Orlando soccer stadium has raised $15m via the old green-card-for-investment scam

The interwebs are freaking out about this article in the New York Times by our old friend Ken Belson, which talks about how Orlando City F.C. owner Flávio Augusto da Silva is seeking overseas stadium investors in exchange for a shot at green cards, “in what may be the first deal of its kind.”

As with so much that Belson writes: No, not exactly. The federal EB-5 program offering to let foreign investors in U.S. development projects jump the line for visas has been around for 25 years (which Belson notes), and was in fact a key part of then-Brooklyn Nets owner Bruce Ratner’s finance plan for his arena project back in 2010 (which he doesn’t). The money there went to pay for infrastructure for the larger site, not the arena per se, but still it means the Orlando deal isn’t exactly a first. (EB-5 loans were also proposed for one of Las Vegas’s many arenas that never got built, at least not yet.)

EB-5 has been criticized for being ripe for abuse, with some developers allegedly using it as a scam to rake in cash without ever building anything, while others have complained that if the U.S. is really going to sell green cards to people will to pay for the privilege, it should at least get the money directly instead of giving it to private developers in the hopes that it will somehow create jobs. (The provision of the EB-5 program that da Silva is using is only available for projects in high-unemployment areas, which is certainly true for the area around the Orlando soccer stadium, though how a handful of temporary construction jobs and less temporary hot dog vendor jobs is going to do much to mitigate this is less clear.)

Anyway, this is indeed a scam, though it’s one that is by no means limited to Orlando’s soccer stadium (which is otherwise being funded entirely out of da Silva’s pocket), and one that’s more about how developers have sweet-talked the federal government into getting them access to cheap capital by bumping certain foreigners with money to the front of the immigration line. Team officials haven’t said how much they’re expecting to raise by this method (they say they have $15 million so far), but keep in mind it’s just a no-interest loan, not a grant, so while da Silva would be saving money, he’s still be on the hook for the principal. It’s worth getting upset about, in other words, but less because da Silva is applying for it than because it still exists at all.


14 comments on “Orlando soccer stadium has raised $15m via the old green-card-for-investment scam

  1. Shorter da Silva: “This is way more expensive than I thought it would be, and there aren’t any locals who want to help me pay for it.”

    To the extent that Orlando/Orange County is entirely run by developers, real estate moguls, and tourist interests, this is likely far from the first major project in town that’s been funded in some part by that program. I’m gonna have to read up on that one.

  2. I like da Silva’s soaking rich foreigners plan better than Scott Walker’s take 300 million from state university students and hand it to the billionaire owners of the Milwaukee Bucks plan.

    • I don’t think the UW cuts and the Bucks subsidy are related. The UW cuts appear to be purely political. The Bucks subsidy came in spite of the fact that the Bucks owner are heavy donors to Walker’s political enemies.

  3. I totally agree. However the owner has to spend his money first and even the visa’s sold might never get approval. Fact is this country has no problems selling visa’s to rich people or talented foreign students. I wonder why Mr. Belson failed to mention the Nets or how the Mets are scamming the taxpayers of New York.

  4. Neil (or, should I say “Donald, Jr.”),

    What’s so bad about offering an incentive for foreign investment? I certainly can’t see how the EB-5 program is a “scam”. It appears to be transparent.

    As for the idea that the money should go to the Treasury instead of towards an actual project where an actual thing that creates actual economic activity is being built, I think we just have a fundamental disagreement.

    • Yeah, I’ll agree with Ben, this isn’t a scam. Who’s scammed?

      If this country wants to give green cards in exchange for foreign investment and puts it into law, then that’s law, not a scam.

      Good on Orlando and Silva for taking advantage of it. They are building a stadium and aren’t leaching tax payer money like most everyone else.

      They are also doing their part to upgrade Orlando downtown, which is mostly a shithole. This to me seems like an example of very good use of this EB-5 program.

    • Whoever is getting skipped in line for green cards because they don’t have $500,000 to spend is getting scammed.

      Or, if you accept that green cards should be doled out based on ability to pay, then American residents in general are getting scammed, because the money is going to developers instead of us.

      None of this is da Silva’s fault — he’s just taking advantage of a screwy program. But it’s incredibly screwy.

      • I think that’s sensationalism and too much bleeding heart. I’m leftist and work in refugee field, so I don’t think I’m anti-immigrant, but I can’t agree with this at all.

        America prefers to give green cards to people who can benefit the country the most. So the poor, the lazy and the uneducated wait at the end of the line.

        That is not discrimination or a scam, because immigration isn’t a human right, unless they are refugees. Immigration is the country’s prerogative. The most useful are the most welcome.

        As to giving money to “us”, how will that work? Do you mean give 500k to the government?

        First of all, I would say that money does go to “us” as well as developers. This isn’t your usual “take money from New Britain, Connecticut, give money to Hartford, Connecticut” situation. Money is taken from China or India or Brazil and gets invested into the American economy.

        Yes, developers benefit, but workers also benefit, local communities benefit, people who sell materials for the project benefit, ultimately the tax collector and all of America benefits. This is money that wouldn’t be in America otherwise. 4.5 billion just last year, not much in the large picture, but not nothing either.

        That’s money that gets put into the economy from outside and benefits everyone.

        Secondly, lets remember what you wrote in that last paragraph of the article. These 500k are investments and not grants. People don’t just “give” away the money, they get a share of whatever hotel, mall or stadium they help build. People are also guaranteed dividends and voting rights and what not.

        To say “give” that money to us or to the government isn’t exactly an apples and apples alternative.

        I generally agree with your insights in these articles, but I think in this case you probably formed your opinion out of inertia. Not every stadium developer is a scammer, not every funding scheme is bad for the common man.

      • You’re welcome to your opinion, but I didn’t form mine out of “inertia,” whatever that’s supposed to mean. If you click on the links in the above post, you’ll see that I’ve been consistently criticizing EB-5 for years, as have lots and lots of other people. No, it’s not as bad as direct taxpayer funding, but it’s not without costs, either.

        As for that alleged $4.5 billion in economic activity, a Homeland Security study indicated that the government “cannot demonstrate that the program is improving the U.S. economy and creating jobs for U.S. citizens”:

        http://fortune.com/2014/07/24/immigration-eb-5-visa-for-sale/

        If you’d be happier calling it a “dodge” rather than a “scam,” go for it. But it’s a special benefit carved out of U.S. immigration law for wealthy immigrants and developers seeking cheap capital. That’s problematic, to say the least.

        • It is a scam and the Vermont “Jay Peak” scam is a good example (and the scam is often perpetrated against the foreign investors as well as ordinary people as the program offers less oversight on the investment projects). They get a benefit in return for lies about what economic development they are going to create (you can call the lies “wishful thinking” but that misunderstands the proper way of expressing risk; only disclosing the best case result is a form of lying). So stadium developers should be very comfortable with the lies needed.

  5. Give me your tired, your poor,
    Your huddled masses yearning to breathe free,
    Screw that, give us $500,000!

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