Marina del Rey is one of the wealthiest areas in Los Angeles County, and it would be hard to choose a vantage point from which this fact is more obvious than at Via Marina and Tahiti Way, the last vacant lot in the marina.

In one direction, one can look out at the water and see rows of yachts and sailboats lined by luxury apartments. To the left is a rental complex where residents pay more than $6,000 a month and enjoy a heated saltwater lap pool and private massage rooms. In the residences to the right, a concierge delivers groceries and dry cleaning to residents.

It is little surprise, then, that a developer wants to build a hotel on this four-acre property. What is surprising is this: The project is getting perks through a federal program designed to help jobless neighborhoods.

Developer Hardage Group has convinced government officials that the Marina del Rey site is in a high-unemployment area. It’s done so by claiming that South Los Angeles and Crenshaw, poorer neighborhoods as far as 15 miles away, are part of its project area. The project is one of several in wealthier parts of Los Angeles County that have gerrymandered project areas to qualify for the perks, according to documents obtained through records requests by the Business Journal.

Critics say that by cobbling together these zones, developers are subverting the intent of the rules and are benefiting despite creating jobs away from where they are most needed.

The developers are taking advantage of provisions in a federal investment visa program known as EB-5, which lures foreigners to invest in job-creating projects in the United States in exchange for green cards. The program encourages investment in economically needy communities by giving projects in those areas big advantages in attracting overseas investors.

But developers have been allowed by state and federal officials to claim their projects are in jobless areas by creating maps that can span nearly a dozen cities, drawn specifically to include poor neighborhoods. After getting approved, some of these developers have gone on to secure millions in foreign investment through the program.

“The point of all this is that it was supposed to bring investment to truly depressed parts of the country that needed them,” said David North, a fellow at the Center for Immigration Studies in Washington and a frequent critic of the program. “This is distorting the program.”

Rep. Lucille Roybal-Allard, D-Commerce, whose district includes some of the job-poor areas cited, said in an email, “We need to take a hard look at the process for evaluating EB-5 applications to ensure that the program is working as intended and guaranteeing job creation and investment in low-income communities.”

Defining unemployment

Use of the EB-5 program has surged since the recession, when pressure on developers to find alternative ways to fund their projects coincided with a boom in wealth in China. Last year, foreign investors were approved to invest at least $3.7 billion through the program – nearly 10 times as much as in 2007.

To receive a green card, those investors must place at least $1 million into job-creating projects in the United States. However, the threshold is lowered to $500,000 if the project is in a high-unemployment area – defined as 50 percent higher than the national unemployment rate. The federal government leaves it to individual states to decide which areas qualify.

EB-5 funding can be preferable to construction loans because it’s cheaper. Developers often agree to pay interest to EB-5 investors, but at rates as low as 2.5 percent, several points lower than a typical construction loan, according to Scott Kalt, an attorney at Elkins Kalt in Century City who has worked on EB-5 projects.

Investors, on the other hand, benefit because it fast-tracks them to a green card, which can otherwise be difficult to obtain. Usually hailing from China and South Korea, many have young children they want to send to school in the United States.

At Via Marina and Tahiti Way in Marina del Rey, San Diego’s Hardage is planning a $70 million, 288-room Marriott Courtyard hotel. The developer hopes to raise half that amount through EB-5 investments. It expects to begin construction late next year, according to the project website.

But Marina del Rey has an unemployment rate of less than 6 percent, almost half the county average and ranks in the top 10 in per-capita income in the county, according to Census Bureau data. Though the project is not in a city, county or census tract defined by the state as a high-unemployment area, it still qualified after a Hardage subsidiary drew a map annexing faraway communities.

The map heads northeast from the marina, avoiding the commercially successful areas of Santa Monica, Culver City and Playa del Rey, then expands broadly to the southeast, encompassing poorer communities such as Crenshaw, Baldwin Hills, Leimert Park, Hyde Park and a wide swath of South Los Angeles. It ends at 120th and Figueroa streets, some 80 blocks south of USC. A laborer who lived in that neighborhood would face an hour-and-a-half bus ride to the hotel site.

Many of the neighborhoods claimed by the project bear little resemblance to Marina del Rey. They include Chesterfield Square, south of Leimert Park, which has the highest crime rate in the county and ranks in the bottom 12 percent in median household income, according to data from the Los Angeles Times, as well as a section of Jefferson Park where the unemployment rate tops 40 percent.

By averaging more than 150 census tracts, Hardage was able to claim its project was in an area of 15 percent unemployment last year, qualifying it for benefits.

Hardage officials did not return repeated requests for comment. Neither did the principal of Invest L.A. Regional Center, the business that helped it secure EB-5 funding.

Invest L.A. also facilitated the funding for a project in Pasadena, where developer Singpoli Group is planning a two-phase, $76 million hotel restoration and retail project at the busy commercial intersection of Colorado Boulevard and Lake Avenue. Invest L.A. shares an office with Singpoli in Pasadena, and William Chu, Singpoli’s chief financial officer, is listed as Invest L.A.’s president.

The map drawn for the Singpoli project to qualify for benefits marks a straight shot down to Compton, connecting seven cities and one unincorporated part of the county between Pasadena and the historically depressed southeastern city: Lynwood, South Gate, Bell Gardens, Commerce, East Los Angeles, Monterey Park, Alhambra and South Pasadena.

Four of those cities had unemployment rates higher than 17 percent last year, including Commerce, which at 20.5 percent had the highest rate of any city in the county. The map does not include the wealthier cities of San Marino, Arcadia, La Canada Flintridge or Glendale, each of which directly borders Pasadena.

Since receiving approval, the project has secured $38 million in EB-5 investments.

Philip Kim, head of real estate services at Singpoli, defended his company by saying that determining what areas need jobs is “not an exact science,” and noted that both state and federal officials had signed off. He added that it was possible that the Pasadena project would create jobs in Compton and South Gate, nearly an hour and a half away by train.

“The type of jobs at a hotel are a lot of low-end jobs and manual work,” he said. “I would think that people in those poorer areas would probably apply for those positions since they’re at different levels.”

Loose oversight

In California, projects must be certified every year. Both the Pasadena and Marina del Rey projects were recertified by the Governor’s Office of Business and Economic Development in May. Brook Taylor, a spokesman for the office, said the projects were first certified under former Gov. Arnold Schwarzenegger’s administration, which allowed developers to link an unlimited number of census tracts.

“These projects were certified under a previous administration. It is not our intention whatsoever to pull the rug out from underneath them,” he said. “Going forward, we want to make sure the program is streamlined and more consistent with the spirit of the program.”

A spokesman for Citizenship and Immigration Services, which oversees the EB-5 program, said the agency only checks to see that submitted project areas do in fact have an unemployment rate 50 percent higher than the national average, and leaves it to states to judge what boundaries are acceptable. He cited the agency’s lack of individual expertise on a state-by-state basis.

Nationally, several EB-5 projects have been singled out by critics as examples of gerrymandering, most notably those in wealthier parts of New York. However, none of those appears to span as wide a geographic area as the projects in Los Angeles.

In order to streamline the process, California began limiting new applicants to 12 census tracts as of May. But even that can lead to stretching the rules. World Financial, developer of a Cerritos office building, connected 12 tracts spanning six miles and three cities. The census tract farthest from the project has an unemployment rate of 33 percent, nearly five times higher than that of the development site. Company officials did not return calls for comment.

Though these projects get perks for being in high-unemployment areas, they tout themselves as anything but to investors.

The $21 million Gateway Temple City development qualified after including 10 cities and one unincorporated area stretching to Compton nearly 20 miles away. But when Peter Choi of the Temple City Chamber of Commerce accompanied the project’s developer, Randy Wang, to investor presentations in China last year, he said the city’s relative affluence was a selling point.

“Temple City is known for very high property values and a very strong school system, which is why it’s attractive to Chinese investors and families,” Choi said.

Wang, who did not return repeated requests for comment, last year announced that he had secured $11.5 million in EB-5 investments, but Temple City officials told the Business Journal the project had turned to private financing. It is unclear what that means for the previously secured $11.5 million.

Critics say such allowances do little to help needy communities targeted by the program.

“It does seem to me a problem to provide a special benefit to a developer that is meant to go for encouraging investment and creating good jobs in low-income communities and have that actually be for projects in relatively prosperous communities like Marina del Rey or Pasadena,” said James Elmendorf, deputy director of the Los Angeles Alliance for a New Economy, “where in fact there is no prospect of providing decent wages or health care or anything that would ensure jobs would actually help lift people out of poverty.”

North, the EB-5 critic, said the practice actually draws investment away from the very communities they are supposed to help.

“I don’t see a whole lot of investments going to clearly chronically high-unemployment sort of areas,” he said. “It’s building myriad hotels is what it’s doing.”

North said the flexibility granted to EB-5 projects made it far too easy to qualify.

“This program is essentially designed to meet the needs of these developers as opposed to public needs,” he said.

Taylor, of the Office of Business and Economic Development, countered that the investments help the larger region.

“The bottom line is these projects are in fact going to be creating jobs,” he said, “spurring investment and contributing to the overall economy in these regions.”

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