Trump-branded building gets Chinese boost
Updated: 2016-03-09 11:16
By Paul Welitzkin in New York(China Daily USA)
Republican presidential candidate Donald Trump, who has bashed immigrants and China in the US presidential race, is lending his brand to a building partly financed by a visa program that mainly benefits wealthy Chinese investors.
Media reports say that Trump Bay Street, a luxury rental apartment building being built in Jersey City, New Jersey, is being funded in part through the federal EB-5 visa program.
Created in 1990 to help stimulate the US economy through job creation and foreign investment, immigrants who invest a minimum of $1 million - or $500,000 in low-employment or rural areas, and create at least 10 full-time jobs through the project they are funding become eligible for US residency.
Trump Bay Street (right), under construction, will adjoin the existing Trump Plaza Residences (left) in Jersey City's Powerhouse Arts District. Niu Yue / For China Daily
"Investors from China currently account for almost 90 percent of all EB-5 investors," Stephen Yale-Loehr, a law professor at Cornell University, told China Daily.
Trump Bay Street is being developed by the Kushner Companies, whose chief executive officer, Jared Kushner, is married to Trump's daughter Ivanka. Trump has licensed his name to the project, according to news reports.
A Trump spokeswoman told Bloomberg in an e-mail, "This was a highly successful license deal, but he is not a partner in the financing of the development." She did not respond to questions about EB-5. A Kushner spokeswoman said the project was legal and creating jobs, according to Bloomberg.
CNN reported that US Immigration Fund, a private firm that solicits foreign investors for EB-5 projects, confirmed 100 Chinese investors in the project.
EB-5 financing is common in large commercial projects like the Hudson Yards development in New York City, the Silverstein World Trade Center 2 building in New York, and the Century Plaza hotel in Los Angeles.
Originally, few people immigrated to the US using EB-5. As late as 2008, only 1,000 people a year came in through the program, said Yale-Loehr. However, the financial crisis resulted in the loss of domestic lending sources for many US developers, who discovered the EB-5 program as a financing vehicle.
In 2014, 10,000 took advantage of the EB-5 program, Yale-Loehr noted.
Congress considered making significant changes to the program in 2015, but instead extended the EB-5 regional center program until Sept 30, 2016.
EB-5 has become controversial, as the Government Accountability Office, the investigative arm of Congress, found last year that many EB-5 applications contained a high risk of fraud. The GAO also discovered counterfeit documentation.
State Department officials told the GAO that there is "no reliable method to verify the source of the funds of petitioners", Bloomberg reported.
"Although EB-5 investors only account for about 1 percent of all US immigration annually, the program has an outsized economic impact. EB-5 applicants have invested more than $13 billion since 2008 and have created tens of thousands of jobs for US workers," said Yale-Loehr.
(China Daily USA 03/09/2016 page2)