Real estate developer Frank Jao and silent partners have put $10 million into projects in his former homeland, suggesting a sea change in political climate.

BIG PLANS: Frank Jao shows his rendering for a development project in Vietnam. Jao is known as the Godfather of Little Saigon because he built many of the landmark malls on Bolsa Avenue. On the wall behind him are projects from the United States.

The Orange County Register

Frank Jao fled Vietnam in 1975 to escape communism and seek his fortune in Orange County.

Now, after becoming the biggest developer in Little Saigon, Jao sees Vietnam as a new land of opportunity – a suggestion that once would have drawn death threats from some anti-communists.

Jao is putting his money where his mouth is. For the first time after three decades in exile, he is investing in his homeland.

“Vietnam is geared up. It’s a good buying opportunity,” Jao, 60, said this week in the Huntington Beach offices of Bridgecreek Development, which has built$400 million worth of projects.

So far, Jao said, he and silent partners have invested about $10 million in two projects. If those go well, he plans to assemble a $100 million private fund for future investments in Vietnam and China.

The investments by Jao – often called the “Godfather of Little Saigon” because his shopping malls helped turn Bolsa Avenue into the Main Street of the largest Vietnamese community outside Vietnam – show how attitudes and economics have changed.

A few years ago, advocates of trade with Vietnam faced boycotts, death threats and denunciation as communist collaborators. When Dr. Co Pham, a physician who headed the Vietnamese-American Chamber of Commerce, proposed opening trade ties in 1994, he would wear a bulletproof vest when he went out in public.

“Frank has always been cautious about his overseas activities,” said Jeffrey Brody, a Cal State Fullerton professor who teaches a course on the Vietnamese-American experience. “If he is openly investing in a project in Vietnam, it’s a sign that the political climate has changed. It’s also a sign that Vietnam is seeking investment from the overseas Vietnamese community and that the overseas Vietnamese trust the government enough to invest millions of dollars.”

Tony Lam, a Vietnamese refugee and former Westminster councilman, said it’s no surprise that Jao is investing openly in Vietnam.

“The people are fed up with anti-communism,” Lam said. “Products from Vietnam are all over here. The people are used to it now.”

Ky Ngo, a Little Saigon community activist who led several protests against Lam and others he accused of being communist collaborators, said he no longer attacks people for simply trading with Vietnam.

But Ngo accused Jao of a different type of collaboration: using a 2002 appointment by President Bush as chairman of the board of the Vietnam Education Foundation to further his personal business interests.

“People aren’t mad about him doing business with Vietnam, but we’re upset he’s using his title with the U.S. government for his benefit,” Ngo said.

Jao said there’s nothing wrong with doing business while also serving on the board because he never uses foundation resources to do business. He said critics like Ngo won’t deter him from investing where he wants.

Controversy has followed Jao before. His mother’s Chinese ancestry and the Chinese architecture of his projects fueled questions about his loyalty to the Vietnamese community, criticisms he dismisses.

“I’m entitled to do business like any citizen,” Jao said. “I am a business entity, so I have to behave like a business entity. I am a U.S. citizen. I can’t be bound by the rules and regulations of the Vietnamese community.”

Incentives to invest in Vietnam are growing as its economy gears up. Vietnam is on track to join the World Trade Organization by November, when it hosts the Asia-Pacific Economic Cooperation conference, a summit that will bring 21 heads of state to Hanoi, including Bush.

The International Monetary Fund forecasts 7.8 percent growth for Vietnam this year, leading IMF Chief Economist Raghuram Rajan to call Vietnam an “emerging China.”

Vietnam’s Ministry of Planning and Investment reported $5.15 billion in direct foreign investment in the first nine months of 2006, up 26 percent over the same period in 2005.

Jao’s first investments are a Hanoi-based media company and a food-processing complex outside Ho Chi Minh City, the former Saigon.

Phase I of the Binh Dien Food Distribution Center is under construction, Jao said. The mixed-use complex, which Jao expects to be complete in four years, will employ 25,000 to 30,000 food-processing workers and house 2,100 families.

Jao said his U.S. investment syndicate will own 29 percent of the project.

He also runs another type of company, which only overseas Vietnamese can own, that will control 41 percent of Binh Dien, giving him control of a total 70 percent stake in the enterprise.

Through a private equity company called V-Home Group, Jao owns a minority stake in Vietnamnet, a media subsidiary of the state-owned Vietnam Post & Telecommunications Corp.

“Our goal is to do TV broadcasts, cell phones, Internet and cable,” he said.

V-Home Group also bought a stake in a company called EMHI, which controls the master license for Walt Disney Corp.products in Vietnam. In May, Jao was named as vice chairman of EMHI’s board.

The search for opportunities in Vietnam started in 1988, and Jao said he’s returned to his homeland several times without finding the right deals until this year.

Vietnam’s previous lack of transparency, its capricious bureaucrats and its hurdles against repatriating profits still concern Jao. But U.S. government-sponsored insurance policies through the Overseas Private Investment Corp. give him confidence he won’t lose everything. In some ways, Jao said, development is easier in Vietnam than California.

“Here, it takes two or three years to get a building permit,” he said of Orange County. “In Vietnam, it’s six months to get a permit, and the speed of construction is three times faster.”

Jao, whose local developments include the Asian Garden Mall and Asian Village, among other projects in Little Saigon, continues to build there. He plans to break ground this fall on Saigon Village, a $100 million, 144 condo project for seniors on Moran Street near Bolsa Avenue.

“This is part of our global strategy,” Jao said. “The recent decline of the real estate market in the U.S. is a concern, but it’s not unexpected. Nothing keeps going up forever. Real estate in China and Vietnam has shot up for five years, and we don’t expect that to go on forever.”

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