The China Development Bank might help transform San Francisco's former naval bases into massive housing projects. The development plans for Treasure Island
and Hunters Point Shipyard
have been in the works for a while, promising upwards of 20,000 new homes and a couple of hotels thrown in for good measure. The U.S.-based developer working on the projects, Lennar Corporation, has been working on the plans for well over a decade.
According to a Wall Street Journal article
, Lennar is negotiating $1.7 billion from the China Development Bank to finance the projects. They are expected to cost a total of $10.5 billion.
Loans from the China Development Bank and Export-Import Bank of China have financed construction projects around the world, building billions worth of highways, railroads, airports and housing in Africa, Asia, and South America. Chinese companies have used state financing to purchase prime real estate in New York City.
San Francisco is no exception.
However, most of the infrastructure projects funded by the China Development Bank are typically built with imported Chinese labor. After all, the bank's primary objective is to support domestic development as well as China's interests overseas. Most deals require use of Chinese developers and contractors to build projects. So when the loans are doled out, money frequently cycles back into Chinese pockets instead of local resources and labor.
San Francisco might cause some complications in this predictable formula. Generally, developers are required to pay adequate wages and use local labor.
However, Lennar and the China Development Bank are discussing the possibility of using the China Railway Construction Corporation, China's second-largest state-owned construction company, to spearhead the Treasure Island and Hunters Point projects. This might be a test of how well China's expansion tactics play out when it comes to San Francisco's real estate.Follow us on Twitter at @SFWeekly and @TheSnitchSF