Giving Hudson Yards $1.2B Earmarked For Poor Areas An 'Insult'

HUDSON YARDS, NY — New York City Public Advocate Jumaane Williams said that recent reports showing Hudson Yards received billions in funding from a program designed to aid poverty-stricken areas is the latest sign that the Midtown mega project wasn't built to enhance the lives of the majority of New Yorkers.

Combined with the facts that the majority of stores in Hudson Yards cater to wealthy shoppers and affordable housing units haven't been built yet, the recent revelation adds "insult to injury" for everyday New Yorkers, Williams said during a Tuesday morning press conference.

"We've been talking about New York City as a tale of two cities for quite some time," Williams said. "A great example of that has been Hudson Yards. The amount of subsidies that they have gotten compared to what was put there and the amount of affordable housing [the city] received."

Hudson Yards benefited from a reported $1.2 billion in funding through the EB-5 visa program, which allows people to invest a minimum of $500,000 into real estate projects in order to buy visas for their family members to enter the United States, CityLab first reported.

Hudson Yards only qualified for the program because it was looped into the same "targeted employment area" as several public housing developments in Harlem, according to the report. For an area to qualify as a targeted employment area it needs to meet the standard of 150% unemployment compared to the national rate.

Read CityLab's full report here.

Williams described the targeted employment area as gerrymandered and proof that Hudson Yards was "built on the backs" of New Yorkers with the most need. The public advocate showed a map of the zone during his press conference, describing the area as "stunning" and "astonishing."

"It is quite clear that this project was not of the majority of this city. To the extent that it's beautiful and can help with tourism it's awesome. But we can't do it on the back of New York City people who are fighting for housing, trying to buy food to eat," Williams said Tuesday.

Because the city has no control over how zones for the EB-5 visa program are drawn, Williams called on Gov. Andrew Cuomo to investigate how Hudson Yards ended up siphoning off funding from a program designed to spur investment in distressed areas. Williams said that the use of EB-5 funding at Hudson Yards sets a "terrible precedent" for large development projects going forward.

Any changes to the EB-5 program would have to be made at a federal level, a spokesman for Empire State Development said. The state is solely responsible for certifying a need for job creation in the region, and New York City had an annual unemployment rate of 9.3% when the Hudson Yards project was certified.

Developers contended that the EB-5 visa program is not a source of public funding, but instead brought in private investment that "was a catalyst" in creating both construction jobs and jobs that have gone to a "scores" of residents from nearby neighborhoods and public housing developments.

"We utilized a program set up by the Federal government and followed the applicable rules," a spokesperson for Hudson Yards said in a statement. "By utilizing the EB-5 program we were able to finance the critical infrastructure for the project, the platform, where traditional financing was all but non-existent in the post-recession marketplace."

Developers also touted the fact that the Hudson Yards development added $10 billion to the city's GDP during construction and resulted in the creation of 1,000 units of below-market housing.

In the meantime, the city is working to make Hudson Yards more friendly to normal New Yorkers, Williams said. The public advocate endorsed a bill currently in front of the City Council that would require businesses to accept cash and called on Hudson Yards' developers, The Related Companies, to finish building its commitment of affordable housing units. Williams said Tuesday that only about quarter of the affordable units — which represents 10% of the total development — are currently built.

Cashless stores are discriminatory because 12% of New Yorkers don't have access to a bank and 25% are under-banked, Williams said. The public advocate called out businesses such as Sweetgreen and Citarella, which don't accept cash at their Hudson Yards locations, but said many more stores in the development are also cashless.

"This is an employment zone that they've created, and I'm guessing not many people from there are employed [at Hudson Yards] and even if they are employed here they can't afford to shop here," Williams said. "And if they go to lunch they better not have cash."

"This project more and more is beginning to show haw far this country is being torn apart between the haves and the have nots."