The 400-room, 14-story Park Inn in downtown Toledo was sold to unidentified Chinese investors in September for $3 million. City officials say the investors plan to turn the landmark hotel into an international business center.
Yuan Xiaohong and Wu Kin Hung are the most prominent Chinese investors spending their money in Toledo, but they are not alone.
Delegations of Chinese investors “roll through here” every two or three weeks — pretty regularly — Toledo Mayor Mike Bell said at the end of last year. Each one gets the red-carpet treatment that includes a tour of the city’s museum, a private symphony concert, and usually dinner someplace nice, such as The Docks.
“A large portion of them are from China, and it is pretty sharp that we have gotten the recognition from people, or at least on the radar screen for people to be able to market our city,” Mr. Bell said.
“It can be the same group coming back again, and they come back and ask more questions,” he said. “And they fly in and ask another question and get some more information, and they fan out throughout the city, but I think it is working pretty well.”
The mayor said his decision to go after some of the $2 trillion China is expected to invest worldwide over the next decade has been the right decision for Toledo. The Docks sale to Dashing Pacific Group — which is run by Ms. Yuan and Mr. Wu — was for $2.15 million.
The two investors paid an additional $3.8 million for 69 acres of the east-side Marina District. Mr. Bell said those amounts are paltry compared to the investment that could be in the city’s future from Chinese investors.
Payoffs like that are part of the reason neither Mr. Bell nor Regional Growth Partnership Chief Executive Dean Monske questions where Chinese investors made their fortunes or if the money is actually sovereign wealth fund cash — funding from the Communist-controlled government of China.
“The nice part about this whole thing is that it is starting to work in the direction that it was supposed to,” Mr. Bell said. “Typically now, instead of starting at the mayor’s office, they start with RGP, and what Dean [Monske] does is he coordinates the get-togethers with my office, and then we sit down and we talk about whatever they want to talk about. Typically, it is about investment potentials.”
Dean Monske of the Regional Growth Partnership says at least one other deal with Chinese investors dwarfs the sale of the Marina District. He would not elaborate.
Also a secret are the identities of a different group of Chinese investors called Five Lakes Global Group Ltd., who bought the downtown Park Inn Hotel. City officials said they plan to turn the hotel into an international business center but other than that would not reveal their names or where in China they are from.
The landmark 400-room, 14-story hotel was sold in September for $3 million — a fraction of its original $42 million cost. The hotel was sold by 101 N Summit Street Holdings LLC, a holding company for the hotel’s previous owners, which included the Ohio Carpenters Pension Fund.
Lucas County real estate records don’t state the name of the new owner of the 24-year-old hotel, which was placed in a trust under Louisville Title Agency for Northwest Ohio Inc. However, a manager at the hotel identified the name of the company as Five Lakes Global.
Louisville Title Agency, whose President Jim Lindsay was a member of the mayor’s delegation to China in May, is the agency holding the deed to the Park Inn in trust, as it does for hundreds of other properties, including The Docks and the 69 acres of Marina District property.
Mr. Bell said the investors of the Park Inn will come forward “in their time” and will present a plan. “They are not acting any different than any other business person,” he said.
Robert Lawrence, professor of trade policy at Harvard University’s Kennedy school of government, said the emergence of a huge middle class in China has generated an internal demand for investment in America, and it appears Toledo is trying to capitalize on that.
He cautioned against making moral judgments on investors because of their birthplaces.
“I think you should always exercise due diligence with everyone you deal with,” Mr. Lawrence said. “I don’t see a unique reason to be particularly suspicious in relevance to other investors … I don’t think you should have a presumption or an idea how these people made their money. Some may have been part of a system that is not the same as we have here in the United States, but many may not have been.”
There is also little reason to be wary of investors who buy real estate with the intent to develop, he said.
“They are putting their money into a very unmovable asset, and they have every incentive to think about the long-term health of the city,” Mr. Lawrence said. “There are fly-by-night investors and there are investors who open factories in Third World countries to take advantage of certain advantages and then leave, and those you should be wary about, but those who buy your real estate, you shouldn’t be worried about.”
Mr. Bell said there is good reason investors from China or elsewhere want to remain anonymous.
“Most business people would not want to do the dance we had to do,” he said, referring to getting Toledo City Council to approve the Marina District sale to Dashing Pacific.
The goal is to get them to stay in Toledo rather than go to some other American city to spend their money.
The mayor said some of the investors from China have included businessmen dealing with medical equipment, pharmaceuticals, and real estate.
Mr. Monske said the majority of people are referred to Toledo by either chambers of commerce in China or business associations similar to the RGP. Others have been encouraged to visit Toledo by the mayor during one of his three trips to China or by the Dashing Pacific investors.
“There is really no one who comes in here anymore, if it is coming through [the RGP], that we don’t know who they are and haven’t done due diligence, and knowing that these are real people with real means that want to look at business opportunities,” Mr. Monske said.
All the groups get “the dog and pony show … the sights, all the cultural stuff, all business opportunities,” he said. “There hasn’t been barely a week that someone hasn’t been in this town ... It gets to be a circus at times because it is a lot to handle.”
Mr. Bell said he knows corruption has occurred in China, but that doesn’t discourage him from attracting business from that country.
He added: “If I can get a company to come here and abide by our rules and hire U.S. citizens to be able to feed their families, and pay for their houses, and they are following our rules, then that is all I care about. I am not going to get into that world thing.”
Contact Ignazio Messina at: email@example.com or 419-724-6171.