Tung Chee-hwa’s multibillion-dollar gift to the US
The American consulate in Hong Kong sits on prime land and the city’s former chief executive gave Washington an unprecedented 999-year freehold lease
United States President Donald Trump prides himself on being an astute property mogul. His critics think otherwise.
Now, he has an opportunity to prove his enemies wrong; and it doesn’t even involve any conflict of interest. He can easily make a lot of money for his country in a property deal of the century, at least in Hong Kong – at our expense. My guess is that he will soon press the US Department of State to sell the prime site on Garden Road, Central, currently occupied by the US consulate. American diplomats and spies, get ready for humbler offices!
Apparently, the post-handover government of Tung Chee-hwa allowed the Americans to convert an old restricted land lease into a freehold lasting for 999 years from 1950, for just HK$44 million, in 1999. Today, at 308,595 sq ft of gross floor area, it could easily sell for HK$7.7 billion as a five-storey building, but probably much more if the plot ratio is relaxed.
For details about the lease changes dating back to the last mid-century, go to the website of David Webb, the intrepid corporate governance advocate who has done some serious digging into the matter. The Garden Road site, wrote Webb, is probably “the longest leasehold property in all of China”.
You wouldn’t be surprised that Tung also gave Hong Kong Disneyland a 75-year lease renewable for another 75 years.
OK, it’s nowhere nearly as good as the deal with the US consulate, but still a preferential one when everyone else was getting just 50 years – the time span of “one country two systems” under the Basic Law.
How did Tung and his lieutenants come up with those terms? Did they volunteer or were they pressured by the Americans? Did the central government approve of it at the time?
The exact leasehold conditions were reportedly hidden from the public and would not show up in a cursory search at the Land Registry.
Tung prides himself on being a friend of the Americans and positions himself as a bridge between China and the US.
His China-United States Exchange Foundation, founded in 2008, is set up for that express purpose. Sadly, some investigative reporters in the US – fake news? – have claimed it is part of a communist united front to fund and influence American scholars, researchers and policymakers to develop positive views of China.
If only they knew what a friend he has been of America!