China’s Anbang Insurance and Trump adviser Kushner end talks on NY tower as conflicts cited
China’s Anbang Insurance Group and a company owned by the family of US President Donald Trump’s son-in-law Jared Kushner have ended talks to redevelop a Manhattan office tower, a deal that had drawn scrutiny from lawmakers citing ethics concerns.
“Kushner Companies is no longer in discussions with Anbang about 666 Fifth Avenue’s potential redevelopment, and our firms have mutually agreed to end talks regarding the property,” according to a statement emailed by a Kushner spokesman, who declined to comment further. “Kushner Companies remains in active, advanced negotiations around 666 Fifth Avenue with a number of potential investors.”
A spokesman for Anbang declined to comment. The news was reported earlier by the New York Post.
Anbang had discussed investing more than US$400 million as part of a US$4 billion transaction with Kushner Companies that may have included terms that some real estate experts considered unusually favourable for the Kushners, Bloomberg reported earlier this month. Anbang had said “there is no investment” in the building a day after Bloomberg’s report, while not disputing the details of the financing proposal.
The property, co-owned by Kushner Companies, has been losing money for three years and faces increasing loan fees this year, which may explain why the Kushner family was negotiating with Anbang on new financing. The proposed deal would have refinanced the debt, while forgiving the majority of a second tier of loans known as a “hope note,” where much of the interest on the debt has accrued, according to the refinancing agreement.
Five Democratic lawmakers raised ethics concerns about the Chinese firm’s potential investment after the news emerged. The lawmakers asked the White House in a March 24 letter to explain whether Kushner was involved in any talks about the possible partnership with Anbang and also asked for additional details on Kushner’s divestment from his family’s company.
“This deal, if executed, would appear to present a clear conflict of interest,” the lawmakers wrote to Stefan Passantino, White House deputy counsel. Anbang has “close ties to the Chinese state”, they added.
The death of the deal comes at a time when Kushner is under increased scrutiny by government authorities. Senate investigators plan to question him as part of its investigations into ties between the Russian government and Trump’s 2016 campaign, the panel said on Monday.
A transaction would have been the first in the US this year for Anbang. The insurer has been on a deal-making spree since its US$1.95 billion purchase of Manhattan’s Waldorf Astoria hotel in 2015.