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EB-5 could be brought back to life (Credit: iStock)

After the last recession, developers turned to the federal EB-5 program for cheap financing to fund new development projects in the countrys hottest residential and commercial markets. The program became such a lifeline for developers in search of funds that it was once described as the crack cocaine of real estate finance.

Now, in an effort to counter the major economic disruption brought about by the coronavirus pandemic, the Trump administration is considering dramatically upping the scale of the program as part of a broader stimulus package, according to Politico. The potential proposal, if implemented, could result in billions of dollars flowing into new construction projects.

Investors moved away from the program after rule changes in November, which increased the minimum investment threshold, and developers also cooled on it after lawmakers banned a popular practice which allowed developers to build projects in tony areas rather than the low-income areas the program was designed to target.

Sen. Lindsey Graham

The House is now seeking to include two changes that could increase the number of available visas available to 75,000 from 10,000, according to Politico, which cited sources familiar with the matter. For some projects, the investment threshold to earn legal residence would halve, to $450,000 from $900,000. (Sen. Lindsey Graham, one of the lawmakers championing a lowering of the investment threshold, said that Politicos account was untrue and he has not spoken to the Trump administration about EB-5 in the wake of the pandemic.)

Talk of the proposal has created excitement among industry players. If it goes through, everyone will be getting into full sales mode, said Michael Gibson of Miami-based USAdvisors, which connects EB-5 investors with developers.

Bernardo Rieber, the CEO of Aventura, Florida-based Rieber Developments, who is using EB-5 money to develop a mixed-use project dubbed 12|12 Aventura, said the changes put forth in the proposal would allow him to start new projects.

It will allow me to launch one or two other construction projects, and each project employs 1,000 people. said Rieber. Its only positive.

Hudson Yards

The program gives foreigners a chance to obtain a green card in exchange for investing in a U.S. business that creates at least 10 jobs locally. EB-5 money, has been used to fund the development of major projects such as Related Companies Hudson Yards in New York, as well as glitzy condo towers in New York, Los Angeles, Miami and other core markets. EB-5 money, often structured akin to a mezzanine loan, can provide financing at low rates, often at half the interest rate of a conventional mezzanine loan. But in recent years it has been plagued with problems, including fraud and abuse as well as visa backlogs from China, where the waiting time for Chinese investors is about 14 years. Those factors have muted interest in the program from investors and led to regulators getting tougher on it.

Novembers stricter rules basically killed the program, according to Scott Bettridge, who chairs Cozen OConnors immigration practice in Miami.

We have talked to a handful [of investors], but no one is pulling the trigger at the $900,000 level, Bettridge said.

Nicholas Mastroianni II, the CEO and founder of US Immigration Fund, an EB-5 regional center that has raised $2.9 billion in capital for developers, said increasing the number of new visas issued by 60,000 would be a huge boost for his business.

It would get business back to where it was in 2013 and 2014, he said.

The proposal also comes at a time when some lenders may pull back due to uncertainty surrounding the novel coronavirus, and developers looking to build new construction projects may not have many options for financing or they might have to turn to private lenders with higher interest rates.

Desperate times call for innovative solutions, said Stephen Yale-Loehr, an immigration law professor at Cornell University and an expert on the EB-5 program. This could be one way to jumpstart the economy.

Opening the EB-5 floodgates could help developers gain access to money when other sources are staying on the sidelines. Billy Meyer, of Seattle-based real estate investment firm Columbia Pacific Advisors, said his firm has halted all lending for 30 days. Many other lenders are in a similar boat.

We are taking a 30 day pause, said Meyer. No one knows what the hell is going on here. The virus is massively outbreaking and we dont know how bad it will get.

Steve Witkoff, an active developer in New York, Miami and Los Angeles, said that any proposal that would increase liquidity would be welcomed, but didnt think the banks would sit out the action.

Its important to remember that this is not the Financial Crisis, he said during a panel discussion with The Real Deal Monday.

EB-5, however, has strong detractors among groups that argue for less immigration as well as those concerned about its potential for fraud and abuse.

Sen. Chuck Grassley

A spokesperson for Sen. Chuck Grassley, a vocal opponent of EB-5, said that using a national emergency to allow big city developers to exploit a program designed to provide economic relief to rural and distressed areas is not something Chairman Grassley would support.

RJ Hauman of the Federation for American Immigration Reform, which argues for greater restrictions on immigration, claims to have been in touch with the White House and the Senate about the proposal. He said that using a coronavirus package to give more green cards to shady investors from the country where the virus originated would be Washington at its worst.

Palm House hotel

There have certainly been cases of fraud, including at the Palm House hotel project in Palm Beach, where the developer swindled millions of dollars into properties and his yacht named Alibi. Theres also the Jay Peak ski resort project Vermont, where state and federal regulators alleged that the owners misused $200 million of EB-5 money.

I think that its an invitation for fraud. I think that its a horrendous idea. As long as foreign money from distant places is pooled into the hands of Americans there is going to be massive fraud, said Doug Litowitz, a Chicago-based lawyer who represents Chinese EB-5 investors.

Litowitz added that a number of EB-5 projects are going to face headwinds due to the economic impacts of the coronavirus, causing more strain on the program and foreign investors.

Theres a lot of hotels that were built with EB-5 money. Are they going to default now on the EB-5 loan? said Litowitz.

The origins of the proposal reported by Politico are unknown. Graham and Sen. Chuck Schumer of New York previously sponsored a bill that would lower the minimum investment amount for the EB-5 program. Industry experts also say a proposal to put EB-5 in a stimulus package would make sense.

But Graham denied that he is pushing forward the EB-5 proposal in the stimulus package on Fox News last week.

I havent talked to anybody on the planet, much less the Trump Administration about putting EB-5 on the coronavirus bill, Graham said on Hannity. This is not the time or the place.

See the article here:
Could a pandemic bring EB-5 back to life? - The Real Deal

By Christopher Hayes

In a vacuum, the coronavirus shows no prejudice. But in a society that race, class, and gender have helped to shape, the suffering is not evenly distributed. When the COVID-19 pandemic has ended in this country, we will see an unequal distribution of infections and deaths along the intersecting lines of race and class.

New Jersey is a place of great and worsening income inequality, with substantial racial disparities. The median income for Black families, around $48,000, is a little more than half of what white families earn. Latino families bring in about 60% of what white families earn. The economic barriers erected by a legacy of structural discrimination, including our states highly segregated schools, put our poorest residents at the highest risk of catching the virus.

A disproportionate number of Black and Latino New Jerseyans have jobs that cannot be done remotely, whether at a cash register, in a nursing home, at an airport, in a kitchen, or as part of a custodial team. Many of these jobs put them in close quarters, and in repeat contact, with people who may be infected. This leaves the workers and their families at risk.

While New Jersey is one of the few states with a paid sick leave law, and we should be proud of that, it provides only 40 hours of paid time off for the year. It does nothing for people who work off the books. Tipped workers are supposed to be paid based on their previous weeks earnings, while those who work on commission get their base pay (if they have one) or minimum wage, whichever is greater.

On Wednesday, Gov. Phil Murphy signed a paid family leave expansion allowing workers who are ill, and those who are caring for a sick family member, to collect two-thirds of their pay for up to six weeks. Its capped at $667 weekly. This represents a huge step forward, though many low-wage families will struggle without full pay, with Latinos feeling particularly at risk. At the federal level, the coronavirus relief package provides two weeks of sick leave at full pay. The law excludes workers at large firms, or about half the U.S. workforce.

The situation is perhaps most dire for the nearly 500,000 undocumented immigrants living in New Jersey. The U.S. Labor Departments top employment category for these workers is accommodation and food services, arts, entertainment, and recreation These are precisely the people who lost their jobs first when businesses began closing statewide. The new federal stimulus bill will greatly expand unemployment benefits, essential at a time of unprecedented unemployment applications, but it will not help undocumented workers.

Half of undocumented workers in New Jersey make less than $24,000 a year for an individual, or less than $50,000 for a family of four, and more than half have no health insurance. Though coronavirus testing is now free, our undocumented neighbors may be reluctant to get tested, as they worry it could lead to deportation. This keeps the virus spreading among their family members, friends, and communities.

To make matters worse, African Americans and Latinos suffer disproportionately from some of the underlying conditions that threaten COVID-19 patients with a much higher risk of death. African American adults are 60% more likely to carry a diabetes diagnosis than white adults, and they have the greatest incidence of high blood pressure in the world. And while Latino adults dont have high blood pressure at a higher rate than white people, it is less well-controlled and it kills them at a much higher rate.

Asthma already kills African Americans at a higher rate than any other racial or ethnic group in the country. Black and Latino Americans are much more likely to live near hazardous waste facilities and in places with poor air quality, leading to irreversible respiratory damage that makes surviving COVID-19 much more difficult.

All of this paints a sobering picture for many of New Jerseys most vulnerable families, a situation that is already playing out in Detroit. Its difficult to say whats happening in Newark or Camden, as we have only tested a few thousand residents, and getting tested presents serious challenges to people without cars.

Racial and class disparities are nothing new, but we continue to see new ways in which they manifest. The good news is that we have solutions: school integration, immigration reform, and federal action to correct centuries-old wrongs. Whats needed is the effort to enact them. Perhaps, when the pandemic ends, our leaders will take a closer look at how to reduce these inequities before the next crisis strikes.

Christopher Hayes is a labor historian in the School of Management and Labor Relations at Rutgers, The State University of New Jersey.

The Star-Ledger/NJ.com encourages submissions of opinion. Bookmark NJ.com/Opinion. Follow us on Twitter @NJ_Opinion and on Facebook at NJ.com Opinion. Get the latest news updates right in your inbox. Subscribe to NJ.coms newsletters.

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Black and Latino communities will be hit the hardest during the COVID-19 pandemic. Heres Why. - NJ.com

Can Americans agree on anything anymore? If you pay attention to Congress and the presidential contest, the answer sure seems to be No. But if you ask the American people, youll find the opposite is true. This is the case with one of the most pressing and supposedly divisive issues of our time: immigration.

According to Gallup, more than 75 percent of Americans say immigration is good for the country. On the economy, values and culture, more people say immigrants have made a positive difference than a negative one. In fact, the percentage of Americans who say immigration helps the economy has been rising for a decade. More than three-quarters of adults want Congress to come up with a plan to help undocumented immigrants, admit people to America who have skills the country needs, and secure the border. Our citizens want us to do all of the above, not choose between the options.

The polling is clear: Americans want action on immigration. Yet, year after year, Congress does nothing. Why? Because Republicans and Democrats arent feeling pressure from society to get the job done. To solve this issue, they need to feel that pressure.

It has been said that politics is downstream from culture, and that holds true on immigration. Our leaders and lawmakers wont cooperate until and unless they see the rest of us cooperating. This may seem like a tall task in these partisan times, but nothing is more important for anyone who wants to see immigration reform get done and done right.

What does cooperation look like in practice? It means conservatives partnering with liberals, different faith traditions uniting their voices, business groups and labor unions working together, and other diverse people and groups recognizing that they have common views on this issue. There already is an immigration consensus that cuts across economic, ideological, religious and political lines. Its just a matter of intentionally elevating it.

This has happened before. The criminal justice reform movement that culminated with the First Step Act in 2018 had a diversity of voices many of whom disagreed on most other issues. They achieved success precisely because they put those differences aside. Similarly, with immigration the facts that are obscured by political bickering have a better chance of breaking through when highlighted by people of varied backgrounds and beliefs.

To start, immigration is at the heart of the American story. It is part and parcel of the countrys growth, with each generation seeing a new influx of people from across the globe. Look back far enough and nearly every American can trace their heritage to people who came here in search of a better life. For some, its their parents. For others, its their great-great-great grandparents, or maybe further back. All are testament to Americas appeal and its power to uplift all who come here.

Immigration is essential to the American economy. Not only do immigrants fill millions of jobs, they create millions of jobs, too. Immigrants are twice as likely to start businesses; they have founded 40 percent of the companies on the Fortune 500. To keep the economy growing, our country needs more immigrants, not fewer, to foster innovations, build companies, take new jobs, and create opportunities and prosperity that benefit us all.

Finally, immigration is an expression of Americas commitment to justice and human dignity. Theres a reason that nearly 90 percent of our fellow citizens want the Dreamers undocumented immigrants brought here as children to be allowed to stay. Its the same reason we hold up Ellis Island as a proud national symbol. We believe in the ideals of life, liberty and the pursuit of happiness, even for those who werent born here. We welcome people who want to use their talents to contribute to Americas success.

These views are widely held across our country. If we hope to turn that consensus into concrete action, Americans of all stripes need to come together and demand better from our leaders. Cooperation isnt just possible, its essential to achieve the kind of immigration reform that Americans deserve and want.

Tim Busch is founder and CEO of the Pacific Hospitality Group, founder of the Napa Institute, and a supporter of Stand Together.

See the rest here:
Let's show Congress how to cooperate on immigration reform | TheHill - The Hill

Left-wing reform groups are pushing for the mass release of prisoners, a reduction in arrests, and limits on enforcement of immigration law as ways to combat the coronavirus outbreak in the United States, according to a Washington Free Beacon report.

The initiative comes in response to warnings from experts that the coronavirus, officially known as COVID-19, could "wreak havoc" on U.S. jails because the facilities, often deficient in basic elements of infection control such as clean sinks and an abundance of soap and paper towels, would be less equipped to handle an outbreak should the virus breach the prison walls.

Instead of calling for increased sanitization standards in prisons, however, several of the groups appear to be using the outbreak to push criminal justice reform measures.

Here's more from the Free Beacon:

The Prison Policy Initiative on Friday published recommendations for how to aid the "justice-involved population" during the outbreak. It also called for the release of "medically fragile and older adults," citing higher rates of chronic illness among prisoners.

In addition to the release of certain individuals, the Prison Policy Initiative recommendations also include taking steps to reduce the intake of prisoners. The group suggested law enforcement and sentencing institutions should start reclassifying misdemeanor offenses, using citations for lesser crimes, and diverting criminals away from jails and toward mental health and substance abuse programs in their communities.

But criminal justice reform isn't the only issue being pushed as the pandemic grows in America.

Major liberal think tank the Center for American Progress called on the Department of Homeland Security earlier this week to "suspend certain immigration enforcement practices during the coronavirus outbreak."

Specifically, CAP suggested that the Trump administration "issue a formal statement assuring the public that health care facilities will be 'immigration enforcement-free zones' for the duration of the outbreak." The group characterized its suggestion as an "important step" "to ensure that all people in the United States have the ability to seek necessary medical care regardless of immigration status."

Read more:
Left-wing groups pushing for jailbreak, immigration reform amid the coronavirus outbreak - TheBlaze

Modern society seems to be locked in an endless tug-of-war between What We Are Told versus Reality. We were told the Titanic was unsinkable, until it sank. We were told the 1980 Soviet hockey team was unbeatable, until Team USA beat them. We were told Donald TrumpDonald John TrumpTrump faces toughest crisis of presidency in coronavirus House passes bill to help prop up economy from coronavirus White House physician: Trump doesn't require test after exposure to 2 people with coronavirus MORE would suffer the worst defeat in the history of presidential elections, until he won. This has proven to be a lopsided contest. Reality often takes time to catch up to What We Are Told, but it always wins in the end.

The latest chapter in this battle has recently been settled. We were told that sanctuary laws make communities safer. We were told that they make a more welcoming and inclusive community. Reality has spoken, and it turns out none of that is true. Sanctuary laws make communities more dangerous. Innocent people are being victimized by sanctuary laws, and immigrants are no safer because of them. It is time for sanctuary laws to go into the ash bin of historically bad ideas, along with the blood-soaked, unintended consequences that they bring.

Since the murder of Kate Steinle by an illegal alien on Pier 14 in San Francisco first brought the issue widespread attention in 2015, there has been a steady stream of incidents where an unacceptably high number of people are now dead who would still be alive if not for sanctuary laws in their communities. Its a national disgrace that dare not be discussed in the halls of power in Washington and elsewhere.

The victims in this tragic farce are our sons, daughters, spouses and grandparents. The response from our elected leaders is a toxic stew of gaslighting and coldhearted arrogance. In Chicago, Mayor Lori Lightfoot has been under fire after a criminal alien previously released under the citys sanctuary law was arrested for sexually assaulting a three-year-old girl in a McDonalds bathroom. Read that again: a three-year-old girl. The mayorsresponsecould not have been more tone-deaf.

"If ICE (Immigration and Customs Enforcement) is complaining, then they should do their job better, she said. "They're critical because we have said very clearly we are a welcoming city, a sanctuary city. Chicago Police Department will not cooperate with ICE on any immigration-related business. And that's affected their ability to conduct immigration raids across the city. But that's exactly our intention.

The Immigration Reform Law Institute (IRLI) recently exposed the case of Roberto Antonio Garza-Palacios, a criminal alien in Montgomery County, Md., whose negligence while driving caused the deaths of two people including an FBI agent in 2017. His punishment? A $280 fine, no deportation, and no prohibitions against driving. The IRLIinvestigationfound that Garza-Palacios, who had a long criminal record and was shielded by sanctuary laws, was back on the streets driving just a few months ago before allegedly flipping his car and fleeing the scene. Who among us would feel comfortable with their teenage driver sharing the roads with this person? In what fantasy world does this make for a safer community?

While politicians lecture us on the need to be more welcoming to non-citizens who break our laws, the number ofstolen livesresulting from sanctuary laws and out-of-control mass migration only grows.

The claim that sanctuary laws make a community safer is simply the opposite of the truth. The Department of Homeland Securitys Office of the Inspector General just released ascathing reporton the damage caused by sanctuary laws. Its findings showed that forcing ICE to apprehend criminal aliens anywhere besides a controlled environment like a jail causes much greater danger to the ICE agents, those arrested and those living nearby. No one is safer this way.

Another fraudulent argument by defenders of this disastrous policy is that sanctuary laws encourage illegal aliens to cooperate with police, as they will be unafraid of being deported themselves. Aside from the fact that many victims of illegal alien crimes are other illegal aliens, this claim doesnt fly either. ICE does not apprehend or deport anyone who gives them a tip on a criminal alien.

In fact, the federal government specifically protects people in this circumstance. TheU-visasafeguards victims of certain crimes and those who are helpful to law enforcement in the investigation of criminal activity. A pox on local politicians who shamelessly lie to illegal aliens in their communities and stoke fear that cooperation with law enforcement will lead to their deportation.

We as a society would be better served by casting a more skeptical eye toward What We Are Told and placing more trust in Reality. The latter is telling us there is a better way than sanctuary laws. Its up to us to demand it.

Brian Lonergan is director of communications at theImmigration Reform Law Institute, a public interest law firm working to defend the rights and interests of the American people from the negative effects of illegal migration.

Read more from the original source:
Reality is smashing the sanctuary city charade | TheHill - The Hill