Lancaster Mayor R. Rex Parris has a big business dream: China
The city of Lancaster has few Chinese restaurants. Its mayor cannot use chopsticks. And he has tried and failed to learn Mandarin.
But that doesn’t stop R. Rex Parris from dreaming of creating an oasis for Chinese investment in this Mojave Desert town.
The mayor has taken numerous trips to China, wooing corporate leaders and government officials with his business-friendly ways. He talks boldly of opening a trade
office in Beijing just for Lancaster, much like the one that California opened this year in Shanghai. And he even hopes to build a Buddhist temple in town to attract Chinese residents.
This might sound a little ambitious for a city tucked into a dusty corner of Los Angeles County not exactly known as a beacon for international commerce. But Parris’ plan might just be working.
“Hopefully, Lancaster will become the largest Chinese corporation area in California,” Parris, 61, said during an interview at an Italian restaurant in town. “How cool is that? The little town of Lancaster.”
The city scored its first victory this year by persuading Chinese automaker Build Your Dreams to open an electric bus factory and a plant for building batteries. City officials hope that it could bring 1,000 jobs and millions of dollars in sales taxes in the next few years.
The company, known as BYD, has won contracts to build 10 buses for the Long Beach transit agency and as many as 25 for the L.A. County Metropolitan Transportation Authority. It is pursuing other contracts in the U.S., Canada and South America, and already plans on adding dozens of workers to sustain the ramp-up in production.
But the company has already run into issues with its California operations, including a state investigation of its labor practices and quality issues with its buses.
The state’s Department of Industrial Relations opened an investigation into workplace issues last month, and on Oct. 10 issued five citations, ordering the company to pay $79,250 in fines and nearly $20,000 in back wages for violations involving 22 employees.
The agency found BYD had failed to pay minimum wage to some employees at its Los Angeles headquarters and Lancaster factory and had failed to give Lancaster workers a second rest break during their shifts as required by California law. The company was also cited for issuing itemized wage statements containing “inaccurate or incomplete” information and for failing to give some employees statements twice a month.
A spokeswoman for the industrial relations department said the investigation is ongoing.
BYD Vice President Micheal Austin declined to comment on the investigation. Parris said there had been questions as to whether BYD’s Chinese employees were subject to Chinese or U.S. labor laws. He said BYD hired a labor lawyer who will audit the company’s practices to make sure they comply with all state and federal laws.
“It’s really minor, the problem,” said Parris, who owns a law firm that handles employment cases, among others. “My understanding is these are easy fixes.”
BYD’s Long Beach contract drew fire from critics who thought it should have gone to a U.S. company, or at least one that had built buses in the United States before. The project ran into issues in July when a bus developed cracks while going through federal safety testing; Long Beach transit inspectors subsequently found welding issues in frames built at a BYD factory in China.
Austin said that testing is intended to find problems in order to fix them before any buses actually hit the road.
“It’s a process. Everything is solvable,” he said. “None of their audit findings are showstoppers.”
Despite the issues, Parris remains upbeat about BYD, and hints at negotiations with another Chinese company that he said is “much bigger in scope” compared with BYD. A deal could be announced within the next year, he said.
A lot of money is up for grabs: Last year, Chinese firms invested $6.5 billion in the U.S., up 12% from 2010, according to Rhodium Group. That figure is expected to rise again this year. From 2000 to 2011, California ranked fifth in total investment behind New York, Texas, Illinois and Virginia.
“The smart mayors and governors will do what they did and try to attract the Chinese investment, which is going to grow dramatically in the U.S. in general and in California,” said Richard Drobnick, a business professor at USC.
For Parris, turning toward Chinese business deals was a matter of necessity.
When he was elected in 2008, Lancaster was facing tough times. The city, 70 miles north of downtown Los Angeles and near Edwards Air Force Base, was hit hard when the aerospace industry shed thousands of jobs during the economic downturn of the early 1990s.
Lancaster recorded 21 homicides that year, up from eight in 2001. The jobless rate was 10.7% and has surged to 14.4%. At one point, Lancaster had the second-highest foreclosure rate of any ZIP Code in the country.
Economists such as Drobnick say Parris’ goal to create a hub for Chinese business could serve as a blueprint for other small cities in the nation. In some ways, Lancaster has advantages.
Unlike mayors in bigger cities such as Los Angeles, the mayor of Lancaster can clear red tape quickly, and with little opposition, for favorite projects. He can rush contracts and permits through City Hall in a matter of days or weeks, unlike the years it can take in L.A.
Parris is also not shy about using his powers to lavish the red-carpet treatment on foreign visitors. Visiting dignitaries and tycoons zip around town with police escorts. Many are treated to catered lunches, serenaded by violinists, at either the mayor’s home or the city’s only art museum — Parris says there aren’t many good restaurants in town.
Stella Li, BYD’s senior vice president, said Parris compared favorably to mayors in China, who often went all-out to woo big companies into their cities.
“They ask what you need and they do it,” she said.
The city of Lancaster resurfaced some roads and put up new signage at the factory site, and pegged larger incentives to BYD’s performance. If the company hires 200 workers in the next three years, the city will buy 13 acres of land adjacent to the current bus factory and give it to BYD to build a second manufacturing plant. Austin said the company currently has about 15 employees at the Lancaster facility, which is scheduled to begin production by year’s end.
Parris is just one of many mayors around the country who are eagerly luring Chinese investment to their cities.
Jean Quan, the first Chinese American mayor of Oakland, recalls being buttonholed at a conference in Washington by two mayors from Ohio and Indiana. Chinese companies had recently reopened manufacturing plants in their towns.
“These two mayors, one white and one black, from the Midwest were asking for cultural advice,” she said. “They were so grateful that the Chinese would come in and reopen a factory in the Rust Belt.”
But there’s certainly no guarantee that Lancaster will get its big payday.
Economists say small cities simply don’t have the name recognition or amenities that Chinese investors often look for. High-tech companies sometimes have trouble finding the skilled labor force they need. It can also be harder to bring workers over from China with no Asian communities nearby or Chinese restaurants and grocery stores.
It could especially be hard for Lancaster, whose past is riddled with failed schemes to improve its economy. The city has tried and failed to create an inland port. Efforts to attract companies over the years with incentives have mostly stalled. Economists say its best selling point may be its closeness to Los Angeles.
Then there is Parris.
The eccentric mayor, who made a fortune as a personal injury lawyer, is more known for his zany ideas than skills at economic development.
He has proposed playing bird noises over public loudspeakers to make residents happier, passed a law allowing the city to castrate pit bulls and once proclaimed that his high desert town was “growing a Christian community.” Critics have called him a control freak, and crazy to boot.
But the mayor has powerful allies, including county Supervisor Michael D. Antonovich and his Chinese-born wife, Christine, a well-connected former actress.
It was Antonovich who introduced Parris to BYD officials in 2008, at a dinner at the swanky California Club in downtown Los Angeles, where, Parris recalled, Christine kept kicking him under the table and telling him, “Keep talking.”
The Antonoviches also brought Lancaster officials to China in 2010, where they toured BYD’s headquarters in Shenzhen and even test-drove its electric vehicles. Antonovich also backed BYD on its bids for contracts with Long Beach and the MTA; in June, the MTA board, including Antonovich, awarded the contract to the Chinese company as part of a $30-million clean air pilot program.
The supervisor, whose district includes Lancaster, said he hoped the BYD factory would become a linchpin for other foreign investors interested in the Antelope Valley.
His interest is not exclusive to Lancaster; he also pushed for another recently announced project, a light-rail manufacturing facility that Japanese firm Kinkisharyo International is bringing to neighboring Palmdale.
He said he first met BYD executives at the World Economic Forum in Davos, Switzerland, in 2008 and brokered the meeting with Parris shortly after.
“It was a fierce competition between Los Angeles city and Lancaster,” Antonovich said. Los Angeles got the company’s U.S. headquarters, but the factory, and most of the jobs, went to Lancaster.
Christopher Tang, a business professor at UCLA, said Parris may succeed to a certain extent.
“The Chinese will not have heard of Lancaster, but they can position it as just north of L.A.,” he said. “The cost of setting up a factory in L.A. or San Francisco or San Jose is getting very expensive. If you can give some concessions to build a factory, that would be attractive.”
Staff writer David Zahniser contributed to this report.