Kushner family’s real estate dealings land foreign-investor visa back in the spotlight

Kushner family’s real estate dealings land foreign-investor visa back in the spotlight


JUDY WOODRUFF: But first: how a little-known
program designed to attract foreign investment is increasingly under the microscope, for
economic reasons and political ones. Thousands of investors apply and participate
annually, and one real estate business in particular has put it back in the spotlight
in recent months: the family of Jared Kushner, the president’s son-in-law. Our economics reporter, Paul Solman, has covered
the controversies around the program before. Here’s his latest update. It’s part of our weekly series Making Sense. PAUL SOLMAN: The soaring real estate market
in Jersey City, New Jersey, due south of Wall Street, a city becoming famous for its many
murals and its wave of emigres from Manhattan and Brooklyn fleeing sky-high rents. One neighborhood that’s on the rise, Journal
Square, named after the 150-year Journal News. One of its latter-day reporters, Terrence
McDonald. TERRENCE MCDONALD, The Jersey Journal: This
was our old headquarters. And Jared Kushner’s company bought that and
bought the office building next door and bought this whole vacant lot right here. PAUL SOLMAN: Jared Kushner is, of course,
President Trump’s son-in-law. And what are they going to build? TERRENCE MCDONALD: The plan is to build two
towers on this vacant lot and one tower across the street, 72 stories, mostly residential
and also commercial retail on the bottom. PAUL SOLMAN: Now, you may have heard about
this development last month, when Jared Kushner’s sister pitched it to investors in China. MAN: CNN found out about this event because
of this ad. It was actually posted in the elevator of
our building here in Beijing. PAUL SOLMAN: So, reporters went, including
CNN’s Matt Rivers, and most were promptly shown the door, which only provoked more coverage. Why the selective secrecy? For one thing, Nicole Kushner Meyer may have
thought twice about the optics or my-optics of trading on her family connection to the
president, though Kushner companies later said Meyer — quote — “apologizes if that
mention of her brother was in any way interpreted as an attempt to lure investors” — unquote. But also iffy, the investment itself, criticized
for selling U.S. citizenship for cash, the embattled EB-5 visa program, in which foreigners
who ante up a million dollars to create 10 U.S. jobs are granted permanent residency,
and eventual U.S. citizenship, for themselves and for all immediate family members under
age 21. Now, the Kushners, who declined to comment
for this story, have used EB-5 investments before, also here in Jersey City. JARED KUSHNER, Senior Presidential Adviser:
As a company, we have done a lot of projects, but I have actually never done a groundbreaking
before. PAUL SOLMAN: Fifty million dollars of Chinese
cash for visas helped build Trump Bay Street, the president licensing his name to his son-in-law’s
company, the financing at below-market rates. TERRENCE MCDONALD: This is one of the newer
luxury high-rises here in Jersey City. The highest price I saw was on the 48th floor. It’s a 50-story building. It was about $5,000 a month for a two-bedroom/two-bathroom
apartment. PAUL SOLMAN: Luxury apartments, just a few
minutes by subway from Manhattan. But, hey, Congress decided, during a recession
in 1990, that a million dollars to create 10 jobs is a good deal for the U.S. economy,
no matter what the project. It turns out, however, that the investors
in Kushner’s project only had to put up $500,000, half-price tickets to citizenship for themselves
and their entire families, thanks to a clause that takes 50 percent off if you create the
jobs in a — quote — “high-unemployment area” — unquote. But wait a minute. The unemployment rate around Trump Bay Street
was very low. NORMAN ODER, Journalist: There is an essential
dodge here going on. There’s something really fake going on. PAUL SOLMAN: Journalist Norman Oder was the
first to report on the loophole that the Kushners, and pretty much all urban developers who use
the EB-5 program, exploit. NORMAN ODER: EB-5 investments are supposed
to be a million dollars unless it’s in a rural area or an area of high unemployment. That’s called a targeted employment area. Then it’s $500,000. Guess what? Every project is finagled into a high-unemployment
area. PAUL SOLMAN: So how do you do that? NORMAN ODER: You have to connect census tracts. PAUL SOLMAN: So, let’s walk you through the
process that played out here in Jersey City. TERRENCE MCDONALD: We’re about one mile away
from Trump Bay Street. PAUL SOLMAN: But we’re still in the EB-5 district. TERRENCE MCDONALD: Yes, we are. PAUL SOLMAN: EB-5 visa investors can pay half-price
if they’re investing in an area with a jobless rate one-and-a-half times the national average. I can see that we’re gradually getting into
dicier territory here. TERRENCE MCDONALD: We’re about two miles away
from Trump Bay Street now in an area of the city that has struggled with violence and
with crime and with poverty. PAUL SOLMAN: In 2014, when the Kushners and
their partners were pitching Chinese visa seekers, the national unemployment rate was
just over 6 percent. So now we’re how far away from downtown? TERRENCE MCDONALD: We’re about three, a little
more than three miles away from Trump Bay Street now, on Ocean Avenue. PAUL SOLMAN: And we’re in a substantially
worse neighborhood now. TERRENCE MCDONALD: Yes, yes, businesses that
are closed. And this area does struggle with violence
even more than the neighborhood we were just in. PAUL SOLMAN: We’re walking the so-called targeted
employment area the developers created, with an average jobless rate of more than 9 percent. TERRENCE MCDONALD: The unemployment rate where
Trump Bay Street is, about four miles away, is so low that they have to include a huge
swathe of the inner city and lower half of the city to make the rate work. PAUL SOLMAN: The only requirement, the employment
area has to be made up of neighborhoods that border each other. TERRENCE MCDONALD: So, we’re about at the
end of the line here. That’s Bayonne on the other side of the train
tracks. PAUL SOLMAN: About five miles and a whole
lot of shoe leather south of Trump Bay Street, a gerrymandered, but legal district made up
of 16 different census tracts, with an overall unemployment rate of 9.8 percent, when the
national average was 6. The claim is that Trump Bay Street created
more than 1,280 jobs. But did it actually help the poor parts of
town that made its financing attractive? So, you work in construction. MAN: Absolutely. PAUL SOLMAN: Did you try to get a job downtown? MAN: Several of us tried to get a job downtown. But they’re not hiring us. I don’t know no one at all who has no type
of job from downtown at Trump Towers or who informed anyone else about the jobs. TERRENCE MCDONALD: Do you think that the construction
of these luxury high-rises downtown has benefited this area of the city at all? MAN: No. Look around. People — a lot of people need help around
here. PAUL SOLMAN: Any of the contractors you know
work downtown? WOMAN: No. No. PAUL SOLMAN: You either? WOMAN: No. PAUL SOLMAN: What do you think of the idea,
though, of you being included in this area that then allows them to get the foreign money
to build the towers? WOMAN: I don’t think that’s fair. STEVEN FULOP, Mayor of Jersey City, New Jersey:
The intention of the EB-5 program are to subsidize areas in a city or community that are lower-income,
in needs of jobs, and don’t have development. PAUL SOLMAN: Not to subsidize areas that don’t
need it, says Jersey City Mayor Steven Fulop. STEVEN FULOP: The media scrutiny on this stuff
has brought a lot of that to light, and there will probably be policy changes in Washington
as a result of it. PAUL SOLMAN: Well, there’s been legislation
to try to reform EB-5 for years. STEVEN FULOP: I think now you’re in a unique
moment in time where there’s more scrutiny and more awareness around it. PAUL SOLMAN: Mayor Fulop, a Democrat up for
reelection this fall, is also more aware. The day after the story broke about Nicole
Kushner Meyer’s efforts in China, he withdrew his support for a usually standard 30-year
tax abatement and $30 million municipal bond that the Kushners and their partners had applied
for to build one Journal Square. So, where’s the mayor right now? STEVEN FULOP: We’re not giving the subsidy. We have clearly said that, and they say they
can’t move forward without it. So we will see where it goes from here. PAUL SOLMAN: Where it’s gone is that, just
yesterday, the Kushner consortium withdrew its tax break request. According to the private company helping raise
$150 million in EB-5 money, 6,600 new jobs are now on hold. But they would be in a prospering part of
town with just a 4 percent jobless rate. The poorer neighborhoods to the south? Their job was to boost the average unemployment
rate high enough to qualify investors for the half-price visas. For the “PBS NewsHour,” this is economics
correspondent Paul Solman reporting from Jersey City.

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