The Kushner family could lose control of its financially troubled Fifth Avenue tower after their ownership partner objected to an ambitious redevelopment plan.
The family of White House senior adviser Jared Kushner hopes to salvage the overpriced investment by turning the midtown Manhattan property into expensive condos, a hotel and five-floor shopping mall, reported Bloomberg.
But their partner, Vornado Realty Trust, has been telling brokers the renovation will be a much more modest office development, three sources told the website.
Vornado’s chairman and CEO, Steve Roth, was never supportive of the ambitious redevelopment but had not actively blocked the Kushner plan until now.
The real estate company owns 49.5 percent of the tower at 666 Fifth Avenue but is unlikely to invest more into the property without refinancing the debt — which could set off a chain of events that could imperil the Kushners’ ownership.
The family purchased the tower at the height of the real estate market — which crashed a short time later and has lost money for years.
A $1.2 billion mortgage payment is due in February 2019, and its losses make it unattractive to lenders who could refinance the debt.
Vornado bought half of the tower for $80 million and half the debt in 2011, when Kushner Cos. added $30 million by selling air rights to a nearby property.
An expected $400 million cash payout failed to materialize for the Kushners and Vornado after the Anbang Insurance Group, a Chinese company that has bought several major U.S. properties, pulled out over conflict-of-interest concerns involving President Donald Trump’s son-in-law.