Wednesday, March 09, 2011

Is the EB-5 money Plan B for infrastructure funding (after bonds plan was scotched)? Maybe, but maybe they're just winging it

Is Forest City Ratner aiming to use $249 million from foreign millionaires under the EB-5 immigration program to make up for an infrastructure gap? There are some hints that's so, but also some counter-evidence.

In 2009, the Brooklyn Arena Local Development Corporation (BALDC), set up to issue tax-exempt bonds for Atlantic Yards arena construction, was also considering the issuance of up to $400 million in bonds for Atlantic Yards infrastructure.

That didn't happen. As I wrote 11/30/09, the Empire State Development Corporation (ESDC) stated, somewhat cryptically:
ESDC was at one time considering additional tax exempt bonds for infrastructure financing. Ultimately ESDC decided not to pursue that type of financing.
The gap

The ESDC's 2009 Modified General Project Plan budgeted $717 million for project infrastructure, with $100 million from the state for infrastructure and under $100 million--the amount is debatable--from the city.

The bonds presumably would have filled some of the gap.

Forest City Ratner executive MaryAnne Gilmartin once said the $249 million would be used for a new railyard (infrastructure) and perhaps to pay off a land loan.

I pointed to evidence that the latter--the loan repayment--was a more likely priority. Then another Forest City executive said last month they hadn't decided how to use the EB-5 funding.

So maybe they're just winging it, and when the numbers "pencil out," as Gilmartin likes to say, they will proceed.

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