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Developer's New Suburb May Be in China : Entrepreneur: Largo Vista is shipping two manufactured homes to free enterprise zone near Hong Kong, where demand is said to be high.

July 30, 1994|CHRIS WOODYARD | TIMES STAFF WRITER

NEWPORT BEACH — Like many Orange County developers, John A. Jones has visions of wooded hillsides covered in ranch-style homes.

The difference is that Jones' vision doesn't stop at Temecula or Rancho Santa Margarita or any of the Southland's new edge cities. The hillsides he sees are near the Chinese free enterprise zone of Shenzhen, China--just north of the Hong Kong border.

And Jones isn't a builder, he's an exporter.

His company, Largo Vista Group Ltd., is sending two manufactured homes to China in the next few days. They are the first of four 800- to 1,500-square-foot modular residences to be shipped as model homes for a proposed project that eventually could become a neighborhood beside Xili Lake, about 20 miles from the boom town of Shenzhen.

If all goes according to plan, Largo Vista officials say they hope to build hundreds of prefabricated homes in the Chinese countryside and sell them at prices ranging from $35,000 to $200,000. They would create the rough equivalent of Orange County's suburban sprawl outside one of the world's most crowded and expensive metropolitan areas.

"There is a dire need for housing" in industrial South China, said Jones, Largo Vista's chairman.

Chinese entrepreneurs and managers who have become the old nation's new wealthy are eager to buy Western-style homes, according to Jones. Largo Vista discovered the need almost by accident.

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The company hosted a delegation of Chinese provincial officials on a visit to Orange County several years ago, Largo Vista President Daniel J. Mendez recalled. He said there was a gap in the group's schedule that he had to fill, so he decided to give them a tour of a prefabricated home factory.

Mendez said he took them the Golden West Homes plant in Perris. The Chinese officials viewed the finished models and asked how much they cost. Mendez said he thought the average price of $110,000--including an inexpensive lot--would be way beyond the spending range of the Chinese and was surprised when delegates said such homes would be a bargain.

Homes being built in South China near Hong Kong typically are bare-bones condominiums that the Chinese buy for the equivalent of $100,000 or more, pooling all the money they can raise from friends and relatives, he said. They usually pay cash.

When Largo Vista showed off pictures of its model homes at recent trade show in China, Mendez said, one man asked the price and later came back with two shopping bags crammed with money and offered to buy one on the spot. Unfortunately, Mendez said, the homes weren't for sale.

The model homes Largo is shipping are being built by Golden West Homes. The models should be available for inspection by early January.

If there are enough orders to warrant going ahead with the project, Mendez said, houses will be built at a plant in China, most likely through a licensing arrangement with Golden West or some other manufactured housing company in the United States, Jones said.

No modifications are being made for the China market in the Golden West models.

Jones said visiting Chinese officials who have seen the houses say they like the open, airy design that contrasts with the smaller rooms and compartmentalized look of newer Chinese structures.

Largo Vista already has experience in Shenzhen, having broken ground on a $23-million joint venture there to build a new movie complex and museum.

Jones said there are deals to be had everywhere in the free enterprise zone around Shenzhen. He has had a hard time, though, getting Americans to see the potential.

"In China, it's just mind boggling. There is so much going on," he said.

Largo Vista Group Ltd. at a Glance

* Founded: 1988

* Headquarters: Newport Beach

* President: Dan Mendez

* Employees: 7

* Projected 1994 net income: $10.4 million

* Products: Manufactured houses and other structures. Recently completed a theater complex in China and is preparing to ship houses to Chinese provinces near Hong Kong.

Source: Largo Vista Group Ltd.

Researched by JANICE L. JONES / Los Angeles Times

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