NEWARK, N.J. (CN) – Development companies associated with the Kushner family sued Jersey City and its mayor, claiming they were railroaded out of tax abatements and a contract to build skyscrapers in Journal Square due to the family’s association with President Donald Trump.
The companies were told in April that they had defaulted on their obligations under an $800 million redevelopment agreement, though the real reason was “political animus” toward the Kushners, according to a 47-page lawsuit filed Wednesday in Newark, New Jersey, federal court.
Jersey City Mayor Steven Fulop, a Democrat, allegedly said that Jared Kushner, President Trump’s son-in-law and a senior White House advisor, was too radioactive to remain involved in the deal.
“The issuance of the notice of default was motivated solely by political animus” and “to appease and curry favor with the overwhelmingly anti-Trump constituents of Jersey City,” according to the complaint, which seeks damages for both alleged contractual and constitutional violations.
The plaintiffs – One Journal Square Partners Urban Renewal Company LLC, One Journal
Square Tower North Urban Renewal Company LLC, and One Journal Square Tower South Urban Renewal Company LLC – are represented by Joseph Fiorenzo with Sills Cummis & Gross.
In a tweet Wednesday evening, Mayor Fulop said the lawsuit was “nonsense” and a cash grab by Kushner.
“Bottom line: the same way they illegally try to use the presidency to make $ when it suits them is the same way here where they try to use the presidency to be pretend victims when that suits them,” Fulop wrote.
Journal Square, which for years had been considered a poor area, has recently been considered ripe for redevelopment with a number of developers purchasing a plot of land around One Journal Square, which sits atop a train station.
In 2014, the Kushner-affiliated companies took over the project and bought One Journal Square with the understanding that it would be a private-public joint venture and would rely partially on government funding, the complaint states.
The Kushner Companies LLC —of which Kushner was CEO at the time— was a principal investor in the Journal Square Partners entities, which agreed to make a $2.5 million contribution to the nearby Loew’s Theater and, as part of the deal, Jersey City would give out 30-year tax abatements, according to the lawsuit.
Under the original agreement, two 66-story towers would be built on the site with plans to market property to Orthodox Jews in the area.
Last November, the Jersey City Planning Board unanimously gave final approval to the project’s amended site plan, including the height of skyscrapers and setback lines due to the nearby train station, the complaint notes.
Despite the promises made, however, Fulop seemed to get cold feet, allegedly saying on Facebook that “the city is not supportive of their request” for a tax abatement.
City officials later told the Journal Square Partners companies that it was “not a good time” to apply for a tax abatement, suggesting they file the application after Fulop’s re-election that November, the companies claim.
“While the tax abatement application was put on ‘hold’ at the request of city officials, its unwillingness to deal fairly with the application as a result of the Kushner family’s relationship with President Trump was improper,” the lawsuit states.
After Fulop won re-election, he met with Kushner representatives in January.
“At the meeting, Fulop confirmed that…it would be ‘blatant discrimination’ to refuse to provide tax abatements to JSP,” the complaint states. “Fulop further confirmed during this meeting that the true motive in the denial of tax abatements to the project was the involvement of the Kushner family, stating that it was ‘really tough’ to move forward with the deal, and that the problem would go away if the Kushners left the deal and a new partner was brought in.”
At one point, Fulop allegedly asked a member of Kushner Companies partner KABR Group “what the fuck is going on” regarding an article suggesting the project was still a full go.
“Fulop’s attacks on JSP and the Kushner family were completely transparent, and he made no efforts to mask his true motivation,” the lawsuit states, noting several tweets and press quotes by Fulop saying the deal with the Kushners was dead.
In its default notice, Jersey City falsely claimed the companies failed to meet certain deadlines or submit evidence of the necessary financing and equity capital, the complaint states.
Fulop has tweeted support for the Kushner-affiliated companies being moved off the project, such as in April 2018 when he tweeted that “hopefully this will now move to a different partner that can complete the project.”
The mayor, a former Wall Street executive who has known other members of the Kushner clan, said in 2014 that he and the president’s son-in-law enjoyed a “terrific friendship.”
The developers’ attorney, Fiorenzo, called the reneged deal “outrageous conduct” that “strikes at the very heart of our economic system.”