Field of Schemes: Arena Developers Raising Money By LEGALLY Selling Green Cards
|Putin lackey Dmitry Medvedev, 5`4″, talks turkey
with oligarch and Brooklyn Nets owner Mikhail Prokhorov, 6`8″
From Field of Schemes, a blog devoted to chronicling the innumerable ways that the rich guys involved with owning stadiums and/or sports teams rip the rest of us off.
Posted on January 31, 2014 by Neil deMause
Atlantic Yards Report had a long story yesterday (it doesn’t have any other kind) about how the Brooklyn Nets‘ arena developers are looking to do another round of EB-5 financing, the mechanism that allows foreign investors — mostly Chinese, in this case — to jump the line for green cards if they’ll extend interest-free loans to U.S. development projects in blighted neighborhoods. It’s well worth a read if you’re interested, especially for the bit about how the Chinese government will actually be benefitting from this as a co-investor, but I just wanted to call out this quote it pulls from an article last year by Dartmouth business professor John Vogel:
One of the oddities about the EB-5 program is that the U.S. government is giving out the green cards, but the entrepreneur who puts together the investment gets the money. This scheme seems inefficient and open to corruption. If our government really believes that it is a good idea to sell green cards, maybe we should drop the pretense that this is a job creation program. It might be more efficient to have the money go directly to the U.S. Treasury and reduce the deficit by billions of dollars a year.
This is actually an excellent way of looking at it: Green cards are a public asset, one that the government mostly chooses to give away in order of application, but which here are being handed out in exchange for investment cash. In other words, the government is selling green cards, but it’s not getting the money — that’s going to private developers.
Now, you can say that it’s encouraging private development in places that need it (though it’s tough to imagine anyplace that needs a hand in promoting development less than Brooklyn), but still, is that the most efficient way to get housing built?
The chief developer of Atlantic Yards is Bruce Ratner.
The only thing the citizens of Los Angeles can boast about as a self-governing citizenry is that L.A. hasn`t had an NFL team in a couple of decades.
The most high profile tenant is Brooklyn Nets owner Mikhail Prokhorov, a 6`8″ Russian oligarch worth $13.2 billion. Prokhorov got rich in 1996 by auctioning off to himself for a nugatory price a government-owned company that produced 1/4th of the world`s nickel output.
Is it really too much to ask that professional sports leagues such as the NBA or the English Premiere League in soccer not sell franchises, especially potential flagship ones in major cities, to Russian white collar gangsters? (Perhaps flagship newspapers shouldn`t sell a large share of their stock to Mexican oligarchs either.)