The group plans to open a biotech incubator twice the size in South San Francisco, near Genentech’s campus, by the middle of 2013. They’re searching for a third Bay Area property to turn into a 200,000-square-foot space for clean-tech companies next year.

By the time they’re done, the combined incubators will hold space, for startups, greater than seven football fields, or enough to occupy about one-fifth of the Empire State Building. All these offices and labs are meant to house young companies eager to do business in China, and Chinese startups expanding to the U.S.

Hanhai zPark is scouting spaces in Boston and other cities, as well. “There’s a huge demand from cities all over the U.S. that they need investors from China to grow their industries and jobs,” says Victor Wang, president of Hanhai zPark.

The money flowing from China to buy U.S. properties and companies reached a record $6.5 billion last year, up 17 percent from a year earlier, according to Rhodium Group, a research and advisory firm.

Hanhai zPark isn’t the first China-focused incubator to open in Silicon Valley last year: InnoSpring, a Santa Clara space whose backers include Chinese real estate developers, opened a few months earlier.

Why park big new incubators in an area already packed with them? Existing ties between China and the Bay Area make Silicon Valley a natural home to ventures like Hanhai zPark. Many Chinese-born entrepreneurs go to Stanford or work at U.S. tech companies in the valley.

Stanford connection

Wang, himself a native of Harbin, in northern China, went to Stanford business school before starting his own health IT venture. About a year and a half ago, leaders from Hanhai, a privately held operator of five big business incubators in China, and zPark, a state-owned developer of the largest science and tech park in China, approached him about running a space for startups in the U.S. Xi Jinping, China’s incoming president, and Vice President Joe Biden touted the deal during meetings in Los Angeles and Washington last year.

The space available may be growing faster than demand. Hanhai zPark has about 40 tenants so far, but it has room for 100 or 200, depending on the space they need. About a quarter of the tenants are American companies, many founded by Chinese immigrants or Americans of Chinese heritage, Wang says. The rest are Chinese companies exploring the U.S. market.

On top of offering the usual incubator services, such as legal and accounting help, Hanhai zPark will invest directly in some of its tenant companies through a $5 million angel fund. It will also make introductions to people in business and government on the mainland. “We’ll connect (startups’) needs to the Chinese partners in different cities,” Wang says.

Seeking investors

Those connections, along with ample capital, are the main attraction for American companies considering seeking investors from China. “That differentiates them from other venture investors, particularly in sectors where there’s a high political risk, like digital services,” says Thilo Hanemann, research director at Rhodium Group, who tracks Chinese investment flows.

That can help startups crack a market where even multinationals such as Google have stumbled. Still, companies face risks doing business on the mainland, where the legal protections taken for granted in the U.S. and Europe don’t exist. In China, “there’s no rule of law that protects individuals and companies against the government,” Hanemann says.

Expect the pace of Chinese investment in the U.S. to accelerate. Hanemann notes that while the growth in cross-border investment gets a lot of attention, China is really playing catch up. “If you think about China as the world’s second-largest economy, the right question to ask is why have they not been more active?” he says.

Part of the reason is that the government has only recently made it easier for wealth to move beyond China’s borders. “There’s a lot of channels through which Chinese corporations and funds can shovel money into the U.S. now,” Hanemann says.

John Tozzi is a Bloomberg Businessweek reporter. E-mail: jtozzi@bloomberg.net

Article source: http://www.sfgate.com/technology/article/Chinese-incubators-growing-in-Bay-Area-4343918.php

Political consultant Jim Stearns, who is representing the labor organizations behind the recount effort, said after reviewing the cost estimates provided by the Department of Elections late Friday, the group decided it was simply too expensive. Elections Director John Arntz estimated that it would cost nearly $80,000 to manually re-tally the 35,140 ballots cast in the race and that a machine recount would cost about $7,000 less. In a Monday letter to Arntz announcing their intent to cancel the recount request, lawyer Jim Sutton wrote that a complete recount could cost as much as $120,000.

A recount has never been done since San Francisco instituted ranked-choice voting eight years ago, and it appears to be two to three times as expensive as in a normal, two-candidate race.

“We still believe that the election was close enough to merit a recount, and believe there was good chance that results could have changed,” Stearns said Monday. “But given the prices from the Department of Elections, we simply can’t afford it. At these costs, it’s hard to see how any individual campaign or organization other than the most wealthy ones could ever afford a recount.”

Considering the costs, Stearns said, city officials may want to consider whether taxpayers should at least partially fund recounts under ranked-choice voting. In the letter, Sutton urged city officials to consider “adopting a rule whereby the city would pay for a recount should the results be within a certain margin, as is done in several states,” or to explore a change in city law, which currently limits the amount a candidate can raise from their existing donor pool to $100 per person. The letter noted that $120,000 is more than many candidates raise during their entire race.

- Marisa Lagos

On the move: Mayor Ed Lee is focusing on former Building Inspection Commissioner Mel Murphy as he looks to fill an open seat on the city’s Port Commission, an influential panel that will consider major developments planned for the waterfront, including a proposed arena.

Lee on Monday took a break from holding up his end of the bargain on his World Series bet with Detroit’s Mayor David Bing to tell the Insider he was waiting for a completed background check of Murphy before making an appointment.

“He’s a contender for sure,” Lee said.

Murphy, co-owner of Murphy O’Brien Real Estate Investments, is also a director of the Coalition for Responsible Growth, a political advocacy group funded largely by developers and others with real estate interests.

If appointed, his confirmation could face opposition from some on the Board of Supervisors’ left flank who consider the group too conservative.

Last year, Lee’s election campaign said it had returned seven contributions from Department of Building Inspection employees totaling $2,150 that were donated at a fundraiser at Murphy’s home. City law prohibits commissioners from soliciting city employees for campaign contributions.

- John Coté

E-mail: cityinsider@sfchronicle.com Twitter: @SFCityInsider.

Article source: http://www.sfgate.com/bayarea/article/SF-election-loser-drops-recount-request-4088402.php