The promotional materials for 88 Kushner-KABR, also known as Trump Bay Street, show a building designed with comforts and amenities certain to attract opulent buyers: There are panoramic views of the Manhattan skyline, an address just blocks from the Hudson River, and real estate developers with a proven reputation for success.
But this sales pitch for the 50-story, 447-unit apartment building isn't meant for buyers. It's targeting wealthy foreign investors, whom developers hope will trade capital for permanent residency in the United States.
The building is a second tower under construction alongside Trump Plaza in Jersey City's booming luxury real estate market. The $218 million high-rise, announced in 2014, was heralded by The Wall Street Journal as the first big deal between Donald Trump and his son-in-law, Jared Kushner, who is married to Ivanka and heir to a real estate fortune of his own. To finance the project, the developers (Kushner Companies and KABR Group, a New Jersey real estate firm) are using $50 million of the $218 million project from wealthy immigrants, secured through an investor visa program known as EB-5, as a Bloomberg Politics report pointed out on Sunday.
The EB-5 investor visa program, created in 1990, offers visas to immigrants who invest $1 million in a commercial project that will create or preserve at least ten jobs in the United States. (They can invest $500,000 if the project takes place in a high-unemployment area.) The program provides a maximum of 10,000 visas each year, many of which lead to green cards: In 2012, only 6 percent of EB-5 visa holders were denied for permanent residency, according to the Brookings Institution.
"This is a really different visa program," said Audrey Singer, a senior fellow at the Brookings Institution, a nonpartisan think tank based in Washington, DC. "Most visa programs don't involve any kind of a business deal, and most business deals don't involve issuing visas."
For most of its existence, the EB-5 visa program was largely unused. But as lending standards tightened after the 2008 recession, American developers began to see the program as a viable source of low-interest financing. A more robust recruiting infrastructure emerged abroad, particularly in China, pitching affluent investors on the idea of an EB-5 visa as a relatively certain path to permanent residency in the US. The program hit its visa limit for the first time in 2014, and again in 2015.
A spokesperson for Donald Trump's presidential campaign declined to comment in detail about the Republican frontrunner's involvement with the EB-5 program and the second tower being built alongside Trump Plaza in Jersey City. "This was a highly successful license deal but he is not a partner in the financing of the development," she wrote in a statement via email. Trump often works with developers who pay a licensing fee to use his name, while not dealing directly with financing.
"Most visa programs don't involve any kind of a business deal, and most business deals don't involve issuing visas." — Audrey Singer
At a debate among Republican presidential candidates on March 3, the real estate mogul defended another business endeavor centered on immigration—the use of temporary foreign workers at his Mar-a-Lago Club in Palm Beach, Florida. The New York Times reported that while 300 US citizens had applied or been referred for jobs at the exclusive club since 2010, only 17 had been hired. "This is a procedure; it's part of the law," Trump said at the debate. "I take advantage of that. There's nothing wrong with it."
The EB-5 program, for its part, is also perfectly legal—but a 2015 report by the US Government Accountability Office derided the program as poorly regulated and vulnerable to fraud. One of the most recent examples of abuse came to light in 2013, when Chicago real estate developer Anshoo Sethi fraudulently collected roughly $160 million from 290 Chinese nationals who were hoping to gain access to a visa, and then never built the hotels and convention center outlined in his investment plan. He pleaded guilty to wire fraud in January.
Congress renewed the EB-5 program for one year in December, but reform appears to be on the horizon. Aside from the threat of fraud, some lawmakers representing rural areas say the distribution of EB-5 projects unfairly favors big-city real estate developers. With only 10,000 visas available each year, covering both applicants and their immediate family members, "the pie gets very small, very quickly," according to Singer. "That's one of the complaints about these New York projects that are really huge and are soaking up a lot of the visas."
To secure EB-5 funding, Kushner and KABR Group worked with US Immigration Fund, a Florida-based company notable for steering such investments into high-profile New York real estate projects, including development at Brooklyn's Atlantic Yards and renovations to the Nassau Coliseum on Long Island. The company serves as a "regional center" for the EB-5 program—essentially a middleman that allows investors to pool funds for a commercial project, often revolving around real estate.
Nicholas Mastroianni III, senior vice president of US Immigration Fund, told me that 88 Kushner-KABR "ranks up there with one of our most confident projects that we've done. [The developers] have a very long track record of success in building this kind of development." Risa Heller, a Kushner spokesperson, did not respond to my request for comment.
As Trump fuels his presidential run with promises to build a wall on the US-Mexico border and ban Muslim immigrants from entering the country, EB-5 offers a vision of what type of visa program might be more palatable to the real estate tycoon—in this case, one that supplies green cards to the super-wealthy, even if they come from China, which he's cited as a threat to American prosperity on numerous occasions.
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