Investment from China in Kushner Manhattan property is off

AP News
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Posted: Mar 29, 2017 12:58 PM
Investment from China in Kushner Manhattan property is off

NEW YORK (AP) — Talks with a Chinese company seeking a stake in a Fifth Avenue skyscraper owned by the family of Jared Kushner are over.

The Kushner Cos. confirmed Wednesday that negotiations with Anbang Insurance Group to help fund redevelopment of the family's office tower on Manhattan's Fifth Avenue have ended. The news was first reported by the New York Post.

The talks had drawn criticism from lawmakers and government ethics experts. They saw it as a potential attempt by China to curry favor with the White House.

Jared Kushner is President Donald Trump's son-in-law and a senior adviser. He stepped down as CEO of the real estate company in January and has sold stakes in several properties, including 666 Fifth Ave., to help allay concerns about conflicts of interest.

Company spokesman James Yolles would not say why the Anbang talks were called off, only that the decision was reached by both parties. He said that Kushner Cos. is still negotiating with other potential investors.

Kushner Cos. bought the property in 2007 for a reported $1.8 billion when Jared Kushner was running the business. It was a big leap for a company previously associated mostly with garden apartments in the New York suburbs.

It soon became apparent that the Kushner had overpaid. The debt taken on to land the property nearly crippled the company during the financial crisis. In 2011, Kushner Cos. sold a stake in the 41-floor building to Vornado Realty Trust.

Anbang has ties to politically powerful families in Beijing, and its ownership structure is unclear. The company has come under scrutiny as it has moved expand its holdings in the U.S. In 2015, Anbang bought Manhattan's iconic Waldorf Astoria hotel for nearly $2 billion.

Four months after the close of that sale, the State Department abandoned decades of tradition, saying that during the annual U.N. General Assembly in the fall, it would set up shop in another New York hotel other than the Waldorf-Astoria.

Officials with the State Department gave no reason.

It was widely reported that Anbang was considering a $4 billion deal to help Kushner refurbish 666 Fifth Ave.

Jared Kushner sold his stake in the building as part of his agreement with the Office of Government Ethics, but his family would have stood to benefit from an Anbang deal.

A senior White House official told The Associated Press earlier this month that Kushner would recuse himself from any government business to which Anbang was a party if the deal went through. The official requested anonymity to discuss a personnel matter.

The Kushner family owns or manages 20,000 apartments, 13 million square feet of office space and industrial properties in several states, including New York, New Jersey, Maryland and Illinois.