Last Friday, a new EB-5 bill was proposed by Congressman Bob Goodlatte (R-VA) that would prevent real estate developers from obtaining high unemployment area status for their projects, which are actually located in affluent communities. This bill is a result of legislative collaboration by Mr. Goodlatte and Senior Ranking House Judiciary Member John Conyers Jr. (D-MI). The bill addresses the concerns that have been raised about the gerrymandering and fraud surrounding the much beleaguered EB-5 Immigrant Investor Program.
Urban Equality NOW (UEN), a non-profit in support of a much reformed EB-5 program, noted recent reports on the funding of a 50-story luxury rental apartment building in connection with The Trump Organization.
Republican Presidential hopeful, Donald Trump, has publicly taken a stand against deficient immigrant screening and is calling for reform of the immigration system, possibly even freezing it while adjustments are made. Yet, according to the US Immigration Fund, about a quarter of the $50 million raised so far for the Jersey City project, came directly through the EB-5 program.
“The EB-5 program has been fraught with gerrymandering of the Targeted Employment Areas at the detriment of oppressed areas that truly need the jobs, and Goodlatte’s bill will help put an end to it,” says Angelica Martinez, Board of Director for Urban Equality NOW. “A good example of the projects that are sliding their way into the program are several tied to The Trump Organization.”
“One of Mr. Trump’s platforms has been a strict reform of the immigration system, so it’s troubling his organization makes use of a highly controversial program with a high risk of fraud,” continues Ms. Martinez.
According to several sources, including a 2016 Bloomberg article, The Trump Bay Street, Trump Plaza Residence, Mar-a-Lago Club and a Trump golf course project have all used temporary visas for workers with some, if not all, of those visas coming from the EB-5 program
The EB-5 program was created to stimulate the U.S. Economy through job creation and capital investment by foreign investors. The program, as it is currently written, allows large urban developers to continue drawing liberal boundaries around their projects in order to qualify urban, affluent areas as a Targeted Employment Area (TEA). These well-documented gerrymandering tactics undermine the intent of the original regulations which incentivizes EB-5 investment into rural and truly economically distressed areas. The Trump Tower is just one of many. Mr. Goodlatte’s EB-5 proposal is a sincere effort to return the EB-5 program to its original intent of being an economic aid program for underserved communities.
UEN is a non-profit group that stepped up to be the voice of the American Worker in lawmaker discussions surrounding the controversial bill in 2015, and the debate rages on in 2016. One of the main concerns has been the commonly accepted gerrymandering of the TEA as stated in the current EB-5 legislation, “Only those collections of U.S. Census Tracts, wherein aggregate unemployment meets or exceeds the 150% threshold, should be granted applications.”
The Trump building, just a 5 minute train ride from Lower Manhattan, is located in Jersey City’s Powerhouse district, the site of a $179 million retail and commercial complex inside Downtown Jersey City. The Powerhouse District, according to USA Today, is “part of a remarkable demographic and economic U-turn. In a region where many cities are shrinking, Jersey City in the last quarter-century has gained about 30,000 residents, 27,000 jobs and 18 million square feet of prime office space — more than all such space in downtown Atlanta, Phoenix or Miami.”