Critics say Trump Bay Street, now leasing apartments at $3,100 a month in New Jersey, is a showcase for the misuse of a controversial immigrant visa program
The first residential Trump-branded development to open since Donald Trumps election victory last month opened for business in Jersey City, New Jersey, this week.
The gleaming Trump Bay Street complex, a luxury rental project completed under the direction of Jared Kushner, son-in-law and would-be White House adviser to the president-elect, sits across the Hudson river, minutes from Manhattans financial district by train or ferry.
The project was built by the Kushner familys Kushner Co operation, which boasts of completing more than $7bn in acquisitions under Jared Kushner, its CEO, since 2007.
The 50-storey building is not lacking in Trumpian grandiosity. Renters are promised a top-hat-wearing concierge and furnishings chosen by the personal decorator for Ivanka Trump, Kushners wife, in conjunction with the home furnishing superbrand Restoration Hardware.
But critics say Trump Bay Street, which uses the Trump name under licenceand is now leasing apartments starting at $3,100 a month, is also a showcase for something else: the misuse of an controversial immigrant visa program originally designed to promote economic investment to disadvantaged areas through the sale of visas that can ultimately be converted to citizenship.
Kushners development, with its chefs, dining tables and elaborate health and sports facilities, was completed with upward of $50m raised through EB-5 financing, according to a slide presentation by US Immigration Fund.
The EB-5 program is popular with Chinese nationals with $500,000 or more to invest in US development projects. In 2014, the most recent year for which records are available, the US issued 10,692 of these visas 85% to people from China, according to the Department of Homeland Security.
But Trump Bay could soon become a focal point not only of efforts to reform EB-5 but also of the incoming Trump administrations unresolved family business conflicts.
EB-5 is an extremely complicated, corruption-prone way to bring foreign investment into the US, says David North, a Fellow of the Center for Immigration Studies, and in this case it is part and parcel of the conflict of interest issues that are flying around the incoming administration.
North estimates that more than 60% of all EB-5 investment in the US comes into Manhattan and surrounding areas while the majority of applications originate in China.
In recent months, the EB-5 program has been the subject of bipartisan criticism in Washington, with opponents including Senator Dianne Feinstein, Democrat of California, vowing to end the system when it comes up for renewal in Congress this month.
On the Republican side, Senator Charles Grassley of Iowa, chairman of the Senate Judiciary Committee, has described the program as riddled with corruption and national security vulnerabilities.
In August, a report issued by the Government Accountability Office said it could not be sure that the money used for EB-5 was not coming from the drug trade, human trafficking or other criminal activities.
Critics of the system say not only is the $500,000 investment threshold too low but the funds the program raises frequently go toward luxury developments in New York or Miami and not, as originally stipulated, to disadvantaged areas as the scheme originally intended.
A New York University studyfound that EB-5 investment was largely financing luxury developments, including a Chinese-style casino in Las Vegas, a Waldorf Astoria hotel in Beverly Hills and the redevelopment of the Hudson rail yards in Manhattan.
Its hard for smaller states and cities to compete with the glitzy hotels and luxurious condo projects, Grassley argued at a congressional hearing.
But supporters, including the Democrats incoming Senate minority leader Chuck Schumer, who represents New York, claim EB-5 has pumped almost $9bn into the economy and created more than 35,000 jobs since it was created in 1990.
The future of the EB-5 program could now be coloured by Donald Trumps campaign promises to crack down on immigration.
In September, Congress passed a resolution keeping the program alive to 9 December. Legislators will now have to agree on a reform for the program or let it expire.
But some believe Trump will not simply back maintaining EB-5 but expanding it.
His strong stance is against illegal immigration, said the former New York governor George Pataki at a forum in Shanghai soon after Trumps election in November. And EB-5 is a legal immigration program. He understands the need for capital, the need for investment.
With Congress being lobbied to extend EB-5 indefinitely, one of the options open to the president-elect could be to back raising the investment bar and introducing reforms that ensure investment capital flows to disadvantaged areas at the expense of New York or other wealthy areas.
But North, for one, was not holding his breath for that.
The way the program works now is as an asset transfer program for rich Chinese investors to line the pockets of rich New York developers. The administration could make the program less useful to the rich of New York and more useful for the rest of us. Theyre unlikely to do that.
Read more: https://www.theguardian.com/us-news/2016/dec/03/trump-bay-street-new-jersey-relied-on-immigrant-visa-funds