A company owned by the family of Jared Kushner, President Donald Trump’s son-in-law and senior adviser, stands to receive more than $400 million from a prominent Chinese company that is investing in the Kushners’ marquee Manhattan office tower at 666 Fifth Ave.
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The proposed partnership is seeking additional participants through a controversial federal program known as EB-5, which is intended for economically distressed neighborhoods and provides residency permits to major foreign investors.
The deal would value the 41-story tower at $2.85 billion, the most ever for a single Manhattan building: $1.6 billion for the office section and $1.25 billion for the retail section. The new partnership will refinance $1.15 billion in existing mortgage debt.
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“At the very least, this raises serious questions about the appearance of a conflict that arises from the possibility that the Kushners are getting a sweetheart deal,” said Larry Noble, general counsel at the Campaign Legal Center. “A classic way you influence people is by financially helping their family.”
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The deal would allow Vornado Realty Trust — which is partnered with Trump in his two most valuable properties — to exit a troubled asset with a 10-fold payout on its stake in the building’s offices and a doubling of its investment in its stores. It declined to discuss the deal.
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Anbang would pay a hefty price for both sections of the 666 Fifth Ave. project but score its first U.S. real estate investment of the year. The company’s ties to the Chinese government are sufficiently unclear that former President Barack Obama declined to stay at the Waldorf after Anbang bought it because of fears of espionage. Now Anbang will be business partners with in-laws of the First Family.
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Supporters argue that the program, which is overwhelmingly used on deals involving Chinese investors, attracts foreign capital and creates jobs at no U.S. taxpayer cost. But some Homeland Security officials and the General Accounting Office have warned that lax vetting has threatened to turn the program into a mechanism for the government to sell visas to wealthy foreigners with no proven skills, paving the way for money laundering and compromising national security.
It has been used to finance high-profile developments in wealthy enclaves, however, including Brooklyn’s Barclays Center and Hudson Yards. The deal for 666 Fifth Avenue, on one of the world’s most expensive shopping strips, blocks from Trump Tower, would arguably be the toniest location for an EB-5 project yet. The $850 million in EB-5 funding sought in the refinancing plan for 666 Fifth Avenue would be the largest to date.