Hong Kong Scion Betting Billions on New Vision for Avenue of Stars Site

A scion of one of the richest family empires in this megalopolis is making a bold bet to turn a dowdy strip of waterfront into a glamorous front-row seat to one of the world's most stunning skylines.

Adrian Cheng, grandson of the late Cheng Yu-tung, the legendary real estate and jewelry magnate, has re-envisioned the tip of Tsim Sha Tsui, which has fallen short in terms of commercial development even though it is popular with tourists, families and teenage lovers gazing at the neon field of lights across Victoria Harbour. The promenade has been too hot, too crowded and too sparse in food and drink choices.

But now, after five years of planning, the Cheng family's New World Development Co. is moving ahead with a $2.6 billion complex of a luxury hotel, offices, an arts and culture district, as well as a spruced-up public promenade and public park. At the helm of the project, now taking shape on the site the family has owned for years, is 36-year-old Adrian Cheng, who represents the new generation of wealthy scions taking over the fortunes forged in the old era of Hong Kong tycoons, some now well into their 80s.

The project, named Victoria Dockside, "will be a creative heart and haven of Hong Kong," Mr. Cheng said in an emailed statement.

Victoria Dockside underscores that 20 years after Hong Kong returned to China, the mechanics of private development remain dominated by the city's big real-estate families. While Beijing increasingly exerts its influence on other parts of the former British colony, families like the Chengs, the Lees and the Kwoks control the top sites and have the financial and political relationships to stay in the driver's seat.

At the same time, families like the Chengs continue to take on big risks. New World is planning to charge some of the highest office rents in the city for space in a location that is not known as a prime office district.

The family also is working with a new design that makes more use of the open air in the retail and public spaces than other megaprojects in the city. "I think it's a big gamble," said Forth Bagley, a principal at the Kohn Pedersen Fox Associates firm in New York and a key architect on the project, about the size of New World's investment.

Mr. Bagley compared it to Hudson Yards, a gigantic development on New York's waterfront that his firm is also helping to design. That project, which created a new place above a rail yard that has been attracting big-name tenants like BlackRock Inc., KKR & Co. and Time Warner Inc.

Mr. Bagley predicts that New World will enjoy similar success in Hong Kong. The developer "did so much, that it's not going to fail."

In Hong Kong, the site of Victoria Dockside has had a few lives: first as a bustling logistics and trade wharf in the early 20th century; later a New World Centre commercial complex, which the developer closed in 2009. The Avenue of Stars there -- Hong Kong's version of the Hollywood Walk of Fame -- became famous for featuring the plaques and some handprints of Chinese and Hong Kong celebrities, including Jackie Chan and Maggie Cheung, and a life-size statue of a posing Bruce Lee.

Earlier plans to revamp the area faced controversy for not including enough public opinion in the planning process. A proposed observation deck and movie-history gallery at the eastern end of the promenade was also criticized for possibly blocking the views of some buildings behind it. Hong Kong's Town Planning Board scrapped those plans last February. In response, New World slightly downsized the project. The deck and gallery are out, for now.

"So it languishes, and that's a pity," said Paul Zimmerman about the eastern waterfront of Tsim Sha Tsui. Mr. Zimmerman is a local elected official and a member of the Harbourfront Commission, which advises the government on development plans along the waterfront.

Mr. Cheng declined to comment on the government's actions.

On a recent muggy afternoon, jackhammering noises and banging boomed from the construction project. While the Avenue of Stars remains closed until late next year, visitors can still climb up to a two-story platform nearby to snap photos of the view, or eat a Hong Kong-style snack from one of the food trucks parked close by.

"All the tourists want to come here to see the celebrities of the Avenue of Stars," one of the food-truck workers said as he handed out a box of spicy shrimp wontons. "But once they get here, they find out they can't, so there's not that many people coming around anymore," he said, though he expects a new flow of business once the avenue is open again. The public park, Salisbury Garden, is expected to reopen August.

Drawings of the new Avenue of Stars envision a dreamier, more romantic mood than the old walkway, renderings from New York landscape architecture firm James Corner Field Operations show. Curved shell-shaped leafy awnings shade benches. Mini food carts, vending machines and soft lights dot the promenade. Movies can be projected onto the spray from a water fountain. The side of the waterfront is more striking: From the perspective from a boat on the harbor, it looks like giant dragon scales.

In the background, the recently topped-out Rosewood hotel, stretching nearly 1,000 feet high, looks like a toothpick. New skyscrapers have been popping up since the government removed height restrictions in 1998 after the old Kai Tak airport closed. Before, planes used to make a notoriously harrowing landing that swooped closely by tall office buildings.

Mr. Bagley's biggest challenge for Victoria Dockside was to design the Rosewood building in such a way "so you're not just plunking down a huge tower," he said. He's also trying something unusual for a place as humid as Hong Kong: Opening up more of the edifice to the outdoors. Hong Kong is mostly full of plinths, giant boxes of shops and offices blasting cold air.

"That's the gamble," Mr. Bagley said. "That people are going to want to be outside."

--Peter Grant contributed to this article.

Write to Dominique Fong at dominique.fong@wsj.com

(END) Dow Jones Newswires

July 04, 2017 05:44 ET (09:44 GMT)