Chinese banks have poured more than $1 billion into real estate loans in New York City in the past year. Investors from China are snapping up luxury apartments and planning to spend hundreds of millions of dollars on commercial and residential projects like Atlantic Yards in Brooklyn. Chinese companies have signed major leases at the Empire State Building and at 1 World Trade Center, which is the centerpiece of the rebuilding at ground zero.(Emphasis added)
Investment in the city by companies and entrepreneurs from China has been surging in the last few years, recalling the boom in Japanese investment that swept the region in the 1980s and helping to buoy the local economy even as the country as a whole struggles to get out of recession.
The Chinese investments are occurring with little fanfare, in part because Chinese executives tend to shun publicity. But back home, their government is urging them to invest overseas to diversify China’s foreign-exchange holdings, develop business partnerships and improve the country’s leverage in international affairs.
What's wrong with that summary? The Chinese putting money into Atlantic Yards--'scuse me, the "Brooklyn Arena and Infrastructure Project"--aren't making real investments. They're buying green cards for themselves and their families, allowing their children to be educated in America.
The EB-5 mention
The article states:
Chinese money is also poised to flow into the city through a federal program that offers the possibility of permanent residency to foreigners who invest at least $500,000 in certain development projects.(Emphasis added)
Under this program, known as EB-5, Forest City Ratner Companies has arranged for $249 million in loans from Chinese investors for residential and office towers at Atlantic Yards, the commercial and residential project in Brooklyn that includes a new stadium for the New Jersey Nets. The developers of a hospital and hotel project in Flushing, Queens, have lined up about $30 million in financing from China, turning away scores of other interested investors, said Richard Xia, president of the firm raising the money.
What are "certain development projects"? They're supposed to create jobs. No jobs would be created.
Would the Chinese money support residential and office towers? Forest City's partner in China told the investors they were putting money into a basketball arena. That's why Forest City sent Darryl (Chocolate Thunder) Dawkins to China.
More recently, Forest City executives have said the money would be used to refinance a land loan, as well as pay for infrastructure. Or that they haven't decided.
The Times's blind eye
I'm not the only reporter to cast a skeptical eye on Forest City's green card venture. Reuters did so too, nailing Forest City's partner, the New York City Regional Center for misleading investors--and, as I pointed out, the NYCRC's own point man made the same deceptive statements.
It's on video, people.
I laid out a road map for EB-5 coverage in a 3/17/11 comment on the Times's web site, a comment recommended by 55 readers.
Nor did the latest article include the disclosure of the Times Company's partnership with Forest City Ratner on the Times Tower--a disclosure that presumably might prompt reporters and editors to be a wee bit more careful.
In this case, the reporter seemed to be working from a clip file--a clip file that consisted of very brief Times coverage of EB-5.