a good bet he'll be more open when he gets to Beijing.

Raising questions with the USCIS

U.S. Citizenship and Immigration Services (part of the Department of Homeland Security, or DHS) spokeswoman Luz Irazabal told me that regional centers face annual oversight but questions can be raised by the public:
All petitions filed by a foreign entrepreneur connected to a regional center are reviewed individually as it pertains to the regional center.

To report your concern, feel free to send an email to USCIS.ImmigrantInvestorProgram@dhs.gov. You can also contact the DHS Office of the Inspector General at 1-800-323-8603 (phone), 202-254-2392 (fax) or DHSOIGhotline@dhs.gov (email).

As for following up after an allegation is filed, USCIS will investigate. However, we are not able to disclose information about pending/ongoing investigations.

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