Kushners drop much-criticized effort to raise Chinese cash

AP News
Posted: Jan 24, 2018 5:00 PM
Kushners drop much-criticized effort to raise Chinese cash

NEW YORK (AP) — The family real estate company once run by Jared Kushner is no longer seeking $150 million from Chinese investors for a New Jersey building project after months of criticism that the company was playing up its White House ties to raise the money.

A person familiar with the fundraising effort said this week that the company has stopped trying to raise money from wealthy Chinese to help pay for One Journal Square, a planned 66-story residential, retail and office complex in Jersey City, New Jersey, just across the Hudson River from lower Manhattan. The person was not authorized to discuss the matter publicly and spoke to The Associated Press on condition of anonymity.

Ethics experts blasted the Kushner Cos. last May after Jared Kushner's sister, Nicole Kushner Meyer, mentioned her brother at a presentation to prospective investors in Shanghai. The presentation included a photo of Donald Trump, and Chinese ads included vague promises that the project had "government support" and was "founded by celebrity developers." The company, which canceled other appearances in the country, denied it was seeking to benefit from its White House ties.

Jared Kushner, Trump's son-in-law, resigned as CEO of Kushner Cos. last year to become a senior adviser to the president.

The Jersey City project is just one of several by the Kushner family company, but it has been thrown in the spotlight as a test of whether the people close to Trump are profiting from his presidency.

The Kushner Cos. and its partner, KABR Group, were trying to raise the money under the so-called EB-5 program offering temporary U.S. visas for foreign investors who put at least $500,000 in certain projects to help revive economically struggling areas and create jobs. The program has been criticized by lawmakers and others for targeting areas that don't need it as well as for attracting fraudsters.

Kushner Cos. and KABR Group had previously raised tens of millions under the program for another project in Jersey City along its thriving waterfront section. The project, called Trump Bay Street, has licensed the Trump name from the president's company.

Federal prosecutors in Brooklyn reportedly subpoenaed documents from the Kushner Cos. last year about its EB-5 financing. Charlie Kushner, Jared's father, told the Washington Post on Monday that he was not concerned, but the news has come at a bad time as the company seeks to interest more investors and lenders.

The decision to drop the Chinese fundraising for One Journal Square was previously reported by The Real Deal, a real estate publication.

Kushner Cos. spokeswoman Christine Taylor did not confirm or deny the move, but emailed a statement saying the company was "assessing several financing options." She said the company recently secured "bridge financing" from Fortress Investment Group, a type of loan that must be paid off with more permanent funds.

One Journal Square has suffered several setbacks in the past year. They include the pullout of the anchor tenant WeWork because, as the Kushner Cos. puts it, the shared office space firm wasn't the "right fit." And Jersey City Mayor Steven Fulop has opposed a 30-year local tax break for the project.

On Wednesday, Bloomberg News reported the Mayor Fulop recently held a meeting with Charlie Kushner, suggesting perhaps the tax break may be back on the table. But Fulop shot down that idea within hours, tweeting the idea was "DOA," or dead on arrival.

As for the Kushners, they are putting a positive spin on recent events, saying in their statement that they expect the One Journal Square to break ground in 2018.

"This project is now shovel-ready," it said.