The major redevelopment of the Kushner Companies' 666 Fifth Avenue building by Zaha Hadid Architects (ZHA) may be stalled for good. According to Bloomberg, Kushner's partner on the project, Vornado Realty Trust, has decided to simply renovate the site's existing structure. Kushner's original plan, with designs by ZHA, was to strip the current building down to its steel core and extend it up into a 1,400-foot-tall slender cigarette of a tower. The building would have included luxury condos and office space as well as a five-story mall. Currently the property, a 1957 Carson & Lundin-designed aluminum panel building, is a sturdy 41 stories with its unforgettable address displayed in huge numerals at its peak. In ZHA's plan, the development would have been rechristened 660 Fifth Avenue, distancing itself a bit from the connotations of its current address. When the renderings for the new tower were released earlier this year, finding investors for the project proved difficult. Some were concerned by a potential conflict of interest as Kushner Companies' former director, Jared Kushner, left to serve as the senior advisor to his father-in-law, President Donald J. Trump. Anbang Insurance Group, a Chinese conglomerate, pulled out of investment negotiations with Kushner in late March, dealing a significant blow to the development's progress. Now that Vornado has refocused its attention as well, ZHA's design is on hold. Both of the partnering organizations have vastly different stakes. Vornado spent $80 million for its share of the project with money drawn from a secure portfolio of properties. Kushner Companies had to withdraw the costs for their share–$30 million–from the property itself, having struggled to find investors since the beginning of the Trump presidency. Politics aside, it looks for now like Midtown Manhattan won't be getting Hadid's steel-frame torpedo. Those interested in renting an apartment at 666 Fifth Avenue (which were estimated to go at $6,000 per square foot) can perhaps plead for a condo exchange at ZHA's new residences in Chelsea at 520 West 28th Street.
Posts tagged with "Jared Kushner":
Real estate developer Jared Kushner, a senior advisor to President Donald Trump, has filed permits for a Morris Adjmi–designed tower in DUMBO, Brooklyn. The 21-story residential high rise is backed by Kushner's development firm, Kushner Companies, as well as CIM Group and LIVWRK. The building is planned for 85 Jay Street. Rising to 250 feet, the 874,149-square-foot development will offer 737 apartments, while allocating just over 60,000 square feet for commercial purposes. According to The Real Deal, the developers bought the $345 million,135,000-square-foot plot from Jehovah's Witnesses in December 2016. Those tracking Brooklyn development will know that the same team also purchased the religious organization's Watchtower offices that same year, shelling out $340 million for the DUMBO property. New York–based Morris Adjmi has worked with Kushner in the past. Adjmi designed 30 Journal Square complex in Jersey City for Kushner Companies this year, a project that will be Adjmi's largest in the New York metro area. Another one of Kushner's properties in the vicinity, however, is not fairing quite so well. One Journal Square, a mixed-used project designed by Woods Bagot is looking for funding via the controversial EB-5 investor visa program. Kushner reportedly looked to Chinese investors to plug the gap left by prospective tenants, WeWork, who took several million dollars of investment and tax breaks with them on their departure. Despite the funding setback, One Journal Square is still on course to start construction early next year.
One Journal Square, a mixed-use development designed by global architecture firm Woods Bagot, has been put under the microscope as the project’s developer, Kushner Companies, seeks funding through the controversial EB-5 investor visa program. The Jersey City development has been hit with turmoil recently, with its main tenant, WeWork, backing out and taking several million dollars of tax breaks with them, as well as potentially losing a major chunk of cash ($30.4 million in city bonds, to be precise) and a 30-year tax abatement to boot, according to Bloomberg News. Kushner Companies, like many developers, has turned to Chinese investors to garner funds, specifically $150 million of the $1 billion budget, utilizing the EB-5 investor visa program. The EB-5 program, more formally known as the EB-5 Immigrant Investor Visa Program, was created by the Immigration Act of 1990 as a way to spur investment into rural communities and communities struggling with high unemployment rates. The gist is that a foreign investor can invest a minimum of $500,000 to $1 million in a business that will employ at least ten American workers, and, in exchange, they will receive a U.S. visa, which can turn into permanent residency for the investor and their family. The program was developed to spur growth in downtrodden communities, however, the program has become a loophole for developers to fund luxury projects, claiming nearby neighborhoods struggling with unemployment in order to qualify their luxury developments for the program. Then all they have to do is sell visas to wealthy foreigners in exchange for ‘cheap money.’ The number of visas issued through the EB-5 program has increased dramatically in recent years, from a meager 64 visas in 2003 to nearly 9,000 visas issued in 2015, according to The New York Times. Of those 9,000, approximately 80 percent were to Chinese investors, according to The Washington Post. Despite the increase in growth, a report by the Government Accountability Office in 2015 suggests the program is at high risk for fraud and has no reliable means of verifying sources of funds (like that one time invested funds were linked to several Chinese brothels). Although the EB-5 program itself is no stranger to scandals (for example, a member of Iranian intelligence utilized the program to obtain a visa), there is no doubt that much of this particular scandal comes from the company in question’s ties to a particular senior adviser to the White House (that would be Jared Kushner, husband to Ivanka Trump and former chief executive of Kushner Companies). Only one day before Kushner’s sister spoke to investors in Beijing about One Journal Square, saying the project “means a lot to me and my entire family,” President Trump signed an extension to the EB-5 program as part of his Omnibus bill, raising many eyebrows. Although there is no evidence that Kushner or his sister have done anything illegal or in direct violation of any ethics codes, the controversy surrounding One Journal Square has drawn a lot of attention to the conflict-of-interest concerns floating around President Trump’s White House, as well as the ongoing debate about the future of the EB-5 program and what that means for luxury developers. Despite the scandal and struggle to find funds, however, One Journal Square is still set to begin construction early next year. Stay tuned.
[3/29/2017 — UPDATE: Anbang backs out of negotiations to redevelop 666 Fifth via The Real Deal] Plans to convert the existing building at 666 Fifth Avenue, a long-idled development project owned by Kushner Companies and Vornado Realty Trust, might yet see the light of day as foreign investors indicate their interest in financing the tower. Kushner Companies was led by son-in-law to President Donald Trump and former CEO Jared Kushner until mid-January when he relinquished his control over the company and formally divested his stake in 666 Fifth Avenue. Though some have questioned the significance of these measures to sever himself from the project, Kushner will purportedly no longer have a formal role as it moves forward and will recuse himself if any conflict-of-interest should arise. Yet, Kushner’s precarious web of financial entanglements could potentially haunt him. Shortly before his departure from his family's business, Kushner negotiated investment talks with Anbang Insurance Group, a Chinese company shrouded by opaque ownership and known associations with the Chinese state. In a report by 6sqft, sources say that Anbang has been involved in “advanced talks to provide as much as half of the $2.5 billion in equity for the planned redevelopment.” Though the company has denied it is a stakeholder in the 666 Fifth Avenue project, the deal seems to support its growing portfolio of real estate investments in New York City as they are also the owners of nearby Waldorf Astoria Hotel. The building will require a substantial redesign of the existing structural core to accommodate an additional 40 stories, a task to be resolved by London-based Zaha Hadid Architects (ZHA) which recently circulated a rendering of the ambitious 1,400-foot-tall tower. ZHA has been signed up for the project since 2015 and later this year will wrap construction on its first project in New York City, a residential building adjacent to the High Line. If all goes as intended, demolition will begin in 2019 with a desired completion by 2025.