Tacoma is “the investment frontier” for Chinese who want to diversify their holdings and ensure educational opportunity for their children, according to regional experts who addressed a room full of investors Tuesday.
As if to prove the point, moments later a Pierce County-based construction firm revealed it was working with a foreign investor on a potential $120 million project on 6 acres near the University of Washington Tacoma — Tacoma’s biggest undeveloped plot of land.
The investor, Xun Kun Luo, is in the very early stages of due diligence. According to city staff, he is coordinating with a top official at Yareton Investment and Management LLC — another foreign investment firm that is working on building a 24-story, 300-room hotel next to the city’s convention center.
The heightened interest in Tacoma makes sense to experts in foreign investment.
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“Investors probably can make more money in Tacoma than in Seattle. Seattle is close to its peak,” said Elizabeth Peng, a founding partner of Peng & Weber, a Mercer Island law firm that specializes in immigration and business issues. Chinese people “want their kids to come here for education. But in addition to education, they want to make money.”
Peng was one of the panelists at the opening session of the Pacific Northwest-China Trade and Investment Summit, the fifth annual gathering of foreign investors put on by the World Trade Center Tacoma. The two-day event began Tuesday and was overshadowed by the visit of Chinese President Xi Jinping.
“The whole Puget Sound community has been engaged in (planning) for Xi’s visit,” said Louise Tieman, president and CEO of the World Trade Center Tacoma. The final dates for Xi’s visit weren’t known until last week, and by then it was too late to reschedule the summit.
Still, 15 investors attended the two-day event at the Bicentennial Pavilion near the Hotel Murano. Tieman said the attendees were looking for real estate deals as well as other direct purchases, including high-end wind and lighting components. One investor was specifically looking to export new and used Audis and Jaguars to sell them in China, Tieman said.
Summit attendees heard from panelists who discussed tax and legal implications for foreign investment. They discussed how to better market the South Puget Sound region to foreign investors. The breadth of educational opportunity in Pierce County alone was a selling point. Couple that with the fact that many Chinese are focusing their investment dollars on specific areas in King County, Peng said, and creating pockets of community where assimilation isn’t required.
Chinese parents “want their kids to be able to mingle with American kids,” Peng said. “I hear this from my clients daily. They don’t want their kids to go to school and speak Chinese.”
One client sent her daughter to Pacific Lutheran University because there are relatively few Chinese speakers there, so she would be forced to speak English.
Another big topic of discussion was strategies for investing in real estate. It was then that Doug Orth of Puyallup’s Absher Construction listed several projects that involved the federal EB-5 program, which offers visas to foreign investors who create jobs in the United States.
Among them was something called Tacoma Town Center, which is in the early conceptual phase and intended for the empty 6.4 acres southwest of the UWT campus, on South 21st Street and South Jefferson Avenue.
Tacoma Town Center is proposed by Wuhan, China-based Boshengshiji Real Estate, whose principal is Luo. Luo, along with Yareton, has been working with the city of Tacoma on an agreement.
Early drawings of the project show an eight-building complex that surrounds a courtyard. The complex would include retail and office space, as well as five buildings of multistory residential development, including some for students, said Absher’s Orth. He estimated the project to be worth about $120 million.
The project “is still very conceptual,” said Martha Anderson, the city’s assistant director of economic development who attended the summit. The development team “just hired an architect last week.”
Tacoma officials solicited ideas and bids for the site in June 2013 and received no responses. This year, the city received two unsolicited proposals, economic development director Ricardo Noguera said in an email. City officials interviewed the people making the proposals and moved ahead with Luo.
City Manager T.C. Broadnax signed a purchase and sale agreement in early August, Noguera wrote, and planned to go before the City Council with the project after the due diligence period, which is toward the end of the year.
“The proposal requires significant predevelopment vetting to ensure it materializes, so we chose to hold off from bringing the item to council for consideration until the due diligence period was met,” Noguera wrote.