Tuesday, January 13, 2015

EB-5 fundraising for "Atlantic Yards III" invokes 535 Carlton groundbreaking, de Blasio photo op, royal visit

The groundbreaking last December 15 for the first Atlantic Yards/Pacific Park tower to be built by the new Greenland Forest City Partners joint venture was not just a showcase for Mayor Bill de Blasio's plan for a "100% affordable" tower, 535 Carlton Avenue.

The photo ops also serve to promote "Atlantic Yards III," the third effort by Forest City (and the second with the Greenland Group, owned by the government of Shanghai) to raise cheap capital from Chinese investors seeking green cards under the federal government's EB-5 program. (Two previous efforts raised $228 million and $249 million.)

In this case, the joint venture aims to raise $100 million from 200 investors, who get to jump the immigration line as long as each investment purportedly creates ten jobs. It's a relatively easy hurdle, given that no head count is necessary--a hired economist's report suffices--and immigrant investors get credit for all jobs associated with a project, not merely the fraction proportionate to their investment.

The website for "Atlantic Yards III," via the Chinese immigration consultancy Qiao Wai Group, now emphases the groundbreaking ceremony. (The company last year promoted the purported endorsement by a U.S. State Department official until the department complained.)

Note the groundbreaking photo at right within the graphic below, as well as the outline of excavating equipment. The repeated words in the red outline indicate that a groundbreaking  ceremony was held.
From the Atlantic Yards III web site
The mayor's role

Similarly, the headline below cites the start of the project, while the next line cites the presence of Mayor de Blasio, Greenland Group Chairman Zhang Yuliang, and, China's Deputy Consul General in New York, Cheng Lei.

From the Atlantic Yards III web site

Note the photo of de Blasio and Zhang together. Potential investors in China, by far the largest source of EB-5 investors, are very much reassured by the evidence, however tangential of official involvement.

The value of vagueness

EB-5 saves tens of millions of dollars thanks to lower interest rates; the investors care far more about green cards than investment return.

There was, of course, no mention of EB-5 at the groundbreaking ceremony, since the idea that a Chinese government-owned company is reaping profits by marketing U.S. residency to Chinese nationals might not sit right.

(EB-5 is already sketchy, as Fortune among others pointed out, but the notion that a foreign government might profit takes it to a new level.)

Also, though the EB-5 project has nothing to do with the Barclays Center, the promotion makes a big deal out of the attendance at a Brooklyn Nets game by the UK's Prince William and his wife Kate Middleton, and their meeting with Brooklyn royalty, Jay-Z and Beyonce.

From the Atlantic Yards III web site

Various press releases/articles in the Chinese media took off on the groundbreaking to promote EB-5, such as this, this, and this.

Later that week, Zhang attended the 25th session of the US-China Joint Commission on Commerce and Trade (JCCT) in Chicago, Illinois.

The Atlantic Yards III website, below

Note the use of Brooklyn Nets players, and former NBA players, as if they have anything to do with this "project," which does not involve the Barclays Center.

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