Skip to main content

Touting success with immigrant investors, NYC Regional Center (still) deceptively claims EB-5 money helped build Barclays Center

Would you believe that the New York City Regional Center (NYCRC), which raised $228 million for Forest City Ratner's Atlantic Yards project in 2010 from 456 immigrant investors seeking green cards for themselves and their families (through the "dodgy" EB-5 program), is still not telling the truth.

Note that the press release at bottom, as well as the NYCRC's web site, below, states that the low-interest loan from immigrant investors "assisted with the construction of specific components of the overall development, examples of which included: the Barclays Center Arena..."

Except Reuters reported in December 2010 that a South Korean migration agent, Kookmin, working on behalf of the NYCRC not only guaranteed investors their permanent green but "also implied the investors would be financing the construction of the new home for the New Jersey Nets NBA basketball team."

Reuters got George Olsen, a NYCRC managing principal, to acknowledge that "the claims were 'not accurate' - the investors will finance the rebuilding of a rail yard and some related infrastructure near the new basketball court -- and promised he would jump on Kookmin 'with two feet.'"

However, as I wrote on Huffington Post, the deceptive statements highlighted by Reuters and explained away by Olsen have been made by the NYCRC's own principals in a project video and by the NCYRC's point man in China, Gregg D. Hayden, during investment seminars and webcasts there. (Hayden is now NYCRC's General Manager - Asia/Europe.

(Forest City Ratner and its new Chinese government -owned partner on Atlantic Yards, Greenland Holdings, have apparently raised another $249 million in low-cost capital, again through deceptive means, though using a different regional center, which is a private sector entity federall authorized to raise such funds.)

From the NYCRC web site
From the NYCRC web site
The press release

The press release from the NYCRC, I-829 Petition Approvals in the Brooklyn Arena and Transportation Infrastructure Project, is subtitled "USCIS issues I-829 petition approvals to EB-5 investors in NYCRC's Brooklyn Arena and Transportation Infrastructure Project":
NEW YORK, Aug. 8, 2014 /PRNewswire/ -- The New York City Regional Center ("NYCRC") (www.nycrc.com) is pleased to announce that the United States Citizenship Immigration Services ("USCIS") has issued the first twenty I-829 petition approvals to EB-5 investors participating in the NYCRC's Brooklyn Arena and Transportation Infrastructure Project. The issuance of the I-829 petition approval removes the conditional status and deems the investor to be a lawful permanent resident of the United States. Permanent residence permits EB-5 investors to live and work anywhere in the United States, and be protected by the laws of the United States. An investor's spouse and children are also authorized to live, work and attend school anywhere in the United States.
USCIS approved the Brooklyn Arena and Transportation Infrastructure Project as a permissible EB-5 project on September 23, 2010. To date, all 456 EB-5 investors in the offering have received I-526 petition approvals from USCIS. Moreover, the federal government has issued 1,325 conditional green cards to investors and family members.

"The issuance of these I-829 petition approvals in the Brooklyn Arena and Transportation Infrastructure Project is another milestone for the NYCRC. These new approvals will add to the over 500 individuals who have already received permanent residency through NYCRC projects," said NYCRC Managing Principal Paul Levinsohn.
"The NYCRC is helping to spur job creation and economic development throughout New York City while also assisting families begin a new life in America. We look forward to continuing our track record of well-structured, professional EB-5 offerings. We send our congratulations to these investors," added NYCRC Managing Principal George L. Olsen.
The Brooklyn Arena and Transportation Infrastructure Project involved the construction of specific components of Brooklyn's Atlantic Yards development. EB-5 capital was loaned to an affiliate of Forest City Enterprises (NYSE: FCE.A, FCE.B), the real estate company designated by the State of New York to oversee the Atlantic Yards development. The loan assisted with the construction of specific components of the overall development, examples of which included: the Barclays Center Arena; a new subway station entrance within 100 feet of the arena; an outdoor public plaza outside the arena; the demolition and reconstruction of the Carlton Avenue Bridge; an on-grade parking facility; and the excavation, removal, rerouting, and upgrading of water and sewer lines.
The NYCRC was approved by USCIS in 2008 to secure EB-5 investment in real estate projects within Brooklyn, Queens, Manhattan, and the Bronx. The NYCRC was the first regional center approved in New York City. The NYCRC works in conjunction with the government and designated developers to fund critical economic development projects in New York City.

The NYCRC has become an important contributor to New York City's economic revitalization by helping to fund a series of public/private real estate projects that create much needed jobs. NYCRC projects include EB-5 funding to assist with the redevelopment of the Brooklyn Navy Yard, New York City's largest industrial park, as well as funding to assist with the expansion of Steiner Studios, the city's largest film and television production facility. The NYCRC has also provided capital for key components of the Atlantic Yards project as well as the redevelopment of Downtown Brooklyn's central business district. NYCRC funding is being used to assist with the redevelopment of the George Washington Bridge Bus Station and the continuing efforts to revitalize Lower Manhattan's waterfront and the Bronx and Washington Heights business corridors. The NYCRC will also provide capital to assist with the construction of a wireless infrastructure network in select New York City underground subway stations.

Comments

Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…

Former ESDC CEO Lago returns to NYC to head City Planning Commission

Carl Weisbrod, Mayor Bill de Blasio's City Planning Commission Chairman and Director of the Department of City Planning, is resigning,

And he's being replaced by Marisa Lago, currently a federal official, but who Atlantic Yards-ologists remember as the short-term Empire State Development Corporation CEO who, in an impolitic but candid 2009 statement, acknowledged that the project would take "decades."

Still, Lago not long after that played the good soldier at a May 2009 Senate oversight hearing, justifying changes in the project but claiming the public benefits remained the same.

By returning to City Planning, Lago will join former ESDC General Counsel Anita Laremont, who after retiring from the state (and taking a pension) got the job with the city.

Back at planning

Lago, a lawyer, in 1983 began work as an aide to City Planning Chairman Herb Sturz, and later served as the General Counsel to the president of the NYC Economic Development Corporation, Weisbrod himself.