Even a good, long article on the "cesspool of illegality" behind EB-5 misses some criticisms (gerrymandering, misleading marketing, job-creation funny math)
There's a good, long 8/23/20 piece in The Wire China about EB-5 headlined The Price of Admission, subtitled "How Chinese money and American greed turned the EB-5 visa program into a cesspool of illegality."
It's got lots of details and ends with a tough kicker. "There’s really no integrity rules,” [NYU's Gary] Friedland says. “It’s really still the wild west.”
A few misreadings
Yet even this very strong case about EB-5 is marred by a couple of misreadings. Consider:
And this:
Nor did New York City "use" the program but rather encouraged its use by private developers.
Job-creating?
And the EB-5 money did not build Barclays. Rather, evidence suggests, it enhanced the developer’s profits, replacing a high-interest land loan with a low-interst loan from immigrant investors.
Nor does the article address the fact that generous rules for calculating jobs benefit the developers and the middlemen, rather than ensure that jobs are created by this investment.
I detailed more of my criticisms in a 2015 essay for the NewsHour.
It's got lots of details and ends with a tough kicker. "There’s really no integrity rules,” [NYU's Gary] Friedland says. “It’s really still the wild west.”
A few misreadings
Yet even this very strong case about EB-5 is marred by a couple of misreadings. Consider:
At the time, the minimum investment was $500,000, and it had to be earmarked for areas of high unemployment, such as the Rust Belt region or inner-city Chicago.(Emphasis added) This ignores the rampant gerrymandering of EB-5 projects to enable well-located real-estate developments within zones of high unemployment, including Atlantic Yards and Hudson Yards and many more, as reported by this blog, the New York Times, the Wall Street Journal, and City Lab.
And this:
“The program, when it works, is a great program,” says Michael Gibson, managing director of USAdvisors, an investment advisory firm focused on EB-5 projects. New York City, for example, has successfully used EB-5 funds to finance development projects for years, including Hudson Yards and Brooklyn’s Atlantic Yards, which used $228 million from EB-5 investors to help build the Barclays Center Arena. Elsewhere, however, Gibson says, “this program is the essence of non-transparency.”Wait a sec. It's still the "essence of non-transparency"--and misleading marketing regarding Atlantic Yards.
Nor did New York City "use" the program but rather encouraged its use by private developers.
Job-creating?
And the EB-5 money did not build Barclays. Rather, evidence suggests, it enhanced the developer’s profits, replacing a high-interest land loan with a low-interst loan from immigrant investors.
Nor does the article address the fact that generous rules for calculating jobs benefit the developers and the middlemen, rather than ensure that jobs are created by this investment.
I detailed more of my criticisms in a 2015 essay for the NewsHour.
Comments
Post a Comment