BEIJING - A Chinese investment group said Wednesday it will finance the majority of a $1.5 billion mixed-use development project in Oakland, an unusually large investment by a Chinese company in California, especially in real estate.
The agreement was finalized ahead of Gov. Jerry Brown's week-long trade mission to China, and he used it to promote foreign investment in the Golden State. It was also a personal victory of sorts for Brown, who was mayor of Oakland when the project - the subject of litigation in recent years - was first approved by city officials in 2006.
"We're going to announce a major investment by China ... in where else than Oakland, of course," Brown said at a reception at the U.S. embassy in Beijing.
The investment by China-based Zarsion Holdings Group Co., Ltd., is estimated to be worth more than $1 billion over eight to 10 years. That is compared to a total of $1.3 billion in investment deals from China that California did from 2000 to 2011, according to an October report for the Asia Society by the research firm Rhodium Group.
The Brooklyn Basin project just south of Jack London Square is to include the construction of 3,100 housing units, 200,000 square feet of retail and commercial space and 30 acres of parks and open space. Michael Ghielmetti, president of Oakland-based Signature Development Group, said construction will start next year.
It is not unusual for a politician on a trade mission to come armed with a series of pre-arranged deals to announce while on the trip. The agreement was the first of a series of business deals Brown is expected to promote before leaving the country next week.
Ghielmetti said the deal was finalized only last week, and he said the possibility of announcing the agreement during the governor's visit helped speed it along.
"It meant a lot to our investor to have some type of celebratory affair, if you will," Ghielmetti said.
Brown is seeking Chinese investment for public and private projects in California. He and Chinese commerce officials earlier Wednesday signed a non-binding, largely ceremonial agreement to cooperate more on trade and investment.
PHOTO CREDIT: Gov. Jerry Brown and Chinese commerce officials sign a non-binding, largely ceremonial economic development agreement in Beijing on Wednesday, David Siders / Sacramento Bee