EB-5 investor continues Eighth Avenue center project

Render of 6208 Eighth Avenue (Raymond Chan Architects)

An EB-5 investor is suing the developers of a long-delayed mixed-use project in Brooklyn’s Sunset Park, saying the huge complex may never gain city approval and the site is now for sale.

Jinyuan Li wants to recoup the $ 550,000 he invested in the planned construction of the Eighth Avenue Center, billed as a 1.3 million square foot mega-development.

Li, a Chinese citizen who lives there, learned that he was among 70 EB-5 investors who contributed a total of $ 35 million to the project, according to the lawsuit. The money would help finance the complex, whose plans called for a three-story shopping center, as well as two 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 stage, and 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 lawsuit. The complaint also names an EB-5 fund created for the project, the 62-08 Fund, as well as the NY EB-5 Express regional center, which managed the administrative services of the fund. Planning documents list 62-08 Realty LLC as the registered developer of the project.

Attempts to reach JIC Capital, Gloryland Development and NY EB-5 Express were unsuccessful.

The lawsuit, first reported by PincusCo, adds to a growing list of disputes involving the federal EB-5 program, which provides green cards to foreign investors who invest money in U.S. projects. More recently, a fund run by a controversial EB-5 regional hub 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 concerns mounted as plans for the 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 make up for the long delay; he said the interest payments were just over $ 2,000.

Because the project failed to get off the ground, in September, the federal agency overseeing the EB-5 program rejected Li’s request to receive a visa – a green card being the ultimate goal. Li then demanded that his investment of $ 550,000 be repaid, of which $ 100,000 was said to be in escrow, according to the lawsuit.

The future of the Eighth Avenue Center looks uncertain. A review of the United States Citizenship and Immigration Services found that the project was not fully funded and is 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 lawsuit.

The project is now in the environmental impact stage of the city’s land review process, but developers are already keen to get out of it. In 2019, they brought in broker Cushman & Wakefield Stephen Preuss to market the site for sale at over $ 150 million, reported the Trade Observer at the time. In a recent interview, Preuss said The real deal he hasn’t marketed the site for about a year. The site is also in a federal opportunity zone, which would provide long-term tax benefits for developers.

The property, a former rail yard for the Long Island Railroad, has had a checkered history.

Over a decade ago, Andrew Kohen of MSK Properties was looking to build a Home Depot and an 11-story residential building on the site. The property was rezoned in 2007 from industrial, to commercial and residential, according to YIMBY. Kohen abandoned his plans a year later when the market collapsed. In 2014, he sold the 160,700-square-foot site for $ 51.5 million, according to property records.