Two Atlanta lawyers recently helped their clients—one based in China and the other based here—ink a lease agreement on nearly 14,000 square feet of space in Atlantic Station.
Jones Day lawyer R. Mason Cargill assisted business incubator Chinamex in establishing a U.S. subsidiary and negotiating a 7-year, 10-month lease to house its new North American headquarters here. The lease was signed in mid-December, with Philip G. Skinner of Arnall Golden Gregory representing Atlantic Station.
Chinamex, a private Beijing-based company which helps other Chinese firms expand overseas, is the brainchild of parent company Chinamex Middle East Investment and Trade Promotion Centre, which already has established other business outposts in Amsterdam, Netherlands, and Dubai, United Arab Emirates.
Cargill said that Atlanta, thanks to good marketing and lots of personal attention from the Metro Atlanta Chamber of Commerce, won out over San Francisco as the incubator's U.S. headquarters. Chinamex, he said, plans to exhibit products manufactured by companies in the Hubei Province and its capital city, Wuhan, which has a population of about 10 million and is about an hour by air from Shanghai. Chinamex also will offer consulting and temporary office space and will help Chinese companies that want to deal more directly with the U.S. market to set up operations here, primarily for marketing their products.
Cargill and Skinner both said that U.S. leases are longer and more complex than leases in China, which meant that Chinamex officials had a lot of questions about the provisions and that negotiations took a bit longer than they might have with a U.S. tenant. Also, Skinner said, leases for mixed-use projects like Atlantic Station are by nature more complex than for free-standing office buildings because they involve covenants governing how a project can be developed and used and who pays for services that are used by the whole project.
Although Atlanta has been courting Chinese business for some time—Cargill was part of a prospecting trip to China, along with then-Mayor Shirley Franklin and the Metro Chamber in 2006—East-West business hasn't yet taken off in a big way here. The Atlanta-Journal Constitution reported that four much-promoted Chinese investment projects announced in the past three years have yet to come to fruition. These stalled projects include Kingwasong LLC's plans to produce soy sauce in Newnan and construction equipment manufacturer Sany Heavy Industry Co.'s plans for a $30 million investment in Peachtree City.
Still, Cargill—who spent several years in his firm's Shanghai office—said he thinks business relations will someday blossom between Atlanta and China. Developments are slow now because of the economy, he said, and because Chinese companies don't have the same incentives that Japanese companies had to set up operations here—namely, a cheaper work force than was available at home.
Still, he said, “I'm very optimistic. … I think it may be a slow process. A gradual process, but I think it'll happen.”