Feds Scrutinizes Building Owned by China Near Trump Tower

NEW YORK (Bloomberg) -

The location shouts midtown Manhattan. To the southeast stands the U.N., to the southwest Grand Central. And, four blocks over, an edifice that, in a blink, became a landmark of presidential power: Trump Tower.

Now the address, 850 Third Ave., has suddenly been transformed from a workaday office tower into a potential national security concern.

The apparent reason: It is owned by a big Chinese conglomerate, HNA Group Co. — a giant that, in recent years, emerged seemingly out of nowhere to become a potent symbol of China’s global ambitions.

HNA acquired 850 Third before Donald Trump was elected president. But now its ownership is raising concerns for the Committee on Foreign Investment in the United States, which reviews the national security implications of foreign investments. There are “unique facts and circumstances” regarding the location, a representative for HNA said.

One potential issue: the 21-story building houses one of only two police precincts that are within a mile of Trump Tower. HNA said it’s taking steps to address CFIUS’s concerns, without providing further detail. Those issues didn’t exist when HNA bought the property, according to the company’s statement.

Still, 850 Third Ave. has suddenly become a subject of speculation. 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 amid rising tensions between the U.S. and China’s government, which is said to have decided to help HNA pull itself out of recent liquidity challenges. The Chinese conglomerate, which has sold more than $17 billion in assets to reduce its massive debt load, has been marketing the Manhattan building since at least February. It has since sold real estate holdings from San Francisco to Minneapolis.

Trump has been zeroing in on Chinese investment in the U.S. amid his escalating trade war with the world’s second-largest economy.

Plans to bolster CFIUS’s powers may mean more deals get into trouble. The body’s reach may be expanded under a bill that Congress is expected to pass in August.

HNA agreed to buy 850 Third Ave. before Trump was elected. The company has become a poster child for a swath of Chinese acquirers that sought out high-profile deals around the world before the government started reining them in last year amid concern about unsustainable corporate debt levels.