It doesn’t look like the long-drawn-out saga of Kushner Companies’ 666 Fifth Avenue will be coming to a close anytime soon—and a new report by Bloomberg suggests that the firm’s already tenuous grip on the skyscraper may be loosening, thanks to its partner in the project.
According to the report, Vornado Realty Trust, which has a 49.5 percent stake in the building, wants 666 Fifth to remain offices, and is “unlikely to invest further in the property without first being reassured of its future.” That contradicts Kushner Companies’ long-held desire to tear down most of the existing skyscraper and replace it with a luxury building—most recently, a 1,400-foot tower designed by Zaha Hadid that would have a hotel and pricey condos.
Kushner Companies bought the building back in 2006 for a record-breaking $1.8 billion, but the firm hasn’t been able to get a return on its investment; 666 Fifth has consistently lost money since the Kushners acquired it, and per the Bloomberg report, about 30 percent of its available space is currently vacant. Attempts to bring investors on board (including Chinese firm Anbang) have not panned out. (It may also figure into the ongoing investigation into Russian meddling in the U.S. presidential election.)
And Kushner has yet to begin repaying its half of the $1.2 billion mortgage—which is due in a little more than a year.
These factors have all led Vornado, led by Steve Roth, to a “sharp reversal,” per Bloomberg; “[Roth is] signaling to any lenders or investors who may still be interested in the Kushner effort to back off,” according to Bloomberg’s sources. (And he was never that into the glitzy redevelopment to begin with—per an earlier Bloomberg investigation, he once said the building “would be worth a lot more if it was just dirt.”)
This could force a refinancing of the building, which “could result in the Kushners’ losing control of the building,” per Bloomberg’s sources.
For its part, Kushner Companies denied that any such moves were taking place. “All options are still being assessed, and no decision has been made about which option to pursue,” a spokesperson told Bloomberg. “Any implication that an agreed upon path has been reached or that there is contemplation of an outcome that would be to the sole benefit of one party over the other would simply be wrong.”