Billionaire Stephen Ross is
getting a lot of flack for his Trump fundraiser. Socially progressive clients
of his health club chain are quitting in droves over his perceived support for
the president. So why is Ross doing it? A Wall Street executive opines that
it’s because Ross wants to ensure EB-5 is extended when the program expires at
the end of this September.
Ross, the developer behind the Hudson Yards project, has a real estate empire that is built to a significant degree by the inexpensive foreign equity capital he gets from the EB-5 visa program. It’s significant enough to make Wall Street bankers wonder why Ross, never a supporter of Trump, would suddenly throw a multi-million-dollar fundraiser for the right-wing president.
People who are members of
elite health club Equinox, a company that Ross has invested in, are not only
wondering the same thing but quitting the club over it. Heres’ typical example
of the Twitter outcry this is generating: “Since he uses his $ to support child
separation, hatred, division & animosity for the rule of law, he can’t have
any more of mine. My butt won’t be on his bike.” Ross has a number of
businesses that cater to such left-wing clients. So why risk their ire with
such obvious support of Trump?
EB-5 is the answer. A Wall Street executive claims that Ross is focused on making sure the program — set to expire September 30, 2019 — is extended.
A New York University study states that “EB-5 capital continues to thrive as a mainstream source of capital for real estate development projects.” Developers love that it’s a very inexpensive source of equity capital as foreign investors are more concerned with getting a Green Card than a good return on their money. With many investors getting a return of 2% or less, it’s far cheaper for developers than the annual returns of 20% or more than private equity firms demand.
Ross’ Hudson Yards EB5 project cost about $25 billion and received $1.2 billion in equity capital from EB-5, as an example. Another example of the importance of EB-5 to Ross comes from something as seemingly unrelated as a job posting. Eight months ago, his development company made a recruitment post on LinkedIn for a Shanghai investment manager who will “introduce Related’s real estate projects to Asian nationals that are interested in immigrating to the United States via the USCIS Employment-Based visa program.”
Both he and his CEO, Jeff
Blau, are said to make the continuation of the program their first lobby
priority. Interestingly, neither Ross nor Blau have responded to a request for
comment about this.
People question the intersection of a right-wing president and a billionaire who caters to left-wing clients. The answer seems to hinge on the expiry of USA investor visa program. Because of money — in this case, cheap foreign equity capital — talks.
Read the Vanity Fair article
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