Chapter 158 The Key to Project Success
"Wow, Mr. Lin is amazing. He can even connect the dots. Now we don't have to worry about the factory in Country Y closing down."
Lin Ruoyan saw these cases from other people in the real world more than a decade later. She showed off other people's successful experiences and said with a guilty conscience, "Actually, Yicheng is one of the earliest industrial bases in my country. At that time, European powers also brought some original machinery from their countries. Chinese compradors followed the European model to build factories and engage in industry, mainly for the purpose of making money, but they inadvertently boosted the economy of the entire region.
If these historical traces could be preserved for future generations to see in person, they would be more convincing than pictures. Furthermore, both here and in Country Y are old factories, so we should make use of them if possible, adapting them to the needs of different eras. The internet you mentioned is a good area, and unique boutique hotels could also be considered."
Qin Shuang was very happy. Her judgment was correct. There were different project solutions for different cities. Mr. Lin also pointed out the direction of work, which made her more clear about the matter. "Then I will start preparing for the auction of the old city."
"Well, if time is sufficient, the design company must be carefully selected. This is a land bidding with a plan, which is different from the way we used to rely on talking to get the land for luxury housing. The plan must be innovative. In addition, the booklet reporting the plan must also combine the point of introducing industries to bring economic growth, and cannot only talk about residential properties." Lin Ruoyan reminded.
Over the next few days, Lin Ruoyan and Qin Shuang split up to investigate the project. The project location was easy to find, and Qin Shuang contacted the company. Lin Ruoyan, through Wei Xu, contacted the person in charge of the bidding and auction department and inquired about how to participate in the auction.
Seeing that Mr. Lin was a real estate developer in Beijing, and asking about all those luxury homes, biomedical bases, international schools, and even the XX New Town, a major company with so many projects wanted to invest in Yicheng's urban renewal, it was definitely good news. They were especially grateful to Wei Xu for the connection. Wei Xu not only had a good reputation himself, but he could also introduce such a major developer, so he had to give him face and greenlight any project he wanted to participate in.
While welcoming, local companies are required to register as a local company before bidding. The registered capital must be at least 100 million yuan, with the higher the better. This so-called registered capital is simply the amount of money you must have in your account during the capital verification process, or other collateral equivalent to that amount.
Lin Ruoyan's luxury housing project with a value of more than 5 billion yuan has been completed and has a pre-sale certificate. There is no loan or mortgage, and it is all funded by her own funds, so the registration was quite easy to pass the capital verification.
Qin Shuang had already gone through all the procedures for company registration, with the assistance of local authorities. He even took Chen Jun with him to go through the process so he could get a feel for it. If he were to run a business on his own in the future, he would inevitably have to go through these procedures.
Chen Jun's focus was still on the hotel, but when he thought of his bright future, he was full of energy and studied very hard, asking questions whenever he didn't understand. Qin Shuang also taught him everything he knew.
However, Chen Jun's knowledge of real estate was still lacking. He was a little worried when he learned that Mr. Lin was participating in the land auction here, not to build luxury homes, but some kind of urban complex. He asked Qin Shuang privately, "Sister Qin, this comprehensive urban renewal project you're talking about sounds very grand. But it involves various property types, and we have to deal with demolition and relocation. The old factory buildings need to be preferentially preserved, and new buildings need to be constructed. After all this turmoil, will we really be able to make a profit? As far as I know, things like demolition are very difficult to handle."
Qin Shuang asked back: "Then what do you want to do?"
"Two hundred acres of land, besides building some commercial buildings and a hotel, the rest is for luxury homes. Anhui was once a land of merchants, and there are actually quite a few wealthy people hidden here. They return to their roots, so wouldn't it be great to buy a luxury home here and retire?"
Chen Jun's approach is relatively simple. The customer base he describes does exist, but these days are no longer ancient. Many wealthy individuals invest not only in their hometowns but also in larger cities they perceive as more promising. This is why several municipalities are constantly siphoning population from their surrounding areas. Only cities with continuously growing populations can sustain the constant shift in residential demand.
Qin Shuang felt that he could not convince Chen Jun, so he took him to ask Lin Ruoyan why they wanted to build an urban complex.
Lin Ruoyan knew they had thought more deeply about this issue, so she answered their questions and explained, "This area can't support the ultimate high-end customer base of our luxury housing project in the CY District, nor can it command such high prices. Therefore, we can only offer a reduced-spec version. If this reduced-spec version coexists with our newly launched top-of-the-line project, it will lower our high-end image."
So I'm going to take a different approach. And if I do it, I have to break away from the purely residential framework. The other developers here probably saw that residential properties in the main urban area are selling well, so regardless of the required commercial-to-residential ratio, they're building them for residential purposes on over 200 acres of land, aiming for quick sales and a one-time deal. Once they make a profit, they'll exit.
This does not help much in the local economic development.”
Chen Jun was puzzled and said, "I've looked at the requirements. Mr. Lin, since they require commercial use to account for 40%, how can we build only residential properties?"
"There are many apartments that can also be used as offices, just like many small companies rent hotels for offices. They can build apartments, commercial and residential buildings, or even hotels, and turn the hotels into small apartments that can be sold. This way, developers can quickly sell and get their money back." Lin Ruoyan explained, and then continued,
"We don't need a quick return on investment. Instead of thinking about future profits, think about how to get the project. Since we can predict other developers' mindsets and the possible directions of their plans, we must differentiate ourselves to be innovative and attract the attention of relevant departments.
Local land sales require auctions, and the difference isn't just about money. Bidders are also required to provide a plan, a test of what they plan to do with the land they buy.
There must be other, unspoken criteria for who they ultimately award the project to. Land is sold through a competitive bidding process, and the highest bidder wins. The proceeds are all turned over to the government and cannot be used for personal gain. Those in charge of the relevant departments may be more interested in using this project to gain fame and achieve political success.
Our proposal should express the possibility of enabling them to achieve political success. Beautiful housing is not as good as thriving industries.
So that's how it is. Qin Shuang nodded frequently after hearing this.
Seeing that they understood the underlying logic, Lin Ruoyan continued, "Urban renewal is the only way for old industrial cities to transform. Whoever can create a classic project first and perfectly solve the problems that are worrying local people will definitely be welcomed. We make a little money from development projects, and we don't ask for too much. This is definitely not as profitable as building luxury homes."
Local authorities are holding onto the land vacated by these old factories because they're worried about this. If they were all demolished and turned into residential buildings, the city would lose its vitality. You might need to contact the relevant departments to find out more, to verify my thoughts.
If the above speculations are verified, it means that they are no longer satisfied with simply demolishing old factories, building new houses and selling them for a profit. That kind of business cannot bring sustainable and stable tax revenue to the local area.
Factories relocating from the old city to the new district took away not only people but also tax revenue. They left behind a glut of residential buildings in the old city, a tax hole that can't be filled by selling land all at once, nor can the city government simply balance the tax burden between the two districts.
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