Hudson Yards tower officially underway, loses 'supertall' designation

Dive Brief:

The Moinian Group officially broke ground Friday on the $2 billion, 53-story 3 Hudson Yards skyscraper project in Manhattan, according to Reuters, although foundation work started more than a year ago.
A redesign of the building, according to Curbed New York, has reduced the office tower's planned height from 1,050 feet to 940 feet, which puts it about 44 feet lower than its former "supertall' designation requires. Tentative design features will include average ceiling height of 18 feet; floor plates from 40,000 square feet to 50,400 square feet; conference space or executive offices on the top two floors; and an outdoor terrace, which will be accessible from the eighth floor.
Moinian is looking for $250 to $500 million of cash through the U.S. Citizenship and Immigration Services-run EB-5 program, which gives foreign nationals priority processing of their green card applications in exchange for investments in approved real estate and other business deals.

Dive Insight:

Back in 2015, Hudson Yards developers Related Companies and Oxford Properties Group scored $5 billion in financing, and some of that money came through the EB-5 program. Chinese investors dominate this investment tool, and, in an interview with Construction Dive earlier this year, Rogelio Carrasquillo, formerly with Fox Rothschild in New York City, said that applications from China represented about 90% of the program.

The EB-5 process has come under fire in the last few years due to some high-profile fraud on the part of participants on the U.S. side. For example, Seattle developer Lobsang Dargey pleaded guilty in January to spending EB-5 investor funds on high-priced gifts for his family and friends.

Authorities also alleged that Dargey moved the money to projects that were not approved to participate in the program, misled USCIS and investors about his finances, and illegally guaranteed green cards in exchange for investments. In August, according to The Seattle Times, Dargey was sentenced to four years in prison. The jail term is in addition to the $24 million Dargey agreed to pay in restitution.

The EB-5 program was set to expire Sept. 8, but Congress extended that deadline 90 days to Dec. 8. According to The Real Deal, a 10-year backlog in EB-5 applications has created a near-$17 billion pool of funds ready to be invested in U.S. businesses.