Wednesday, February 02, 2011

How Bloomberg went to bat for Ratner's effort to gain $249 million in immigrant investor funding

Thanks to the website of an immigration broker in South Korea, we now have some of the documents used to promote the legitimacy of the effort to raise $249 million in EB-5 funds, mainly from Chinese investors, but partly from Korean ones, for Forest City Ratner's Atlantic Yards project.

Most of the documents are boilerplate recitations of money committed, though presumably presented as impressive signs of government and corporate commitment to so-called Brooklyn Arena and Infrastructure Project, a curious subset of Atlantic Yards as presented via the EB-5 program for immigrant investors.

Notably, however, one letter, from Mayor Mike Bloomberg, shows how much the city has gone to bat for such a questionable effort. (Click on all documents to enlarge.)

The Bloomberg letter

The 7/28/10 letter from Bloomberg to the director of the United States Citizenship and Immigration Services (USCIS) supports the New York City Regional Center's (NYCRC) effort to get pre-approval of its plan to raise money for the Brooklyn Arena and Infrastructure Project.

(The NYCRC, a private investment fund, packages the deal and gets $38,000 an investor in project issue fees.)

Bloomberg calls the $249 million sought "vital to the initial stages" of Atlantic Yards. However, as state officials admit, the project would go forward with or without the new funding.

As the yellow highlight added by the Kookmin consultancy suggests, the main emphasis of the letter, as aimed to immigrant investors, is to confirm that the city has put $155 million into Atlantic Yards--which is not the same thing as the project presented to investors.

The Forest City Ratner letter

The letter from Forest City Ratner to the NYCRC states that Forest City Ratner and its investors, partners, and affiliants have spent more than $270 million, with $187.8 million on deposit with various trustees to pay remaining costs.

That adds up to at least $457.8 million.
The ESDC letter

The Empire State Development Corporation letter, again sent to the NYCRC, states that the State of New York, via the ESDC, "has provided $100,000,000 of governmental funding towards costs incurred for the construction of certain infrastructure in connection with the Atlantic Yards Land Use Improvement and Civic Project."

Again, that's not the project presented to immigrant investors.

The bond trustee letter

The letter from Joseph Lawlor, VP, The Bank of New York Mellon, as PILOT Bond Trustee, indicates that $511 million of proceeds from PILOT [payment in lieu of taxes] Revenue Bonds have been received, and will help fund arena construction.

No comments:

Post a Comment