China’s official state-sponsored international investment company has pledged to invest at least $100 million into a billion-dollar-plus development in Niagara Falls, Ont.
The real estate arm of CITIC Ltd. announced that it will invest the money in a planned mixed-use housing and entertainment venture proposed for 484 acres west of Marineland and near the Thundering Waters Golf Club. In doing so, officials said the firm would become a shareholder in the ambitious project, raising the possibility of further investment in the future.
Specific details of the project by China-based developer GR Investments Co. Ltd., which has already acquired the land, have not been finalized or divulged. But Niagara Falls Mayor Jim Diodati, who has been involved in talks with the group, said it will be a combination of housing, business and commercial use, time-shares, marinas on the Welland River and a health spa. There will also be an “innovation” area to encourage incubation and commercialization of Chinese research and development, since the project will be located near an existing industrial park.
Public meetings have already been held, and Diodati said city officials will work with the developer to shepherd the project through the planning process, which will likely take until the end of 2018 before any construction is done. “A lot of it is conceptual. It starts with a vision, and this is the vision,” he said. “It’s a big project, with big bucks. So it’s not something that happens instantly. It takes a lot of planning.”
Nevertheless, he stressed that the project appears to be real, noting that the developers “already have quite a track record in China for some top-notch developments.”
“It’s significant in that it’s not land they have options on. They’ve already purchased it,” he said. “They’ve already spent several million dollars.”
The announcement in Beijing by CITIC, alongside government officials from Canada, represents a major investment in Canada by a foreign sovereign fund, as well as an endorsement by the Chinese government that will lend confidence to other investors in the project, said Diodati, who flew to China for the announcement. He was accompanied by two other Niagara Falls officials, and the Ontario premier and Canadian ambassador to China were also present at the announcement, along with a “room filled with prospective investors.”
“It was important to see CITIC there with the private investors and the premier of the province and our ambassador to China, to have us all in the room endorsing and supporting this type of global investment,” Diodati said. “This will give a lot of confidence to other prospective Chinese investors when the government is in. It was great news, well worth the trip.”
Originally founded by the government in 1979 as China International Trust and Investment Corp., CITIC Ltd. is one of the largest companies in the Hang Seng Index, and is listed on the Hong Kong Stock Exchange. It’s one of the largest conglomerates in China, with more than 120,000 employees in businesses spanning financial services, resources and energy, manufacturing, engineering and contracting, real estate and infrastructure. Fortune magazine ranked it in 2014 as the 160th largest corporation in the world. It is 78 percent owned by CITIC Group Corp., which is fully owned by the Chinese Ministry of Finance.
Its original purpose was to facilitate both domestic and foreign investments as part of China’s efforts under Deng Xiao-ping to reform and open up the country’s economy. It partnered with foreign companies for investments within the country, issued China’s first foreign-currency bond in 1982, and listed a subsidiary, CITIC Pacific, on a public stock exchange in 1991. It was reorganized and renamed in 2002 and again in 2011 and 2014, when it took its current form.
Now CITIC is pursuing a path of more overseas investment, and the Niagara Falls project is part of that new Invest Abroad initiative, Diodati said.
“They want to use Niagara Falls as their launchpad for further investment,” he said.
“They love Niagara Falls. It’s a huge, iconic, global brand.”