Quote:
Originally Posted by the urban politician
Your argument about Aldermanic prerogative aside, that "boo hoo" is quite a taunt for not returning $50 million!
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EB-5 Visa programs are *required* to put the investment at risk. Depending on how the company is structured and funded, it may or may not be fraud. A lot would depend on how the corporation and the investing parties agreement was structured. As with any investment where you put money at risk, you have to be very careful. I know some countries have visa programs where you basically just have to plop your cash into a bank account for some period of time. But that is most definitely not what the US EB-5 program is. The US literally considers EB-5 to be a jobs program, and not only are the investors risking their money financially, but if the investment fails to generate the minimum required jobs, they could also lose their qualification for a Green Card.
The extent of risk and chance of fraud in the EB-5 program is a national issue, not a local one. I doubt any investor would pay blame on the city of their investment for a national program that is usually advised against for anyone mostly looking for investments, and only really advised for people who literally have no other possible way to immigrate to the US and will not settle for any other country.
Chances are, they did lose at least some of their investment. I'm not sure how costs would have risen to $50 million before construction even started on a project of that size, but if the ownership structure was like some tech finding deals I've seen it's at least possible that the investors ahead of the EB-5 investors had preferred stock or risk guarantees that would have invalidated an EB-5 Visa investment because the level of risk wasn't sufficient.
If actual fraud happened, they should get something back. But if they were simply subordinate shareholders and it was their dollars that funded the design and planning expenses then they lost because they rolled the dice in a risky game and lost. If you're going to invest $1 million in a game to gain residency in the United States, you really do need to be advised and not just treat it like opening a CD account at a bank. It's entirely possible that the advisor or advisors to the EB-5 investors were negligent or committed malpractice or were the perpetrators of fraud independent of the developers. It's probably a lot more complex that just "getting their money back," and worst case it could be like owning GM stock in 2009. Even if you sympathize with those investors, you likely didn't believe they deserved their money back.
The description in the article does sound odd, not least of which is that my understanding of EB-5 is that you have to invest at least one million except in certain areas with high unemployment. I don't see how downtown Chicago qualifies for that exception.