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Atlantic Yards/Pacific Park infographics: what's built/what's coming/what's missing, who's responsible, + project FAQ/timeline (pinned post)

The mysterious case of China City of America, now Thompson Education Center, an EB-5 project upstate

I'm catching up on a lot of news related to the EB-5 program, which has helped the developers of Atlantic Yards/Pacific Park raise $477 million in cheap capital, with another $100 million to go. Perhaps the clearest summary of the lure and sketchiness of the program came in a February 2012 quote from an EB-5 fundraiser to The Daily:“It’s just a way of being able to get free money, basically, to build all sorts of projects.”

Why might Long Island businesswoman Sherry Li put $55,000 into Gov. Andrew Cuomo's re-election campaign?



I can only speculate that it's because she's trying to build a controversial, maybe fantastical project upstate called "China City of America," using EB-5 funds from immigrant investors.

Surfacing in 2013

The outline of Li's ambitious, extravagant idea first got wide play in the 12/4/13 New York Post, which, in Mysterious plans to build upstate NY ‘China City of America’, reported:
A Long Island businesswoman wants to build a massive “Chinese Disneyland” in the Catskills — which would include an amusement park, huge mansions and a “Forbidden City” laid out according to the principles of Feng Shui.
The China City of America scheme could bring thousands of wealthy Chinese immigrants to the tiny Sullivan County town of Thompson, under a federal program that lets foreigners get visas by investing $500,000 in the US.
The mastermind behind the plan, Sherry Li, says the development would eventually draw $6 billion in foreign investment.
From previous China City website
Li's lawyer, Larry Behar, in a 3/2/12 news release, described attending an EB-5 Convention in Shanghai. He reported: "China City of America began its first soft marketing to a huge audience where Mr. Behar was guest speaker along with President Sherry Li."

A critical report

The Post reported how the project generated opposition, and quoted analyst David North of the Center for Immigration Studies (CIS), who had dissected the proposal.

In his report, China City: A perfect storm EB-5 proposal in upstate New York, North noted that, beyond "the usual critical comments about the shaky financial prospects and dubious job-creation claims of the promoters," this project had a "budget bordering on the bizarre," a potential major ecological impact, the controversial record of local allies, and even a charge from "within the Chinese community"--actually Falun Gong--"that China City is a stalking horse for the Chinese communist government in Beijing."

North noted how the promoters published a "Notice of Action," which could give an impression of official approvals but merely meant the federal government had received an application from China City Regional Center LLC, to gain authorization to collect investments. The form, North noted, had been already redesigned to look less misleading.

China City’s local allies, North noted, were a fracking enthusiast, Thomas J. Shepstone, and Simon Gelb, who currently owns the 2,000-plus acres allegedly destined for China City and previously built the Hasidic village Kiryas Joel in adjacent Orange County

A response

In response, Li issued a press release 12/12/13 on the China City of America web site, headlined "China City of America Becoming Reality in Catskills":
Monticello, NY, December 12, 2013 --- China City of America, a conceptual plan that encompasses multi-use commercial, residential, business, education, amusement and entertainment components, will be built in Sullivan County, NY over multiple years, according to Sherry Li, CCOA's Chief Executive Officer. We appreciate the public's interest in this project, Li said.
...Larry Behar of the Behar Law Group, who serves as CCOA's EB-5 immigration attorney, said that CCOA has complied with USCIS regulations and timely responded to two USCIS RFE (Request for Evidence) of the regional center designation originally filed on December 13th, 2011. The CCOA professional team also consists of top EB-5 economists, business plan writers, SEC attorneys, EB-5 immigration attorneys and feasibility study evaluators. 
The press release quoted Behar as charging North with slander for suggesting that the project is a stalking horse for the Chinese government. (There's been no further indication of Chinese government involvement.)

Behar also pointed to the Center's "long history of anti-immigrant positions."

(CIS says it has a "low-immigration, pro-immigrant" vision of an America that admits fewer immigrants but affords a warmer welcome for those who are admitted." The Southern Poverty Law Center and others call it nativist and anti-immigrant. Without evaluating the rest of their work, I'd say North's work on EB-5 is a generally incisive counterweight to the enormous propaganda in favor of the program.)

Li and Lianbo Wang, also associated with China City of America, each gave $2000 in 2013 to the re-election campaign of EB-5 supporter Rep. Robert Goodlatte (R-VA), as I learned.

An AP follow-up

The Associated Press followed up with an article published 1/19/14 in the Washington Post, Skepticism surrounds China City plan for upstate New York:
The people behind China City have since dialed back the pace of their plans, now proposing to start with a college, dorms and faculty housing on 575 acres solely in Thompson after strong opposition surfaced in Mamakating. And the original Web site touting the project appears to have been taken down.... Li said the school, known as the Thompson Education Center, would be a tax-paying, for-profit college enrolling 900 students at first, with a curriculum concentrated on business, art and entertainment majors..
The article quoted North: “It doesn’t matter to me if this is all Chinese or all Swedish. This is a bad project." Li said there was no Chinese government money in the project.

A project in limbo

Only later last year did a follow-up emerge. The Commercial Observer did some tough reporting--anomalous for the local press regarding EB-5--on 9/8/14, EB-5: Ambitious China City Project Sits in Limbo:
The original plan was submitted to U.S. Citizenship and Immigration Services in December of 2011, with 39 percent of the capital stack for its first of three phases of construction set to come from foreign investors through EB-5.
Alas, the application is still pending and the scope of the project seems to continuously, and mysteriously, shrink. The notorious project has come to represent the pitfalls of using EB-5 in the New York development world, sources told Mortgage Observer.
The project, now cut to 570 acres, omits the amusement park and focuses on the Thompson Learning Center.

The Observer pointed out that "the $65,000 non-refundable deposit each investor must contribute has raised some eyebrows." Neither Li, Behar, nor the project's local counsel would answer questions.

Since then, the project has issued numerous feel-good press releases, such as China City of America Can Assist the Struggling Upstate New York Economy and Thompson Education Center Hosts a Project Information & Job Opportunity Event in Sullivan County.

But there's little evidence the project has made concrete progress. A 1/24/15 op-ed in the Times Herald-Record, Paula Medley wrote My View: Thompson group's credibility, plausibility must be questioned:
A flawed paid advertisement (Dec. 26, 2014) by Thompson Education Center (TEC), formerly Thompson Learning Center and China City of America, compels this response by the Basha Kill Area Association (BKAA), a Sullivan County-based environmental group whose mission since 1972 "has been to protect the Basha Kill wetlands and surrounding area from ecological degradation, to promote education and respect for the environment in general and to promote the area's beauty."
...Significantly, this ad not only ignores the Basha Kill connection, but omits referencing the Harlen Swamp Wetland Complex, a unique ecosystem encompassing 148 acres of TEC's 573 acre property and listed as a conservation priority in the 2009 Plan for providing important habitat for varied wetland species.
...Further eroding TEC's credibility is the sponsor's determination to seemingly build on every available square inch of land that is not wetland or a wetland buffer, yielding a proposed development totaling 4.5 million square feet in the Town of Thompson's most restrictive zoning district - rural residential - where such high density construction is prohibited.
Medley noted that "TEC currently has not been approved as an EB-5 Regional Center" and argued that it manipulated local employment statistics.

Comments

  1. Anonymous7:12 AM

    Keep digging on these scams like the EB5!
    Rich people pay to play and lower income people are demonized and deported and separated from their families.

    ReplyDelete

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