DUBAI - It is being called an economic gold rush. The
rampant development – mostly in real estate, in the Persian Gulf country
of Dubai. There are hundreds of billions being invested, and billions more to
be made. Donald Trump and U.S. investment bankers have started to take notice.
But, one American developer in particular knows more about the Dubai market than
Poke around the old Gold Suk, the gold trading market in the center of Dubai
City, and you're likely to find all sorts of things. People are friendly, prices
are negotiable and English is spoken on most corners. But if you were to strike
up a conversation and ask any of these folks where Hilbert, Wisconsin is, you
might get some interesting answers.
Todd Thiel knows where Wisconsin is because he was born in Hilbert, a little
farming community outside of well, everywhere, and he also knows where the Gold
Suk is in Dubai. He comes to this moderate Muslim country on the Persian Gulf
once a month. And if you're looking for a barbecue in the desert near the border
with Oman, complete with entertainment, he's your man.
“What they had stated to our firm, for instance, was if you do what you
say you can do, you will witness and be part of a lifestyle that not many people,
if ever, will ever see,” said Thiel. "So what they're telling you
is if you can understand us, if you can embrace us and we let you in and that's
the truth and that's business in general, if we let you in, we'll take care
of you and we'll treat you like one of our own."
Todd Thiel is the CEO of McKinley Reserve based in Hilbert. It’s an umbrella
company that focuses on real estate, private equity and publicly traded securities.
He is also the eleventh of 12 children of a Wisconsin dairy farm family, the kid
more interested in his saving account than cows.
“I was the real 'Alex P. Keaton', what I wanted for my birthday was a
savings bond,” said Thiel.
What Thiel wants for his birthday these days is the successful completion of
his billion-plus-dollar development in Dubai City. He has been working in this
one of seven United Arab Emirates near the Tropic of Cancer since 2002 and is
the biggest American investment in Dubai.
While most U.S. developers and investment banks have been cautious about jumping
into the hottest economy in the Middle East - and some would say the world -
Thiel went for that ole 'first mover' advantage.
“We're taking a calculated risk," he said. "We're not putting
all our eggs in one basket in Dubai. We're really the last remaining parcel
in what they call the Dubai Internet City, or Tcom area."
As with most fast developing countries, like China, Dubai is building projects
in groups. Media City, Knowledge City and Dubai Sports City all come with central
commercial components germane to their core business along with retail, residential
and hospitality phases. But nothing is built here in “phases”, it
all goes up simultaneously. When they say a project will be done in 2010, they
mean the whole project. It makes things look like they grow up overnight.
“There are people coming in to live, there are people coming in to work,
and pretty soon, there will be people coming in to retire,” said U. Balasubramaniam,
CEO of Dubai Sports City.
Until six months ago, what Thiel and his Capital Partners branch of McKinley
enjoyed in Dubai was being the only developer with a free hold title to it's
land. Using that contract as a template, Dubai has now passed new free hold
legislation allowing more companies in on the deal.
“There's no question, the ruler, Shiek Mohammed had put out a call to
the world for foreign investment," said Thiel. "These guys wanted
to put themselves on the map. I like to think of it as an economic miracle in
the Middle East.”
A miracle Thiel plans to stay invested in - up to a point.
“At the moment we're intending on developing it ourselves, but if we
had the opportunity to bring in other developers we'd entertain it," he
Which is the way most U.S. investors are getting into the Dubai market - in
pieces. In many ways, the whole country is an economic incubator for the entire
region. No taxes, working on becoming a free trade zone and working on sustainability,
tourism from Europe, the Arab world and soon China - all made possible with
the expansion of Emirates Airlines. Forty-nine flights a month to Germany alone
is fuel for today's growth. But, eventually someone will have to fill all those
office buildings long term.
It's more than 17 hours by plane from Hilbert to Dubai. But the two have never