The Real Deal New York

US attorney subpoenas Kushner Companies over EB-5

August 02, 2017 08:57PM

Rendering of One Journal Square and Jared Kushner (Credit: Getty Images)

New York federal prosecutors have issued a subpoena to Kushner Companies over the developer’s use of the EB-5 visa program, according to the Wall Street Journal.

The subpoena pertains, at least in part, to One Journal Square, a two-tower project being developed by Kushner Cos. in Jersey City. A spokesperson for the Brooklyn U.S. attorney’s office declined to comment about the subpoena to the newspaper. Emily Wolf, general counsel for the developer, said that it “utilized the program, fully complied with its rules and regulations and did nothing improper. We are cooperating with legal requests for information.”

Kushner Cos. was soliciting EB-5 funds for the mixed-use project, which the developer said will cost nearly $1 billion, more than twice the cost the firm estimated in 2015. In May, Kushner Cos. issued an apology after an incident in which Nicole Kushner Meyer referenced Jared Kushner, former CEO of the firm and now senior aide to President Trump, in the firm’s presentation to EB-5 investors in China. The reference was seen by some critics as a blatant effort to profit from the family’s connection to the White House.

Kushner Cos. has used the controversial cash-for-green card visa program before, at Trump Bay Street, another Jersey City project that Jared retains a stake in. The developer was also soliciting EB-5 funds for a proposed redevelopment of 666 Fifth Avenue, the company’s flagship property in Manhattan.

The EB-5 program, which gives green cards to foreigners who invest in job-creating real estate projects in low-employment areas of the U.S., has been criticized for funneling money to luxury developments through gerrymandering. Some politicians from both sides of the aisle have called for the program to be abolished, describing it as “citizenship for sale.” But it remains an incredibly popular and relatively cheap method of raising money for developers, particularly in gateway cities such as New York, Los Angeles and Miami. Many of the country’s top developers are big proponents of the program, and spend millions lobbying for it to stay in place as-is. In late July, Related Companies co-sponsored an EB-5 investment industry gathering at which U.S. Sen. Ted Cruz was tapped as the keynote speaker. [WSJ]Hiten Samtani