Kushner plans to build twin-towers in New Jersey unraveling

This May 8, 2017 photo shows the lot where One Journal Square, a twin-tower residential building in New Jersey championed by Jared Kushner, was to be constructed in Jersey City, N.J. Plans for the project are in danger of falling apart as his family's real estate company threatens legal action against a city that it says ended negotiations for no good reason. (Reena Rose Sibayan/The Jersey Journal via AP)

NEW YORK — First, Jared Kushner's big plans for a skyscraper in Manhattan fell apart. Now, it's the turn of his major twin-tower project across the river in New Jersey.

Plans for a pair of gleaming, 66-story residential towers in Jersey City championed by Kushner when he was CEO of his family company are in danger of collapsing amid a heated exchange of letters and emails with the city.

The Kushner Cos. is now making veiled threats of legal action. It is saying the heavily Democratic city, run by Mayor Steven Fulop, ended negotiations over the project for no good reason, other than perhaps bias against Kushner because he has moved on to become an adviser to President Donald Trump, his father-in-law.

"It is crystal clear that Fulop is now playing politics," Kushner Cos. said in a statement to The Associated Press.

For its part, the city says the Kushner Cos. are to blame for the stalemate, claiming the developer has missed a key deadline to begin construction and defaulted on a payment it owed to the municipal government last year.

"It should be obvious to everyone that the Kushner's claim that the mayor needed to 'play politics' to win votes has no merit," city spokeswoman Hannah Peterson said in an email. "This is a false argument that is being used to explain why things didn't go their way."

The falling fortunes of One Journal Square is another example of how the Kushner family's ties to the White House may be hurting its business. Among recent hits, the company has had to abandon plans to raze and rebuild its money-losing skyscraper, 666 Fifth Avenue, after potential foreign investors pulled out following criticism their money could raise potential conflicts with Kushner's public role as an adviser to Trump.

Fulop has known the Kushners for years. He supported the company's other project in Jersey City called Trump Bay Street, a residential building along the Hudson River that licenses its name from Trump's company, the Trump Organization.

The war of words between Jersey City and Kushner Cos. follows several blows to the project, including the withdrawal of a key tenant and funding source earlier in the year and dashed hopes for $150 million in financing from China. Later, the Kushner Cos. and its partner, KABR Group, pulled an application to the city for a 30-year break from local taxes after Fulop came out against it before his re-election in November.

Still, the Kushner Cos. was striking an optimistic tone as late as January, issuing a statement that the project was "shovel-ready."

Behind the scenes, things had been deteriorating for months.

In a letter to the city in February, a lawyer representing Kushner Cos. and KABR Group blasted the city for "suddenly and unexpectedly" cutting off all serious discussion over a "nearly completed" draft agreement on building plans the previous summer. The city action had harmed his clients, lawyer Eugene Paolino wrote, and any further delays would compel him to take "necessary action to protect" their interests.

The city fired back with a letter from one of its lawyers, laying blame for the delays on the two developers and their changes to original plans for the building. It also said the developers missed a key construction deadline and failed to pay a $40,000 fee to the city in April last year, which it said raised doubts about their ability to "see the project through to fruition."

The stalemate between the Jersey City and the Kushners was earlier reported by online news site Hudson County View.

In recent days, the fight has only gotten nastier. Referring to a new application for local tax breaks, Fulop tweeted on Friday, "There is a sense of entitlement that the developer has towards a subsidy — we as a city just don't see it the same way."

City Councilman Rich Boggiano, who represents a struggling area where One Journal Square is planned, said he is disappointed with the "politics" of the situation, and getting impatient.

"All I know is I want the damn thing done," Boggiano said. "It's my neighborhood, and we're tired of having an empty dirt lot."

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