Jeremy Hobson: Well as we said a moment ago President Obama will be in Pittsburgh today Pushing high-tech manufacturing like biotech and robotics. That idea is just one of many to get the nation’s Rust Belt out of its long slow industrial decline. In Toledo, Ohio, city leaders are hoping to turn undeveloped waterfront land into new residences, commercial spaces and parks. And the money for that project is coming from an unlikely source: Chinese investors.
Dan Bobkoff of the public media project Changing Gears reports.
Dan Bobkoff: Toledo’s Mayor Michael Bell is so serious about doing business with China, the backside of his business card is in Chinese.
Michael Bell: America is always waiting for people to come to them. Well, we’re on the other side now and we have to be able to reach out and we have to be able to market ourselves.
And, it’s working. Just five months after his first trip to China, Mayor Bell sold a struggling city-owned restaurant complex to Chinese real estate developers for more than $2 million. The buyers didn’t know Toledo existed a year ago. But they’ve become so enamored they just bought an even bigger parcel of the city’s waterfront, called the Marina District.
I’m standing there with Dean Monske of the Regional Growth Partnership, an economic development group. It’s 125 acres. Skyline views, river access, and nothing on it.
Bobkoff: Let’s be honest here, this is mostly just weeds right now.
Dean Monske: You’re right. We’ve got undeveloped land that has been about 10 years right now in the making.
Monske says many local developers have come and gone, but none could get enough financing to actually build something.
The two Chinese developers bought the property for $3.8 million. There’s talk of building mixed-use retail and residential. Mayor Bell says the Chinese didn’t even demand incentives.
Bell: No abatements, no loans, just please accept this cash and get out of our way.
In the past, Chinese investment in the U.S. mostly went to financial, manufacturing, and energy ventures. But China’s newly rich are starting to diversify into real estate.
Derek Scissors is an Asia scholar at the Heritage Foundation. He says most of those deals are for existing buildings. The Toledo venture would be among the first ground-up development projects, if it gets built as planned.
Derek Scissors: We haven’t seen any sign that the Chinese know anything about property development in the U.S.
Scissors points to examples in Australia and elsewhere, where Chinese real estate investors have just sat on land once they bought it. But Toledo can buy back the waterfront property at cost if nothing is built in five years.
I’m Dan Bobkoff for Marketplace.
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