NEW YORK -- A company owned by the family of Jared Kushner, President Donald Trump's son-in-law, has abandoned plans to buy a sprawling industrial site in New Jersey from Honeywell International Inc., a major federal contractor, and develop it into a residential community.
Kushner Cos. had been the leading bidder for the 95-acre formerly contaminated site known as Bayfront, which is co-owned by Honeywell and Jersey City, city officials said. The company had submitted plans to build as many as 8,100 housing units to be marketed to Orthodox Jewish residents of the Williamsburg section of Brooklyn who are being priced out of that neighborhood.
The Honeywell site, which runs along the Hackensack River on the west side of Jersey City, became contaminated in the first half of the 20th century, when Mutual Chemical Co. used it to dump what was then known as chrome ore processing residue, a byproduct from making stainless steel, from a nearby plant.
Last fall, the Kushners bid about $150 million, tens of millions higher than competitors, according to people involved in the negotiations. Honeywell heard from others who would only make an offer once the environmental approvals for the cleaned-up site were final. So the bidding is scheduled to reopen later this year and Kushner Cos. had been expected to continue in the process, the people said.
But on Tuesday, when Bloomberg News asked about Bayfront, company spokesman James Yolles said the Kushners are no longer pursuing the project. He wouldn't elaborate or explain.
A Kushner official who asked not to be named said the company dropped its plan late last year. However, others in the negotiations say they have been in contact with the Kushners in recent weeks with no indication of a change of heart. Mark Albiez, chief of staff to Jersey City Mayor Steven Fulop, said the administration had not received any notice of the withdrawal of the Kushners' bid.
The move was welcome news to ethicists. Jared Kushner, who is married to Trump's daughter, Ivanka, is a senior adviser in the White House. Although he has pledged to recuse from potential conflicts and sold many assets, some of those sales have been to trusts controlled by family members. Honeywell has billions in federal contracts, and development of the site probably would involve a range of federal funding requests for infrastructure improvements to roadways and nearby light-rail lines.
"It's a good sign that they are pulling out," said Larry Noble, general counsel of the Campaign Legal Center. "Though the question is whether or not it's just because of the publicity or because they actually see there is a potential conflict of interest in these situations."
Kushner Cos.' withdrawal from the Honeywell negotiations comes as the family faces pressure for the entanglements inherent in its business-expansion efforts.
Last weekend, Kushner Cos. executives held meetings in two hotel ballrooms in China, trying to raise money for a separate and troubled Jersey City construction project. Part of the money will come from a program that provides visas to investors. News coverage of that effort spurred criticism of the company. Fulop linked to a story about the Chinese fundraising when he announced Sunday that the city rejected the family's application for tens of millions in city tax breaks on the project.
And in March, a Kushner plan to refinance its financially struggling office tower at 666 Fifth Avenue in Manhattan collapsed after news reports revealed the proposal involved billions of dollars from Chinese conglomerate Anbang Insurance Group Co., which has close ties to the ruling party.
In Jersey City, a liberal Democratic stronghold, Kushner Cos.' close connections to Trump have sparked protests, causing problems for its projects in the community and complications for Fulop.
A Democrat running for re-election this November, he has been criticized for his warm relations with both Jared Kushner and his father, Charles, chairman of the family's real-estate ventures.
Business on 05/11/2017