Trump administration to seize stake in Chinese-owned building
The Trump administration, as part of a crackdown on certain US investments made by Chinese companies, is set to snatch a majority stake in 850 Third Ave., The Post has learned.
The stake is owned by HNA, the deep-in-debt Chinese conglomerate — and its US partner in the building is desperate to save it.
The strike on the HNA building, between East 51st and 52nd streets, in the works for months, is believed to be the first move by the Trump White House since Congress on Aug. 1 approved expanded authority of CFIUS — the Committee on Foreign Investors in the United States.
The expanded powers include increased purview over foreign real estate interests.
“This is coming from the White House,” one source said of the seizure that could ultimately force the sale of HNA’s stake in the 575,000-square-foot building.
The seizure is tied to a specific national security concern, sources said. The NYPD’s 17th Precinct is located on the ground floor on the south side of the building. Officers from that precinct, at times, are detailed to protect Trump Tower.
The 58-year-old building, once removed by CFIUS from Chinese hands, sources said, will be placed in a trust. A trustee will then be appointed, and it may eventually be sold — although no sales process is underway.
HNA could fight the seizure in a court battle that could take years to sort out, sources said.
The move by President Trump to force the removal of the Chinese from 850 Third comes as the Washington and China are in a trade war.
The mysterious Chinese conglomerate, whose executives are believed to include Beijing officials, made headlines in January 2017, when it agreed to buy Anthony Scaramucci’s majority stake in hedge fund SkyBridge Capital.
Scaramucci looked to sell his holding ahead of an expected job in the Trump administration. He would become White House communications director, a job that lasted 10 days.
In April, HNA, under pressure from CFIUS, backed out of the SkyBridge deal.
HNA is deep in debt after a multiyear, $50 billion global real estate acquisition spree.
Before a government appointed trustee takes over 850 Third, the minority owner, Norman Sturner, a New York real estate investor, can exercise rights that allow him a chance to rustle up another partner, sources said.
Sturner is seeking an insurance company or pension trust-like group to replace HNA for $460 million, sources said — what many consider a fire sale price — so he can keep operating the property and fund new tenant build-outs.
“There is no seizure or forced sale of 850 Third Avenue underway or pending, and it is grossly inaccurate and misleading to suggest otherwise,” an HNA spokesperson told The Post.
“Out of respect for the confidentiality of the CFIUS process, we will not comment beyond that except to note that there are unique facts and circumstances regarding the location of this particular property that did not exist at the time of purchase, which have raised concerns, and HNA Group is taking measured steps to address them, consistent with our commitment to working cooperatively with regulatory authorities everywhere we operate.”
Sturner did not return requests for comment, and a CFIUS spokesperson declined to comment.