What do the New York Wheel in Staten Island, the Brooklyn Navy Yard and a luxury condo in the Financial District have in common?
Their construction was paid for in part by Chinese nationals.
Under a federal visa program known as EB-5, foreigners who invest half a million dollars on a project in the U.S. that creates at least ten jobs can jump to the head of the line for an application for a green card. More than 80 percent of the people vying for green cards through this program are Chinese.
The EB-5 visa program was created 25 years ago, but it wasn’t until banks stopped lending in the wake of the financial crisis, that it became popular. Real estate developers now use it to help finance many large projects in New York City, including portions of Hudson Yards, the Brooklyn Navy Yard and Pacific Park (the development formerly known as Atlantic Yards).
In Lower Manhattan, the Battery Maritime Building, where you catch the ferry to Governor’s Island, and Pier A, the historic 128-year-old building that was recently renovated, were funded in part with EB-5 financing. City Point, the mixed-use project in Downtown Brooklyn also uses EB-5 money. Other projects include: the International Gem Tower, an office building in Midtown; 30 Park Place, a condominium and Four Seasons hotel development in the Financial District; a 709-unit rental that the Durst Organization is building at 625 West 57th Street and the Knickerbocker Hotel at 6 Times Square.
Despite its widespread use, analysts who have studied the EB-5 visa program say it lacks transparency. It is difficult to track whether the projects actually create as many jobs as they promise, and there have also been several instances of fraud.
But that hasn’t stopped its soaring popularity Because of demand from China, last year for the first time ever, the maximum number of EB-5 visas were reached. This year, the visa's are expected to be maxed out again, but even more quickly. In the meantime, the SEC and Homeland Security are paying more attention to EB-5 visas. And in September, parts of the program will be up for Congressional review.