A year ago this week, a dozen leaders of Seattle's business and political establishment turned up with shovels at a downtown construction site to break ground on an ambitious, 42-story building, the Potala Tower, named for a palace in the mountains of Tibet. Spearheading the $190 million project was a 41-year-old monk-turned-developer named Lobsang Dargey. His investment company, Path America, had collected $125 million from 250 Chinese investors in a little-known program that grants so-called EB-5 visas to foreigners in return for $500,000 "investments."
The EB-5 scheme rewards foreigners willing to invest in job creation in "depressed" areas by conferring Permanent Resident Alien (green card) status to the investor's entire family. Critics call the program a back door to citizenship for the wealthy.
The downtown Seattle project, Potala Tower, was named for the Potala Palace in the mountains of Tibet, the former residence of the Dalai Lama. So it made sense that a quartet of Tibetan monks should have chanted prayers and rung temple bells inside the former transmission shop that was quickly torn down to make way for the tower.
The 41-story building (which is slated for completion this summer) was to include 342 residential units, most of them condos, but some were expected to be market-rate (or even below-market) rentals. The roof deck was to feature include lavish amenities.
Mayor Ed Murray, actor Tom Skerritt, developer Lobsang Dargey
Groundbreaking ceremonies featured 14 shovels wielded by political leaders and local celebrities. Mayor Ed Murray, wearing a ceremonial silk
khatak, turned the lead shovel; at his side were the developer, Lobsang Dargey and his daughter, Luca; and their mutual friend, the actor Tom Skerritt and his daughter Emi.
Path America's projects (all in prosperous Western Washington communities) have indeed put a few dozen people to work in short-term construction projects. But this week, the Securities & Exchange Commission charged Dargey with pocketing over $15 million for his personal use. A Federal judge promptly froze all of Dargey's assets, and now the future of all his ventures is in doubt.
Also in doubt is the EB-5 program itself, which is administered by dozens of "regional centers" (like Path America) that are supposed to pool investors' funds. Two federal investigations (by the Department of Homeland Security and the General Accounting Office) have concluded that the program seems to operate without oversight and have ordered it shut down. But an industry-friendly group, the EB-5 Investment Coalition, is lobbying hard to keep it alive.
So far, despite negative publicity in the Seattle press, Path America's website has made no mention of Dargey's travails.