The Real Deal New York

How Michael Cohen got Jared Kushner into Gowanus

Attorney quietly brokered 2014 development deal
By Konrad Putzier, Mark Maurer and Will Parker | June 28, 2018 01:49PM

Michael Cohen, Jared Kushner, 175-225 Third Street (Credit: Getty Images and Google Maps)

In 2014, Kushner Companies, LIVWRK and SL Green Realty paid $72.5 million to acquire a polluted parking lot on the banks of the Gowanus Canal. The partners were hoping to cash in on a rezoning of the 140,000-square-foot site that would allow them to develop a project spanning nearly 1 million square feet in a rapidly changing neighborhood.

But the plans, which included apartments and space for artists across from a newly-built Whole Foods, antagonized local City Council member Brad Lander. He vowed to block any rezoning that might benefit Kushner Companies, whose former CEO Jared Kushner left to become a senior adviser to President Trump. Lander argued that Jared Kushner’s role in the White House could influence the Environmental Protection Agency’s ongoing cleanup of the canal. He wouldn’t budge.

In April, the partners cut bait and sold the site to Aby Rosen’s RFR Realty to $115 million.

But Kushner might not have been in Gowanus in the first place if it wasn’t for Michael Cohen — President Trump’s personal lawyer and the current subject of an FBI investigation.

Cohen helped broker the 2014 deal and represented the site’s seller, developer Herbert Chaves, according to two sources close to the transaction. The sources said that Cohen’s personal ties to the Kushner family — Jared Kushner is Trump’s son-in-law — may have made it easier for them to land the site. “I think it helped that Kushner had an ally,” said one source familiar with the deal.

Cohen’s involvement in arranging the sale has not been reported to-date.

According to multiple sources, Chaves hired Cohen to vet offers in the off-market bidding process. Kushner and his partners ended up making the highest bid, the sources said. SL Green took a 95 percent stake in the project, while Kushner and LIVWRK shared the 5 percent minority stake.

After selling the site, Chaves’ family used some of the money to buy four Lower Manhattan walk-up apartment buildings in late 2014 through a 1031 exchange. The seller of those buildings, as Bloomberg previously reported, was Michael Cohen.  In 2015, Chaves’ family partnered with Cohen to buy an Upper East Side apartment building at 330 East 63rd Street for $58 million, according to Bloomberg.

Cohen did not immediately respond to a request for comment. Chaves, Kushner Companies and Pinnacle Realty’s David Junik, who represented Kushner and LIVWRK in the Gowanus deal, all declined to comment.

Federal prosecutors are picking apart Cohen’s finances as part of a criminal investigation in the Southern District of New York, based on material that was first explored by Special Counsel Robert Mueller, who is investigating potential collusion between Russia-connected individuals and the Trump campaign.

Jared Kushner, meanwhile, has reportedly had his business dealings examined by Mueller. In New York, U.S. Attorneys have subpoenaed Kushner Companies for records about how it used the EB-5 visa program and how it manages rent-stabilized housing, according to the Wall Street Journal.

In May, The Real Deal sat down with Charlie Kushner for a wide-ranging interview at 666 Fifth Avenue. The family patriarch discussed plans for the flagship tower, its grievances with several politicians (including Lander), the role of ethics watchdogs and more.