Weekly Digest #7: Questions Swirl Around ESD Oversight of EB-5 Loans

Evidence suggests that state authority didn't do due diligence; as foreclosure auction approaches.

This weekly digest offers a way for people to keep up with my Atlantic Yards/Pacific Park Report blog, as well as my other coverage in this newsletter.

Anticipating a rare meeting of the advisory Atlantic Yards Community Development Corporation (AY CDC), in which the parent Empire State Development (ESD) was supposed to report on the pending foreclosure of developer Greenland USA’s shares in six future development sites, I published an investigation, Asleep at the Watch on the EB-5 Loans.

My contention: had ESD done required due diligence on the overleveraged transactions—$349 million in immigrant investor funding under the EB-5 program—and/or the developer’s spending, it might have staved off foreclosure.

At the AY CDC meeting, while the discussion of overleveraging did not generate much light, the advisory board did ask ESD for reports on the spending.

As to the project’s future, the message was vague. "ESD's goal is to determine the best path forward to advance the project and to get the remaining housing built. We are working with Greenland in an effort to have them comply with their obligations under the Development Agreements,” said ESD executive Anna Pycior. “It is our focus. We have been figuring out routes to... complete the project, and are looking forward to your feedback.”

Except there was nothing really to offer feedback on.

From: Learning from Atlantic Yards/Pacific Park (Substack)

Jan. 22: The EB-5 Marketing from 2014 Looks Even Worse Now. With video and screenshots.

Jan. 22: Asleep at the Watch on the EB-5 Loans. Would you believe that a required Expenditure Certificate was not delivered for 4.5 years, not until I filed a Freedom of Information Law request seeking such documents?

From: Atlantic Yards/Pacific Park Report

Jan. 23: Lotteries for NYC-sponsored affordable units will now assign 20% of spots, not 50%, to locals. But the last four Atlantic Yards/Pacific Park towers were New York State-supported, so there was no local preference at all. Not that middle-income units are what help those most facing displacement stay in the neighborhood.

Jan. 24: Atlantic Yards CDC meeting: project still in limbo, as ESD talks vaguely of progress, but acknowledges talks with Greenland stalled. Will foreclosure sale happen?

Jan. 25: At Atlantic Yards CDC meeting, questions about the future of Site 5, catercorner to the arena block. New subcommittee to make recommendations for project's future.

Jan. 26: Was ESD “asleep at the watch”? At Atlantic Yards CDC meeting, directors ask for reports on EB-5 spending. Muddy discussion of loans: “overleveraged” or “over-collateralized”?

Jan. 27: At brief public hearing on moving schools to base of B15 tower (662 Pacific St.), general enthusiasm. Comments welcome by Feb. 26, before vote. Neighbors' questions about school operations will persist.