Why would EB-5 investors in Atlantic Yards earn no interest? Because it's such "a safe, secure position"
So keen are some Chinese to gain entry to America that they value the assurance of a Green Card over any financial return.To simplify the process? How about to maximize return to the New York City Regional Center and Forest City Ratner?
Most EB-5 schemes pay interest of between 2.5 and 2.75 per cent. But not this one, according to Gregg Hayden, the general manager of NYRC.
"The investor on this particular project, to simplify the process, is not getting paid any interest," says Mr Hayden. "We have put them in such a safe, secure position that they're not earning any interest. If you look at the spectrum of EB-5 projects, interest rates are paid according to risk."
As for the security of the the position, well, that's a matter for continued debate.
Buying green cards
The report in The National shows a NYCRC rep pretty much contradicting what his boss said six weeks ago.
Consider what NYCRC principal George Olsen told the 9/14/10 China Daily, in an article headlined Foreign Investors Loan Money for Green Cards:
Olsen said it's a "disservice" to a great program to think that these investors are buying green cards. "These investors are putting hard-earned money at risk in a way that benefits everyone," he said.The two risk factors he suggested: that the area must have a high unemployment rate and that "the investor also must ensure that 10 jobs are ultimately created for American residents. "
First, the unemployment rate is irrelevant if there's an investment that will create jobs. Second, it's questionable whether an investor "must ensure that 10 jobs are ultimately created for American residents."
Rather, the New York City Regional Center must produce a report, accepted by the federal government, that claims that the total amount of money invested, including but not limited to the EB-5 funds, creates or retains ten jobs directly or indirectly.
That's not quite the same hurdle.