Related CEO Blau Sues EB-5 Investors, Claiming Harassment At His Home
The CEO of the Related Cos. says he and his family have been the victim of a targeted harassment and intimidation campaign from investors in the largest private development in U.S. history, Hudson Yards.
Jeff Blau filed a lawsuit on Friday against seven people who invested $500K each in the $25B megaproject, asking a New York County Supreme Court judge to issue an emergency injunction that would bar the individuals from continuing to protest outside his Upper East Side home.
Blau's suit, first reported by PincusCo, claims that the seven investors launched their protest campaign in January and for months have confronted him and his children demanding that they have their $500K investments repaid.
Blau claims the investors sent him photos of his children, have banged pots and pans on the front step of of his house, sent him threatening text messages and emails, and insist that they will escalate their campaign if they are not repaid.
“We hope the court will quickly issue a judgment in this matter and put an end to this misconduct and invasion of privacy,” a Related spokesperson said in a statement to Bisnow.
Related raised roughly $1.2B from investors through the EB-5 Immigrant Investor Program, which allows foreign nationals to invest in U.S. development projects in exchange for a green card.
The seven defendants in Blau's suit invested in Hudson Yards in 2013 and 2014 and all received temporary or permanent legal status following the development's opening. Related has signed megadeals with BlackRock, Meta, Wells Fargo and KKR to open offices at Hudson Yards, built the first Equinox Hotel and sold more than $1B in luxury condos at the project.
But the EB-5 investors, who have been reading headlines of Hudson Yards' success for half a decade, have not been repaid. Blau claims they aren't eligible to be paid out ahead of other investors, and the EB-5 program requires capital to be "at risk," meaning the payments aren't overdue.
That response has frustrated the investors. The group that launched the protest campaign in January did so after filing an arbitration claim back in 2020 to recoup their investment, EB5 Investors reported. Related halted payments due to the pandemic, claiming it was under no obligation to make distributions, The Real Deal reported.
One of the investors Blau named in the lawsuit claims that she hasn't participated in any of the protests or visited the executive's home and said she has asked to be removed from the suit.
“If I need to defend my rights, I believe that I must do so through legal means, and I must never resolve issues by threatening or harming others and their families,” Jingxu He wrote in an email to Bisnow. “Such behavior is inappropriate and I will never agree to or participate in it.”
But, she wrote, the firm that collected the investments from immigrants on behalf of Related promised “risk-free” returns and guaranteed that their capital would be returned within five years. That changed when the pandemic hit, but more than a decade after investing in the project, he is still waiting to be repaid.
“Our investment funds have not been returned, and we have lost normal contact with the immigration company,” she wrote. “Through communication with other investors, I learned that there may be problems with the project, which made our $500,000 unable to be recovered.”
