Kushner Companies

affordable housing, Policy, real estate trends

Image via Creative Commons

Recent news of Kushner Companies’ filing of false documents outlining the residential makeup of their buildings in order to get construction permits has prompted a closer look at the practice, which, according to Politico, has been rampant among New York City property owners for years with few consequences. Last month the Department of Buildings fined Kushner Companies $210,000 for repeatedly submitting inaccurate paperwork. Tenant advocacy group Housing Rights Initiative (HRI) will release a report Monday outlining how landlords filed more than 10,000 deceptive PW1s (Plan/Work Applications) in the span of two and a half years.

What’s going on here?

Policy

237 Henry Street via Google Earth

Kushner Companies, run by the family of Donald Trump’s son-in-law Jared Kushner, allegedly falsified construction permits as a way to remove rent-regulated tenants from their New York City buildings, the New York Times reported. The city’s Department of Buildings on Monday fined the Kushner Cos. $210,000 for 42 violations of submitting false applications across 17 buildings. According to a tenant activist organization, Michael Cohen, Trump’s former attorney, also falsified documents at three of his properties in Manhattan at 237 Henry Street, 172 Rivington Street and 235 East 27th Street.

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Policy, Williamsburg

Rendering via Morris Adjmi Architects

Gov. Andrew Cuomo on Monday launched an investigation into allegations of tenant harassment by Kushner Companies at the Austin Nichols House in Williamsburg. The announcement comes on the same day a group of 19 current and former residents of the building are set to file a $10 million lawsuit against the company for creating unlivable conditions from construction noise and dust and pushing them out to make room for condo buyers. The company, run by the family of Donald Trump’s son-in-law and senior advisor Jared Kushner, purchased the 338-unit property at 184 Kent Avenue in 2015, and has since sold or emptied 75 percent of the rent-stabilized apartments, the Associated Press reported.

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Major Developments, New Jersey

one journal square, kushner companies, jersey city

Old rendering of One Journal Square via KABR Group

A partnership headed by Charles Kushner filed a lawsuit in federal court in Jersey City Wednesday, blaming the mayor’s “political animus” toward all things Trump–and, therefore, Kushner–for sending the company’s residential complex into default earlier this year. According to the New York Times, the suit claims that Jersey City Mayor Steven Fulop issued a default against the $900 million development in order to “appease and curry favor with the overwhelmingly anti-Trump constituents of Jersey City.”

More political animus, this way

Midtown, Policy

666 Fifth Avenue, Kushner Companies, Vornado

Google Street View of 666 Fifth Avenue

Kushner Companies has agreed to purchase the remaining 49.5 percent stake in 666 Fifth Avenue from Vornado Realty Trust for $120 million, nearly wrapping up the drawn-out saga of the problem-plagued condo tower. According to the Wall Street Journal, Vornado said the contract with Kushner is expected to close in the third quarter of this year and is conditional and “there can be no assurance that this transaction will be completed.”

Kushner Cos. first purchased the 41-story building in 2007 for a record $1.8 billion, but the economic recession created enormous financial strain for the company. To help restructure the building’s major debt, they brought in Vornado, which purchased the stake in the building for $80 million and the assumption of half the property’s $1.2 billion mortgage in 2011.

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Midtown, Policy

666 Fifth Avenue, Kushner Companies, Vornado

Google Street View of 666 Fifth Avenue

Update 4/9/18: Vornado announced on Friday that it reached a “handshake” deal to sell its stake at 666 Fifth Avenue back to the Kushner Cos, according to the New York Times. It remains unclear if the Kushners have found a new partner. Steven Roth, chairman of Vornado, in the filing, said the payment would cover the company’s investment: “The existing loan will be repaid including payment to us of the portion of the debt we hold.”

Kushner Cos. said this week it is in talks to buy the remaining 49.5 percent stake in 666 Fifth Avenue from Vornado Realty Trust, furthering the drama at the 41-story Midtown Manhattan office building, according to the Wall Street Journal. The tower has remained one of Kushner Cos. most financially troubled projects. In addition to its debt and high rates of vacancy, the building has been mired in controversy, mostly due to Jared Kushner’s role as a senior adviser and son-in-law to President Donald Trump. While Jared divested in the property to avoid conflicts of interest, investors have been reluctant from entering a deal with Kushner Cos.

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affordable housing, Policy

170-174 East Second Street, where Kushner filed false permits, photo via Google Maps

Update 3/22/18: The Daily News reports that the Department of Buildings is investigating more than 12 properties where Kushner Companies is said to have filed false paperwork in relation to rent-regulated tenants. Kushner Cos. has denied the allegations and said yesterday they are the victims of “politically motivated attacks.”

Controversies continue to pile up for Kushner Companies, the Manhattan development firm led by Jared Kushner until he left last year for the White House. Besides the major financial troubles of their office tower 666 Fifth Avenue, the firm was caught routinely filing false paperwork with the city, “declaring it had zero rent-regulated tenants in dozens of buildings it owned across the city when, in fact, it had hundreds,” according to the AP. Housing Rights Initiative, a New York tenants’ rights watchdog, compiled the work permit application documents. Aaron Carr, the founder, called the act “bare-faced greed,” adding that “the fact that the company was falsifying all these applications with the government shows a sordid attempt to avert accountability and get a rapid return on its investment.”

It happened at least 80 times

Midtown, Policy

666 Fifth Avenue, Kushner Companies, Jared Kushner

A previous rendering of 666 Fifth Avenue, courtesy of Kushner Companies/Zaha Hadid Architects

Instead of the 41-story Midtown tower becoming an 80-story office building with hotel rooms and luxury housing, 666 Fifth Avenue will now get a much more simple upgrade. According to Bloomberg, Vornado Realty Trust, the project’s partner alongside Kushner Companies, told brokers the property will remain an office building, with“mundane” renovations planned. As one of the most financially troubled developments for Kushner Cos., the Fifth Ave project has been losing money since its purchase was first coordinated by Jared Kushner, currently a senior advisor to President Donald Trump, in 2007.

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Major Developments, New Jersey

one journal square, kushner companies, jersey city

Old rendering of One Journal Square via KABR Group

The contentious residential and office tower planned for One Journal Square in Jersey City is getting a second life today when Kushner Companies and KABR Group present revised plans for the project to the city’s Planning Board. Earlier this year, according to NJ.com, the developers failed to get a package of city subsidies, a major investor and future tenant left the deal and a state tax break never came. The updated plan seeking approval includes two 849 foot tall, 56-story towers with 1,512 residential units plus retail and office space. Older plans called for a 56- and 79-story tower with a total of 1,725 units.

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Major Developments, Midtown East, Policy, real estate trends

666 Fifth Avenue, Kushner Companies, Jared Kushner

A rendering of 666 Fifth Avenue, courtesy of Kushner Companies/Zaha Hadid Architects

In 2007, Kushner Companies purchased a 41-story tower in Midtown for $1.8 billion, which was the most expensive real estate deal ever in the U.S. at the time. The transaction of 666 Fifth Avenue, coordinated by Jared Kushner, now a senior advisor to President Donald Trump, was ill-timed, making the purchase just before the economic recession. As the Washington Post reported, the Fifth Avenue project is one of the most financially troubled for Kushner Cos., with one-fourth of office space empty, and its lease revenue not covering monthly interest payments. While Kushner has divested his stake in the property to avoid conflicts of interest, the property’s value has dropped and foreign entities have withdrawn financial support. Currently, Kushner’s dealings are under investigation by special counsel Robert Mueller, as part of the broader investigation into Russian collusion with the Trump campaign.

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