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Luring the dragon to the Rockies

Wilson realtor looks to attract Chinese investment in Jackson and Intermountain West.
Wilson Realtor Bruce Simon and his girlfriend Peggy Thomas pose in front of a bullet train in China. In only a decade, China has built a network of high-speed trains, one of the signs of the economic boom taking place there. Simon hopes Chinese fascination with the Wild West will bring some of that boom to Jackson. COURTESY PHOTO
By Richard Anderson, Jackson Hole, Wyo.
January 16, 2013

The Chinese are coming, and Bruce Simon is ready to welcome them.

Over the past 15 years, the Wilson realtor has traveled to China as a tourist about 10 times, he said. For the past two years, he has been mixing business with leisure, setting up a booth at an international trade show in an attempt to attract Chinese investment in Jackson Hole real estate. Up to 120,000 people passed by his booth during the four days he was set up.

“I found so much interest in real estate,” Simon said, “not just in Jackson Hole but in the whole Rocky Mountain area.”

Chinese companies are already investing in businesses in the United States, and individuals are buying real estate, Simon said. But most of their investment is taking place in California, New York, Florida and, more recently, Texas and Arizona.

Not as many are as familiar with the Rocky Mountains, he said. But they do know Yellowstone, mostly from the Internet and from movies. After visiting the West Coast, most Chinese tourists, on their second trip to the states, make sure they put the world’s first national park on their itinerary, Simon said.

“That’s a big draw,” he said. “That’s what I’m promoting.”

As soon as he mentions that he’s from Yellowstone, “I have people’s attention in the palm of my hand.”

Ed Liebzeit, president and COO of Jackson Hole Sotheby’s International Realty, said he knew of a few others in the business who have been trying to attract Chinese interest in Rocky Mountain real estate, but they are reaching out using the Internet. He knew of no one else actually traveling to China to attend trade shows.

“As of yet, that has not produced a strong business gain,” he said.

The Jackson Hole Council for Global Affairs has, among other goals, been promoting U.S.-China exchanges to reduce carbon emissions from coal for the past 10 years. In his travels and research about the Chinese economy, council president David Wendt has noted a growing interest in international investment — including real estate investment — over the past five to 10 years. Most of the Chinese capital has been spent on industry, he said.

“Here in Wyoming, these investments include a partial stake in Chesapeake’s share in the Niobrara shale oil play and the proposed DKRW coal-to-liquid facility in Medicine Bow,” he said in an email. “Other areas of recent interest in the U.S. include consumer electronics and electric equipment and supplies.”

Individual investment in real estate, however, is somewhat more “idiosyncratic,” he said.

But, he added, “in general, the Chinese are awash with cash and interested in diversifying their investments beyond China to other promising global markets. The more the Chinese are involved in global economic transactions, the more they have to abide by the rules that govern those transactions. Also, Chinese investment here can create U.S. jobs.”

Simon can regale a listener with stories about how much economic liberalization has changed China just since he began visiting. Real estate values have increased by 20 percent a year for the past five to seven years. Astounding architecture has strewn the skylines of cities like Beijing with often fanciful skyscrapers. Entire high-speed rail lines have been built in the past decade. In the past 20 years, 300 million people have migrated from rural farmlands to the cities. In just 30 years, Chongqing, on the way to the Himalaya, has grown into a city of 30 million people — more than four times larger than Manhattan.

“It’s the biggest city you never heard of,” Simon said.

Simon attributes China’s newfound wealth to a number of factors. Chinese leaders are able to make and quickly enact policy changes that allowed the economy to become very efficient and successful. In the old days, Simon said, farmers were paid the same whether they produced one bag of rice or 10; under more recent leadership, increased productivity was rewarded and as a result productivity has increased “twentyfold,” he said.

But, he went on, “just because you’re wealthy today doesn’t mean you’ll be wealthy tomorrow.” The same powerful centralized government that has enabled many Chinese to become rich could just as easily enact policies that would take that wealth away.

Because of that huge uncertainty, Simon said, individuals have been making foreign investments. The top four countries that have been enjoying this influx have been Australia, Canada, England and the United States, he said. The U.S. is especially attractive, he said, because the Chinese think highly of our education system and are eager to get their children into our colleges and universities. Owning property here gives them a foot in the door.

In addition to investing overseas, the Chinese also have imported some ideas from the West.

Two hours outside Beijing, at the base of a rugged range of mountains that rise 4,000 from the plain, a resort settlement of 1,000 single-family homes has sprung up in just a few years. Homes are made of hewn logs or have cedar siding. Many others have walls and chimneys faced with river stone. A small island of grass at the center of a cul-de-sac is home to a cement sculpture of a moose — or rather, what appears to be a moose’s head on an elk’s or deer’s body. Interiors are decorated with Molesworth-inspired furniture, Navajo-style rugs and rustic-looking steel chandeliers with cutouts of elk and Tetonesque mountain profiles.

Welcome to Jackson Hole in Beijing.

On one of his more recent trips to China, Simon stopped by the Beijing sales office for the development —a single-story, ranch-style log structure dwarfed by a cluster of nearby skyscrapers. He stopped by the office cold, without having made any appointment. By using a cellphone translator, Simon was able to communicate with an office worker and establish contact with the resort developer, Andy Fan, who built the development in conjunction with a large real estate company from Seattle (Simon declined to name the company).

“He said, ‘You’re the first people from the real Jackson Hole to visit,’” Simon said. “‘I’m so happy you came, it’s so nice to meet you, I’m so excited.’ To say that he was obsessed with Jackson Hole and the Western lifestyle would be a major understatement.”

Fan is scheduled to visit the Jackson area for the first time this winter, Simon said.

In contrast to Chinese enthusiasm, Simon said he has run into his fair share of resistance, including from local people.

“My response is we’re a country of immigrants,” he said. “My great-grandfather came from Russia to New York in 1888. I could be a man trying to make a living in Belarus now.”

He remains confident that Chinese capital could help recapitalize Jackson’s real estate industry. And because the Chinese generally pay in cash, they could help keep downward pressure on interest rates.

“They have all our money,” he said. “If I’m successful in attracting Chinese investment to the Intermountain area, I’ll have succeeded in getting some of our money back.”

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