An EB-5 investor is suing the developers of a long-delayed mixed-use project in Brooklyn’s Sunset Park, claiming the massive complex may never win city approval and the site is now for sale.
Jinyuan Li wants the $550,000 back that he invested in the planned construction of Eighth Avenue Center, touted as a 1.3 million-square-foot megadevelopment.
Li, a Chinese citizen who lives there, was told he was among 70 EB-5 investors who contributed a total of $35 million toward the project, according to the suit. The money would help fund the complex, whose plans called for a three-story mall, along with a pair of 15-story residential towers with 350 apartments, a 17-story office tower and a 150-room hotel. The site covers Eighth Avenue, between 61st and 64th streets.
But since Li’s investment in 2015, the project has remained in the planning stages, and the general partners, Gloryland Development and JIC Capital, have struggled to get through the city’s land review process. Both companies are named defendants in the suit. The complaint also names an EB-5 fund set up for the project, 62-08 Fund, along with NY EB-5 Express regional center, which handled administrative services for the fund. Planning documents list 62-08 Realty LLC as the project’s registered developer.
Attempts to reach JIC Capital, Gloryland Development and NY EB-5 Express were unsuccessful.
The lawsuit, first reported by PincusCo, adds to the growing list of litigation involving the federal EB-5 program, which provides green cards to foreign investors who pour money into U.S. projects. Most recently, a fund managed by a controversial EB-5 regional center sued Ian Schrager and the Witkoff Group, alleging the developers siphoned millions of dollars from the Public Hotel on Manhattan’s Lower East Side.
Plans without progress
For Li, his misgivings mounted as plans for Eighth Avenue Center dragged on without progress. He alleges that JIC and Gloryland sought to convince him to keep his money in the fund. Eventually, Li was offered a promissory note to compensate for the long delay; he said the interest payments have been just over $2,000.
Because the project failed to get off the ground, in September the federal agency overseeing the EB-5 program denied Li’s petition to receive a visa — a green card being the ultimate goal. Li then sought his full $550,000 investment returned, of which $100,000 was supposed to be in escrow, according to the suit.
The future of Eighth Avenue Center appears to be in doubt. A review by the United States Citizenship and Immigration Services found the project was not fully funded and unlikely to be. The federal agency noted “material shortcomings” in the plans it received and questioned “the viability of the project,” according to Li’s suit.
The project is now in the environmental impact stage of the city’s land review process but the developers already want out. In 2019, they tapped Cushman & Wakefield broker Stephen Preuss to market the site for sale at upwards of $150 million, Commercial Observer reported at the time. In a recent interview, Preuss told The Real Deal he hasn’t been marketing the site for about a year. The site is also in a federal Opportunity Zone, which would provide long-term tax benefits to the developers.
The property, a former rail yard for the Long Island Railroad, has had a troubled history.
More than a decade ago, Andrew Kohen of MSK Properties, was looking to build a Home Depot and an 11-story residential building at the site. The property was rezoned in 2007 from industrial, to commercial and residential, according to YIMBY. Kohen scrapped his plans a year later when the market crashed. In 2014, he sold the 160,700-square-foot site for $51.5 million, according to property records.