Dive Brief:
- New York City developer Related Cos. is at the forefront of efforts to prevent changes to the EB-5 program, which gives foreign investors an edge in obtaining a green card in exchange for a significant investment in a U.S. development, according to The Wall Street Journal.
- Since 2015, the developer has reportedly spent an estimated $1.4 million to support lobbying efforts, which include securing a lengthy extension of program provisions set to expire in April.
- Related used the EB-5 program to raise approximately $600 million for the first phase of its massive, $25 billion mixed-use Hudson Yards development in Manhattan.
Dive Insight:
Currently, the program allows foreigners to invest a minimum of $500,000 into projects that the U.S. government has determined will create a specified number of jobs and contribute economically to the development area. In exchange for that outlay, the investor and his or her immediate family become eligible for conditional green cards, which can be made permanent after a period of time. Typically, investors can petition U.S. Citizenship and Immigration Services that their conditional status be made permanent after a minimum of two years.
Earlier this month, a Seattle-area developer pleaded guilty to EB-5 fraud and now faces up to 10 years in prison. Lobsang Dargey admitted that he misdirected approximately $240 million in foreign investments into unqualified projects and used some of the money for personal luxury items. He also allegedly falsified bank statements and other paperwork meant to verify his financial stability and development plans to both investors and the USCIS. Dargey was able to flip some of the EB-5 dollars into other qualified projects, saving some investors from the threat of deportation, but about 200 conditional green card holders are still at risk.
Critics of the current say that what was once a way to increase development in high-unemployment and rural areas has become a way for developers to come up with cheap financing for luxury projects like Hudson Yards. Related has said the massive Hudson Yards development, with the benefit of the EB-5 program, is contributing more than $150 million each month into the economy.
