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Feng Lun and His Chinese Heart

What is the truth behind China Center, the first tenant of New York’s new World Trade Center? What setbacks has Feng Lun encountered in the development of China Center in the US? What “grand dreams” does this “property mastermind” have for China Center?

AvBuyer   |   1st January 2012
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The AvBuyer editorial team includes Matt Harris and Sean O'Farrell who contribute to a...
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What is the truth behind China Center, the first tenant of New York’s new World Trade Center? What setbacks has Feng Lun encountered in the development of China Center in the US? What “grand dreams” does this “property mastermind” have for China Center?

As part of the world-famous 9/11 reconstruction project, China Center features a Folding Garden in the vertical space between the 64th and 69th floors of One World Trade Center in New York; the Center and the Garden are “very Chinese” yet “very modern.” The owner of this unique space and the chairman of Vantone Holdings is Feng Lun, who told this Bizjet Advisor reporter during a recent interview that he spent more than ten years overcoming numerous difficulties; the end goal was to create a high-end business center for US and Chinese companies, because he has “a deep sense of mission.”

A Long and Arduous Negotiation
In recent years, Chinese enterprises have shown increasing interest in expanding overseas, and growing numbers of private entrepreneurs have come to the US to promote their products, make acquisitions, and start businesses. These entrepreneurs longed to see the establishment of a US-based business center for Chinese entrepreneurs in New York. “There are more than three hundred Chinese companies listed on the NASDAQ Main Board, whose total market value is 15% of the Main Board.” These US-bound Chinese entrepreneurs encounter numerous difficulties living or working in the US, from finding a place that serves proper rice porridge to finding ideal rental offices.

Feng hopes that China Center will become one such business center, offering one-stop service to Chinese enterprises doing business in the US, as well as US companies interested in doing business with Chinese companies.

In 2009, China Center became the first commercial tenant of New York’s One World Trade Center, but Vantone began participating in the reconstruction of One World Trade Center as early as 2003. When the idea for China Center was first proposed, it quickly turned into a tough negotiation with the Americans.

“We had the most difficult time in 2003 when we first negotiated with the Silverstein family. At that time, the market was booming and government coordination was slow. In 2006, we re-opened negotiations with The Port Authority of New York and New Jersey, then came the 2008 financial crisis, which was an opportunity for both of us; we all needed the project to succeed, so a deal was eventually reached,” Feng recalls.

The 20,000m2 China Center will commence operation after the World Trade Center is completed in 2014, at which time, China Center will be the first company to move in and open for business. In Feng’s vision, the target clientele of this special business space are mainstream, high-end, international political and economic elites. China Center aims to become a comprehensive platform for high-end lifestyles, combining social, business, and cultural functions.

For instance, the 66th floor of China Center will be designed as a unique social and business club, providing entirely bilingual services for members with authentic Chinese cuisine, tea, classical music, and meditation. The 67th floor provides an eighteen room conference center with video and multi-media equipment. The business centers on the 68th and 69th floors offer ideal office space for medium and short-term rentals.

The equipment aside, China Center takes more pride in the “soft power” accumulated during Vantone’s years of success and failure in New York. Feng explained that about a dozen internationally-recognized professional service providers will collaborate with China Center to provide tailored services for companies including international acquisitions, international tax consulting, legal consulting, high-end public relations and investor relations, as well as property transactions.

“A Beautiful Woman Wearing Invisible Make-Up”
Feng once said that he does not want China Center to be simple office space within the World Trade Center building; it should present a new image of the current and future China. Therefore, China Center was founded on the creative ideas of Chinese artist Zhou Wei, and top Japanese design architect Kengo Kuma was invited to build the Folding Garden within the skyscraper.
Feng and his design team treated the five and half floors of China Center as an integrated space, punching huge holes in the flooring of three floors, so that all five floors are connected, allowing the Folding Garden to distribute the garden space vertically.

“We hope that this will feel like China even if you close your eyes. You only need to touch it, and not necessarily see it, to know that this is China. When you open your eyes, you won’t see simple Chinese symbols; we are pursuing the spirit of China, instead of a simplified and symbolic China. It’s difficult, like a beautiful woman wearing invisible make-up,” said Feng.

“I Am a Competitive Man”
Having experienced American suspicion, rejection, and eventually acceptance, as well as the process of constructing, designing, and operating China Center over the last ten years, Feng believes that his persistence “comes from a deep sense of mission.”

Feng said that, perhaps it was historical coincidence, but during the negotiation for 7 World Trade Center, the then Governor of New York spoke about the British building a British Center in America when Great Britain was at its strongest. The Americans then built American Centers all over the world. Later, the Japanese purchased Rockefeller Center and the Germans built German Centers and Goethe Institutes around the world. Later, in 2008, when the financial crisis swept the US, China started to build a China Center in New York, a move that was foreshadowed by these previous centers. Then, in 2010, China’s GDP exceeded that of Japan and officially became the world’s number two economy.

Why did it have to be the World Trade Center? “The property business is about choosing space,” Feng said. A unique and dominant space is most valuable. For example, in New York, the reconstructed World Trade Center has become a historical landmark and a tourist hotspot; 95% of visitors to New York will visit the World Trade Center. Around two million Chinese people visit New York each year and more than half of them will visit the World Trade Center. Therefore, the World Trade Center has the highest commercial value.

Why persist after so many setbacks? “I am a competitive man,” said Feng jokingly. Running a property project in an economically-developed city like New York helped him to understand the US business model; the reconstruction of the World Trade Center featured a high-density skyscraper with 1 million m2 of space on a mere 15 hectares. The building required a total investment of $36 billion and additional anti-terrorism and technological support. Vantone’s involvement in such a grand project was enormously beneficial. “Vantone understood all this. Our vision has changed dramatically, which has significance for Vantone’s healthy development and its potential for becoming one of the world’s top companies.” Feng said that if China Center worked well in New York, he might build China Centers in international cities such as London and Tokyo.

Operation is the Bigger Challenge
Feng Lun admitted that, even compared to the difficult negotiations with the Americans, the operation of China Center is the bigger challenge. “The property business in China usually means constructing a building and selling it; it’s simple. However, providing tailored services to a special clientele for the 20,000m2 China Center located in an important building is a huge challenge for us.”

Therefore, from more than two hundred managers recommended by headhunters, Feng chose an Australian, forty-one year-old Jonathan Heath, to realize his “grand dreams.”

“This really is a challenge,” said Heath, who has many years of experience in the high-end service and luxury industries. As China Center is a unique, high-end business space that blends Chinese and American culture, there is currently no available business model to reference. Therefore, in mid-May, Heath will travel to China for an in-depth cultural tour. In addition to gaining an understanding of Chinese culinary culture, Heath will study the consumption behavior and standards of the wealthy. This detail-oriented Australian will bring top Chinese cultural products to China Center; even the employee uniforms and cutlery designs will reflect the height of creativity and taste.

“In addition to top-quality Chinese cuisine, here you can also experience the art, fashion, and films that represent the most avant-garde and high-end cultural experiences,” said Heath. The reconstruction of the World Trade Center was itself a lively topic and so China Center in the World Trade Center will become the first stop for Chinese entrepreneurs.
Heath told this reporter that the virtual offices in China Center can help companies take phone calls and receive mail; when business representatives need to hold meetings, conference facilities can be provided for clients. Most importantly, China Center is the first tenant of the World Trade Center. “This year, our members can print One World Trade Center on their business cards as an office address; this address is the best in the world.”

Part II
Feng Lun: Chinese People Should Buy “Affordable Planes”

Due to the operation of China Center and his various business activities, Feng travels between Beijing and New York frequently. “I flew more than 180 times last year, often on a corporate jet.” Feng told the reporter for BizJet Advisor.

Feng admits that he still usually takes normal commercial flights; however, if he stays longer overseas, for ten to fifteen days, he rents a corporate jet for convenience, especially in the US, where the service is provided by professional companies that fly anytime.

Feng often hires corporate jets such as the Gulfstream 450 or the Bombardier Challenger 850. “I don’t actually have a strong personal preference, as long as it serves the purpose. My secretary books it for me when I need one.”

As more Chinese enterprises begin to purchase corporate jets, Feng thinks that Chinese people should return to buying “affordable planes,” just as the Chinese government is promoting the construction of affordable housing.

“Today, people compete with each other using expensive purchases. However, I think that a corporate jet for flying in China would be less than US$200 million. With a high quality to price ratio, there is no need to buy something too expensive or too large.” Feng commented that if he needs to travel overseas, he can take a commercial flight, then hire a private jet, which is more affordable.

Feng also considered co-owning a plane with five to eight other people, then maintain the plane around the owners’ flight schedules. Although this can significantly reduce maintenance costs, flight schedule conflicts can arise.

Many of Feng’s friends have purchased corporate jets. Currently, there are two extremes; at one extreme, the owner purchased a corporate jet, which he seldom flies, as “one flight costs 500,000”, so the owner would rather buy his employees first class tickets on commercial flights to meet at his office. The other extreme is that the owner flies the plane everyday as the jet costs money even if left idle on the ground.

“So far, private owners of listed companies seldom purchase corporate jets in China,” said Feng Lun. For executives at listed companies, buying a corporate jet might elicit criticism from shareholders and so shareholders’ interests must be given priority. Therefore, executives will be cautious about purchasing corporate jets.

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