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PA Taps Chinese to Fund I-95 Project

Tuesday, December 2, 2014

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Leveraging an immigration program that rewards wealthy foreign investors with U.S. visas, Pennsylvania is reaching into pockets overseas to fund much of a $420 million project to link I-95 with the Pennsylvania Turnpike.

The funding plan, overseen by a limited partnership known as Delaware Valley Regional Center (DVRC), is rapidly subscribing Chinese investors at $500,000 a pop to pay for the massive project.

Photos: DVRC

In China, ads promoting the investment opportunity featured photos of Pennsylvania Gov. Tom Corbett (third from left) and officials from the state's Turnpike Commission. A ceremonial groundbreaking (pictured) for the project occurred in July 2013; construction began in September 2014.

The first part of the project funding, known as Tranche I, sold out Nov. 25, according to DVRC. Round II of fundraising "will be available shortly," the group says.

Construction on the I-95/Turnpike project began in October.

How it Works

The funding plan draws on a fast-growing, and increasingly criticized, Department of Homeland Security program known as the EB-5 "Immigrant Investor Program."

Under the program, foreign nationals may obtain a visa qualifying them and their families for permanent U.S. residency if they invest $1 million in a new commercial enterprise, or at least $500,000 in a domestic project that creates 10 or more jobs in a high unemployment area.

The Pennsylvania project is targeting that second option. The state has already designated the project region as a Targeted Employment Area (TEA).

Pennsylvania wants the foreign investors to advance a $200 million loan for the project in southeastern Pennsylvania. The Pennsylvania Turnpike Commission is overseeing the project.

The Delaware Valley Regional Center promotes the EB-5 Immigration Investor visa as a quick, flexible way to obtain permanent U.S. residency. Forbes has described EB-5 as a "visa-for-sale" program.

EB-5 applicants do not require sponsorship from a U.S. employer or family member and, unlike the multi-year backlogs for many employment and family-based "green card" categories, "there is currently no quota backlog for the EB-5 investor category," DVRC reports in its pitch for investors.

Participating investors "live and work in the United States in any capacity," DVRC notes.

'Visa for Sale'

According to Reuters, the number of EB-5 visas issued nearly tripled from 2007 to 2010, and the number of businesses increased tenfold.

In March, CNN reported that "rich Chinese" were overwhelming the program, and Forbes described EB-5 as a "visa-for-sale" program.

A website called Immigration Law Las Vegas calls EB-5 "the easiest path to Green Cards for foreign investors who want to give their children an American education, or who want live or work or retire in the United States."

In August, a Chicago man was indicted for allegedly using EB-5 as bait to swindle $160 million from Chinese nationals.

'Class A+ Repayment Credit!'

As of Monday (Dec. 1), the Pennsylvania Turnpike Commission does not include the financing plan on the project website and does not list DVRC as part of the project team. The last "project news" noted on the site is from 2010.

The Pennsylvania Turnpike Commission is seeking to borrow nearly half of the $420 million project cost from wealthy private investors outside the United States.

Nevertheless, state officials began pitching the plan in China in September, The Philadelphia Inquirer reported Sunday (Nov. 30).

The newspaper said the ad included photos of Gov. Corbett and Turnpike Commission officials and the text: "Guaranteed by U.S. Government, Class A+ Repayment Credit!" It described the project as "A key expressway-connecting hub project in U.S.A.!"

The ad was "toned down" following inquiries by the newspaper "to remove suggestions of government guarantees for investors," The Inquirer reported.

More than 100 investors have applied out of a goal of 400, mostly from China, the news outlet said.

Trending Now

The idea for the plan came from Turnpike Commissioner Pasquale T. "Pat" Deon Sr., described as a local "restaurateur, beer distributor and Republican power broker" who chairs the board of the state transit agency known as SEPTA.

SEPTA had used a similar mechanism to borrow $175 million to pay for its smart-card fare system in 2011, The Inquirer said.

   

Tagged categories: Asia Pacific; China; Construction; Finance; Government; North America; Program/Project Management; Roads/Highways

Comment from John Fauth, (12/2/2014, 9:55 AM)

Talk about a double edged sword. This has all the flavor of a Nigerian Prince / Ghanan General hoping to swindle those long on greed and short on common sense... but it's legitimate. On the other hand, when authentic American government hawks permanent residence in exchange for cash is reason for real shame. All the class of a sideshow barker.


Comment from Chuck Pease, (12/2/2014, 10:10 AM)

WOW. What a circus. I guess I better have the kids and grandkids take up lessons in the Chinese language!!!!


Comment from Mark Puckett, (12/2/2014, 10:22 AM)

I think its brilliant...instead of incorporating additional drains on the system like much of the current legal and illegal immigration theyre bringing in the type we sorely need to help with the economy mess created by the drains


Comment from J Tyvand, (12/2/2014, 10:46 AM)

Brilliant??? For whom? No sponsorship required, bring your entire family, and not be restricted to living where your money was spent. Democracy for sale. Don't fear most immigrants(legal and otherwise)who want nothing more than a better life for their children, and are willing to work to that goal. Fear the unelected officials at bureaucracies like Homeland Security who come up with this sort of un-American corruption. As a citizenry, we ought to be ashamed, and deserve the uncertainty and chaos this type of government behavior is going to eventually lay at our children's feet.


Comment from Mark Anater, (12/2/2014, 11:26 AM)

Public officials are so afraid of raising taxes that such financing shenanigans are inevitable. This is just a symptom of a much larger problem. We are passing the buck on so many public needs that a painful day of reckoning is inevitable.


Comment from Anthony Kavouris, (12/2/2014, 5:21 PM)

Despicable and deplorable. The quasi-governmental officials responsible for this one are truly selling us and the U.S. out!


Comment from Andrew Piedl, (1/2/2015, 11:57 AM)

Fortunately, the voters of PA have shown soon to be former governor Corbett the door to political retirement.


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