South Kore­ans find­ing their Seoul mate in L.A.

City’s eth­nic Korean pop­u­la­tion has helped draw cash

Los Angeles Times - - Business - John M. Glionna and Ethan Kim

The en­trepreneurs in Seoul wanted to cash in on the grow­ing health craze with a world­wide res­tau­rant chain fea­tur­ing a mod­ern twist on tra­di­tional Korean cui­sine.

The lo­ca­tion of their flag­ship store was a no-brainer — Los An­ge­les.

They viewed the city as wealthy, mul­ti­cul­tural and com­plete with a ready-made Korean Amer­i­can clien­tele.

In West­wood this month, they opened Bibigo, which spe­cial­izes in bibim­bap — a mix of veg­eta­bles, rice, beef, egg and chili paste served up with McDon­ald’s-style speed and con­sis­tency.

The eatery is rid­ing the lat­est Korean wave of in­vestors ea­ger to tra­verse the cul­tural bridge that con­nects Los An­ge­les and Seoul.

“We’re try­ing to play catch-up with Ja­panese sushi and Thai noo­dles,” said Moo Jong Kim, a spokesman for CJ Foodville, Bibigo’s par­ent com­pany. “But we’re go­ing to get there.”

Dur­ing a three-nation trade tour of Asia, Gov. Arnold Sch­warzeneg­ger this week high­lighted two SouthKorean com­pa­nies in­vest­ing in Cal­i­for­nia and Los An­ge­les. Korean Air Lines Co. is build­ing a $1-bil­lion ho­tel, of­fice and re­tail com­plex on the site of the ag­ing Wil­shire Grand ho­tel. And Hyundai Mo­tor Co. is in­vest­ing $150 mil­lion to up­grade its Orange County fa­cil­i­ties.

But there are also scores of small and mid-size South Korean com­pa­nies that are pump­ing tens of mil­lions

of dol­lars an­nu­ally into the flag­ging South­ern Cal­i­for­nia econ­omy.

Cal­i­for­nia ranks as South Korea’s ninth-largest trade part­ner. And South Korea is cur­rently the 11th-largest source of for­eign-owned and af­fil­i­ated com­pa­nies in Los An­ge­les County.

The Asian nation also was ranked the ninth-largest source of em­ploy­ment among for­eign coun­tries — pro­vid­ing 2,200 jobs and $126 mil­lion in an­nual wages in the state in 2007 — ac­cord­ing to a study re­leased last year by the Los An­ge­les County Eco­nomic Devel­op­ment Corp.

But ex­perts pre­dict that South Korea’s eco­nomic foot­print in Cal­i­for­nia is about to ex­pand in a big way.

“It’s go­ing to be crazy,” said Ed­ward Park, a so­ci­ol­o­gist at Loy­ola Mary­mount Uni­ver­sity who spe­cial­izes in Asian Amer­i­can stud­ies. “With its jug­ger­naut ex­port econ­omy, South Korea is flush with cash. Its trade sur­plus for July 2010 was $5.6 bil­lion. And some of that money is com­ing to Cal­i­for­nia.”

Los An­ge­les, home to the largest num­ber of Korean res­i­dents out­side the Korean penin­sula, pro­vides a soft land­ing for much of that in­vest­ment. An­a­lysts say for­eign in­vestors of­ten like to send ini­tial cash out­lays to places with a per­sonal or cul­tural con­nec­tion.

“It’s much eas­ier for South Kore­ans to in­vest in Los An­ge­les,” said Gi-wook Shin, di­rec­tor of the Korean Stud­ies Pro­gram at Stan­ford Uni­ver­sity. “There is al­ready a well-es­tab­lished cul­ture and mar­ket there. If they go to places like the Mid­west, there is much more risk in­volved.”

South Korean in­vest­ment in the U.S. got a ma­jor boost in 2008 when the fed­eral govern­ment de­cided to no longer re­quire visas for vis­it­ing South Korean citi- zens. The move has al­ready shown re­sults.

For the first six months of this year, some 450,000 South Kore­ans en­tered the U.S., a 38% rise over the same pe­riod last year. The U.S. is the third-most-pop­u­lar des­ti­na­tion for South Kore­ans, af­ter China and Ja­pan.

“There’s been a sea change — South Korea now joins na­tions like Ja­pan and Singapore with such priv­i­leges,” Park said. “For Asian na­tions, it’s the most ex­clu­sive club you can join.

“That means South Korean in­vestors will come to seize the op­por­tu­nity of this qual­i­ta­tively dif­fer­ent re­la­tion­ship be­tween South Korea and the U.S., and be­tween Seoul and Los An­ge­les.”

Cal­i­for­nia La­bor and Work­force Devel­op­ment Agency Sec­re­tary Vic­to­ria Brad­shaw, who ac­com­pa­nied Sch­warzeneg­ger to South Korea, said the coun­try is on the state’s in­vest­ment radar.

“There are all kinds of Korean ven­ture cap­i­tal funds in­ter­ested in find­ing biotech and high-tech part­ner­ships in Cal­i­for­nia,” Brad­shaw said. “Re­cent changes in Korean law al­low for this kind of in­vest­ment, which we want to see come to Cal­i­for­nia.”

Dur­ing the gover­nor’s re­cent visit, the Los An­ge­les Cham­ber of Com­merce hosted a sem­i­nar in Seoul de­signed to ad­vise small busi­nesses on how to break into the Cal­i­for­nia mar­ket.

Govern­ment an­a­lysts, lawyers and in­surance bro­kers pro­moted the city and the state as a mul­ti­cul­tural des­ti­na­tion for for­eign in­vest­ment. They pointed out that 20% of all Cal­i­for­ni­ans were born abroad, that the state is the largest re­cip­i­ent of for­eign in­vest­ment in the U.S. and that 500,000 work­ers in the state are em­ployed by for­eign-owned com­pa­nies.

The ap­peals also got per­sonal. One lawyer ex­plained that his son went to school with South Korean class­mates and at lunch traded his mother’s home­made sand­wiches for kim­chi.

South Korean na­tive Peter Kim also told the group how he ar­rived in South­ern Cal­i­for­nia 30 years ago with $5,000 that he later par­layed into mil­lions in busi­ness prof­its.

He raised eye­brows with some in­sider ad­vice: Don’t mess with the IRS.

“If you are caught by them you are dead,” he said. “You can go to the end of the Earth and they will find you. Un­til you are dead they will hound you.”

In the back row, small-busi­ness man Park Sanchun said he was in­tim­i­dated by mov­ing in­vest­ment money across the Pa­cific. “Ev­ery­thing scares me,” said the 32-year-old, whose fam­ily runs an adult di­a­per busi­ness.

He was study­ing English and said he planned to net­work with more than just Korean speak­ers if his com­pany makes the move. “You are a busi­ness­man, not just a Korean busi­ness­man,” he said.

But money from Seoul has caused ten­sion in Los An­ge­les’ Kore­atown, an­a­lysts say.

“It’s hav­ing a hugely dis­rup­tive im­pact,” Park said. “If you’re a res­tau­rant owner there, you’re run­ning scared, be­cause the South Kore­ans bring a more au­then­tic, more ex­cit­ing brand of Korean food.

“Many Korean Amer­i­can own­ers see the writ­ing on the wall — they know they have to step it up or be pushed out,” Park said. “But contractors and other busi­nesses are ready to cater to this new in­vest­ment. Given the tough econ­omy in L.A., they’re all happy as clams.”

Moo Jong Kim of Bibigo said that an in­flux of com­pe­ti­tion shouldn’t be feared.

“The way we see it, any new Korean in­vest­ment into L.A. and Cal­i­for­nia just helps spread Korean cul­ture,” he said.

“This way, ev­ery­body wins.”

Francine Orr

Los An­ge­les Times FOOD, FAST: Christina Yi serves cus­tomers dur­ing the lunchtime rush at Korean res­tau­rant Bibigo in West­wood. Its in­vestors in Seoul saw Los An­ge­les as an ideal place to launch their eatery con­cept.

Matt Douma

For The Times OR­DER UP: One of the Korean dishes served at Bibigo. Cal­i­for­nia is South Korea’s ninth-largest trade part­ner.

VISIT: Gov. Arnold Sch­warzeneg­ger is joined by Hyundai Chair­man Chung Mong-koo, left, and South Korean of­fi­cial Jung Il-young in Cheo­nan.

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