Chinese company Anbang backs out of 666 Fifth Avenue deal with Kushner Cos.

Posted On Wed, March 29, 2017 By

Posted On Wed, March 29, 2017 By In Midtown East

A rendering of 666 Fifth Avenue. Credit: Kushner Companies/Zaha Hadid Architects

“Kushner Companies is no longer in discussions with Anbang about 666 Fifth Ave.’s potential redevelopment, and our firms have mutually agreed to end talks regarding the property,” a spokesman for the developer told the Post. The timing of the Chinese insurance company backing out of the deal–which the Kushners hoped could increase the Midtown’s skyscraper’s value to a whopping $12 billion and include a flashy new Zaha Hadid design–is uncannily timed with investigations into Jared Kushner’s supposed meetings with a scandalous Russian bank. But despite the controversy surrounding ex-CEO and current White House advisor Jared, Kushner Cos. “remains in active, advanced negotiations around 666 Fifth Ave. with a number of potential investors.”

Anbang likely stepped down due to more direct conflicts and concerns that arose about the deal. As 6sqft previously explained, “Before stepping down as CEO of his family’s company to serve as an official advisor to his father-in-law, President Donald Trump, Jared Kushner is reported to have helped set up talks with Anbang, who bought the Waldorf Astoria in late 2014 for nearly $2 billion.” Additionally, the redevelopment planned to utilize the controversial EB-5 program, a federal initiative that provides funds (in this case they would have sought $850 million for the condo conversion) and residency to foreign investors. Though a White House spokesperson said Jared would recuse himself from “any matter where his impartiality could be reasonably questioned,” including a determination on EB-5, there were still other ethical issues, like Anbang’s close ties with the Chinese government.

The decision isn’t entirely surprising; just last week, an Anbang spokesman said, “Any suggestion that Anbang has signed a contract or made any kind of financial commitment is inaccurate.” An unnamed source told the Post that the Kushners are now “weighing [each potential investor] and whether there is a conflict or even a perceived conflict,” and they are avoiding sovereign wealth funds and foreigner investors with extensive U.S. business dealings.

But potential investors may be deterred by conflicting value estimates. Initial reports cited that the deal would value the tower at $7.2 billion, with Anbang providing as much as half of the $2.5 billion in equity for the redevelopment. However, a more recent estimate tied to the aforementioned Zaha Hadid plans said the value could be as much as $12 billion, due to a staggering height increase from 483 to 1,400 feet, an increase of residential space by four times the current amount, and the addition of an 11-story hotel and 464,000 square feet of residential space. If this latter plan were to still go through, Kushner would retain a 20 percent stake but have to buy out partner Vornado Realty Trust’s 49.5 percent stake, as well as existing commercial tenants.

[Via NYP]

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Neighborhoods : Midtown East

  • wright gregson

    I have read that the whole financial arrangement is fishy. any true to that?

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