It provides the unsurprising round-up of projects funded under the federal government's EB-5 program--in which immigrant investors get green cards for themselves and their families in exchange for a $500,000 investment that purportedly creates ten jobs.
Dismissing the controversy
And it mentions--and dismisses--a recent controversy:
Proponents of the program, including President Barack Obama and Mayor Michael Bloomberg, hype its low-interest financing, lack of taxpayer subsidies and ability to create jobs. As it has become increasingly popular in New York, however, it has drawn critics who believe developers and state officials have massaged the rules and not hewed to the spirit of the program. With EB-5 set to expire in September, some potential participants have been given pause.Well, there's no proof that people from those areas--remember the Bed-Stuy Boomerang?--are working at that site, nor that "commuting distance" meets the letter or spirit of the law.
...But some believe its success in New York stems from developers and economic development officials gerrymandering zones so foreigners can readily invest in projects. Norman Oder, an Atlantic Yards critic and blogger, has shown how officials used census statistics to map districts that connect areas of high unemployment to projects in prosperous parts of Brooklyn and Manhattan. But the issue is irrelevant to supporters because the projects are within commuting distance of these jobless areas.
More importantly, Crain's ignores that the New York Times put the issue on the front page and then published an editorial criticizing the program for such abuses.
And whatever's said by supporters--understandably, the main source for this Crain's article--consider that Alejandro Mayorkas, the director of the federal agency in charge of EB, told the Times:
“The question is, are the state authorities adhering to the spirit of the law?” said Mr. Mayorkas, the federal immigration official who is the director of United States Citizenship and Immigration Services. “Where is the project being developed, and where are the jobs being created? Are the people from the areas of high unemployment being employed? Because that’s really the purpose. If they’re not being hired from those areas, then the question is justified."As I wrote, there's no requirement that people be hired from the area of high unemployment (aka Targeted Employment Area), because there's no requirement that the jobs counted be direct jobs.
The issue is not as pat as Crain's reports, even among supporters of EB-5, since states are competing with each other to attract foreign investment. Consider coverage here from EB5info.com.
Renewing the law
The article closes:
A greater risk for EB-5 is that its reauthorization depends on a divided and dysfunctional Congress. While the program has bipartisan support in the House and Senate, its renewal has been tied to the extension of a controversial immigration screening measure called E-Verify.Yale-Loehr is not some neutral academic expert. He's probably the leading attorney serving businesses in the EB-5 field, is of counsel to the firm Miller Mayer, and founded and was the original executive director of Invest In the USA (IIUSA), a trade association of EB-5 immigrant investor regional centers.
...However, that might not be possible, Capitol Hill insiders concede. Meanwhile, potential EB-5 investors and developers are getting skittish, said Stephen Yale-Loehr, a law professor at Cornell University.
“It behooves Congress to reauthorize this program,” he said. “Whether they can do it in a timely manner, that's a political crapshoot.”
The article contains an intriguing passage:
Since Congress launched EB-5 during the recession of 1990, foreigners from Venezuela to China have funded wind farms in South Dakota, oil wells in Texas and ski resorts in Vermont. The Brooklyn Navy Yard got New York's first batch of EB-5 money.Why? Maybe because it's hard to fathom a program that "creates" jobs without having to actually count them, but instead relies on an economist's report.
“At first, we were sort of scratching our heads, thinking, is this real?” said [the Navy Yard's] Mr. [Andrew] Kimball. “The next thing we knew, we were falling out of our chairs.”