Mayor Ed Lee to seek housing project funds in first trip to China

AP File PhotoFriday begins Ed Lee's first trip to China as mayor of San Francisco.

AP File PhotoFriday begins Ed Lee's first trip to China as mayor of San Francisco.

Negotiations over San Francisco’s biggest redevelopment projects in a generation — and just how involved state-owned Chinese enterprises will be in building them — are expected to be a key part of Ed Lee’s first visit to China as mayor, which begins today.

Lee is expected to sit down with officials from the China Development Bank during his eight-day trip to the People’s Republic of China. Over two days in Beijing, the Chinese-American mayor also will meet with key political leadership, which just changed hands.

Homebuilder Lennar Urban, which has development rights to construct more than 10,000 units at the former naval installations at Hunters Point and Treasure Island, is seeking a ?$1.7 billion loan from the state-owned bank. Lee said Thursday that he hopes his visit can help the two parties “get closer” to finalizing the deal.

Lennar declined to comment on loan negotiations, but sources close to the deal say that the traditional Chinese caveat of employing state-owned Chinese construction firms on state-funded projects is delaying the deal. In this case, the Chinese Railway Construction Corporation — which recently finished a light-rail system in Saudi Arabia — is said to be pursuing the San Francisco construction contracts.

The massive developments would be the first American projects for the Chinese corporation and its first work for a private company, sources said.

If such a deal were concluded, it could become the blueprint for an entire wave of Chinese investment in the United States.

Other major California construction projects, such as the statewide high-speed rail system and development projects near the future Transbay Transit Terminal, are also said to be seeking Chinese investors, media reports and sources indicate.

The scope of Lee’s role in the negotiations in unclear, but sources said he is highly regarded by Chinese political leaders and development bank officials. And he’ll have some high-powered traveling companions. Former Mayor Willie Brown is one of 30 fellow travelers, while trip leader Rose Pak, the Chinese Chamber of Commerce’s omnipresent consultant, is already in China.

No city supervisors were invited, sources said. But Lee already has one other friend in Beijing, his Seattle high school classmate Gary Locke, the former Washington governor and current U.S. ambassador to China. Both trace their ancestral roots to Taishan, the home village of Lee’s father, where Lee will be honored with the “red carpet.”

Lee will fly to Hong Kong before traveling to Beijing, where he’ll speak to students at Tsinghua University and meet government officials. He’ll then travel to the southern province of Guangdong, where he’ll meet more politicians and attempt to woo Southern China Airlines to San Francisco International Airport. The mayor will then head to Taishan before returning to San Francisco from Macau on April 7.

Lee, who is planning up to three trips to China this year, also will court Chinese investment in technology and biotechnology companies.

The new Chinese government led by Xi Jinping is very interested in investing overseas and encouraging business relationships with the U.S., says Darlene Chiu Bryant, who heads the ChinaSF office at the Mayor’s Office of Economic Development.

Lee has cultivated ties with China since the first days of his administration. He attended a state dinner in Washington, D.C. for Hu Jintao, the outgoing general secretary of the Chinese Communist Party, shortly after taking office in 2011.

The mayor plans to present Chinese officials with the gift of San Francisco-made iPad cases.

croberts@sfexaminer.com

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