(Bloomberg) -- Kushner Cos., the real estate company owned by Jared Kushner’s family, got a $57 million loan from Fortress Investment Group for a troubled two-tower development in New Jersey.
The loan is likely only a small piece of what would be needed to complete the project. Filings to the the New Jersey Economic Development Authority in 2015, for an earlier iteration of the towers, anticipated $124 million of debt, $10 million in publicly funded redevelopment bonds and $71 million of equity.
New plans for the project call for two 56-story towers with more than 1,500 residential units.
The register’s office of Hudson County, New Jersey, confirmed in a call to Bloomberg that the transaction occurred in October. A spokeswoman for Kushner Cos. confirmed the loan, which was previously reported by Barron’s.
Jared Kushner is the son-in-law and a senior adviser to President Donald Trump. He stepped down from his role as chief executive officer of Kushner Cos. when he joined the administration in January. He has divested to family members stakes in projects that could pose conflicts of interest.
The Jersey City project has encountered problems including the exit of its anchor tenant, the loss of millions in tax breaks and a relationship with the city’s mayor that soured before a 2017 election. It was the subject of a public uproar in May when Jared Kushner’s sister touted the project to Chinese investors and mentioned her brother’s role in the White House. The company later apologized for invoking Jared Kushner’s name.
The issues at the project, known as 1 Journal Square, are similar to others in the property empire of Kushner Cos., a closely held family company, as it navigates doing business while its former CEO sits in the White House. The company is also looking for a way to save its investment in 666 Fifth Avenue, a Manhattan office tower, before a $1.2 billion loan comes due in February 2019.
Still, the new loan could be an indication that 1 Journal Square is regaining its footing. In December, the development authority re-approved a $33 million award for the project, though that’s a fraction of the subsidies available to it when WeWork, the co-working startup, planned on moving in as a tenant. WeWork has since pulled out of the project.
Spokesmen for Fortress and SoftBank Group Corp., which completed its purchase of Fortress late last year, didn’t immediately respond to requests for comment.
Fortress has done several deals with Kushner Cos., including transactions with the Kushner Credit Opportunity Fund, a lending arm.
©2018 Bloomberg L.P.