Saturday, April 05, 2014

Bloomberg reports on new AY investor Greenland: "We should all move very fast. We should catch the moment."

There's some revealing stuff about the Greenland Group, the Chinese government-owned investment fund buying 70% of the remaining Atlantic Yards project, in a 3/31/14 Bloomberg News article headlined Chinese Brooklyn-to-Los Angeles Plans Accelerating: Real Estate:
The speed at which Ifei Chang, 49, assumed her position as president and chief executive officer of Greenland U.S. Holding and her equally swift investment in two multibillion-dollar deals demonstrate the pace at which Chinese companies are committing to large-scale construction outside their homeland. Source: Greenland Holding Group Co. via Bloomberg
It took just one 15-minute phone call in July to persuade Ifei Chang to join Shanghai-based developer Greenland Holding Group Co. and lead a U.S. expansion. Within three months, she was running $6 billion of projects as part of a record push by Chinese investors into American property.
Greenland reached a preliminary agreement in October to buy a 70 percent stake in the $5 billion Atlantic Yards development in Brooklyn, New York. That followed a July deal to acquire a $1 billion residential-and-entertainment project in downtown Los Angeles. Chang, who took charge of that site upon arriving in the U.S., is now on the hunt for more investments.
“In China, you climb a ladder where everything is floating and moving so fast,” Chang, 49, said in an interview at her sparsely furnished 46th-floor L.A. office overlooking the empty lot where the Metropolis project will be built. “We come from a country of 1.4 billion people and a lot of economic growth. This kind of project and investment speed is very normal in China. That’s why we are so confident we will deliver this project.”
The AY deal

Bloomberg reports:
Greenland agreed to buy most of Brooklyn’s Atlantic Yards from the site’s original developer, Forest City Ratner Cos., after a couple of phone calls, a dinner and a visit by the seller’s executive team to Greenland’s Shanghai headquarters.
“Three weeks later, we had an agreement,” Chang said. The memorandum of understanding signed in October became a definitive contract in December.
Regulatory approval for Atlantic Yards LLC, the joint venture for the project, is expected by mid-year, Chang said. The 22-acre (8.9-hectare) development was initially approved in 2006 and delayed in part by the recession. Greenland’s investment will include 14 apartment buildings in Brooklyn, where rents are surging.
“The process and the people have been intense,” MaryAnne Gilmartin, president and CEO of Forest City Ratner, said in an e-mail. “Ifei has proven to be a force of nature -- determined, insightful and highly capable.”
A change in culture: speed

This is very interesting:
Representatives of Chinese companies -- even those with extensive international experience -- often experience culture shock when first faced with the U.S. legal system, approval processes and paperwork, Chang said.
“Everybody is afraid of getting sued,” she said. “In China we may step on somebody else’s feet, but so what? Sometimes somebody else will step on mine. It’s all good. I won’t sue them.”
The culture shock is sometimes mutual. Rob Jernigan, a managing principal at Gensler, the lead architect on the Metropolis project, was surprised to have Chang show up in his downtown Los Angeles office as many as 10 times a week and get calls from her on Sunday afternoons.
What might that mean for Brooklyn? Here's another paragraph, regarding Greenland's intentions in general:
“We hope the city permit procedure will pick up the speed we want, pick up the speed that businesses want, pick up the speed investors want, pick up the speed the citizens really need,” Chang said. “We should all move very fast. We should catch the moment.”
This is consonant with the reported statements that Greenland hopes to finish all of Atlantic Yards in eight years, or within the ten-year time frame once promised in the environmental review. That, of course, depends on the success of modular construction, which so far--at least--has gone somewhat slowly.

And it also suggests that Greenland, even more than Forest City, may feel no qualms about stepping "on somebody else's feet."

And that means that oversight, starting with Empire State Development (the state agency with the contradictory role to oversee/shepherd Atlantic Yards) and extending to potential new oversight entities, might become ever more important.

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