When he campaigned for mayor, Bill De Blasio repeatedly invoked A Tale of Two Cities as a metaphor for New York. We will be ONE city, he said. All sharing the same rules, risks, rewards and purpose.
De Blasio is now delivering on that promise…by linking real estate billionaires, unemployed East Harlem residents, immigrants and global socialites to create a 2.3 billion dollar monstrosity on Central Park South. It all starts with the EB-5 program.
IMMIGRANT INVESTMENT THROUGH EB-5
Established by Congress in 1992, the EB-5 Investor Program enables immigrants to fast-track their visa applications, if they invest $500,000 in commercial enterprises that create 10 jobs in rural or “High Unemployment” urban areas.
For example, if a foreign investor commits $500,000 to help a business in East Harlem, and to create 10 jobs in East Harlem, that investor’s green card will be expedited.
Its purpose is to generate economic development and employment opportunities in Targeted Employment Areas (TEAs) such as East Harlem, Bedford-Stuyvesant, and the South Bronx.
But Mayor De Blasio took it a step further: by gerrymandering the TEAs, and encouraging the jobs and $500,000 investments to migrate into rich city neighborhoods. The most outrageous example of this is the East Harlem-Central Park South project known as 1 Park Lane.
ANATOMY OF A SCAM
The scam was done openly, with the full cooperation of Mayor De Blasio and City Council Speaker Melissa Mark-Viverito.
It works like this:
Central Park South is one of the most affluent areas in the entire United States, and could never qualify as a Targeted Employment Area (TEA) for the EB-5 program .
But by combining East Harlem and Central Park South, and claiming them to be “one” TEA, Central Park South suddenly qualified as a “High Unemployment” area and became eligible for EB-5 funds.
The Wall Street Journal published a map, which shows this EB-5 “linkage” of the two neighborhoods.
By pulling this bait-and-switch, the real estate developer of 1 Park Lane – Steven Witkoff – acquired more than $200 million in low-cost EB-5 financing…all from 400+ aspiring immigrants, in increments of $500,000 apiece.
Since each $500,000 investment requires the creation of 10 jobs, then 4,000 jobs (10 jobs x 400 investors) will be created at 1 Park Lane…just a few feet from the Plaza Hotel, at 36 Central Park South.
These 4,000 jobs were supposed to occur in East Harlem.
But the EB-5 bait-and-switch enabled Mr. Witkoff to magically transport them to 1 Park Lane…aka 36 Central Park South…presumably, because Central Park South is a “High Unemployment” area.
This tactic is so obvious that the Wall Street Journal – a paragon of capitalism – ran a major story on it titled “Swanky New York Condo Project Exploits Aid Program.”
When completed in 2020, Witkoff’s building will be the latest addition to the “Billionaire’s Row” of ultra-luxury skyscrapers on the southern edge of New York’s Central Park.
The views will be commanding, because the tower will reach 1,210 feet: taller than the Chrysler Building, taller than the Eiffel Tower, twice as tall as the Washington Monument, and four times taller than the Statue of Liberty.
1 Park Lane, image from Witkoff
The building will contain a 100-foot swimming pool, spa, library, a private restaurant, and a covered porte-cochère.
Every residence will have 14-foot high windows, and an outdoor terrace with commanding views.
Woman gazing at the poor people in East Harlem
According to their offering documents, 1 Park Lane will be “the most elegant and luxurious condominium apartment building in both New York City and the world. It will be the most desired address for the world’s rich and powerful.”
This paean to Thorstein Veblen is appropriately priced: up to $13,000 per square foot, with 88 units selling for an average of $26 million, and several units costing over $50 million.
Witkoff expects to sell the units for a total of $2.3 billion and a profit of $600 million. In other words, the $200 million of EB-5 financing siphoned away from East Harlem, will be pure profit (1/3 of final profits) for the developer.
FOLLOW THE MONEY TRAIL
How did a federal program to create jobs and investment in struggling neighborhoods like East Harlem, end up building “the most desired address for the world’s rich and powerful?”
On what magic carpet did a developer transport $200 million in EB-5 monies from East Harlem, to a palatial condo tower adjacent to the Plaza Hotel, and 600 feet from the Trump Tower?
The answer is sad but simple…it requires only three words…New York politics.
A 5-minute review of NYC Campaign Finance Board documents reveals that the developer, Steven Witkoff, is the single greatest contributor to the campaign treasury of City Council Speaker Melissa Mark-Viverito – who is also the council person who represents East Harlem.
Steven Witkoff – and his family and employees – have contributed $19,900 to Viverito. All of the contributions were made precisely when their “condominium for the rich and powerful” was undergoing city and state review.
Witkoff is also a member of the Real Estate Board of New York – REBNY – which has has funneled over $100,000 into Viverito’s campaign account over the past three years. Again, these contributions all coincide with the city and state review period, of Witkoff’s “rich and powerful” condominium.
The pattern repeats itself with Mayor De Blasio. The Campaign Finance Board shows these contributions from Witkoff to De Blasio…$39,150…nearly twice the amount given to Viverito.
DE BLASIO DELIVERED
In the end, De Blasio should be congratulated.
He took his Tale of Two Cities, and blended it into one.
By marrying East Harlem and Central Park South – and branding them as one “High Unemployment” area – he technically delivered on his pledge to unite rich and poor, black and white, over and under privileged.
The Mayor and Councilwoman Viverito – two Robin Hoods in reverse – drained $200 million from East Harlem to build “the most elegant and luxurious condominium apartment building in both New York City and the world.”
While mothers fight rats in East Harlem, De Blasio and Viverito siphoned $200 million to create “the most desired address for the world’s rich and powerful.”
A tale of two cities indeed.
For a history of the War Against All Puerto Ricans, read the book…
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