Congress To Probe Kushner 666 Skyscraper And Potential Russian Deal — Here's What You Need To Know
On Monday, congressional aides told NBC that congressmen would ask Kushner to testify on whether or not he was trying to establish Russian backchannels to offload his family's pricey property purchase in Manhattan, 666 5th avenue. The building has been a consistent thorn in Kushner's paw since Trump took office. Here's what you need to know about the controversy around 666.
Some Congressmen Think Jared Kushner Was Trying To Set Up Russian Backchannels To Sell His Property
Jared Kushner is set to testify in front of Congress after it was reported that he sought backchannel communication with Russia during President Trump's transition to power. Congressmen will reportedly ask Kushner whether the move had anything to do with his controversial property 666 5th Avenue:
One of the questions Kushner is expected to be asked is whether he tried to set up a secret back channel way of communicating with the Russians so he could find somebody in Moscow to take the 41-story tower at 666 Fifth Ave. off his family's hands, two Congressional sources with direct knowledge of the investigation confirmed to NBC News.
[NBC]
Kushner Purchased The Building For A Record Price, But Has Struggled To Get Returns On The Investment
In 2007, Jared Kushner bought 666 5th Avenue for a record-setting $1.8 billion. The purchase was meant to put Kushner on the real estate map, but he has struggled to get returns on the investment since then:
Kushner had overpaid for the building in 2007, when he bought it with the help of bank loans for $1.8 billion. The financial crisis ensued, occupancy rates plummeted and Kushner had to be rescued by outside investors to keep the troubled building afloat.
More than a quarter of the office space in the building sits vacant. According to an analysis by Trepp L.L.C., a data and analytics firm that tracks bank lending, 666 Fifth Avenue has not generated enough money to pay its debts for several years, forcing the owners to cover the shortfall — at least $10 million in 2015. And that gap is growing. The interest-only $1.2 billion mortgage comes due in less than two years.
In March, The Kushners Announced A Planned Redesign To Save The Building
In a large-scale demolition and reconstruction project, the building would become a glass, mixed-use skyscraper, designed by the late, renowned architect Zaha Hadid. The project could cost upwards of $8 billion, but the property is expected to be worth $12 billion when completed:
[I]ts new 1,400-square-foot height would be achieved by taking the structure down to its inner steel core and adding 40 floors….Assuming all goes according to plan, the building would be home to ultra-luxury condos (going for as much as $6,000 per square foot), along with a hotel and nearly 500,000 square feet of retail.
[Curbed]
After The Election, Chinese Company Anbang Considered Making A Deal With Kushner To Invest In The Project
Anbang was slated to help fund 666's redesign.
The planned $4-billion transaction includes terms that some real estate experts consider unusually favorable for the Kushners. It would provide them with both a sizable cash payout from Anbang Insurance Group… whose murky links to the Chinese power structure have raised national security concerns over its U.S. investments. In the process, an existing mortgage owed by the Kushners will be slashed to about a fifth of its current amount.
The Potential Deal Raised Conflict Of Interest Questions
While Kushner divested from his family's real estate company, legal scholars such as Kathleen Clark of Washington University say that the move of giving someone's family money is a classic way for companies to influence politicians:
Is it reasonable for us to trust that Jared Kushner actually has the interests of the public at heart when he is advising the president or dealing with the Chinese, who have apparently just enriched his family to an extraordinary degree?
[NPR]
After Heavy Criticism Of The Deal By Lawmakers And The Media, The Two Companies Dissolved Their Negotiations
A spokesman for Kushner Companies, which owns the tower at 666 Fifth Avenue, said the two firms had "mutually agreed" to end talks about a deal. The spokesman said Kushner Companies is in "advanced negotiations" with other potential investors…Five Democratic lawmakers wrote to a White House lawyer last week to ask for information about what they called a "highly troubling transaction" between Kushner Companies and Anbang.
[CNN]
