Trying to Fund the Bridge Project with Foreign Capital

STORY AND PHOTO BY JANIE ROSMAN

What’s wrong with Chinese investors buying into United States projects in exchange for a green card?

Nothing if the projects qualify under the EB-5 Immigrant Investor program set up for this purpose, per Christopher Bentley, Chief of Media Relations, U.S. Citizenship and Immigration Services Office of Communications, Department of Homeland Security.

Seattle-based developer Michael Mattox and immigration lawyer Robert Divine, a former acting director of U.S. Citizenship and Immigration Services, are applying EB-5 to the New NY Bridge project by offering Chinese investors and their families two-year, EB-5 green cards and, ultimately, permanent residency status for $500,000.

Created in 1990 to promote the immigration of those who can help create jobs for U.S. workers through their capital investment into the U.S. economy, EB-5 is based on three main elements (source: USCIS Policy Memorandum (PM-602-0083, dated May 30, 2013) — (1) the immigrant’s investment of capital, (2) in a new commercial enterprise, (3) that creates (at least 10) jobs.

Legislature in 1993 enacted the “Immigrant Investor Pilot Program” to encourage immigrant investment opportunities within designated regional centers like Mattox’s company, Access the USA, one of approximately 601 USCIS-approved regional centers with less restrictive job creation requirements

“When a person is at the two-year mark and has to show the job creation, he or she will have to show direct employment and indirect employment,” Bentley explained. “It is worth noting the investment must be placed completely at risk with no guarantee of return in order for an immigrant to qualify for participation in the EB-5 program.”

Mattox disagrees with Bentley.

“Infrastructure creates lots of jobs, and they’re being created for this (bridge) project,” Mattox told the Rockland County Times last Sunday. “Our package is attractive to investors. It’s like a loan, and in the process, they create jobs and qualify for a green card for themselves, their spouses and their children under 21.”

When pressed for specifics, Mattox said U.S. Securities and Exchange Commission rules prohibit him from discussing his project, which utilizes the RIMS II AND IMPLAN models.

There are no such rules or limitations from a Department of Homeland Security aspect,      USCIS experts in EB-5 subject matters said. “It’s important to note, however, that we deal – exclusively – with the immigration side of the equation, and the SEC likewise deals – exclusively – with the securities aspects,” Bentley said.

The SEC’s Office of Investor Education and Advocacy did not respond by deadline.

Per the New NY Bridge website, the state Department of Labor “will be the main resource for all direct and indirect job openings related to the project.” Contracting opportunities are available through Tappan Zee Constructors, LLC (TZC).

Immigration lawyer-turned-developer Henry Liebman objects to Mattox’s bridge-funding plan because “it’s (EB-5) basically supposed to be (for private business and) entrepreneurial.”

Liebman founded American Life under a federal program that grants U.S. residency green cards to foreigners who invest at least $1 million in property developments or businesses that create 10 or more jobs (or, if investing in economically depressed areas, $500,000).

“This is not what the program was the intended for,” he said. “If you want to include federal projects, (then) structure it the way Canada did and give it to the government.”

The Thruway Authority sold $1.6 billion in five-year bonds, at a 2.2 percent interest cost, on Wall Street before Executive Director Thomas Madison signed for an historic $1.6 billion Transportation Infrastructure Finance and Innovation Act (TIFIA) loan in December 2013. It won’t draw on the proceeds until 2019, and won’t have to start repaying the TIFIA loan until five years after that. The TIFIA program allows flexibility in how loans proceeds are paid.

“As we continue to develop the financial plan for the New NY Bridge, we are open to any ideas that will help us keep tolls on the new bridge as low as possible,” NYSTA Director of Media Relations and Communications Dan Weiller said.

While the Thruway Authority and the New NY Bridge are in no way connected with this secondary marketing of Thruway bonds, an increase in demand for its bonds could reduce financing costs which would in turn help keep tolls on the new bridge as low as possible. While the specifics of each Thruway Authority bond issuance may vary, its bonds are available for purchase by all investors.