Old Ties to S. Korea Pay Off for U.S. Architect : Culture: A long professional relationship proves worthwhile when Asian construction firms became interested in U.S. projects.

William E. Swank Sr.’s Korean business connection began in Bahrain 19 years ago. The California architect was in the Mideast working on the Diplomat Hotel at the same time that big Korean construction firms were undertaking huge projects in the area. Swank came to know and respect the Korean firms, particularly Hyundai Engineering & Construction Co., which managed to build a dry dock despite material shortages and skyrocketing costs.

“I was most impressed by their work ethic. They were obsessed with performing on time. Hyundai was willing to come in with whatever was necessary. They had a shipping line. They built a temporary dock, a cement factory.”

That early admiration turned into a professional relationship when Swank went to work for Hyundai on its Mideast projects. “A lot of the stuff in the Mideast was 180 degrees different than Korean courtesies and niceties. . . . I was known as a firefighter, as one who knew Korean capabilities,” Swank explained during a recent interview in Anaheim.

That was the beginning of Swank’s long relationship with Korean business interests, which have proved most worthwhile upon his return to the United States from South Korea and China in 1985. He has succeeded in linking up with Korean firms in joint ventures for U.S. construction projects. His experience, Swank surmises, “enabled me to leap over whole issues of capability and cultural issues.”

He was a minority partner with Ssangyong Construction in developing the $20-million, 200-suite Marriott Residence Inn in Anaheim that opened earlier this year. The Korean firm, which has offices in Garden Grove, is part of Ssangyong Group, one of South Korea’s giant family-owned conglomerates known as chaebols . Swank was initially involved with, but later dropped out of, another Ssangyong project, a Residence Inn in San Diego, which opened last month.

He is now at work on a $15-million, 140-suite “extended-stay” hotel, a joint venture with Byucksan America, a U.S. subsidiary of another Korean conglomerate. The hotel will be managed as a Residence Inn by Marriott Inc. Swank says he is also working on a 252-acre, $120-million golf course/condo project for Palm Desert with private Korean investors, whom he declined to identify because the deal is not complete.

Swank credits his new business ventures to his previous ties with Korean businessmen. They, like other Asian businessmen, value long business relationships. Swank and his 33-year-old son, William Jr., initially had developed the concept for the Anaheim Residence Inn with S. H. Cho, a former Hyundai executive who now lives in New Jersey.

Then Swank received a phone call from S. Joon Kim, president of Ssangyong Construction Co. “I don’t know how S. Joon Kim got my name. He called me. I knew of him. He called from Century City. We met at the Hyatt in Anaheim that same day and went out to visit the construction site where there a big sign with blank space for the name of the general contractor.

“He said, ‘I’d like Ssangyong’s name on that sign.’ We made a handshake deal within 10 minutes. They had checked me out. I knew the capabilities of the Koreans and their work ethnic, so without prolonged discussion or debate we could decide OK, let’s go do it. I knew there would be some difficulties along the way, but I knew we could do it.” Ssangyong took a 70% interest in the venture.

Swank, who says he understands some Korean but doesn’t speak the language, said he figured that the Anaheim project was “big enough to be proud of it, but small enough to minimize the risks so we could do it.” It also provided Ssangyong, which had developed the Bayview Plaza Shopping Center in San Francisco, an opportunity to learn a different segment of the U.S. construction business. The Korean company sent two employees from Seoul but used local subcontractors on the Anaheim project.

Korean construction firms are interested in U.S. investments and projects because rules for investments abroad were recently liberalized in South Korea. Ssangyong, with the experience of three completed U.S. projects, has a head start over most other Korean construction firms in learning to how to analyze and assess U.S. projects.

Swank says some U.S. interests see the Korean capital as an immediate gold mine. However, they send poorly conceived project proposals, mistaking the Korean firms’ lack of U.S. experience for lack of construction knowledge and sophistication.

“We used to get all kinds of proposals, from the ridiculous to the sublime. They would say, ‘All you have to do is put out $300 million’. . . . 95% of them were just trash. All they had were ideas.”

He said many Korean construction firms want and need to learn about the U.S. construction business. “They don’t completely understand the construction business in the United States. No one will hire them as a general contractor without experience. They have to hone their development skills. You can’t take someone who is reasonably successful in the Mideast or Korea and send him here and expect him to be reasonably successful, because he has no background here.

“My advice to anyone wanting to be involved with Korean firms is to search out the smaller firms, select a project modest in size to make sure you will have a successful project because everyone is trying to take too big a bite,” Swank said. “You should try to establish a high level of communication, perhaps through a Korean attorney or bank, so you can present a project at an appropriate level.

“Korean firms are searching, American firms are searching. Both are wandering around in the dark. If they just met, they could be a success. The fact that I knew a lot of people helped a lot. You have to search out intermediaries to meet with senior people in Korea, have references on all that you’ve done.”

Patience, he added, is important. “I don’t push. Don’t try to assume that your Korean counterpart is receiving and understanding everything. . . . You have to give them time to clearly understand.” Completion and success of a project are more important than an American’s percentage in a project.

Last, “When there is a problem,” he said, “solve it without noise. ‘Noise’--that’s a word used a lot.”