By NORTHWEST ASIAN WEEKLY
850 Third Avenue in New York. (Photo: Costar Group)
The Wall Street Journal reported on Aug. 10 that the Trump administration has ordered Chinese conglomerate HNA Group Co. to sell its majority stake in a Manhattan building whose tenants include a police precinct tasked with protecting Trump Tower.
The Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investments to weigh whether they present national security concerns, informed HNA several months ago that it had to divest itself of its holding in the building. But it didn’t give a reason why.
Congress approved expanded authority of CFIUS in August — giving more power over foreign real estate assets.
HNA acquired 850 Third Avenue before Donald Trump was elected president. One potential issue: the 21-story building located within a mile of Trump Tower, houses the New York Police Department’s 17th precinct, whose duties include security for Trump Tower — which is the president’s base when he’s in New York.
HNA said it’s taking steps to address CFIUS’ concerns, without providing further detail. Those issues didn’t exist when HNA bought the property, according to the company’s statement.
Last week, the New York Post reported that the Trump administration was poised to seize a majority stake in the building. HNA denied the suggestion.
The scrutiny comes as tensions have risen between the United States and China. The Chinese government is said to have decided to help cash-strapped HNA pull itself out of recent liquidity challenges, Bloomberg reported.
The CFIUS wants HNA to set up a blind trust and transfer its stake in the building to the trust that has its own board of directors, which have a fiduciary duty to the trust, not to HNA.
HNA is now in talks with potential buyers interested in the building to abide by the CFIUS order, though it was not given a deadline to sell.