Related Cos. founder Stephen Ross and his Hudson Yards project.
New York-based mega-developer Related Cos. has been instrumental in recent efforts to keep the door open on a controversial program that provides green cards to wealthy investors, reports the Wall Street Journal. Related, the developer behind the $20 billion Hudson Yards project and many other luxury developments, has been instrumental in blocking bipartisan efforts to overhaul a green card program, known as EB-5, that allows permanent legal U.S. residency to immigrants who invest $500,000 or more in certain U.S. businesses.
The purpose behind the program, which allows 10,000 visas a year, is to create jobs; businesses qualify if they create at least 10 jobs per investor. The real estate industry in areas like New York City favor the program because it brings low-cost foreign money to big-ticket luxury projects like Hudson Yards. Developers become qualified by using a provision that was meant for rural and high-unemployment areas by creating districts that link their projects, often in wealthy neighborhoods, to those disadvantaged areas–a practice long known as “gerrymandering.” Critics point to the fact that this diverts money from distressed areas that are far more in need of it.
A key portion of the 1990 EB-5 law was due to expire in September 2015, but was given a series of short extensions. The bipartisan group of legislators working for changes to the program has expressed frustration over what they feel is a diversion from program’s intent to direct money to struggling areas and create jobs where they are far more in demand. There was a bipartisan agreement in 2015 on a general overhaul that addressed developers’ use of the distressed-area provision.
Related has been “by far the most active individual player on the issue,” according to the Journal, working with several smaller real estate companies in the effort to lobby lawmakers to prevent an overhaul, spending over $1.4 million since January 2015–more than twice the amount of any other individual user of the program according to federal lobbying records. Related executives including Chairman Stephen Ross and Chief Executive Jeff Blau have contributed a combined total of $1.27 million to federal candidates and political-action committees according to federal campaign-finance reports.
A spokeswoman for Related said the program “spurs large and small projects throughout the country, and with the help of EB-5, ‘Hudson Yards is now an economic engine pumping over $150 million a month in construction costs alone into the economy and creating thousands of jobs'” and said the company would continue to support expansion of the program.
The most recent extension of the program runs until April; developers hope a Trump White House will favor a long-term extension as the President-elect and his son-in-law, Jared Kushner–who was recently named as a senior White House advisor–are real estate developers. Kushner, who has used the program, has said he will recuse himself from EB-5-related issues.
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