Tuesday, April 10, 2012

EB-5 follies: are immigrant investor funds going into the Brooklyn arena?

Like a game of telephone, news can be distorted along the line. Take for example coverage in Bloomberg Business Week about the EB-5 program of investment immigration:
The Atlantic Yards developer, Forest City Ratner Cos., is borrowing $228 million in EB-5 money for a $1.4 billion infrastructure and arena fund that’s paying for a new subway entrance, parking facilities, municipal water and sewer line upgrades and other work in the vicinity of Barclays Center, according to Joe DePlasco, a spokesman for the company. The arena, which is being built for the National Basketball Association’s New Jersey Nets, will be an anchor of the $4.9 billion development, planned to include up to 6,430 housing units and 247,000 square feet of retail space.
(The evidence, however, points to use of the money for loan replacement, as I've written. And city subsidies have been used, for example, for water main upgrades. That's not to say the investment wasn't sold as part of a basketball arena.)

In the Tampa Tribune, that became:
In Brooklyn, a developer is tapping into the program to raise $228 million for a massive $4.9 billion retail, housing and arena complex called Atlantic Yards, a recent Bloomberg News report said. The arena will house basketball's New Jersey Nets, who are soon to be renamed the Brooklyn Nets.
In Immigration Daily, that became:
Comment: Stadiums That EB-5 Built - As local governments grow increasingly unwilling to use public funds to develop stadiums for professional sports teams, developers are starting to look for non-traditional sources of funds to finance those projects. One surprising source has been the EB-5 program, which reportedly contributed $228M to Atlantic Yards, a mixed-use commercial and residential development project that will eventually be called home by the Brooklyn Nets. A recent article discusses the possibility of using EB-5 funds in developing a baseball stadium in Tampa, Florida, a possibility which is also being considered in Northern California. For more information, see here

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