A project Kushner Companies is planning in Jersey City, already under pressure because of its controversial use of the EB-5 visa program, is in more hot water. A $6.5 million annual tax credit attached to its erstwhile anchor tenant, WeWork, is about to be revoked, WNYC has learned.
The skyscraper, a mixed-use luxury housing, office and retail space named One Journal Square, created headaches last month for White House advisor Jared Kushner, President Donald Trump’s son in law, when it was revealed his sister was pitching the project to Chinese investors, in part by invoking her brother’s name.
WeWork, which had entered into a 50-50 partnership with Kushner Companies for the project, missed a May deadline for extending its state tax credit. “By not submitting the required documents or requesting an extension by the deadline, the company did not meet the terms of its approval,” a spokeswoman for the New Jersey Economic Development Authority, Virginia Pellerin, said in an email.
As WNYC previously reported, WeWork, the workspace-sharing start-up designed to lure techies and creatives, had already decided to withdraw from the project. But the divorce comes with a hefty price tag for Kushner Companies: there’s no guarantee that any future tenant would get the $6.5 million in tax breaks, further squeezing the building’s finances.
Jersey City Mayor Steven Fulop and other Jersey City officials have already vowed to block a 30-year tax abatement worth tens of millions of dollars that the Kushner Companies had been quietly lobbying for.
A Kushner Companies spokesman, James Yolles, expressed optimism that the project would go forward. “We're fully confident that we will receive all approvals required to build One Journal Square in a neighborhood sorely in need of a revitalizing project like ours, providing nearly 4,000 union construction jobs, a memorial plaza and $180 million in tax revenue for Jersey City over the next 30 years," the spokesman said.
WeWork did not respond to calls and emails.
The $6.5 million in lost tax credits were part of an overall state economic development package approved in November 2015 by the New Jersey Economic Development Authority. The state agency is also reviewing a request by Kushner Companies for an extension on a separate $34 million grant. There is no indication the grant will be denied.
Kushner has given up day-to-day management of his real estate company, but not ownership. His lawyer, Blake Roberts, has stated that Kushner “divested his interests in the One Journal Square project by selling them to a family trust ... a mechanism suggested by the Office of Government Ethics." Kushner's mother and siblings are the beneficiaries of the trust.