The company controlled by the family of the White House adviser Jared Kushner is close to receiving a bailout of its financially troubled flagship building by a company with ties to the government of Qatar, according to executives briefed on the deal.
.. Mr. Kushner and his son Jared, President Trump’s son-in-law and one of his key advisers, bought the office tower, which is between 52nd and 53rd Streets, 11 years ago for a record-setting $1.8 billion. But the building today only generates about half its annual mortgage payment, and 30 percent of the 41-story tower is vacant.
In late 2016, Mr. Kushner and his son were close to a much different kind of deal with Anbang, a giant Chinese insurance company with ties to the country’s ruling elite, and with a billionaire from Qatar, Hamad bin Jassim Al-Thani. That plan involved demolishing the existing building at 666 Fifth and erecting a $7.5 billion luxury super tower.
.. Although he resigned as chief executive of the company when he joined the White House in January 2017, Mr. Kushner retained most of his stake in the firm. He shed some of the assets — including his stake in 666 Fifth Avenue — by selling them to a trust controlled by his mother.
Kushner’s Business Got Loans From Companies After White House Meetings
Apollo, the private equity firm, and Citigroup made
large loans last year to the family real estate business
of Jared Kushner, President Trump’s senior adviser... Even by the standards of Apollo, one of the world’s largest private equity firms, the previously unreported transaction with the Kushners was a big deal: It was triple the size of the average property loan made by Apollo’s real estate lending arm, securities filings show... It was one of the largest loans Kushner Companies received last year. An even larger loan came from Citigroup.. There is little precedent for a top White House official meeting with executives of companies as they contemplate sizable loans to his business, say government ethics experts... “This is exactly why senior government officials, for as long back as I have any experience, don’t maintain any active outside business interests,”.. Mr. Kushner steers American policy in the Middle East, for example, but his family company continues to do deals with Israeli investors... Mr. Kushner’s firm has sought investments from the Chinese insurer Anbang and from the former prime minister of Qatar... “Why does Jared have to take the meeting?” he asked. “Is there not somebody else who doesn’t have these financial entanglements who can brainstorm freely with these folks?”.. All of the executives who met with Mr. Kushner have lots to gain or lose in Washington.Apollo has sought ways to benefit from the White House’s possible infrastructure plan. And its executives, including Mr. Harris, had tens of millions of dollars personally at stake in the tax overhaul that was making its way through Washington last year.Citigroup, one of the country’s largest banks, is heavily regulated by federal agencies and, like other financial companies, is trying to get the government to relax its oversight of the industry.
.. he is not required to disclose the lifeblood of any real estate firm’s business: its lenders and outside investors.
.. Mr. Harris, a co-owner of the Philadelphia 76ers and the New Jersey Devils
.. Early last year, the White House enlisted Mr. Harris and other executives to advise the administration on infrastructure policy.
.. One of the largest investors in Apollo’s real estate trust is the Qatari government’s investment fund, the Qatar Investment Authority.
.. Mr. Kushner’s firm previously sought a $500 million investment from the former head of that Qatari fund for its headquarters at 666 Fifth Avenue in Manhattan.
.. Shortly after Kushner Companies received the loan from Apollo, the private equity firm emerged as a beneficiary of the tax cut package that the White House championed. Mr. Trump backed down from his earlier pledge to close a loophole that permits private equity managers to pay taxes on the bulk of their income at rates that are roughly half of ordinary income tax rates. The tax law left the loophole largely intact.
Kushner’s overseas contacts raise concerns as foreign officials seek leverage
Officials in at least four countries have privately discussed ways they can manipulate Jared Kushner, the president’s son-in-law and senior adviser, by taking advantage of his complex business arrangements, financial difficulties and lack of foreign policy experience
.. Among those nations discussing ways to influence Kushner to their advantage were the United Arab Emirates, China, Israel and Mexico
.. H.R. McMaster, President Trump’s national security adviser, learned that Kushner had contacts with foreign officials that he did not coordinate through the National Security Council or officially report.
.. The issue of foreign officials talking about their meetings with Kushner and their perceptions of his vulnerabilities was a subject raised in McMaster’s daily intelligence briefings
.. Kushner’s lack of government experience and his business debt were seen from the beginning of his tenure as potential points of leverage that foreign governments could use to influence him
.. Officials in the White House were concerned that Kushner was “naive and being tricked”
.. conversations with foreign officials, some of whom said they wanted to deal only with Kushner directly and not more experienced personnel
.. White House officials said McMaster was taken aback by some of Kushner’s foreign contacts.
.. Kushner came to his position with an unusually complex set of business holdings and a family company facing significant debt issues.
.. Officials from the UAE identified Kushner as early as the spring of 2017 as particularly manipulable because of his family’s search for investors in their real estate company
.. Not fully disclosing foreign contacts ordinarily would result in a clearance being denied, experts said.
.. One of his top business concerns was what to do with his family’s investment in 666 Fifth Ave. in New York, which the company bought under his direction for $1.8 billion in 2007, the highest price paid at the time for a U.S. office tower
.. leaving the company with a $1.2 billion debt that comes due in January 2019.
.. The Manhattan property has been a particularly nettlesome problem inside the government because Kushner’s company has sought foreign money on the project.
.. Kushner and his company had proposed a redevelopment plan that would double the building’s size, requiring major new investment.
.. They met with an executive of a Chinese-run insurance company, Anbang
.. They also discussed a possible investment by the former finance minister of Qatar
.. Questions have also been raised about whether Kushner discussed financing with a Russian banker. He met in December 2016 with Sergey Gorkov
.. The bank has said they talked about “promising business lines and sectors,”
.. With the deadline for the $1.2 billion debt looming, the company has continued to search for a lender. The redevelopment plan appears to be on hold
.. The company, which is privately held, has stressed that the Fifth Avenue property is a small fraction of its assets and that it is doing well financially.
Kushner Cos. in Talks to Buy Remaining Stake in 666 Fifth Ave.
Kushner Cos. is negotiating to buy the portion it doesn’t already own of 666 Fifth Ave., the financially ailing Manhattan office tower that last year became a lightning rod for criticism of conflicts between a senior member of the Trump administration and his family’s business interests.
.. The building has faced financial problems for much of the last decade because of the 2008 downturn, rising vacancy and its $1.2 billion debt, which comes due next year.
.. the proposal sparked controversy after it was revealed that Kushner was close to forming a partnership with Anbang Insurance Group, a Chinese insurer with connections to the government in Beijing.
.. Jared Kushner has taken steps to insulate himself from conflicts, selling his stake in 666 Fifth and other properties to a trust controlled by other family members.
.. The building is about 30% vacant, partly because Kushner was trying to empty it to prepare for redevelopment.
.. She noted that Kushner has written down the value of its stake in the building to less than 5% of the family’s net worth.
.. the family may face difficulty moving ahead with a redevelopment of the scale of last year’s plan partly because it has opted to shut itself off from major capital sources. For example, the company already has stopped doing deals with sovereign governments or funds because of appearances, according to people familiar with the matter.
.. Kushner also is no longer going after financing for its projects through the federal program known as EB-5, which grants green cards to foreigners
.. Lenders to Kushner projects include JPMorgan Chase & Co., Citigroup Inc. and CIT Group Inc.