South Koreans finding their Seoul mate in L.A.
City’s ethnic Korean population has helped draw cash
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.”
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.
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.