Pacific Park EB-5 funds could end up in billion-dollar Manhattan developments

TSX Broadway in Times Square and Bjarke Ingels-designed NoMad tower identified as redeployment options

TRD New York /
Mar.March 08, 2019 07:00 AM

From left: a rendering of 3 West 29th Street, Nick Mastroianni, TSX Broadway (Credit: BIG via YIMBY and ArX Solutions)

Money set aside through the EB-5 program for Brooklyn’s Pacific Park megaproject could end up in one of two billion-dollar-plus Manhattan developments.

Nicholas Mastroianni II’s U.S. Immigration Fund, the regional center that arranged the investment, is pitching the TSX Broadway hotel project in Times Square and a new office development in NoMad, among other options, as two potential destinations for the EB-5 funds to be redeployed.

“We have identified and are currently negotiating multiple sound investment options,” USIF wrote in materials it sent to investors.

The Jupiter, Florida-based company is looking to redeploy roughly $60 million of EB-5 money into a new project after Forest City Greenland repaid a portion of the loan USIF gave the developer for Pacific Park in 2015. That’s because the joint venture sold the development site at 664 Pacific Street to the Brodsky Organization, which chose not to assume the EB-5 debt, sources previously told The Real Deal.

Now, USIF is telling the 498 EB-5 investors who put money into the the Pacific Park site in exchange for a green card that they can opt to have their pro-rata portion of their investment repaid. Those who wish to remain in the program and pursue their visas will have to put their money into new projects.

At TSX Broadway – the $2.5 billion mixed-use project in Times Square being developed by L&L Holding, Maefield Development and Fortress Investment Group – the EB-5 funds would take the form of a mezzanine loan with an initial term of 45 months.

(USIF had previously redeployed other EB-5 funds into TSX Broadway from another Times Square project, 701 Seventh Avenue, according to the company. And one source said the company has already committed more EB-5 funds to the project, which is USIF’s preferred destination for redeploying the Pacific Park money.)

Another option is the $1.3 billion, Bjarke Ingels-designed office tower dubbed 29th & 5th that HFZ is developing with Collegiate Asset Management. The EB-5 funds would take the form of a preferred equity investment with an initial term of 26 months.

Other options include HFZ Capital and Fortress Investment Group’s landmarked Shore Club in Miami Beach, as well as a blended-investment vehicle that makes short-term loans across multiple investments.

Representatives for USIF could not be reached for comment.

Redeployment is a recurring issue with EB-5 as a backlog of visa applications has extended the timeline investors need their money to be in qualified projects.

USIF, the most prolific EB-5 regional center, has faced a number a challenges from its investors over redeployment, and Pacific Park has been no exception.

One investor last month sued USIF in Manhattan state Supreme Court, claiming USIF never provided investors with disclosures regarding the Pacific Park project and requesting a temporary restraining order putting a halt on redeployment.

The judge, however, quickly dismissed the request and ordered the investors and USIF to settle their differences in arbitration.

“The court denied the temporary restraining order on the first day of the case,” Richard Haddad, USIF’s attorney in the case from the law firm Otterbourg,” told The Real Deal. “And all the relief requested by the plaintiff has been rejected.”

Investors in that case have been working with EB-5 activist Zoe Ma, who last month filed a federal racketeering case against Mastroianni and USIF. The case is ongoing. Ma is a paralegal who has brought multiple suits against Mastroianni, who said the claims are “baseless” and referred to Ma as an “ambulance chaser.”

Ma recently described herself to Bisnow as “the Moses of EB-5 fraud… leading the Chinese out of Egypt.”


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