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The Legacy

At a meeting last month, Jared told his staff that the Observer needed to move on. “Kaplan is a classy guy, but he’s old-school,” Jared said. “If we were doing our jobs right, Gawker wouldn’t have a reason to exist. Curbed wouldn’t have a reason to exist.

“Every Observer writer wants to be a novelist,” he went on. “But we need to be deliberate about when we are short and when we are long.”

On the evening of June 24, Jared stood in the center of The Four Seasons’ Grill Room. Dozens of real-estate machers orbited him at a party celebrating the Observer’s real-estate power list. The mayor was on his way, and Assembly Speaker Sheldon Silver hovered in the corner. “You have to give Jared a lot of credit,” Stephen Ross, the CEO of Related, told me. “I think buying a newspaper is a good way to make a name for yourself. He got everybody’s attention.”

The Observer already seems a slighter product. Still, no matter how much the Observer loses, this kind of respect may be worth it for the Kushners.

The next stage, however, may be harder. The Observer’s problems have hit just as the commercial-real-estate crash imperils Jared’s purchase of 666 Fifth Avenue. Jared and Charlie paid a record price based on the assumption that office rents would continue to climb over the next few years. “It was the poster child for bad underwriting,” says Robert White, the president of Real Capital Analytics. Midtown leases have dropped 50 percent below their peak. At the time of the purchase, rents at 666 Fifth Avenue generated only 65 percent of the cash flow needed to cover the monthly mortgage payments. The Kushners believed they could get the building’s second-largest tenant, the law firm Orrick, Herrington & Sutcliffe, to renew at more than $100 per foot, but negotiations have dragged on. An $80 million reserve fund will run out sometime next year, leaving Jared with two options: Inject more cash or default on the $1.2 billion debt and lose control of the building.

These days, Charlie is a kind of invisible man, not gone but not entirely here either. He spends most of his time shuttling between his office, the Fifth Avenue apartment he purchased in 2003, and his beach house in Long Branch. At The Four Seasons, Charlie and Seryl mingled, but it was apparent he preferred to avoid these kinds of public appearances. “At Jared’s event, I enjoy [being] Jared’s dad,” Charlie told me in his office earlier that afternoon. “For many years, [it was] ‘That’s Charlie’s son.’ ”

He says he has moved on. “I know what I did,” he tells me. “I still have to shave in the morning. I know I’ve done good things, I know I’ve done bad things.”

Ironically, the Kushners may be headed back to New Jersey. Jared and Charlie are pursuing deals, including buying their old portfolio back from troubled AIG. “You can’t be dynastic about these things,” Jared says. “You have to make a decision about what’s best at the time. Facts change.”

Near the end of one of our interviews, Jared shows me around his sparely decorated office. Jared’s mood lifts when he points to a framed Garry Winogrand photograph of JFK that leans against the wall beside to his desk. “I saw this photo and was just obsessed with it,” he says. “I had to buy it as part of a series. The rest are in a box.” The photograph shows JFK from behind as he delivers his 1960 Democratic Convention speech. A television set in the foreground broadcasts JFK’s face from the front.

“I love the juxtaposition of him looking that way and seeing him the other way. I love the glow in his face,” Jared says with a smile. “I look at it all the time.”