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Kushner Companies sues Jersey City over stalled Journal Square project

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The development firm contends that political motives led the city to renege on tax breaks for the project

Rendering via Woods Bagot

Kushner Companies has filed a lawsuit against Jersey City and Mayor Steven Fulop alleging that the Fulop administration put the developer’s 1,000-unit Journal Square project in default owing to “political animus,” the New York Times reports. The move represents an official souring of the relationship between Charles and Jared Kushner’s development firm and the city in which its planted one of its more ambitious projects.

That said, the filing is no big surprise: In April, the AP reported that the project was “in danger of collapsing” after “a heated exchange of letters and emails with the city” made it clear that the two sides would likely not be able to come to an agreement over its future.

Jared Kushner paid $27 million for the vacant site, located smack in the middle of Jersey City’s Journal Square neighborhood, in 2015. The firm had initially courted WeWork as an anchor tenant, but the co-working (and co-living) company backed out of the project earlier this year, forgoing its alleged 50 percent ownership stake in the development and putting a planned tax abatement for the project in jeopardy.

Jersey City mayor Steven Fulop also announced that the city would no longer back One Journal Square, only saying that the project “doesn’t work for us.” Kushner Companies has long contended that Fulop’s motive was political, backing out of providing tax breaks for the project in order to win votes in the firmly left city’s 2017 mayoral election.

The Kushners maintain they have done their part, filing applications and the other minutiae of development, to keep the project afloat. As the Times notes, Fulop is having none of it.

“It’s not like the Kushners have a great deal of credibility in anything they say,” Fulop said in a statement released Thursday. “Their entire lawsuit is hearsay nonsense. Bottom line—the same way they illegally use the presidency to make money is the same way here they try to use the presidency to be pretend victims. They will do anything to manipulate a situation.”

The project was the subject of controversy when the Kushner Companies’ attempts to raise $150 million for the project from Chinese investors via the EB-5 visa program was reported in 2017. Jared Kushner’s sister, Nicole Meyer, led the pitch; as we previously reported, “Meyer pointed to her brother’s position in the White House and showed a picture of President Donald Trump in her pitch to Chinese investors, both in Beijing and Shanghai, according to Bloomberg.” That led to a federal investigation of the firm’s use of that visa program.

Fulop maintains that the city had no choice but to issue the default, given that Kushner Companies has appeared to make little progress in financing the project.