To discuss the present and future of Chinatown, the Business Journal assembled a group of the district's key players. They are Peter Kwong, a Chinatown native who owns two hotels there; Henry Leong, also a native and operator of Quon Yick Noodle Co.; Len Betz, the Los Angeles Community Redevelopment Agency's project manager for Chinatown; and William Chang, who heads Asian American Economic Development Enterprises Inc.
Question: What direction is Chinatown going up, down or sideways?
Kwong: I think it's kind of flat right now. I'm just finishing a project right across the street from Phillipe's restaurant, trying to stimulate the economy with a fast-food drive through, something that Chinatown really needs. I've been running into a stone wall. (Franchisees are) saying that the demographics are not there, that everyone is a senior citizen.
If you look at other parts of the city that are ethnic neighborhoods, there are a lot of franchise businesses in those areas. Corporate America only wants to see Chinatown as an area to have a good meal, to buy herbs and to film martial arts movies. But martial arts movies don't help Chinatown, because all the (images are) negative.
Leong: Peter says it is flat, but I say it is on its way down. The main problem is, there is not enough draw to Chinatown. You could shop and eat the same kind of stuff anywhere else. There is nothing unique to Chinatown, whereas before you could sell it as a tourist spot. Before, the only place you could see a Chinese opera, Chinese movies or find a Chinese school was in Chinatown. The old Chinese school is still there, but Monterey Park, Alhambra and West Covina now all have Chinese schools too. And they have better facilities. A lot of the businesses change hands because they develop credit problems and then they go belly-up. It's not because they are bad businesses.
Betz: As an outsider, my perspective is different. I hear what is being said, but there are numerous contradictions in Chinatown and enormous similarities to every other neighborhood in the city, including Hollywood. Different scale, but a year and a half ago you couldn't get anyone into Hollywood.
Go down on a Saturday afternoon. Bunker Hill is dead, Little Tokyo is dead, but as soon as you hit Chinatown, the sidewalks are packed. They all motor in from Monterey Park and outlying areas, because Chinatown is still the spiritual center for the ethnic Chinese. And the architecture is interesting. A lot of it, just like Hollywood Boulevard, has been obscured by tacky signs and bad stucco. You can remove that and expose this architecturally interesting building. They have been abandoned and now people are rediscovering this area. And that's what I see happening.
Q: But won't it take an outside developer to spark large-scale revitalization?
Betz: Chinatown needs that catalytic development, whatever that development might be big or small, anything that instills confidence in the Chinese people who bought property in the late '80s when it was at its all-time top (value). Whether it's from within Chinatown or outside, Chinese or non-Chinese, I don't know.
You begin by bringing people in and saying, "This is a good place to invest in, but you should do it now before this takes off and you can't afford it. It's this tremendous asset, it offers something unique, it is a Chinese community."
The question is, what's the right kind of development? More retail, housing, a combination? Is it time to diversify the industrial base in Chinatown?
Chang: Let's talk about the existing situation. Of course, everybody realizes it's not very cheerful, it's not in very good shape. For instance, the Grandview Gardens, a big restaurant, used to be a tourist spot. It changed hands several times and for some reason burned down. It's right in the center of Chinatown. It shows Chinatown is going down the drain because it's not taking care of itself.
There are political reasons (for the lack of development), too. The politics in Chinatown are very complicated. The Cantonese people were the first immigrants to the U.S. and they're very conservative, they want to keep the old traditions, everything as is.
Question: Peter, is it distressing for you to have sunk money into an area that's gone downhill?
Kwong: It's got to start somewhere. My heart is in Chinatown. I was born and raised in Chinatown. So to me, I want to give something back. I still have very vibrant businesses there. But someone's going to have to do the first project and maybe after my project, someone will say, "There's a Chinese-looking building that's pedestrian-friendly, why don't we build more of these?"
Betz: We have done one round. We're going to do another round of making over $1 million available for business improvement loans. It's very important. You can see the buildings that have taken the CRA money and gone in and ripped off the bad signs and stucco. The neighbors look at these nice buildings on Broadway. That's what it takes in Chinatown now, gain the confidence of people there, make it look better.
Question: When you look at other successful redevelopment stories in L.A., you see a common denominator: The business community is willing to get together. You seem to be saying that is lacking right now in Chinatown.
Betz: It's lacking, but people are becoming more aware of the need to work together. I go back to Hollywood Boulevard. It's working right now. But the last 25 to 30 years, the merchants were not working together. And Third Street Promenade was a death trap for 20 years. Chinatown is now at that point.
Leong: It's on the verge.
Kwong: Small guys make a lot of change. Who would have thought of putting a cigar-humidor shop and high-end coffee shop in Chinatown? But after we did it, there's two more (high-end coffee) places coming up. So it just takes one person with one idea and other people will say it works and they'll mimic you. Hopefully, Edwards Theatres will say, "Hey, that building works, maybe we could put a theater in."
Question: Is there a generational issue?
Leong: Sure. My family's business is rare, as far as it being second generation. Most people, they raised their kids to be doctors, lawyers and Indian chiefs, and they don't want their kids hanging around Chinatown. They're gone. Almost all the businesses that do have old money in them, they're no longer doing what they started off doing. The old property owners are in the sit-back mode and they want somebody else to make the change. In the Plaza area, they don't want to do anything, but just wait. There's no debt on the property.
Betz: Again, this is what we saw on Hollywood Boulevard. All this property was held since the '20s, for multiple generations. So what did these people do for years? Boarded up the building or rented it to the most marginal business.
Leong: They can't do anything with Grandview because it was supposed to have been designed by a famous architect. So they just leave it (as a burned-out ruin). They make more money selling bill space on there. (The owners) own other property as well in Chinatown. Another building is 95 percent vacant since they developed it. When we asked one (property owner) if he was interested in a (business improvement district), he said, "I'm not putting any more money into this."
Chang: The land is overvalued, which is preventing other investors from going in there. In the meantime, they charge too much rent and have more vacancies. They don't care. They have the money. They can sustain almost forever, until they die. If you have 75 percent vacancy, usually you make some changes. But they don't worry about it.
Kwong: Chinatown landlords have very little debt. You have 20 banks in Chinatown. Tell me how you sustain 20 banks? There are a lot of wealthy people in Chinatown.
Question: Is part of the problem simply poor building design?
Kwong: What people need to realize is, whenever you build a project, it needs to be pedestrian-friendly. It's really bad business to build a building and encase yourself in. It doesn't make sense, because there's no visibility, there's no foot traffic.
We see a lot of those projects in Chinatown now, where the building could be Anywhere U.S.A. (A decade ago), it was as high as $225 a foot for dirt in Chinatown, so when you're paying that much, you want to put as much retail as you can on it.
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