China and the World

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Kushner Companies takes its project to China


She did what...

Over a hundred affluent Chinese investors gathered at the Ritz Carlton Hotel in Beijing last week to hear about a new development in Jersey City. While foreign developers and brokers often host road shows in China to market their projects, the main draw of the presentation this time was the appearance of the sister of Jared Kushner, the son-in-law of US President Donald Trump.

In addition to Beijing, Nicole Kushner Meyer has also travelled to Shanghai, Guangzhou, Shenzhen and Wuhan to promote One Journal Square, which is developed by Kushner Companies. The goal, says the New York Times, was to raise $150 million from Chinese investors through the EB-5 immigrant investor programme.

Created in 1990, the EB-5 offers foreigners who invest more than $500,000 a two-year visa on the proviso their cash will lead to at least 10 American jobs being created (construction jobs, in the Kushner’s case). The US government issues about 10,000 EB-5 visas every year, with the majority of them going to wealthy Chinese.

Even though Jared Kushner stepped down as company chief executive in January and transferred his stake to a family trust, it hasn’t stopped his sister from name-dropping. During the presentation in Beijing, Meyer pointed out that her brother is a “senior advisor to the White House,” implying that the US government is supportive of the programme, says Apple Daily.

Offstage, sales staff worked the room, urging interested investors to make up their minds because the Trump administration, which promises to be tough on immigration policy, might change the rules anytime.

One investor seemed tempted. telling Singtao Daily: “I don’t know how close the siblings are, but I think it is a very good project.”

In a statement, the personal lawyer of Jared Kushner said that his client “has no involvement” with his previous companies. A Kushner Companies spokesperson also issued a statement apologising on behalf of Meyer if “mention of her brother was in any way interpreted as an attempt to lure investors”.

It is not the first time the Kushner family has used the EB-5 scheme to attract affluent Chinese investors. When Jared Kushner was still at the helm last year, the developer raised from China over a quarter of the financing – around $50 million – for Trump Bay Street, a luxury apartment complex also in Jersey City, through the same programme. (Trump did not in fact own the project. He merely licenced his brand name to Kushner Companies.)

Since Trump took office, the Kushners have been accused of capitalising on their ties with the White House to advance the family’s business interests. It was previously reported that the property developer had reached out to the acquisitive insurer Anbang to fund the redevelopment of its flagship property 666 Fifth Avenue in Manhattan. The negotiations quickly fizzled out, after drawing criticisms from US lawmakers, who claimed Beijing could use the deal to influence the White House.

A lot is at stake for Trump’s in-laws. That’s because One Journal Square has run into many problems since the developer first unveiled it in 2015, reports Bloomberg. The original plan for the development was two mixed-use towers that were to be filled with living and work spaces. Anchored by WeWork, a provider of shared office space, the $400 million project was positioned as a means to reinvent Jersey City as an up-and-coming tech hub. Local authorities were excited, offering as much as $93 million in tax credits to support the venture.

But WeWork has since pulled out and the local authorities have rejected Kushner Companies’ request for a 30-year tax break from the city. To revive the plan, the developer decided to make it bigger and more luxurious. According to Meyer’s pitch in China, One Journal Square is now a $1 billion development. Without WeWork, the company has also doubled the number of luxury apartments to 1,476, likely to target rich foreign homebuyers.

During one of her presentations in China Meyer described One Journal Square as a project that “means a lot to me and my entire family”. Based on the increasing sums it will cost to build she probably wasn’t exaggerating.

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