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Kushner, Fulop See Relationships Strained, Raising Doubts About Major Development

5-17-17

By David Cruz
Correspondent

It sounded like the beginning of a beautiful friendship. Jared Kushner, the Kushner Companies CEO, thanking Jersey City Mayor Steve Fulop “who has really gone out of his way to be a big advocate for development and for growth and for doing what’s right for the city, and so we’re really appreciative of all you’ve done and look forward to continuing to work together.”

And Fulop, the newly-elected mayor, responding, “I just want to say to Jared, specifically, that we’ve been able to develop a really terrific friendship here.”

But those were the good old days — back in 2014 — when Kushner and Fulop were breaking ground for Trump Bay Street, a luxury apartment building downtown developed by Kusnher and branded by Trump. By most accounts Trump Bay Street has been a success, but it could also mark the final time the company, and the city, were so chummy.

“You know, I said we struck up a friendship,” said Fulop today. “Over the last two years it’s fair to say that that friendship has been strained due to differences in views.”

That would appear to be a recent development since as recently as last year, Jared Kushner contributed $100,000 to a nonprofit that bundled it with other contributions to make a $400,000 contribution to a PAC associated with Fulop’s now abandoned run for governor. And Kushner’s sister gave $10,000 to the Hudson County Democratic Organization, neither of which is controlled by Fulop and neither of which, says the mayor, ended up benefiting him.

“You know, if somebody donates to an entity that then donates to another entity and then both previous entities I’m involved in but then after the fact, they want to connect, it seems very convoluted to me but that’s the nature of media and politics and it is what it is,” he said.

Fast forward to earlier this month, when Kushner company reps, including Jared’s sister, were in China, promoting a Kushner project called One Journal Square.

The company touted its family ties to the White House, where Kushner — the president’s son-in-law — is a top adviser. The Kushners apologized for any connections the pitch may have suggested but the pitch itself drew attention because it included the offer of EB-5 visas, sometimes called Golden Visas, which allows foreign nationals to invest half a million dollars, with no guaranteed return, but in exchange for a green card, essentially permanent residence. But a GAO report in 2015 raised concerns about the visas, almost 11,000 of which were issued in 2014.

“… Some petitioners may have strong incentives to report inaccurate information about the source of their funds,” read the report, “… such as funds obtained through drug trade, human trafficking or other criminal activities.”

Chinese investors have spent $24 billion in Golden Visas over the past decade. In fact, that tower over which Fulop and Kushner bonded? Partially funded with $50 million raised from EB-5s from China. But the smell around the visas is the least of the problems with the JS1 project. One of the investors in the project — co-working space provider WeWork — pulled out, taking with it tens of millions of dollars in state tax incentives. Then, Fulop went on social media to say that he no longer supported tax incentives for the project, including a 30-year tax abatement and a $30 million city-backed loan, or more than this project — built by another Kushner family company — got from the city and the state.

“The second project of size there should not be given larger incentives than the first one,” explained Fulop. “The first one is the pioneer. They’re the ones who are setting the market. They need the most help. That project worked. Go to number two, you should really be scaling that stuff back, not increasing it. I mean that’s just common sense and that’s where we are.”

The Kushner Companies remains bullish on the project, at least for now.

“Our current proposal for One Journal Square would provide nearly 4,000 sorely needed union construction jobs and $180 million in tax revenue for Jersey City over the next 30 years, along with a new memorial plaza,” the company said in a statement.

Any abatement and/or city loan to the Kushner Companies will have to get city council approval. Councilman Rich Boggiano, who represents Journal Square, is a Fulop critic and generally anti-abatement, says the mayor’s thinking is wrong on this.

“If it’s going to take an abatement to get Journal Square done, my concern right now is, let’s get Journal Square done and completed,” said Boggiano. “I mean, we abated half of downtown, so we’re giving out a few abatements up in Journal Square, we have to.”

Ultimately, the forays into China, which attracted all the attention to this project, has proven to be fruitless. As of today, no new Chinese developers have signed on to the project.