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How Jared Kushner built a luxury skyscraper using loans meant for job-starved areas

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 Jared Kushner and his real estate partners wanted to take advantage of a federal program in 2015 that would save them millions of dollars as they built an opulent, 50-story residential tower in this city’s booming waterfront district, just across the Hudson River from Lower Manhattan.

There was just one problem: The program was designed to benefit projects in poor, job-starved areas.

So the project’s consultants got creative, records show.

They worked with state officials in New Jersey to come up with a map that defined the area around 65 Bay Street as a swath of land that stretched nearly four miles and included some of the city’s poorest and most crime-ridden neighborhoods. At the same time, they excluded some wealthy neighborhoods only blocks away.

The tactic — critics liken it to the gerrymandering of legislative districts — made it appear that the luxury tower was in an area with extraordinarily high unemployment, allowing Kushner Companies and its partners to get $50 million in low-cost financing through the EB-5 visa program.

The move was legal, and other developers have used similar strategies in recent years, often aided by state officials who welcome the infusion of cash. But it illustrates how Kushner, who ran his family’s real estate company before he became a senior adviser to President Trump, and his partners exploited a loophole in a federal program that prominent members of both parties say has been plagued by fraud and abuse.

On the south side of Jersey City, which has some of the most entrenched poverty in the New York City region, many people interviewed one day last week were surprised that their neighborhood’s troubles were part of the reason that 65 Bay Street got cheap financing.

“That’s very sad,” said Pastor Shyrone Richardson of the World Outreach Christian Church in the struggling Bergen-Lafayette section of Jersey City. “Unfortunately, the people who are benefiting from this are not the people in this area.”

Richardson’s church is in a five-block area where nearly 1 in 5 were jobless and three fatal shootings occurred in 2015, according to an analysis of crime and census data.

His neighborhood seems a world away from the gleaming office towers and trendy cafes that surround 65 Bay Street. The Jersey City waterfront saw a building boom after 9/11 that transformed the area into one of the hottest real estate markets in the New York metro region, drawing residents from Manhattan and Brooklyn.

Apartments in the Bay Street building, marketed as Trump Bay Street, rent for up to $4,700 a month and offer sweeping views of Lower Manhattan. A nearby commuter train shuttles passengers to the World Trade Center within minutes. The area within a roughly three-block radius around the building had an unemployment rate of just 2.6 percent in 2015, according to census data.

Under the EB-5 program, a wealthy foreigner can get a fast-track residence visa by investing at least $500,000 in a project in a “targeted employment area.” To qualify, the area must have an unemployment rate 1.5 times the national average. For developers, the terms of the investment are more favorable than a bank loan.

The Trump administration is considering whether to adopt changes that would prevent EB-5 gerrymandering. Kushner has said he will recuse himself from any discussions on the program.

Kushner Companies, meanwhile, is rushing to raise $150 million in low-cost financing through EB-5 for a separate project in Jersey City: a pair of luxury towers in an area called Journal Square. Kushner’s sister caused a stir this month when she mentioned her brother in a pitch for the project to investors in China.

For that project, too, the company is linking the development to blighted neighborhoods miles to the south while excluding adjoining neighborhoods that have lower unemployment rates, records show.

An executive at U.S. Immigration Fund-NJ, a firm helping Kushner Companies to raise EB-5 money for both projects, defended the practice. Mark Giresi, chief operating officer, called it a “common sense” approach that reflects the broader economic reality of each project’s surroundings. He also said jobs created by the project could be filled by workers from the depressed areas only miles away.

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