Thread: Jared Kushner’s Other Real Estate Empire

Jared Kushner’s Other Real Estate Empire

Baltimore-area renters complain about a property owner they say is neglectful and litigious. Few know their landlord is the president’s son-in-law.
By ALEC MacGILLIS
MAY 23, 2017

The townhouse on High Seas Court in the Cove Village development, in the Baltimore suburb of Essex, was not exactly the Cape Cod retreat that its address implied: It was a small unit looking onto a parking lot, the windows of its two bedrooms so high and narrow that a child would have had to stand on a chair to see out of them. But to Kamiia Warren, who moved into the townhouse in 2004, it was a refuge, and a far cry from the East Baltimore neighborhood where she grew up.

“I mean, there were bunny rabbits all hopping around,” she told me recently.

In the townhouse next door lived an older woman with whom Warren became friendly, even doing her grocery shopping once in a while. But over the course of a few months, the woman started acting strangely. She began accosting Warren’s visitors. She shouted through the walls during the day. And at night she banged on the wall, right where Warren kept the bassinet in which her third child slept, waking him up.

Warren sent a letter reporting the problem to the complex’s property manager, a company called Sawyer Realty Holdings.

When there was no response, she decided to move out. In January 2010, she submitted the requisite form giving two months’ notice that she was transferring her Section 8 voucher — the federal low-income subsidy that helped her pay the rent — elsewhere. The complex’s on-site manager signed the form a week later, checking the line that read “The tenant gave notice in accordance with the lease.”

So Warren was startled in January 2013, three years later, when she received a summons from a private process server informing her that she was being sued for $3,014.08 by the owner of Cove Village. The lawsuit, filed in Maryland District Court, was doubly bewildering. It claimed she owed the money for having left in advance of her lease’s expiration, though she had received written permission to leave. And the company suing her was not Sawyer, but one whose name she didn’t recognize: JK2 Westminster L.L.C.

Warren was raising three children alone while taking classes for a bachelor’s degree in health care administration, and she disregarded the summons at first. But JK2 Westminster’s lawyers persisted; two more summonses followed. In April 2014, she appeared without a lawyer at a district-court hearing. She told the judge about the approval for her move, but she did not have a copy of the form the manager had signed. The judge ruled against Warren, awarding JK2 Westminster the full sum it was seeking, plus court costs, attorney’s fees and interest that brought the judgment to nearly $5,000. There was no way Warren, who was working as a home health aide, was going to be able to pay such a sum. “I was so desperate,” she said.

If the case was confounding to Warren, it was not unique. Hundreds like it have been filed over the last five years by JK2 Westminster and affiliated businesses in the state of Maryland alone, where the company owns some 8,000 apartments and townhouses. Nor was JK2 Westminster quite as anonymous as its opaque name suggested. It was a subsidiary of a large New York real estate firm called Kushner Companies, which was led by a young man whose initials happened to be J.K.: Jared Kushner.

When Americans were introduced last year to Ivanka Trump’s husband and the nation’s prospective son-in-law in chief, it was as the preternaturally poised, Harvard-educated scion of a real estate empire whose glittering ambitions resembled Donald Trump’s own. In 2007, Kushner Companies, run at the time by Jared and his father, Charles, bought the aluminum-clad skyscraper at 666 Fifth Avenue for a record-breaking $1.8 billion; they are now seeking partners for a $12 billion plan to replace it with a glass tower that would be 40 stories taller. In 2013 they acquired 17 buildings in Manhattan’s East Village for about $130 million, and three years later they spent $715 million on a cluster of buildings owned by the Jehovah’s Witnesses on prime land in Brooklyn’s fast-developing Dumbo district.

But the Kushners’ empire, like Trump’s, was underwritten by years of dealing in much more modestly ambitioned properties. Jared’s grandfather Joseph Kushner, a Holocaust survivor from Belarus, over his lifetime built a small construction company in New Jersey into a real estate venture that owned and managed some 4,000 low-rise units concentrated in the suburbs of Newark. After taking over the business, Charles expanded Kushner Companies’ holdings to commercial and industrial spaces, but the company’s bread and butter remained the North Jersey apartment complexes bequeathed to him by his father.

In the mid-2000s, the company began to sell off the more than 25,000 multifamily rental units it owned, culminating in a 2007 sale of nearly 17,000 units for $1.9 billion. The sale — near the peak of the housing boom, just months before the crash — was impeccably timed, but it also reflected a shift in the attentions of what would soon be a three-generation real estate dynasty. Charles, a major Democratic Party donor, had returned late the previous year from a brief stint in federal prison after pleading guilty to 18 counts of tax evasion, witness tampering and illegal campaign donations. Back at the helm of the company, he began to shift its focus from New Jersey to New York City — and prepared to pass the reins to his son Jared, who had just received a degree in law and business from New York University.

But amid the high-profile Manhattan and Brooklyn purchases, in 2011, Kushner Companies, with Jared now more firmly in command, pulled together a deal that looked much more like something from the firm’s humble past than from its high-rolling present. That June, the company and its equity partners bought 4,681 units of what are known in real estate jargon as “distress-ridden, Class B” apartment complexes: units whose prices fell somewhere in the middle of the market, typically of a certain age and wear, whose owners were in financial difficulty. The properties were spread across 12 sites in Toledo, Ohio; Pittsburgh; and other Rust Belt cities still reeling from the Great Recession. Kushner had to settle more than 200 debts held against the complexes before the deal could go through; at one complex, in Pittsburgh, circumstances had become so dire that some residents had been left without heat and power because the previous owner couldn’t pay the bills.

Prudential, which was foreclosing on the portfolio, sold it for only $72 million — half the value of the mortgages on the properties.


Baltimore-area properties owned by Kushner Companies.CreditPhilip Montgomery for The New York Times

In the following months, Kushner Companies bought another 1,700 multifamily units in similar markets, according to the trade publication Multifamily Executive. Unlike the company’s big New York investments, the complexes were not acquired with an eye toward appreciation — these were not growing markets, after all — but toward producing a steady cash flow.

“Our goal is to keep buying and incrementally growing — they’re good markets where you can get yield,” Jared Kushner told Multifamily Executive in October 2011, predicting that the net income for the year’s purchases would be $14 million within a year. The complexes buttressed the Kushner portfolio in another way, he said: They would serve as a hedge against an upswing in inflation he believed was looming on the horizon.

A year later, in August 2012, a Kushner-led investment group bought 5,500 multifamily units in the Baltimore area with $371 million in financing from Freddie Mac, the government-backed mortgage lender — another considerable bargain. Two years later, Kushner Companies picked up three more complexes in the Baltimore area for $37.9 million. Today, Westminster Management, Kushner Companies’ property-management arm, lists 34 complexes under its control in Maryland, Ohio and New Jersey, with a total of close to 20,000 units.

Kushner’s largest concentration of multifamily units is in the Baltimore area, where the company controls 15 complexes in all — which, if you assume three residents per unit, could be home to more than 20,000 people. All but two of the complexes are in suburban Baltimore County, but they are only “suburban” in the most literal sense. They sit along arterial shopping strips or highways, yet they are easy to miss — the Highland Village complex, for example, is beside the Baltimore-Washington Parkway, but the tall sound barriers dividing it from the six-lane highway render its more than 1,000 units invisible to the thousands traveling that route every day.

The complexes date mostly from the 1960s and ’70s, when white flight from the city was creating a huge demand for affordable housing in Baltimore County. They were meant to exude middle-class respectability — unglamorous but safe and pleasant enough, a renter’s Levittown. Since then, however, they have slipped socioeconomically, along with the middle class itself, into the vast gray area of the modern precariat — home to casino workers, distribution-warehouse pickers, Uber drivers, students at for-profit colleges. Although most of the tenants I met in a series of recent visits to the complexes pay their own rent, ranging from about $800 to $1,300, some of them receive Section 8 assistance, as Kamiia Warren did; Baltimore County has no public housing for a population of more than 825,000, so these and similar complexes have become the de facto substitute.

At the time of the 2012 Baltimore purchase, Kushner raved about the promise of the low-end multifamily market. “It’s proven over the last few years to be the most resilient asset class, and at the end of the day, it’s a very stable asset class,” he told Multifamily Executive. He said things were proceeding well in the Midwestern complexes he purchased a year earlier.

“It was a lot of construction and a lot of evictions,” he said. “But the communities now look great, and the outcome has been phenomenal.”

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Kamiia Warren at Cove Village, the Kushner Companies property in Essex, Md., where she once lived.CreditPhilip Montgomery for The New York Times

Kamiia Warren still had not paid the $4,984.37 judgment against her by late 2014. Three days before Christmas that year, JK2 Westminster filed a request to garnish her wages from her in-home elder-care job. Five days earlier, Warren had gone to court to fill out a handwritten motion saying she had proof that she was given permission to leave Cove Village in 2010 — she had finally managed to get a copy from the housing department. “Please give me the opportunity to plead my case,” she wrote. But she did not attach a copy of the form to her motion, not realizing it was necessary, so a judge denied it on Jan. 9, on the grounds that there was “no evidence submitted.”

The garnishing started that month. Warren was in the midst of leaving her job, but JK2 Westminster garnished her bank account too. After her account was zeroed out, a loss of about $900, she borrowed money from her mother to buy food for her children and pay her bills. That February — five years after she left Cove Village — Warren returned to court, this time with the housing form in hand, asking the judge to halt garnishment. “I am a single mom of three and my bank account was wiped clean by the plaintiff,” she pleaded in another handwritten request. “I cannot take care of my kids when they snatch all of my money out of my account. I do not feel I owe this money. Please have mercy on my family and I.”

She told me that when she called the law office representing JK2 Westminster that same day from the courthouse to discuss the case, one of the lawyers told her: “This is not going to go away. You will pay us.”

The judge denied Warren’s request without explanation. And JK2 Westminster kept pressing for the rest of the money, sending out one process server after another to present Warren with legal papers. Finally, in January 2016, the court sent notice of a $4,615 lien against Warren — a legal claim against her for the remaining judgment. Warren began to cry as she recounted the episode to me. She said the lien has greatly complicated her hopes of taking out a loan to start her own small assisted-living center. She had gone a couple of years without a bank account, for fear of further garnishing. “It was just pure greed,” she said. “It was unnecessary.” I asked why she hadn’t pushed harder against the judgment once she had the necessary evidence in hand. “They know how to work this stuff,” she replied. “They know what to do, and here I am, I don’t know anything about the law. I would have to hire a lawyer or something, and I really can’t afford that. I really don’t know my rights. I don’t know all the court lingo. I knew that up against them I would lose.”

A search for “JK2 Westminster” in the database of Maryland’s District Court system brings back 548 cases in which it is the plaintiff — and that does not include hundreds of other cases that have been filed in the name of the company’s individual complexes.

A vast majority of these cases have been filed by a single small law firm in the Baltimore suburb of Owings Mills. The law office of Jeffrey Tapper specializes in “collections” work, with an emphasis on landlord-tenant cases. It has represented several other real estate management companies, including Sawyer, which retains a stake in many of the Kushner complexes.


A late-rent notice left on the front door of a Kushner Companies complex in a suburb of Baltimore. CreditPhilip Montgomery for The New York Times

In April, I drove to Owings Mills in hopes of speaking to Tapper. As I waited for him by reception, I overheard an assistant making a call about a new case, saying that the firm would continue to pursue one tenant even if the other person on the lease had filed for bankruptcy. Tapper emerged, a man in his mid-60s with white hair, a paunch and a large smartphone clipped to his belt. Our interview was brief. “I’m not having any conversation with you that has to do with one of my clients,” he said. “I’m not helping you with any of whatever you’re trying to do.”

In the cases that Tapper has brought to court on behalf of JK2 Westminster and individual Kushner-controlled companies, there is a clear pattern of Kushner Companies’ pursuing tenants over virtually any unpaid rent or broken lease — even in the numerous cases where the facts appear to be on the tenants’ side. Not only does the company file cases against them, it pursues the cases for as long as it takes to collect from the overmatched defendants — often several years. The court docket of JK2 Westminster’s case against Warren, for instance, spans more than three years and 112 actions — for a sum that amounts to maybe two days’ worth of billings for the average corporate-law-firm associate, from a woman who never even rented from JK2 Westminster. The pursuit is all the more remarkable given how transient the company’s prey tends to be. Hounding former tenants for money means paying to send out process servers who often report back that they were unable to locate the target. This does not deter Kushner Companies’ lawyers. They send the servers back out again a few months later.

In March 2009, Joan Beverly, a probation agent, signed the lease for her daughter, Lennettea, for a unit at Dutch Village, a complex on the northern edge of Baltimore. Lennettea moved out a year later, several months before her lease was up.

Kushner Companies bought Dutch Village more than two years later. In December 2012, JK2 Westminster filed suit in Baltimore County District Court against Beverly, seeking $3,810.16 — several months of rent it said it was owed, plus about $1,000 in repair costs, including $10 for “failure to return laundry room card.”

That February, Lennettea filed a written court notice explaining that her mother, who was dying of pancreatic cancer, was “in terminal hospice care and is not eligible to work.” She added by way of supporting evidence a letter from the hospice provider to Joan Beverly’s bank, explaining her and her husband’s late mortgage payments on their home:

“There has been added financial stress because Mrs. Beverly is very ill at this time.” But JK2 Westminster persisted in seeking a hearing on the suit. In March, a district court judge found in favor of the company — a total judgment against Joan of more than $5,500.

Joan died two weeks later. Her husband, Tyrone Beverly, a retired longshoreman, requested that the judgment against his deceased wife be removed but was denied. The case remains open in the court database. Tyrone, who was married to Joan for 32 years, told me that he had assumed the judgment had been dismissed and was unaware that it was still listed as awaiting payment. “They just didn’t treat us fair,” he said.


Dutch Village, a Kushner Companies-owned complex in Baltimore.CreditPhilip Montgomery for The New York Times

The sweeping nature of the company’s pursuit of tenants was most evident when those tenants were, in fact, prepared to defend themselves. Shawanda Hough moved out of her unit in the Carriage Hill complex in the northwestern Baltimore suburb of Randallstown in early 2012 after black mold worsened her son’s asthma, landing him in the hospital twice.

After the maintenance crew tried and failed to fix the problem, she got the rental office’s written permission to move out in advance of her lease. But then Kushner Companies bought Carriage Hill, and a year and a half later, in August 2013, JK2 Westminster filed a lawsuit against Hough, seeking $4,068.53.
Hough fought back. In a court filing, she said that she had kept all of her documentation, and that the company had assured her that it had not lost a dime in rent; she had gone so far as to coordinate the time of her departure with the arrival of a new tenant. JK2 Westminster went ahead with a hearing before a judge a month later, but the judge ultimately found for Hough.

Cases like Hough’s, however, were the exception rather than the rule. Over all, about nine out of every 10 cases brought by JK2 Westminster that I surveyed resulted in judgments against the defendants, who often did not appear in person for the hearings — and if they did, almost never had legal representation. How could it possibly be worth Kushner Companies’ while to pursue hundreds of people so aggressively over a few thousand dollars here and there? After all, the pursuit itself cost money. And it wasn’t happening just in Baltimore — Doug Wilkins, a lawyer in Toledo who has represented some of the complexes bought there by Kushner, told me the company is seeking far more monetary judgments than did previous owners.

When I presented JK2 Westminster’s record of litigation to Matthew Cypher, a Georgetown University business professor who used to work for the real estate giant Invesco, he said it was highly unusual to put so much effort into pursuing former tenants in court. “These people fade into the shadows of the night,” he said. “It’s amazing to me that there’s that much to go after.” Brian Pendergraft, an attorney in Greenbelt, Md., who works on both sides of landlord-tenant litigation, told me he had heard of large property-management companies pursuing former tenants for unpaid rent but not going so far as to pursue tenants who predated the company’s ownership of a complex. “I guess you can do it,” he said, “but I don’t think it’s cool.”

But Matthew Hertz, whose Bethesda, Md., firm represents landlords and tenants in similar cases, explained to me that there is a logic behind such aggressive tactics. The costs of the pursuit are not as high as you might imagine, he said — people are not that hard to find in the age of cellphones and easily accessible databases. “If I give my process server a name and phone number, it’s generally enough to trace you,” he said. “If I have a date of birth and Social Security number, it’s even easier.” The legal costs can be billed to the defendant as attorney’s fees, if the terms of the lease allow. And garnishing wages is relatively easy to do by court order, assuming the defendant has wages to garnish.


Dutch Village. CreditPhilip Montgomery for The New York Times

As for pursuing former tenants from years before the new company’s ownership of a complex, Hertz said it was hardly different from an investor’s buying a portfolio of mortgages:

It’s debt to be collected on. “If you buy someone’s properties, you’re buying their debts, not just their assets. You take the good with the bad, and try to collect on the bad. Even if you only get back 5 percent, you’re making something,” he said.

“It’s, ‘I’m buying up this property and if I can collect anything, it’s gravy on top.’ ”

There was, Hertz added, an ancillary benefit to such relentless pursuit: sending a message to current tenants. One way to make sure that tenants are paying their rent and to keep them from breaking leases early — which brings with it the costs and hassles of having to clean apartments and find new tenants — is to instill a sense of fear about violating a lease. “Any landlord takes that into account,” Hertz said. “They know tenants are going to talk to each other. If they say, ‘He’s going to come after you,’ it’s deterrence.”

When Kushner Companies finally responded to my questions about the cases, they essentially affirmed Hertz’s reasoning. As manager for the Baltimore complexes, the company had a “fiduciary obligation” to its ownership partners to collect as much revenue as it could, said Kushner Companies’ chief financial officer, Jennifer McLean, in a written response. She said the company’s legal costs have been “minimal” compared with what it seeks to recover.

McLean declined to comment on several cases, including Kamiia Warren’s. But she said the pursuit of Joan Beverly, the woman dying of cancer, was justified. “This tenant owned the landlord $3,819.16,” she said in the written statement. “As property manager, it’s our job to collect rent payments.”

In general, “Westminster Management only takes legal action against a tenant when absolutely necessary,” McLean said. “If legal action is pursued, however, the company follows guidelines consistent with industry standards.” She added:

“While taking a tenant to court is far from an ideal outcome, that option — and clear rules governing it — must exist as a last resort.”


Catherine Silver outside her apartment in Dutch Village.CreditPhilip Montgomery for The New York Times

The Highland Village complex, along the Baltimore-Washington Parkway, is one of Kushner Companies’ largest, a vast maze of lanes and courts lined with rows of short brick-and-siding-fronted homes. Like the other Kushner complexes I visited in Baltimore’s southern and eastern suburbs, it is situated in what was once a predominantly white working-class community, within reasonable commuting distance of the harbor and industrial plants, now defunct, like Bethlehem Steel. In recent decades, many black transplants from the city and Hispanic immigrants have arrived as well, and Highland Village is an unusually integrated place.

The complex, like the others I saw, seemed designed to preclude neighborliness — most of the townhouses lack even the barest stoop to sit out on, and at least one complex has signs forbidding ball-playing (“violators will be prosecuted”).

At another complex, kids had drawn a rectangle on the side of a storage shed in lieu of a hoop for their basketball game. The only meeting points at many of the complexes are the metal mailbox stands, the Dumpsters and the laundry room. And the only thing that united many of the residents I spoke to, it seemed, was resentment of their landlord.

They complained about Westminster Management’s aggressive rent-collection practices, which many told me exceeded what they had experienced under the previous owners. Rent is marked officially late, they said, if it arrives after 4:30 p.m. on the fifth day of the month. But Westminster recently made paying the rent much more of a challenge. Last fall, it sent notice to residents saying that they could no longer pay by money order (on which many residents, who lack checking accounts, had relied) at the complex’s rental office and would instead need to go to a Walmart or Ace Cash Express and use an assigned “WIPS card” — a plastic card linked to the resident’s account — to pay their rent there. That method carries a $3.50 fee for every payment, and getting to the Walmart or Ace is difficult for the many residents without cars.

Tenants who pay after the 5th are hit with late fees that start around $40 to $50 and escalate from there, with court fees usually added on as well. What upsets residents most, though, are not the fees themselves but that the property managers, instead of putting pink or yellow late notices and court summonses discreetly in mailboxes or under doors, post them in public — on the front doors of townhouse units or on lobby walls or lobby doors of apartment buildings. This bothered even tenants who said they always paid their rent on time.

“The whole neighborhood knows,” said Marquita Parmely, a truck driver who pays $1,010 a month to rent a townhouse at Essex Park, near Cove Village. Dareck Cromwell, a retiree living at Carriage Hill, told me: “They put them in the windows for everybody to see, to see your business. That’s not right. You don’t put people’s business out like that.”

Compounding these grievances was Westminster’s maintenance of the properties — or lack thereof. Their complexes comprise hundreds of units, but typically have only four or so workers looking after them. Alishia Jamesson, a 30-year-old Highland Village resident, invited me into the small living room of the $842-a-month townhouse she and her fiancé share with her two children. The room was cluttered with bags from Walmart and Dollar Tree, ketchup packets and supplies for the work Jamesson took up after she lost her cashier’s job at Walmart for missing too many shifts for parenting duties: making personalized tote bags and gift baskets for weddings.


Chris Freimiller and Jaclyn Meador at Morningside Park.CreditPhilip Montgomery for The New York Times

Jamesson showed me three large holes in the walls of the townhouse, which Westminster charged her and her fiancé, Keith Riggs, $150 to fix in October but had not yet repaired.

“Every time I ask about drywall they say, ‘Oh, well, we only have one drywall person,’ ” Riggs told me. There was also black mold spreading around the bathtub, a large brown stain and crack on the wall adjacent to the stove and a gap in the bathroom skylight that allowed in rain and snow. Jamesson told me that the refrigerator hadn’t worked for more than a month before being replaced; her family had lived on canned food and boxed milk.

Complaints about poor upkeep abounded at the other complexes too. At Highland Village, there was the matter of the vacant unit that burned down one night a couple of months ago: its shell was still standing, attended by nothing but plywood and a tarp. At Essex Park, east of the city, Marquita Parmely, the truck driver, told me she had a mouse infestation that was severe enough that her 12-year-old daughter recently found one in her bed. Parmely also has a 2-year-old with asthma, which is aggravated by allergens in mice droppings.

She moved her own bed and other furniture away from the walls to dissuade mice, kept the family’s laundry in tote bags after mice started appearing in the hamper and vacuumed twice a day. Her neighbor told me it took weeks for staff members to replace a rear window that had been shot out by kids with a BB gun.

At the Carroll Park complex in Middle River, Md., Jen Jackson showed me a ceiling leak that was causing a mold problem. At the Whispering Woods townhouses nearby, a resident named Nicole, who asked that I not use her last name, told me she had filed unheeded complaints about loose plastic shutters, one of which finally fell off and hit her in the head. (When I visited Nicole again a few weeks later, she told me that Westminster staff had scolded her for speaking with me and told her not to do so again. A large black pickup followed me and a photographer as we walked through the complex until we left.)

In the same complex, Renee Cook showed me the large swath of her downstairs ceiling that had collapsed and the mold and mildew beneath the carpet, each resulting from a leak from her neighbor’s (illicit) washer-dryer.

Asked about such conditions, Kushner Companies said it follows industry standards for maintenance staffing and exterminator visits, and that it and its partners had spent $10 million on upgrades across the complexes. “Despite those improvements, issues still arise, given the age of the properties,” said McLean, the chief financial officer. Shortly after I put questions to the company about specific tenants’ complaints, Cook’s ceiling was repaired.

The worst troubles may have been those described in a 2013 court case involving Jasmine Cox’s unit at Cove Village. They began with the bedroom ceiling, which started leaking one day.

Then maggots started coming out of the living-room carpet.

Then raw sewage started flowing out of the kitchen sink. “It sounded like someone turned a pool upside down,” Cox told me. “I heard the water hitting the floor and I panicked. I got out of bed and the sink is black and gray, it’s pooling out of the sink and the house smells terrible.”

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Mike McHargue in his living room at Kushner Companies’ Carroll Park complex in Middle River, Md.CreditPhilip Montgomery for The New York Times

Cox stopped cooking for herself and her son, not wanting food near the sink. A judge allowed her reduced rent for one month.

When she moved out soon afterward, Westminster Management sent her a $600 invoice for a new carpet and other repairs. Cox, who is now working as a battery-test engineer and about to buy her first home, was unaware who was behind the company that had put her through such an ordeal. When I told her of Kushner’s involvement, there was a silence as she took it in.

“Get that [expletive] out of here,” she said.

Very few of the complex residents I met, even ones who had been pursued at length in court by JK2 Westminster, had any idea that their rent and late fees were going to the family company of the president’s son-in-law. “That Jared Kushner?”

Danny Jackson, a plumber in his 15th year living at Harbor Point Estates, exclaimed. “Oh, my God. And I thought he was the good one.”

Jackson said he voted for Hillary Clinton in 2016. Many of the others I spoke with had not voted — in that or any other election. “I’m not a big political person, so I feel like I don’t think I should vote on something I know nothing about,” Alishia Jamesson told me. But eastern Baltimore County was a Trump stronghold, a formerly staunch Democratic territory with many downwardly mobile white voters — and Kushner’s complexes were no exception.

East of the city, I met Chris Freimiller, a 38-year-old resident of the company’s Morningside Park complex, who was smoking Newports in his car before heading to work at a Rite Aid distribution center. Freimiller complained to me about the persistent leaks from the toilet and the ceiling damage it had caused, and about being hit repeatedly with late fees. He told me he voted for president for the first time ever last year — for Donald Trump. His vote, he said, was motivated by “the racial and police issues. How bad it got with Obama and how he seemed to promote the cop-bashing and the racial divide.” Did knowing that he was sending his late fees to Trump’s son-in-law change anything? “Yeah, actually,” he said. “As if they need any more money.”

At the Carroll Park complex, I met Mike McHargue, a private investigator, and his girlfriend, Patricia Howell. “They’re nothing but slumlords,” Howell told me of Westminster Management. “They take everyone’s money.” When I asked if they knew who was behind the company, they said they did not. “Oh, really?” Howell said when I mentioned Kushner’s name. “Oh, really. And I’m a Trump supporter.”


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Fontana Village, a Baltimore-area apartment complex owned by Jared Kushner’s company.

CreditPhilip Montgomery for The New York Times

Jared Kushner stepped down as chief executive of Kushner Companies in January. But he remains a stakeholder in the company — his share of company-related trusts is estimated to be worth at least $600 million — and the company says it has no intention of selling off its multifamily holdings. (JK2 Westminster was formally dissolved in December, but Kushner Companies still owns the complexes through other entities; lawsuits against tenants are now typically filed in the names of the complexes themselves.) Because Kushner retains his interest in the complexes, the White House told The Baltimore Sun in February that he would recuse himself from any policy decisions about Section 8 funding, as many of his tenants rely on it for their rent. But even as Kushner now busies himself with his ever-expanding White House portfolio, his company is carrying on its vigorous efforts in court.

On April 17, three cases were being held consecutively in Baltimore’s District Court involving tenants of the Dutch Village complex. One was against Catherine Silver, a Morgan State University student who had given notice that she was moving at the end of March — she was fed up with lousy maintenance (among other things, a perpetually clogged toilet and a ceiling leak in her closet). But when Silver went to Walmart to pay her March rent with her WIPS card, the money mistakenly ended up not in the account for Dutch Village but the one for Kushner Companies’ adjacent complex, Pleasantview.

Westminster Management started eviction proceedings. On March 23, a sheriff’s deputy changed the locks on the unit.

Silver was traveling at the time — it was spring break — and it was not until March 31 that she was able to explain to a judge what happened and get her keys back. By that point, it was too late to get her possessions into the moving truck she’d rented, and classes had resumed. She stayed in the unit, in which Westminster had turned off the heat and hot water, trying again to plan her departure. But Westminster was now after her for April’s rent, despite the fact that the company had literally barred her from being able to move before April, as she had intended. On April 25, a judge ruled that she needed to pay half of April’s rent, plus court costs: $471.

Westminster had a lawyer from Tapper’s firm, Andrew Rabinowitz, at the April 25 hearing, which lasted more than three hours — all over less than $500. The next day Rabinowitz was back to defend Westminster against Silver’s criminal complaint over the unfounded eviction. This time, he was more accommodating, perhaps because he realized a reporter was present. After conferring with Dutch Village’s property manager, who was also in attendance, Rabinowitz agreed to let Silver have until the end of May to move out, rent-free, as long as she paid for April. Silver asked if she could have her hot water turned back on. He said he would look into it. But when I visited Silver two weeks later, the hot water was still off. The stove was covered with the pots she was using to boil water for bathing.

On May 10 at the Highland Village complex, a woman was distributing the yellow “failure to pay rent” notices filed with the District Court to tenants who were behind on their May rent. One went up on the door of a man who introduced himself to me as Tommy, a recently divorced house painter with two children, who was at that moment sitting in his pickup truck reading Psalm 91 to gird himself for a visit to traffic court. He said he didn’t know why he kept being hit with late fees and court fees at Highland Village because he was up to date on the rent itself.

Over at Carroll Park, Mike McHargue, the private investigator, had also received a yellow notice and was trying to find out when he needed to come up with money to avoid eviction. So was Chris Freimiller, the Rite Aid worker. He had missed a couple weeks of work with back pain related to a metal bar in his leg from an earlier car accident, and Westminster Management had moved quickly to file for eviction over $722.09 in missing rent, plus $66 in fees. When I arrived, Freimiller was sleeping on the couch after a night shift, and his wife, Jaclyn Meador, was trying to get an eviction date from the constable while their 11-year-old son, Ethan, looked on.

One more yellow notice was affixed at the Highland Park home of Alishia Jamesson, the wedding-basket maker. Her fiancé had left his job as a casino housekeeper to take a job handling Amazon packages near the airport, but his first check hadn’t come through yet. Jamesson was working at Walmart again.

The couple’s car tags had expired, so both were enduring long public-transit commutes. No one had come from maintenance.

There were still three holes in the wall.

https://www.nytimes.com/2017/05/23/magazine/jared-kushners-other-real-estate-empire.html?

Jersey City is a case study in the perils of politics and real estate for the Kushners



Being related to President Trump is not a blessing in Jersey City. (July 5, 2017)

Barbara Demick


Until he stepped aside from his real estate business to become a senior White House aide, developer Jared Kushner was a major player in the gentrification of Jersey City, where former railroad yards and waste sites are being transformed into luxury housing.

His company built a high-rise branded with the name of his father-in-law, Donald Trump, featuring a gold-hued marquee and skyline views of lower Manhattan. It was embarking on a twin-towered $800-million compound that would have dominated downtown’s Journal Square, and bidding on a 100-acre industrial site to build 8,000 homes to be marketed to Orthodox Jews.

But being related to President Trump is not a blessing here.
Since the presidential election, Jersey City has turned sharply against Kushner. Opposition to Trump runs deep here, and the city has been taking out some of that hostility on the Kushner Cos., withdrawing political support for high-profile projects and shining a spotlight on the company’s business practices.

Mayor Steve Fulop, a personal friend of 36-year-old Jared, abruptly yanked his support for a tax abatement at Journal Square in May. Several other Kushner projects have run into intense public opposition, with community activists accusing the Kushners of hiding campaign contributions, abusing a federal program designed to promote development in poorareas, and selling visas to Chinese investors while the Trump administration is cracking down on immigration.

“Trump is toxic in Jersey City,” said Bill Matsikoudis, a lawyer and former city official who is running for mayor against Fulop.

Historically steeped in Democratic-machine politics, the city now has a large population of immigrants, young professionals and minorities. Few of them voted for Trump, who got 14% of the vote here in the presidential election.

Plenty of people here also hold a grudge against Trump because of his claim during the presidential campaign — soundly debunked — that “thousands and thousands” of people in Jersey City were cheering on Sept. 11, 2001, when the World Trade Center came down.

“The Kushners are woven into the fabric of a lot of communities in New Jersey, but the problem for them is that none of those communities like Trump,” said Matt Hale, a political scientist at Seton Hall University in Newark. If you anger someone in New Jersey, he added, “You don’t get the tax abatement. That’s the transactional nature of New Jersey politics.”

Fulop has said his decision to pull his support for the tax abatement had nothing to do with his friendship with Kushner, from whom he said he received no campaign contributions.

The mayor’s “support or lack of support” for the project, said spokeswoman Jennifer Morrill, “is based on what is financially best for Jersey City.”

Kushner Cos. officials have emphasized that official support for projects in Jersey City has always come not in response to campaign contributions, but in recognition of their developments’ potential to provide tax revenue and jobs.


The site of the One Journal Square luxury apartment project in Jersey City, N.J. (Carolyn Cole / Los Angeles Times)


Kushner has stepped down from his CEO role at his family’s company. But the fact that he retains ownership in some of its properties has raised questions here about whether there are inherent conflicts in being a real estate developer while holding a high federal position.

Despite the glamorous image presented by Kushner, especially posing next to his wife, Ivanka Trump, his family has been known for years in New Jersey as bread-and-butter developers who owned small apartment complexes, industrial lots and a trailer park. They were generous philanthropists, especially for Jewish causes, and donors to Democratic politicians and causes.

New Jersey can be a perilous place to do business, and developers often are expected to make political contributions and form political alliances in order to get their projects off the ground.

In 2004, Charles Kushner, Jared’s father, was indicted for making illegal campaign contributions and tampering with a witness — his own brother-in-law, whom he set up with a prostitute to retaliate for testifying against him. The case cemented a long-running family feud and earned Charles Kushner a two-year prison sentence.

That left Jared, just a few years out of Harvard, to run the company as chief executive officer. He stepped down before taking the White House job, but retains an interest in some of the Jersey City projects, including the Bay Street project, according to his financial disclosure statement.

Even recently, his company was showing tremendous potential in Jersey City. The young developer and the mayor seemed a perfect match, publicly heaping compliments on each other at the 2014 groundbreaking for the Trump Bay Street project. “I wanted to say to Jared specifically, it’s been really great. We have been able to develop a terrific friendship here,” Fulop said. Kushner returned the praise, calling the mayor “a big advocate for development ... and for doing what’s really right for the city.”

But the political tide in town began to turn against the Kushners in Jersey City shortly after the presidential election.
Some ordinary citizens, unhappy with Trump’s election, began publicly voicing opposition to his son-in-law’s development footprint in Jersey City.

“Many of these buildings being built literally shadow over the populations that Trump is attacking in Jersey City,” said school Principal Oscar Velez of PS 22, where immigrant pupils were in tears after the election, fearing their parents would be deported.

“Trump can’t go and spew venom about these people and Jersey City and then have an organization using his name ask for tax abatements and favorable treatment,” he said.

The Kushners also were sharply criticized after a sales conference last month in Beijing’s Ritz-Carlton Hotel, where Nicole Meyer, Jared’s sister, appeared to drop references to the family’s relationship to Trump in an attempt to attract financing for the Journal Square project. In her speech, she mentioned a federal program that gives preferential visas in exchange for investment. The Journal Square project “means a lot to me and my entire family,” she told potential investors.

Another branch of the Kushner family also seeking low-cost financing for a Jersey City project was even more explicit in using its Trump connection, running a promotion in Chinese that advertised: “Work hand-in-hand with Trump son-in-law Kushner.”

The pitches by the Kushners drew protests from ethics watchdogs, who have been vocal critics of the first family’s business interests.

Hale, the Seton Hall political scientist, said that social media in New Jersey “exploded at the horror of the Kushners looking like they were selling visas to finance their real estate in New Jersey.”

Kushner Cos. hastily issued an apology: “Ms. Meyer wanted to make clear that her brother had stepped away from the company in January and has nothing to do with this project,” the firm said in a statement. But the damage was done. Fulop had already announced on Facebook that he had dropped his support for the tax abatement and other state and municipal subsidies.

Kushner Cos. also withdrew its application to develop the 100-acre housing tract for Orthodox Jews.

The China episode cast a spotlight on the Kushners’ use of the federal visa program known as EB-5, which was designed to attract foreign investment to economically depressed areas by offering green cards to people who invest at least $500,000 in places where the unemployment rate is at least one-and-a-half times the national average.

The Kushners were seeking additional financing to expand their 50-story luxury compound, Trump Bay Street, in one of Jersey City’s most prosperous neighborhoods. The property is just a few blocks from the Hudson River and caters to young Wall Street professionals and tech workers. The cheapest apartment rents for $2,795 a month.

To qualify for the foreign investment program, which would allow them to borrow cheaply, Kushner Cos. submitted a map that linked the upscale neighborhood to poor census tracts up to four miles away.

“There are many distressed urban neighborhood in this city that need development, but not this one,” said James Solomon, a political scientist who lives in Jersey City and is one of the organizers of a group called Evict Trump-Kushner from Jersey City. “They gerrymandered the documents to make it look like there was high unemployment.”

Gary Friedland, an expert in real estate finance at New York University who has called for reforms in the EB-5 program, said the manipulation of census tracts is so common that “if it was not the Kushners, you wouldn’t be writing about [it].”

Still, he added, “It is an abuse of the whole concept of the program. This special incentive was supposed to be reserved for areas that cannot attract conventional capital, particularly rural areas and distressed inner cities.”

Such abuses have led to a bipartisan drive in Congress to abolish or reform the EB-5 program, but the president extended the program in May when he signed legislation to fund the federal government budget until September.

Ethics watchdogs complain that conflicts of interest are inevitable because members of the first family haven’t adequately separated themselves from their business interests.


Activists Arlene Stein and James Solomon are just some of those fighting the new Kushner development. (Carolyn Cole / Los Angeles Times)


Kushner has not entirely divested his portfolio, but has sold it to a family trust. And he still owns interests in several Jersey City projects, including the headquarters of the local newspaper, the Jersey Journal, and the luxury apartments called Trump Bay Street. With that development, the Kushners are in the process of trying to raise $250 million in financing to pay off the construction loan and the Chinese investors, which might mean tapping international lenders.

“Members of the Trump family are going to have to take remedial steps [to divest], and until they do, it is going to be a source of controversy for all of them — the president, daughter and her husband. It casts a pall over every decision they make,” said Norman Eisen, a former White House ethics czar who now runs Citizens for Responsibility and Ethics in Washington.

The Kushners’ higher public profile also has reopened a festering controversy over secretive campaign contributions from 2015 when Fulop, a former Goldman Sachs executive, was consideringa run for state governor.

At that time, a political action committee reported to be supporting a possible gubernatorial bid by the mayor received $400,000 from a nonprofit called Progressive New Jersey Inc. that didn’t disclose its donors. One of them was later revealed to be Kushner Cos., which had given $100,000.

That campaign contribution, which has since been returned, has become an issue in a contentious mayoral race. Fulop challenger Matsikoudis says the contribution was made as the Kushners were negotiating to develop the vacant 100 acres and looking for tax abatements and help applying for state loans.

“To me it is 100% corrupt to give a secret campaign contribution that way,” said Matsikoudis. “I can’t say that it was a quid pro quo bribe, but everyone was aware what was at stake for the Kushners in Jersey City at that time.”

Fulop himself declined to comment, but Morrill said the mayor had not received any campaign contributions from the Kushners and denied that the PAC was for his benefit, or that the friendship between Jared Kushner and the mayor had any bearing on development projects.

Kushner Cos. declined to comment on the donation. A spokesman, James Yolles, said the company remained committed to Jersey City and especially the Journal Square project.

“We are committed to moving ahead with this meaningful investment in the long-term future of Journal Square, which will provide nearly 4,000 union construction jobs, a memorial plaza, and $180 million in tax revenue for Jersey City over the next 30 years,” he said.

http://www.latimes.com/nation/la-na-...017-story.html

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