Immigrant Place Entrepreneurs in Los Angeles, 1970–99

International Journal of Urban and Regional Research Volume 26.2 June 2002 215–28 Immigrant Place Entrepreneurs in Los Angeles, 1970–99* IVAN LIGHT Early in the twentieth century, Robert Park (1915) assigned responsibility for immigrant housing to ‘private enterprise’ without paying attention to how private enterprise actually produced it (Light, 2001).1 Park just assumed that markets unerringly followed consumer demand. Whatever consumers wanted, markets slavishly produced, including ethnic residential neighborhoods. Admittedly, Park’s assumption was very common, and the whole Chicago School followed suit. Indeed, their tradition prevails even today in mainstream studies of residential choice and location, which routinely ignore the supply side (Fong and Gulia, 2000: 168; Fong and Shibuya, 2000: 139).2 Reviewing that massive literature, Massey (1985: 319) concludes that immigrants are ‘guided to the neighborhood by social networks anchored among friends and relatives who live there’. True as far as it goes, and a fair encapsulation of the mainstream view, Massey’s generalization overlooks and ignores the supplier institutions that plan, produce and distribute housing in contact with consumers’ social networks. In a state socialist economy this oversight would be glaring, but even in a market economy like that of the United States, in which the private sector produces 98% of housing, Massey’s generalization ignores business firms. Specifically, his review article ignores firms in real estate, real property development and construction.3 However, in market economies, networks of firms plan, produce and distribute residential housing to networks of consumers. In international real estate transactions, ‘local property consultants’ link foreign capital to real estate investments in the targeted destination (De Magalhaes, 2001: 104). Social networks refer customers to business networks and vice-versa. No producers means no housing. Consumers’ networks cannot guide anyone to housing that does not exist. Therefore, a complete picture of housing access and neighborhood formation requires attention to the supply side as well as to the demand side, and the existing residential segregation literature pays next to no attention to the supply side. Happily, outside the residential segregation literature, one finds two research approaches that do offer theoretical access to the supply side: Harvey Molotch (1976) and * An earlier version of this paper was presented at the ‘Embeddedness of Immigration Conference’, Jerusalem, 17–20 June 2000. The author thanks Eran Razin and Jan Rath for helpful suggestions. 1 ‘and we leave to private enterprise . . . the task of determining the city’s limits and the location of its residential and industrial districts’ (Park, 1915: 579). 2 ‘Policy-makers and scholars seem to believe property development is a simple response to economic opportunity . . . According to this reasoning, if there is a demand for office or residential space, then developers will come along and fill it’ (Fainstein, 1994: 18). 3 Continuing the practice, Massey and Denton (1993) do not list developer, realtor, entrepreneur, selfemployment or real property in their index. ß Joint Editors and Blackwell Publishers Ltd 2002. Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA. 216 Ivan Light John Logan and Harvey Molotch’s (1987) theory of the urban growth machine. This influential theory still offers the best explanation of how urbanization proceeds in the United States (Jonas and Wilson, 1999: 3). Logan and Molotch locate the motor of urbanization in local interest coalitions (called ‘growth machines’) whose livelihood depends upon population growth in their locality. Growth machines include more constituents than only entrepreneurs. Growth machines enroll labor unions, insurance companies, newspapers, churches, universities and business around a common, heavily promoted program of population growth in a particular city. Their common and essential motive is economic self-interest. Urban growth creates additional jobs for union members, additional automobiles for insurance companies, additional readers for newspapers, additional congregants for churches, and additional customers for businesses. Construction and real estate entrepreneurs are charter members of urban growth machines because the prosperity of both needs a continuous influx of new population, mainly through internal and international migration.4 Local growth increases demand for housing and road construction and also raises the price of real estate. Every city has a growth machine, but some growth machines are more effective than others (Light, 1984: 111–12). Harvey Molotch (1988: 31) long ago noticed that the literature assumed that the growth machine’s leadership comes ‘rightfully from the higher social circles’ without more closely identifying the leadership’s social origins. Following that tradition, with the exception of Roger Keil, the existing literature pays no attention to the nativity of place entrepreneurs, tacitly assuming that place entrepreneurs are native whites. In the history of the United States, historians have also accepted this assumption by dint of not challenging it. Thus, John Higham (1988: 16) described nineteenth-century real estate interests in the West that, in conjunction with railroads, actively promoted migration to the West in eastern states as well as in Europe. Higham does not indicate that any of the immigration promoters were themselves immigrants or non-white.5 In principle, however, immigrants could have joined the urban growth machine in the past and could join it in the present. For example, immigrants could and sometimes did become real estate developers or real estate agents, both entrepreneurial roles.6 Although research is scarce, Richard Platkin (1972) has documented the role of Jews in American real estate promotion and investment. Immigrant place entrepreneurs could promote immigration from their homeland. In doing so, immigrant place entrepreneurs would promote international migration out of economic self-interest just as immigrant labor contractors have long done. At that point, the immigrant place entrepreneurs would participate in institutionalized promotion of cumulatively caused immigration (Light et al., 1993; 1999). Evidence that immigrants join urban growth machines as realtors (not as developers) appears in a second urban literature whose connection to the growth machine theory remains unexplored. In a path-breaking study, Risa Palm examined the racial segregation of Denver in 1982. Palm (1985: 66) found that home sellers selected real estate brokers partially on the basis of race and that real estate brokers tended to work for ‘brokers of the same race or ethnicity’. Moreover, regardless of race, real estate agents steered customers to racially segregated neighborhoods. Black agents steered black customers to black 4 True, Logan and Molotch (1987: 29–31) distinguish between growth bloc entrepreneurs on the basis of their agency. At one extreme, ‘structural speculators’ aggressively promote growth and mobilize political pressure to assure it. At the other, ‘serendipitous entrepreneurs’ have come into ownership of land but do nothing to promote its development. However, this useful distinction does not strip even the serendipitous entrepreneurs from membership in an urban growth bloc. 5 But the nineteenth-century memoirs of Henry Villard (1999: 125) make it clear that American real estate companies in Milwaukee actively recruited German and French speaking agents in order to penetrate immigrant markets. In this sense, the immigrant realtors had joined Milwaukee’s growth bloc in the nineteenth century. 6 For a textbook view of how to do property development, see McMahan (1988). ß Joint Editors and Blackwell Publishers Ltd 2002 Immigrant place entrepreneurs in Los Angeles 217 neighborhoods.7 Since black agents and non-black agents followed an identical practice, the black and non-black agents actually helped to create residential segregation in Denver. Reviewing the now substantial literature bearing on racial steering, Fong and Wilkes (1999: 598) declare that ‘real estate agents show fewer housing units to minority groups and steer minority members to predominantly minority neighborhoods’. The implication is this: residential segregation is not just a passive reflection of consumer preference. Brokers co-create it. In two recent studies of the Portugese real estate brokers in Toronto, Carlos Teixeira has confirmed this generalization while pushing forward its theoretical implications. Like the other researchers, Teixeira (1997) found that Portugese real estate agents served a predominantly Portugese clientele. In fact, 52% of Portugese home buyers utilized a Portugese agent in their search. Portugese brokers had ‘cultural expertise’ in dealing with co-ethnics whose ‘behaviour and needs’ differed from those of non-co-ethnics (Teixeira, 1998: 273). Nonetheless, Teixeira (ibid.: 209) also reported that this co-ethnic pairing resulted from ‘successful marketing campaigns’ and was not just a spontaneous and unsolicited result of consumers’ networks or cultural preference. At this point, Teixeira suggested, Portugese real estate brokers were actually restructuring the ethnic map of Toronto, and not simply responding passively to buyer preferences. The case of Edison, New Jersey, additionally shows how ethnic real estate interests can take over a stagnant city’s inactive growth machine and reactivate it. In 1970 no South Asians lived in Edison, a stagnant inner suburb of New York City. In 1999 it was home to 15,000 Indian immigrants, mostly Gujaratis (Smith, 2000). An Indian real estate developer started the transition. In 1983 Pradip Kothari started a real estate business and travel agency in Edison. Kothari advertised Edison in Gujarat, advising co-ethnics to purchase a home in Edison as their ‘piece of the American Dream’. He promoted Edison so effectively that Gujarati migrants knew ‘all about Edison and Oak Tree Road’ long before they left India. Oak Tree Road is now the shopping capital for all of Indian New Jersey. Indeed, Kothari’s efforts turned Edison into a South Asian enclave in which only Indians now buy homes. Unsurprisingly, Kothari is President of Edison’s Indian Business Association and also of Edison’s Indo-American Cultural Association, both of which he runs from his home on Oak Tree Road.8 Obviously Kuthari did not give Gujaratis the motive to emigrate or the money to buy suburban homes, but his promotional efforts, joined later by other Indian real estate agencies,9 attracted Gujaratis to Edison who might otherwise have gone elsewhere in New Jersey or even have failed to come to New Jersey at all. Los Angeles, 1970–2000 The history of Los Angeles exemplifies the growth machine’s production of urbanization.10 Echoing Cary McWilliams, Greg Hise (1997: 11) calls Southern California ‘a gamble that boosters made on the future’. The boosters’ gamble paid off when a growing population opened lucrative opportunities in construction, manufacturing and commerce for the boosters. Similarly, William Fulton (1997: 7) declares that during the past century, Los Angeles produced ‘one of the most effective growth machines ever created’, a conclusion Purcell (2000: 86) echoes. Los Angeles’ growth machine began 7 Rose Helper’s 1969 survey of the real estate industry in Chicago paid only the briefest of attention to black realtors. 8 Access the Indian Business Association at their website: www.njindia.com/njassoc.htm. 9 Visit: www.ontrackrealty.com. 10 For histories and descriptions of Los Angeles, see Light (1988), Laslett (1996), Soja and Scott (1996) and Hise (1997). ß Joint Editors and Blackwell Publishers Ltd 2002 218 Ivan Light with a cluster of visionary entrepreneurs, who lured whites from the Middle West with the promise of a balmy climate, a moral society and a single-family home. This was the intellectual side of the growth machine’s appeal. However, the entrepreneurs also promised a handsome capital gain on that bungalow, which most twentieth century migrants did actually obtain (Hise, 1997: 21). Fulton maintains, however, that Los Angeles’ century-old growth machine foundered in the 1980s, when sheer size rendered the Los Angeles metropolis ungovernable (ibid.: 14). In Fulton’s opinion, Los Angeles’ growth machine collapsed because suburbanites ‘turned angry about traffic jams and high taxes, reducing their tolerance for more suburbs’, the growth machine’s raison d’etre (ibid.: 16). Out of their frustration, a slowgrowth coalition of homeowners and environmentalists coalesced. This slow-growth coalition ‘succeeded in hobbling the growth machine’ in the mountains and at the beach, two essential targets already slated for growth machine expansion (ibid.: 17; see also Pincetl, 1999b: 233–4). In this situation, Fulton concludes, political support for the growth machine collapsed, the leadership of the growth machine bailed out and ‘no new paradigm has emerged to take its place’. As a result, Los Angeles’ growth machine now lacks leadership (Purcell, 2000: 94). To embellish this thesis — the death of the growth machine — Fulton examines the past and present of the Los Angeles metropolitan area. Fulton has no trouble mobilizing evidence for his thesis; Purcell (2000) offers additional evidence in support as does Pincetl (1999b; also Strickland, 2001).11 Indeed, three developments, all subsequent to his publication, also support Fulton’s conclusion. One is the sale of the Los Angeles Times to a Wall Street conglomerate in 1999. This sale removes the Chandler family, the newspaper’s founder/owner family and key members of the growth machine, from the city’s ruling directorate.12 This removal spells abdication of charter members of the growth machine. A second is the Environmental Defense Fund’s disclosure that between 1981 and 1991, County Supervisor Michael Antonovich took money from property developers to ignore their overbuilding in the Santa Monica Mountains (Miller, 2000). The third is Michael Dear’s (2001) influential report, which concludes that the perimeters of Los Angeles have reached the limits of horizontal growth. The sale of the Los Angeles Times shows that elite families are bailing out of Los Angeles.13 The Antonovich scandal shows that developers face environmentalist power that limits their ability to build, a symptom of political resistance.14 Nonetheless, Fulton’s death-of-the-growth machine thesis faces two distinct objections. First, as Purcell (2000) has argued, the Los Angeles growth machine did not really die; it only lost control of the political consensus in support of growth. However, Purcell does not observe that the growth machine only lost this control in the native-born population because he also ignores the immigrant component of the growth machine. Second, during the period in which the growth machine was supposedly dying, the population of Greater Los Angeles increased from 9.9 million in 1970 to 14.5 million in 1990 (Sabagh and Bozorgmehr, 1996: 82). Components of this increase were 1.7 million additional native born persons and 2.8 million foreign born persons (Table 1). 11 Today’s Los Angeles Times carries two stories that stress the strength of anti-growth sentiment in Southern California. See Wedner (2001) and Strickland (2001). 12 ‘The extent to which Los Angeles was literally invented by the Los Angeles Times and by its owners . . . in the Chandler family, remains hard for people in less recent parts of the country to apprehend’ (Didion, 1992: 222). 13 ‘Growth networks often work behind the scenes, in a corrupt manner, to exploit rapid development even if they do not actively advocate it’ (Gottdiener, 1985: 225). 14 ‘Place entrepreneurs can so completely control the local land-use planning process that they capture the local elected officials and bureaucracy entirely’ (Pincetl, 1999a: 210). To learn more about the land-use plan for the Santa Monica Mountains, contact Leo Stark, Los Angeles County Department of Regional Planning (http//planning.co.la.ca.us/drp_smm.html). ß Joint Editors and Blackwell Publishers Ltd 2002 Immigrant place entrepreneurs in Los Angeles 219 Table 1 Chinese, Korean and total population of Los Angeles region by nativity, 1970–90 Population category Native born Korean Foreign born Korean Native born Chinese Foreign born Chinese Total native born Total foreign born 1970 1980 1990 Index* 4,200 9,200 26,800 29,000 8,868,600 1,090,300 11,960 64,740 36,160 80,420 9,485,340 2,136,840 36,322 155,568 75,769 231,361 10,576,033 3,919,394 864 1,690 283 798 119 359 * Index is 1990/1960  100. Source: Sabagh and Bozorgmehr (1996: Table 3.2). This increase occurred despite the net loss of 83,128 non-Hispanic whites, and thanks to a net influx of 803,532 Asian immigrants and two million Mexican and Central American immigrants. Unfortunately, Fulton’s book does not address immigration or immigrant financial elites. Fulton implicitly assumed that only native whites ran the Los Angeles growth machine. Had he examined the immigration process, Fulton would have learned that many immigrants came to Los Angeles because co-ethnic entrepreneurs in real estate and property development had encouraged them to come, the classic growth machine strategy.15 This is the same myopia that we find in the residential segregation literature.16 Chinese immigrants in property development In point of fact, immigrant Chinese and Korean entrepreneurs played a serious role in promotion of co-ethnic immigration to Los Angeles, the creation and preparation of new residential neighborhoods for the new immigrants, and support of Los Angeles property values, which have never been higher!17 The Chinese case follows the modus operandi that Michael Goldberg (1985: 44–51) identified long ago: small Chinese investors in real estate operate through social networks; big Chinese investors use co-ethnic place entrepreneurs abroad to invest their capital. In 1970, Los Angeles’ historic Chinatown was the only neighborhood in which Chinese predominated, and the only one in which Chinese immigrants could comfortably settle. Chinatown was central, dense, cramped and working class. However, new Chinese immigrants were middle and upper-middle class.18 In this situation, Charles Wong (1979: 263) observes, ‘Chinese realtors, contractors, and businessmen’ moved in on Monterey Park, an inner ring suburb of mixed white and Latino population. The names of this leadership are public knowledge. China-born, Frederic Hsieh came to Los Angeles to work as a city engineer, but he entered real estate instead. In 1972 at age 27, he moved to Monterey Park and opened a real estate business. ‘Hsieh and other [Chinese] entrepreneurs made Monterey Park a desirable alternative to the Los Angeles, San Francisco, and New York Chinatowns’ (Horton, 1995: 29). Hsieh’s 15 International corporations that invest in Los Angeles real estate join the growth machine from abroad in that their return on investment depends on metropolitan growth. But these international corporations have not been shown to promote immigration to the region in order to support their investment (see Davis, 1987). 16 William Clark’s (1996) review of residential patterns in Los Angeles, very carefully crafted, shows no awareness of real estate development as a guiding process. 17 ‘House prices continue to climb as sales drop’ (Strickland, 2000). 18 Many rich immigrants came to the San Gabriel Valley from Taiwan with fortunes to invest in real estate, but they were suspicious of American developers. John Chi’s Trinity Valley Investment Corporation swindled hundreds of Chinese investors out of their property investment in what investigators called ‘one of the nation’s largest affinity scams’ (see Dunn, 1993). ß Joint Editors and Blackwell Publishers Ltd 2002 220 Ivan Light was the first Chinese real estate business in Monterey Park, and Hsieh is invariably credited with planning the suburban city’s transition to Chinese control.19 His modus operandi was pure growth machine. Hsieh’s Mandarin Realty Company promoted Monterey Park in Hong Kong and Taiwan as ‘the Chinese Beverly Hills’ (Fong, 1994: 29; Tseng, 1994: 172; Allen and Turner, 1997: 122), a distinct exaggeration that nonetheless evoked buyer interest in China.20 Right from the beginning, Hsieh intended to make Monterey Park an upscale Chinese residential and business enclave. In 1977, Hsieh told an astonished gathering of the Monterey Park Chamber of Commerce that Monterey Park would become a ‘mecca for Chinese business’ (Horton, 1995: 28). This was Hsieh’s entrepreneurial vision of the future. Sharing Hsieh’s vision, Chinese business firms in Monterey Park initially refused to join the Monterey Park Chamber of Commerce, which had solicited their membership. Instead, they formed their own organization, the Monterey Park Chinese Chamber of Commerce (Wong, 1979: 277). Later, it is true, experiencing political rebuffs, they joined the Monterey Park Chamber of Commerce as its Chinese committee. Of the 40 Chinese firms that took membership in this Chinese committee, fully half were real estate promoters, and the real estate promoters, Wong noted, were the Chinese committee’s core activists. When the Monterey Park Chamber of Commerce declined to endorse a ‘Chinese theme’ for the suburb, its Chinese committee threatened to secede. By 1979, only 7 years after Hsieh opened his real estate business, Chinese were ‘virtually the only ones investing in the city’ of Monterey Park, and the investors tended to be ‘recent immigrant Chinese’ (Wong, 1979: 285). Hsieh profited personally from the development of Monterey Park as a suburban Chinatown. Basically, he bought land cheaply early in his career, then, having promoted Monterey Park in the interim, resold that land later at inflated prices to Chinese immigrants. Only 3 years after starting his real estate business, Hsieh assembled several land parcels together from empty and underused commercial lots near Atlantic Boulevard, now a thriving and bustling commercial zone. He called these empty lots Dearfield Plaza. He saved a land parcel for his own Omni Bank. Two decades later, Hsieh owned many businesses in Monterey Park — real estate holdings, the Hong Kong Restaurant, a music store, a theater, and insurance and trading firms — and he had even expanded his operations to Asia (Horton, 1995: 29). The land on which the business sat had appreciated in value in the interim. Of course, other Chinese business owners also profited from the development of Monterey Park. These business owners were members of what we should call the Chinese branch of Los Angeles’ growth machine. Winston Ko, President of Kowin Development, became a millionaire before age 30 as a result of land promotion in Monterey Park. Gregory Tse of Wing On Realty, realized that land was cheap in Monterey Park compared to Hong Kong. Tse bought Monterey Park lots cheaply, then resold them at a profit to wealthy Hong Kong immigrants (Fong, 1994: 51). By 1994, Monterey Park housed 66 Chinese restaurants, 14 Chinese mini-malls, 2 Chinese newspapers, 20 Chinese banks and 6 Chinese supermarkets, of which Diho Market was the first American-style Chinese supermarket in the United States (Horton, 1995: 30).21 19 Allen and Turner (1997: 122 ) declare that the Chinese push into the San Gabriel Valley is attributable to ‘a single Chinese immigrant, Frederic Hsieh’. 20 ‘In the 1970s Monterey Park was the major port of Chinese entry into the [San Gabriel] Valley. At that time the city held many attractions for the newcomers: a location near the old, congested Chinatown, an established Asian population, and relatively new and affordable residential and commercial property — all vigorously marketed in Taiwan and Hong Kong by enterprising Chinese real estate and business interests who saw a future in a convenient, pleasant, and affordable suburb’ (Horton, 1995: 15). 21 Chinese in Toronto studied and imitated the shopping center methodology that Monterey Park initiated (see Wang, 1999: 177). There are now 52 Chinese shopping centers in Toronto, all suburban. In outer suburbs, Chinese developers introduced Chinese shopping centers ‘to attract more Chinese immigrants to move into surrounding areas’ (ibid.). ß Joint Editors and Blackwell Publishers Ltd 2002 Immigrant place entrepreneurs in Los Angeles 221 Roger Chen founded the Tawa Supermarket in 1984. The supermarket set up Tawa Commercial Property Development Corporation in 1988. This property developer division built numerous Chinese shopping malls throughout Southern California (Li, 1998: 511). Currently, 10-centimeters thick, Chinese telephone directories list hundreds of professionals in every imaginable service. All profited from the growth of Monterey Park’s Chinese population. Beyond Monterey Park, two adjacent suburban cities, Alhambra and Rosemead, subsequently developed Chinese business and residential centers as a result of the same land promotion and development methodology. Neighboring them, also in the San Gabriel Valley, Arcadia and San Marino became the highest prestige locations for Chinese settlement. In all these cities, Chinese property developers and realtors moved in, promoted the suburban towns in Hong Kong and Taiwan, and then sold lots to immigrant Chinese, who arrived in the United States already informed of the upscale Chinese communities that awaited their settlement. Indeed, the whole San Gabriel Valley, from Monterey Park to Diamond Bar, had become heavily Chinese in 1999. Horton’s analysis of Chinese telephone books showed that in 1983 the Chinese agglomeration in the San Gabriel Valley was already catching up with Chinatown as the largest regional center of Chinese business. In 1983 about one-half of all the Chinese businesses listed in the telephone books covering greater Los Angeles were located in Chinatown, and one-third in the San Gabriel Valley. By 1992 the San Gabriel Valley had 55% of all Chinese businesses in Los Angeles, and Chinatown only 6% (Horton, 1995: 31). The Chinese property developers had access to Chinese capital. Many Chinese banks sprang into existence to support the émigrés as well as to ‘take advantage of the property boom in California’ (Zhou, 1998: 548). In 1992, Los Angeles had 24 Chinese banks with assets of $5.6 billion. Two-thirds of these banks had been established before 1985. Three of the Chinese banks were among the largest 30 banks in California. In general, the Chinese had better access to banking than did non-Chinese residents of Los Angeles. Chinese bankers prefer to do business in the Chinese language with persons who belong to their personal network. Korean immigrants in property development ‘Unlike other minorities’, wrote Kyung Lee (1969: 51), ‘Koreans did not settle in clusters’. Los Angeles Koreans had no geographical enclave comparable to Chinatown or Little Tokyo in 1968. Indeed, precisely because it offers a residential and commercial core, Los Angeles Koreatown is still unique among American-Korean settlements, which generally lack a central cluster.22 What is now called Los Angeles Koreatown was known in 1970 as the mid-Wilshire district. Located about 5 kilometers west of downtown Los Angeles, squarely in the central city, mid-Wilshire was a dreary residential and retail neighborhood that had catered to poor white, black and Hispanic renters. A decade later, in 1980, the City of Los Angeles officially renamed the mid-Wilshire district Koreatown. The naming ceremony was heavily attended by dignitaries. At the time of the naming ceremony, Koreatown housed 300 Korean businesses, major Korean cultural and civic associations and 13,000 Korean immigrants, who represented 21% of Los Angeles’ total Korean population (Kim, 1986: 60). Seeking to explain this remarkable transformation, as stark as any in the urban literature, Abelmann and Lie (1995: 100–1) advance a formulaic explanation according to which Hi-Duk Lee opened the first Korean restaurant at 3122 W. Olympic Boulevard in 1971. Other Koreans noticed Lee’s restaurant, and then settled in the vicinity. Still other Korean business owners settled near them, thus setting in 22 Min (1996: 35) declares Los Angeles ‘unique’ among American cities because of its Koreatown cluster. ß Joint Editors and Blackwell Publishers Ltd 2002 222 Ivan Light motion what Abelmann and Lie declare an unplanned, spontaneous and spiraling process of Korean settlement whose unplanned upshot was Koreatown, an inner-city Korean community. This version conforms to the leaderless process version of neighborhood formation that Robert Park endorsed in 1916, and that still rules the urban literature, but the old formula fails to deliver the correct story in a globalized world (Light, 2001). Los Angeles Koreatown did not emerge from a leaderless process (Kim, 1986: 57). First, Koreatowns are not routine. Los Angeles was the only American city that developed a Koreatown. Other major Korean centers — New York City, Washington, DC and Chicago — do not have Koreatowns. Second, as Roger Keil (1998: 101, 144) has already noted, Korean banks, using Korean money, financed Korean business in Los Angeles, including real estate investment. Koreatown was built without American banks and without American entrepreneurs.23 Third, from the beginning, Korean developers and realtors in Los Angeles hoped to transform the mid-Wilshire district into a staging ground for the incipient Korean immigration (Oh, 1983). This immigration had only just begun in 1970, thanks to the Immigration and Naturalization Act of 1965, which opened immigration to Asians. These Korean immigrant place entrepreneurs assumed the leadership for effectuating that transformation. To this end, they promptly formed the Koreatown Development Association.24 The Development Association was a group of Korean immigrant real estate promoters. It is important to understand the role of Hi-Duk Lee in this leadership group, other prominent members of which were Byung Min and Sonia Suk. Hi-Duk Lee was Director of the Koreatown Development Association, not just a random restaurateur, who happened to start the first Korean business on Olympic Boulevard (Quinones, 2001). The methods of the Koreatown developers were classic growth machine. They bought up cheap land in the mid-Wilshire district and promoted Koreatown in Seoul, the provenance of most Korean immigrants to Los Angeles (Light and Bonacich, 1988: 200). Korean-born property developers became the major property owners in Koreatown during the 1970s (Sherman, 1979). When Koreans emigrated, they already knew that Koreatown was the neighborhood to settle. Korean immigrants then bought or rented residences from the Koreatown developers. The more immigrant Koreans who settled in Koreatown, the higher the land values and the greater the profit of the Koreatown developers. This methodology is just basic growth machine. Everything depended upon promoting Koreatown awareness in Korea as well as in Los Angeles itself. To accomplish this goal, the Koreatown developers coordinated a program of public relations, marketing, government relationships and publicity.25 In 1973 the Koreatown Development Association offered free business signs in Korean for firms in the targeted area (Light and Bonacich, 1988: 201). They intended thereby to call attention to Korean firms (Kim, 1975). The Koreatown developers organized the first Koreatown parade in 1975. This parade drew interracial local crowds and made copy for newspapers in Seoul as well as Los Angeles. The Koreatown developers petitioned the City of Los Angeles officially to designate the mid-Wilshire district ‘Koreatown’. The City of Los Angeles did so in 1980 despite the fact that Koreans were then only 7% of the residents of the area (Light and Bonacich, 1988: 309). Shortly thereafter, the Koreatown Development Association also induced the California Department of Transportation to erect a freeway sign (still in place) that pointed the way to ‘Koreatown’ to passing 23 Koreatown ‘is a new model — a healthy financial dynamic not controlled by Anglo elites or their banks’ (Dymski and Veitch, 1992: 151). 24 Koreatown was founded in 1973 ‘by nine Korean merchants who wanted to draw the Korean immigrants into the community’. Gene Kim was the first president of the Korean Association of Southern California. His idea was ‘a brilliant promotional stroke. They offered to put up signs, free, for any Korean business establishments that wanted them. That was in February 1973. They had soon erected 60 signs and suddenly Korea Town existed’ (Smith, 1976: 35). 25 ‘Efforts to promote Koreatown had involved concentrated investments by Korean real estate operators in one neighborhood’ (Light and Bonacich, 1988: 308). ß Joint Editors and Blackwell Publishers Ltd 2002 Immigrant place entrepreneurs in Los Angeles 223 motorists. This sign identified the neighborhood by its new name, and attracted custom and Korean settlement. A Korean developer, Sang Lee, ran for public office in 1988.26 When crime posed an obstacle to Koreatown’s development, the KTDA operated a private police department to assure security for shoppers while demanding more police protection for Koreatown. To this end, the KTDA also raised private funds to finance a sheriff’s substation in Koreatown (Light and Bonacich, 1988: 311). Koreatown’s success probably disappointed its founders. Successful as a central city business center, it was less successful as a center of Korean residence. By 1980 it was already clear that Koreatown was a first-settlement stopping place for recently arrived Koreans, who relocated to suburban Korean settlements as soon as they could afford to do so (Allen and Turner, 1997: 149–50). The riot and arson of 1992 dimmed the luster of Koreatown in the Korean newspapers. Wealthier Koreans currently move to Palos Verdes Estates, Rolling Hills Estates, Rancho Palos Verdes and Orange County (Millican, 1992). However, Korean immigrant developers importantly orchestrated the suburbanization of the Korean population. Among these was multimillionaire Edward Cho, who immigrated to Los Angeles in 1971 and undertook property development in Garden Grove. Before his suicide in 1994, Cho had been President of the Korean Association of Orange County (Pinsky, 1994). The development of suburban Korean areas created a socio-economic ladder for Korean immigrants to climb upon arrival in Los Angeles. Some Koreans moved directly into the higher class suburbs without enduring a residence in Koreatown (Kim, 1986: 56). However, most Korean immigrants spent at least several months in Koreatown before moving out to more affluent and desirable suburbs (Lee and Sanchez, 1999). After the Los Angeles riot and arson of 1992, during which many Koreatown businesses were burned and looted (Light et al., 1994), Koreatown and mid-Wilshire properties lost value. Nonetheless, Korean property developers expanded their holdings. By 1999, Koreans owned an additional 3.5 million square feet of commercial property in nearby mid-Wilshire, of which the Korean and Korean-American businesses occupied only 40% (Vincent, 2001). The leading Korean American investor was Dr. David Lee, who purchased 15 office towers on behalf of various consortia of Korean and KoreanAmerican investors. To attract non-Korean tenants, and out of deference to the sensitivities of Latinos and Armenians whom they were soliciting as tenants, the Korean Chamber of Commerce agreed to stop identifying the office towers as Koreatown properties and to restrict the use of Korean language signs on the office towers (Fulmer, 1999). The real estate pages of the Los Angeles Times pay frequent testimony to the influence on Southern California of Korean, Chinese, Japanese and other Asian developers (Furlong, 1988; Kotkin and Friedman, 1993). Conclusion Especially in multi-ethnic California, growth machines need no longer be all-white. Indeed, following Keil (1998: 146), one concludes that in Los Angeles ‘local space entrepreneurs’ cannot be white and still attract Asian capital into the Los Angeles real estate.27 When immigrants turn to real property development, they join the locality’s growth machine, which becomes an ethnic business, not just a business. As such, they acquire a financial interest in promoting growth in the locality. However, to accomplish this end, Asian immigrant place entrepreneurs attract co-ethnic immigrants from Asian homelands, not midwestern whites, as had the historic founders of Los Angeles (Figure 1). Immigrant place entrepreneurs influence and direct urban development in ways that 26 Korman owned Goldwell Investors (see Miller, 1988). 27 Real estate ‘has been increasingly absorbed into the international system as foreign entrepreneurs buy up significant blocks of U.S. land and buildings’ (Molotch, 1988: 29). ß Joint Editors and Blackwell Publishers Ltd 2002 224 Ivan Light Figure 1 Asian immigrant place entrepreneurs in Los Angeles non-immigrant place entrepreneurs could not or would not. Therefore, immigrant place entrepreneurs can wax while native-born place entrepreneurs wane. In the period 1970– 99, Chinese and Korean immigrant entrepreneurs reorganized Los Angeles’ morphology, building new communities to house fellow immigrants. Borrowing from co-ethnic banks, often funded with homeland capital, they advertised their properties in China and in Korea, making immigration to Los Angeles easier for prospective immigrants from these countries (Figure 1). Co-ethnic realtors promoted their properties to immigrant customers. They produced and marketed upscale ethnic suburbs that attracted to Los Angeles more and higher status immigrants than would otherwise have selected the region for settlement. To the extent that the Chinese and Korean immigrant entrepreneurs promoted emigration from Asia, successfully attracting thousands who would not otherwise have come to Los Angeles, they counteracted the incapacity of the Los Angeles growth ß Joint Editors and Blackwell Publishers Ltd 2002 Immigrant place entrepreneurs in Los Angeles 225 machine to attract white people. To the extent that they encouraged the emigration of wealthier co-ethnics, the Asian place entrepreneurs increased the average status level of the Los Angeles metropolitan area, strengthening real estate prices in the metropolis. As Fulton and Purcell observed, Los Angeles’ historic white growth machine faltered in this 30 years; but they failed to notice that an Asian growth machine had gathered strength at the same time. The contrary trends point to an emergent Los Angeles growth machine, with immigrant leadership, that can continue the region’s historic growth trajectory well into the twenty-first century despite the collapse of growth ideology among native whites. Admittedly, this case study does not prove that immigrant entrepreneurs always join municipal growth machines, only that they sometimes do. Studies of African Americans did not depict black developers because, with few exceptions, there were none (Helper, 1969; Molotch, 1972). In the case of contemporary working-class Mexican and Central American immigrants to Los Angeles, property development has clearly fallen behind what the more affluent Chinese and Korean immigrants achieved. Although Latino ‘place entrepreneurs’ are now appearing in Los Angeles, the Latino entrepreneurs are just starting the conscious redesign of the region’s morphology that Chinese and Koreans undertook 30 years earlier.28 To this extent, then, the residential succession literature legitimately ignores Latino property developers since there really were none until quite recently (Krivo, 1995). The same excuse does not apply to Chinese and Korean residential choice since, in these cases, immigrant place entrepreneurs created the entire choice context in which co-ethnic home buyers and renters made locational decisions. 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