A deal that would restart construction on the stalled 40-story Potala Tower — and give hope to Chinese investors who put $83 million into the development to earn a U.S. green card — has been recommended by the project’s court-appointed receiver.
The agreement would infuse the project with $30 million in new capital and terminate the involvement of developer Lobsang Dargey, who in August was sued by the Securities and Exchange Commission (SEC) on allegations he diverted millions of dollars of investors’ money for his own use.
However, $1.8 million from the proposed arrangement would go to pay Dargey’s lawyers, according to papers filed Monday in U.S. District Court in Seattle by Michael Grassmueck, the receiver put in charge of many of Dargey’s corporate entities. A hearing on the plan is scheduled for Thursday before Judge James Robart.
Grassmueck initially proposed to sell the Potala project as it was — a 60-foot-deep hole in the ground at 2116 Fourth Ave. in downtown Seattle.
That approach was opposed by lawyers for many of the Chinese investors who each put $500,000 or more into Dargey’s development in expectation of earning a U.S. visa under the federal EB-5 program. They argued selling the project would deprive their clients of the all-important opportunity for a visa, even if they got back much of their money.
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