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Vandercar Holdings set for huge Chinese development Business Courier of Cincinnati - by Dan Monk Senior Staff Reporter

Cincinnati development company Vandercar Holdings Inc. hopes to break ground in July on a technology park of up to 330 acres in central China.

A 33-acre first phase will include $100 million in new data centers, office buildings, apartments and recreational facilities in Zhengzhou, a city of 7 million people and the capital of Henan province.

If the project goes as planned, $350 million will be invested in the next five years, said Jeff Holtmeier, chairman of the Oakley-based real estate company known for big-box retail developments and the Corridor 75 logistics park in Monroe.

Holtmeier and Vandercar founder Rob Smyjunas formed a joint venture last February with Unis-Tonghe Technology Co., a state-owned enterprise affiliated with Tsinghua University of Beijing. The Cincinnati investors will be 49 percent owners of the joint venture, which recently received a land certificate from Henan’s provincial government and is close to lining up financing, Holtmeier said.

Overtaking India
A master plan for the technology park, developed by GBBN Architects Inc. of Cincinnati, involves four superblocks of housing, recreation and commercial space. Each block includes a man-made lake. When viewed from above, the water feature spells the company name, Unis.

“(China’s) intention is, in the next five years to overtake India as the world’s leading IT outsourcer,” Holtmeier said. “They have the infrastructure. They have the capabilities in terms of engineering talent. They have the cost structure. Once they overcome the language barrier, they will likely become a world leader in software development.”

Holtmeier is best known as the founder of Phoneland, a Cincinnati telephone systems provider that changed its name to InfiNet before Holtmeier sold it in 2000. He has pursued technology deals in China for several years, promoting new Chinese connections with American firms. One deal he helped to forge is a joint venture, announced in January, between Unis-Tonghe and MMR Information Systems Inc. of Los Angeles. The medical records company will deploy a customized version of its software for the Chinese market.

Last year, Unis-Tonghe Vice President Luo Jianhui invited Holtmeier to help him develop a technology park that would house data centers for Chinese government clients and cultivate U.S. and European customers for IT outsourcing. Holtmeier invited Smyjunas into the deal.

“I always call them brother,” Luo said during a recent visit to Cincinnati. “We built deeply a friendship between us. Their friendship let me understand more about the United States.”

‘The Chinese are less transactional’
GBBN partner Kim Patton said the selection of a Cincinnati developer for a project 7,000 miles away isn’t as unusual as it might seem.

“The Chinese are less transactional than we are,” said Patton, who manages GBBN’s Beijing practice, which accounts for about a third of the firm’s revenue. “Most of my relationships there have at least four or five reasons why you’re doing business together. So, my guess is that Jeff has a good relationship with this individual. If it’s just about doing a job in China they’d probably pick a Chinese developer.”

Unis-Tonghe is a unit of Tsinghua Holdings, which Holtmeier describes as the “Hewlett-Packard of China,” with an estimated 25,000 employees. Zhengzhou was chosen as an ideal site for data centers, Smyjunas said, after the Sichuan earthquake in 2008.

“The government did a study on disaster back up capabilities,” said Smyjunas, best known for the Center of Cincinnati retail center in Oakley. “Zhengzhou was identified because it’s the center of all the Internet broadband pipes and it doesn’t have fault lines and flooding.”

Zhengzhou is the second-largest city in central China with an estimated 300,000 university students and logistical advantages that come from its designation as a major hub on China’s growing high-speed rail network.

The joint venture partners are in the process of raising $15 million from capital sources in the U.S. and China, Smyjunas said. He expects the $100 million first phase to be financed in stages, with the first building constructed, leased and then sold to raise capital for the next structure. At this point, the group only has government commitments for a project of up to 100 acres. But if the build-out is successful, the partners expect the government would authorize another 230 acres for future development.
“There’s a tremendous amount of opportunity in China,” Holtmeier said.
http://cincinnati.bizjournals.com/cincinnati/stories/2010/03/15/story2.html?b=1268625600%5E3018681