Politics

Jared Kushner got his start as Somerville landlord

These apartments on Dimick Street and Waldo Avenue in Somerville were once owned by Jared Kushner.
CRAIG F. WALKER/GLOBE STAFF
These apartments on Dimick Street and Waldo Avenue in Somerville were once owned by Jared Kushner.

SOMERVILLE — It was the low-ball of all low-ball offers, insulting in the moment, laughable in retrospect.

Four Harvard grad students renting a first-floor Dimick Street apartment received word in the spring of 2002 that their new landlord wanted to renovate their unit and put it on the market as a condominium. The kitchen and bathroom work would be performed, the students were told, while they were still living there.

Dan Neafsey and his roommates took a break from doctorate work in evolutionary biology and scoured Somerville regulations and tenant law to discover their lease prevented such disruptive work. But they agreed to go along, if the landlord would give them a one-month break on their $1,850 rent.

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Then came the counteroffer from their landlord, a baby-faced Harvard undergrad named Jared Kushner: He would give them a $100 break.

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“My impression was that he was more interested in practicing playing hardball than being effective as a landlord,” Neafsey recalled of the young man who one day would marry Ivanka Trump and land an official role as a high-level adviser to President Trump.

“The guy is, like, an 18-year-old Harvard trust kid,” said Steve Vollmer, another roommate. “It seemed like he was very young and amateurish.”

The roommates rejected the offer out of hand. The work never got done. And they barely gave their landlord another thought, until there he was at the right hand of the most powerful man in the world.

Kushner’s clumsy bit of hardball typified his first foray into multiunit, residential real estate investing, according to Globe interviews with tenants, business partners, and a review of Somerville housing records. At 19, he was in the training-wheels stage of his career as a developer, learning as he went, making his share of mistakes, acquiring a landlord’s tough edge and cool calculus — traits he still manifests in the White House.

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Learning to fix up and flip clusters of low-end apartment buildings, he used Somerville as his own private laboratory. And he passed the first key test — he made a profit.

Of course, he had a headstart. Much as Trump began his career of deals with a multimillion-dollar boost from his father, Kushner started out with his wealthy father acting as senior partner and offering crucial assistance — including helping secure $9 million in mortgage loans.

Charles Kushner wanted his son to learn by doing in the family trade. And there was nothing glitzy or glamorous about Kushner’s apprenticeship, coming long before he became chief executive of the Kushner family real estate empire, and well before he married into the billionaire Trump family.

Kushner, who often rode from his Harvard dorm to his properties in the cab of his contractor’s pickup truck, managed 40 apartment units across a run-down but rising Somerville market. He converted another 16 units into condominiums that he would sell individually. And his efforts paid off — the properties he bought for $8.3 million sold four years later for $13 million.

But Kushner, who did not respond to requests for an interview to discuss his business record in Somerville, also made a number of rookie errors and left numerous angry tenants in his wake.

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His properties amassed 25 housing complaints over four years, including complaints about overflowing dumpsters, pests, and sewage odors, according to the Globe review. Tenants complained of what they called nonsensical financial dealings. Some renters say they went an entire winter without heat.

And one easily avoidable business error forced an embarrassed Kushner to pay cash to cancel a contract he had signed but not fully understood.

$50,000. Poof.

But during these years he gained experience in real estate finance that would be vital to him later. And he built some business credibility — just as his future father-in-law, Donald Trump, said he did when he was an Ivy League undergrad decades earlier at the University of Pennsylvania, buying properties in Philadelphia.

A $2.5 million pledge

Kushner often rode from his Harvard dorm to his properties in the cab of his contractor’s pickup truck.
Craig F. Walker/Globe Staff
Kushner often rode from his Harvard dorm to his properties in the cab of his contractor’s pickup truck.

Kushner grew up in Livingston, N.J., the eldest son in a real estate family. As he was applying for college, his father wanted to make sure he got into Harvard.

He pledged $2.5 million to the school, and he also asked Senator Frank Lautenberg of New Jersey to get Senator Edward M. Kennedy of Massachusetts to lobby Harvard dean William Fitzsimmons, according to “The Price of Admission” by Daniel Golden.

When Kushner arrived in Cambridge in 1999, he plugged into campus life. He was active in the Harvard Chabad, a campus Jewish group; played junior varsity squash; and was a member of an exclusive social club called The Fly. He was also listed as the cooking editor of Current Magazine, a news and campus life publication that had started at Harvard a few years earlier.

But while he was living in Kirkland House and getting a degree in government, his lot was very different from his fellow undergrads. He frequently left the brick and ivy of Cambridge and headed across the city line to Somerville, with its block upon block of working-class, wood-frame buildings.

“I may have spent more hours in Somerville than I did in Cambridge,” he told the New York Daily News in 2006.

In the fall of 2000, just before the start of Jared’s sophomore year, Charles Kushner came up to Cambridge with his son. It was time to get started on Jared’s extracurricular business education. They met on a Sunday afternoon with Michael Rubin, a local lawyer, and Charles Kushner began an interview of sorts.

“He said, ‘We’re in the real estate business and I want Jared to learn while he’s in college. He’s going to buy some properties and he needs guidance,’ ” Rubin recalled. “He was trying to get his feet wet. His dad really wanted him to see what it was like to experience some independence, instead of just being slotted in the family business.”

At the time, Kushner Companies, founded in 1985 by Jared’s father, owned and managed more than 20,000 apartment units, most of them in New Jersey.

Rent control in Massachusetts had ended several years earlier. The Kushners saw opportunities to swoop into Somerville, fix up apartments, and raise rents or convert them to condos.

“It was a good time to get in and spend some money and get a good return,” Rubin said.

Jared Kushner — along with his father and his mother’s brother, Richard Stadtmauer — set up several different corporate entities in Massachusetts. Jared, often listed as vice president, was making decisions, but only after consulting with his father and his uncle back in New Jersey.

“He wasn’t just given a check and say go knock yourself out. He was watched,” Rubin said. “He would do the analysis and consult with his dad or his dad’s people or his uncle before making decisions. He was usually pretty spot-on.”

As Jared was quietly buying up and renovating properties, his family was in a state of uproar, with Charles Kushner warring with his own brother, Murray. A few years later, Charles Kushner would be convicted of tax evasion, witness tampering, and illegal campaign contributions, and Jared would help run the family business.

The drama that would be revealed in court papers later was weighing on Jared during his time at Harvard.

“It was a ton of stress on him,” Rubin said. “When the proverbial [stuff] hit the fan, he just got quiet.”

Transient neighborhoods

Jared Kushner closed on most of his Somerville properties one busy day in November 2000. He was 19 years old, a quiet presence in the room as paperwork was shuffled between attorneys.

His new holdings were scattered in clumps around Somerville, with the largest concentration near Inman Square. It was, and still is, the type of transient neighborhood, within a 10-minute walk to Harvard, where tenants write their names on notecards at the front door to signal the mailman who will be living there for the year. Also the type of on-the-verge section ripe for a real estate tyro looking for bargains.

The apartments on Waldo Avenue and Dimick Street had linoleum floors in the kitchen, balconies in the back, and parking for a select few.

“It was a pretty typical, dingy Somerville apartment,” one tenant recalled. “Kind of a grad student flop house,” said another.

“It wasn’t completely dilapidated,” Vollmer said. “It didn’t leak. It was kept together. But it was what you’d expect from housing that moves between students pretty quickly.”

Kushner promptly set about making repairs and renovations, remodeling bathrooms and kitchens, refinishing hardwood floors, updating electrical work. All told, he poured at least $275,000 into the buildings, according to cost estimates provided in city work permits.

Most of his efforts went into converting 22 apartments to 16 condos in an expansive property perched on Prospect Hill. That yielded the biggest return: From an apartment building he’d purchased for $2.25 million he reaped $4.3 million in condo sales.

“These were very neglected buildings,” Kushner told the New York Sun in 2006. “And we turned them into places that people could go home and be proud of.”

Kushner had several people he relied upon for help, bumming rides from all of them.

“He had a lot of money, but no car,” said Roberto Santos, the property manager for Kushner’s buildings. “Even at the airport, I’d go pick him up.”

Nelson Oliveira, a contractor who did all the work on Kushner’s properties, used to pick Kushner up on campus about once a week. As they drove to job sites in Oliveira’s pickup truck, Jared would talk about his grandfather, a Holocaust survivor who started from scratch in the United States.

“He was very proud of his grandfather, the way he started from zero. He would say his grandfather was a hard worker. He believed in hard work, you know?”

But Oliveira concedes that construction work ran into delays on some of the projects, which drew Kushner’s ire.

“He did sometimes get angry . . . but he was polite about it,” Oliveira aid. “I never heard him use the f-word or anything like that. He never cursed.”

They’d go to lunch at S&S, the longtime diner in Inman Square, or an Italian restaurant on Mass. Ave. Kushner would eat soups and salads or, sometimes, pizza.

“He was always watching what he ate. He always liked healthy food,” Oliveira said. “I always ate junk food. I said, ‘Jared, I gotta eat like you!’ ”

Oliveira took direction from Jared but was quietly made aware that the family was keeping close track and valued his work. Each year around the holidays the Kushner family would send him a gift, Oliveira said, including, one year, a winter coat.

Persistent issues with trash

Nick Hildebidle took Jared Kushner’s company to small claims court in a dispute over a security deposit.
Craig F. Walker/Globe Staff
Nick Hildebidle took Jared Kushner’s company to small claims court in a dispute over a security deposit.

Calm and considerate with Oliveira, Kushner appeared decidedly less charitable to his tenants.

The Globe reached more than two dozen of his former tenants, many of whom were surprised to learn that Kushner was behind the vague-sounding partnerships — Somerville Building Associates and the like — where they used to send their rent checks. Most complaints were handled by a management company; they rarely dealt with him.

One building had persistent issues with trash and overflowing dumpsters that triggered letters from the city and a local alderman.

Another property had several complaints about foul smells and insects that lingered. “Owner not responding to tenants living conditions,” the city wrote in August 2004. “Tenant will call exterminators.” Six months later, another complaint came in: “Strong sewage smell in apartment coming from basement.”

Six weeks later, reports of “mold, smell of dead animals, infestation of insects.” The city ordered extermination of the apartment and repairs to windows throughout. Within a few weeks, the city deemed the issue resolved.

A large Kushner-owned 15-unit building on Waldo Avenue had reports of no heat at times in the winter, and then a broken thermostat that would push hot air into the rooms in the fall and spring. A city inspector wrote in a report that it was 95 degrees in one apartment.

Residents reported being told by property managers to just open the windows.

One tenant wrote in 2004 that the renters had “landed . . . in the middle of an unbelievably distressing situation with a slumlord who refuses to fix the heat.”

“We had the misfortune of being the first tenants to fight a landlord as vindictive and crooked as Kushner Companies,” they wrote, saying the problem had gone on for at least three years.

A few doors down, other tenants had similar issues.

“We went a whole winter without any heat,” recalled Rachel Marks, who relied on residual heat from the two floors below, which helped but did not offset the subzero temperatures that winter. “We were going back and forth complaining all winter. We were cold.”

Marks — who said she had paid $632.40 to fill the oil tank outside in preparation for winter — raised alarms with the property manager, and later with Kushner headquarters in New Jersey.

Property managers claimed the problem was with a gas line, even though the home was heated by oil.

In another instance, when Nick Hildebidle and his two roommates moved out of an apartment on Waldo Avenue, the management company refused, without citing a reason, to return their security deposit.

Hildebidle, a 23-year-old with no legal background, cobbled together the paperwork to file a small claims case in Somerville District Court. No one from Kushner’s company showed up for the appointed court date and Hildebidle won the case by default. Nearly a year after they moved out, they got their $1,550 security deposit back, with interest.

“My impression of him as landlord was he didn’t know what he was doing,” said Jennifer Douglas, who had spent eight years in her Waldo Avenue apartment before Kushner took over and doubled her rent. “He wasn’t out to be a slumlord or harm somebody deliberately. But he didn’t really care about tenants either. It was just, ‘This is my building now. I want to do condo conversions.’ ”

“I was unable to negotiate with that guy,’’ she said. “He was just unbending.”

But Kushner never converted that building on Waldo Avenue to condos. “My sense of things was he poorly judged what constituted a high-cost condo in that market at that moment,” Douglas said. “It was like a 12- or 15-unit building and it had no style. The moment wasn’t right.”

Kushner’s only successful condominium conversation was the building on Prospect Hill. And within four years, once he had been out of Harvard for a year, he was ready to get out of Somerville.

‘He was humbled’

Marc Resnick was going to buy all of Kushner’s properties in what would be one of the biggest purchases he’d made in nearly 20 years in real estate.

When he met the 23-year-old Kushner, he thought the same thing people still think to this day: He’s got a lot of responsibility for someone so young and inexperienced.

“He was pretty confident for such a young kid,” Resnick said.

They had a purchase and sale agreement in place for all of Kushner’s remaining properties. But when Kushner sent him the loan documents, Resnick quickly realized that one of the loans came with more complicated terms that would result in a $200,000 penalty if Kushner wanted to get out of the loan a year early.

“The truth is that he didn’t understand his own loan,” Resnick said. “So I explained to him that if he sold me the property he was going to pay hundreds of thousands of dollars in a prepayment penalty. He listened to me. He hung up, and then he called back a few days later and asked if we could meet.”

Kushner arrived alone at Resnick’s office in Brighton, sharply dressed in a suit and without his father or attorney.

“He was humbled,” Resnick said.

Kushner paid Resnick $50,000 to break the purchase and sale agreement. It was the first time in at least 500 transactions that Resnick had experienced such a thing.

“I joke all the time, if you give me $50,000, I’ll gladly not buy any property you’d like,” he said. “ ‘What else would you not want me to buy?’ ”

After graduating cum laude from Harvard, Kushner left for New York and began law school.

By 2005, he had sold all of his real estate in Somerville. The next year, he paid a reported $10 million to buy the New York Observer in 2006. Soon, he would started dating Ivanka Trump. He was on his way.

And by the time his classmates were submitting notes for their 10th year reunion at Harvard, his was one of the shorter entries. He listed little else beyond his updated address: 666 Fifth Ave., which his company had purchased for $1.8 billion.

Matt Viser can be reached at matt.viser@globe.com. Follow him on Twitter @mviser.