It’s not easy to backtrack on a statement found in court documents, but Howard Michaels is attempting to do just that about his “legalized crack cocaine” comment about the EB-5 program.
Michaels, who heads the Carlton Group, wrote the phrase in a 2014 email to Michael Shvo, telling the developer he and his partners “would be crazy not to jump on this” to finance their 91-story tower at 125 Greenwich Street.
Shvo, who is developing the 275-unit condominium tower with Davide Bizzi’s Bizzi & Partners and Howard Lorber’s New Valley, heeded the counsel: the developers secured $175 million in mezzanine financing through an EB-5 loan.
Michaels said in a subsequent email that he was “pointing out the virtues of the EB-5 financing,” which he said is low-cost and “creates lots of construction jobs and employment,” the Wall Street Journal reported.
In March, the Carlton Group filed a lawsuit against the developers of 125 Greenwich Street, seeking nearly $4 million worth of unpaid commission.
Developers are using the program, which grants foreign investors a U.S. green card in exchange for a $500,000 investment, more than ever. The number of applications for the program climbed to 17,691 in 2015 from 6,554 in 2013, according to U.S. Citizenship and Immigration Services.