Skip to main content

EB-5 farce: my blog used to help sell Nassau Coliseum investment to immigrants seeking green cards (true)

Fifth of a five-part series on Forest City Ratner's plans for Nassau Coliseum redevelopment.
Part 1 concerned the overall plan. Part 2 addressed the curious politics of a Community Benefits Agreement. Part 3 addressed the astonishing pitch in China for EB-5 investment. Part 4 discussed Forest City's claim, at the Nassau County Legislature, it wasn't making much profit on EB-5, and its defense of a sketchy fundraising partner. This fifth part concerns the brazen effort by EB-5 promoters to use an excerpt from this blog.


It's no secret that I'm a wee bit critical of the EB-5 program, under which immigrant investors get green cards for themselves and their families in exchange for parking $500,000 in a purportedly job-creating enterprise.

After all, the benefit goes mostly to the developer/entrepreneur, the middlemen, and the immigrant investors, not the public, which "owns" the valuable property (visas) being traded.

Moreover, the marketing of EB-5 projects is often at best deceptive and at worst fraudulent. Immigrant investors, especially those in China, by far the largest market, are not necessarily expected to do diligence, or to understand what they read in English.

Consider the excerpt at right and below from the recent iteration of the Qiao Wai web site pitching the Nassau Coliseum EB-5 investment, $90 million from 180 investors.

Arrow added by AYR, other highlighting in original
The excerpt aims to convince potential investors that the deal is solid.  Indeed, most of the evidence easily bolsters that perspective.

But the web site's sloppy use of an excerpt from my blog--including the seemingly damning subtitle "Other questionable statements"--shows that those promoting EB-5 have no expectation potential investors can understand English.

It's not dissimilar to the use of stale, off-topic quotations, while promoting the EB-5 investment in Atlantic Yards, from former Brooklyn Borough President Marty Markowitz, former New York City Mayor Mike Bloomberg, and former New York State Governor David Paterson.

There's no regulation, and they get away with what they can. (I did nudge the U.S. State Department about the improper use of a top official, and they pressured the promoters to stop.)

The Nassau Coliseum pitch

The heading of this section, according to a professional translator, promises "Government oversight throughout the entire process, guaranteeing the integrity of the project."

It elaborates that various levels of government in New York will participate.

Note that Chinese investors feel more confident when government is involved.

Step 1 indicates that, once the reconstruction project was established, "it was given policy support and tax relief from the government."

(Actually, the project was promoted in August 2013 by Nassau County Executive Ed Mangano as "100% privately financed Coliseum that will share revenue with the County at zero expense to the taxpayer.")

Step 2 indicates that representatives of Nassau County met with Forest City Enterprises to sign a long-term lease for the Coliseum--quite true.

Step 3 notes that the state government has agreed to "invest part of its funds to support the construction of the facilities surrounding the reconstruction project." Indeed, in January, Gov. Cuomo's executive budget proposed allotting some portion of a $150 million fund to a Coliseum parking facility.

Step 4 reaches farce

Step 4 cites a 2015 statement by Mangano that "the reconstruction project of the Long Island Coliseum supported by the government will begin in the latter part of this year." That's true, except that "support" is more cooperation than anything else.

But do check out Step 4, which contains an excerpt from this blog, published 3/27/15 under the headline Nassau County Executive Mangano bizarrely suggests renovated Coliseum will lure Islanders back; Ratner in dispute over retail plan?

A section I subtitled "Watching Mangano wink" addressed the County Executive's curious announced plan to lure the New York Islanders back to the renovated Coliseum, though they have announced a relocation to Brooklyn, which has far more suites and sponsorship opportunities.

"Other questionable statements"

The next section was subtitled "Other questionable statements." Bizarrely enough, those excerpting it for the Qiao Wai web site did not remove the subtitle. Note the big red arrow I added.

The EB-5 promoters did highlight, using red rectangles, Mangano's statements that construction would begin at the Coliseum later this year and would employ 2,700 people--both pieces of information that would inspire confidence in those considering EB-5 investments.

(Each of the 180 investors has to "create" 10 jobs, though the number is not a head count but rather an economist's calculation, and the investors can gain credit for jobs calculated based on the entire amount of money in the project, not solely their investment.)

The next paragraph in my post questioned the claim of 2,700 jobs and $10 billion in economic benefit. It was, unsurprisingly, excluded from the excerpt. But anyone who understands English should have been flummoxed by the "Other questionable statements" subheading.

At bottom of the excerpt, the message is sunny: with the project "moving forward, it’s expected that more supportive government policies will gradually come out. So stay tuned."

Indeed, that's Forest City Ratner's m.o., to make a deal and then wrangle "more supportive government policies." In that, the investors were provided with some unwitting candor.

Arrow added by AYR, other highlighting in original

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

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…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…