Forum’s struggles turn it into a financial drain on the church that owns it

At the Tabernacle in Inglewood on a recent Sunday, more than 2,000 members of the Faithful Central Bible Church jammed the aisles of the warehouse-turned-church hall, standing, clapping and swaying to the gospel music thundering from a men’s choir and accompanying rock band.

They were warming up to hear their charismatic leader Bishop Kenneth Ulmer fire up the crowd with his trademark mix of humor (jokes about the new bathrooms), inspiration (God has a special assignment for you) and warning (“arm yourself against the enemy”).

Faithful Central knows how to put on a show for its members. But the church’s own venture into the real world of show business has been perilous.

A decade ago, Faithful Central paid $22 million to buy the 17,500-seat Forum, an iconic rock venue in Inglewood that once was home to the Los Angeles Lakers and Kings. The mega-church had outgrown its old headquarters and wanted a new home to house its 10,000-member congregation.

More ambitiously, church officials envisioned a family entertainment venue with concerts, shops, restaurants and a hotel that would create hundreds of jobs in an underserved area while generating income for the church and its mission.

The dream, however, never came to pass. Today, the Forum sits mostly vacant and silent, a monument to a bygone era when it was known as the Fabulous Forum and hosted such acts as the Rolling Stones, Elvis Presley and Bob Dylan. The shops, restaurants and hotel never materialized.

“We’re in a challenging situation right now,” Ulmer acknowledged in an interview.

The Forum no longer houses church services or much of anything else. It has drawn only one event so far this year, a concert hosted by the Catholic radio organization Guadalupe Radio Network. Instead, it has become a financial drain on one of the oldest and largest African American churches in the country.

The Forum hasn’t been generating nearly enough revenue to cover operating costs, let alone an annual $1.2-million mortgage payment to its lender, forcing the church to dip into its own funds to avoid defaulting on the loan. This spring the church said it could no longer make payments to the company it hired to operate the arena, triggering a contentious legal brawl with its former partner — the second such dispute with a management company in a decade.

The church now finds itself squaring off against SMG, the world’s largest manager of convention and entertainment venues. The Pennsylvania company has filed a lawsuit against Faithful Central, seeking to collect more than $1 million in fees it says the church owes it.

The church-owned, for-profit arm Forum Enterprises has fired back, accusing SMG of mismanagement, charging excessive fees and spreading false rumors to concert promoters that scared away business. It even filed a complaint with the Inglewood Police Department alleging that SMG stole more than $210,000 from an account before it ended its contract with the church. The department chose not to pursue a criminal investigation against SMG, and the company has dismissed the allegation as baseless.

“What surprised me was that a partner would kick us when we were down,” Ulmer said of the SMG lawsuit. “It’s rather heartbreaking.”

John Burns, chief financial officer of SMG, called the litigation “an unfortunate contractual dispute” and disputed the church’s claims, saying that allegations of poor management surfaced only after SMG sued and that his company did the best it could in a trying climate. “It’s an older venue in a very competitive marketplace,” he said.

The Forum’s struggles come as the concert business itself is being squeezed by weak ticket sales, partly reflecting cutbacks in consumer spending. The 43-year-old Forum also must compete with newer facilities in the market.

“The Forum is a building that one time was an icon but today is just not the top choice,” said Gary Bongiovanni, editor in chief of concert trade magazine Pollstar. “The hotter shows generally are going to want the newer buildings.”

The Forum’s chief competition is the $375-million Staples Center in downtown Los Angeles. Anschutz Entertainment Group opened Staples in 1999, luring away the NBA-champion Lakers and the L.A. Kings, and high-profile performers such as Taylor Swift and Lady Gaga.

Initially, Forum Enterprises agreed to use AEG as an exclusive booking agent, with the company obligated to secure $500,000 in events each year. But when business fell short, Forum Enterprises sued AEG, accusing the company of steering business to its own venues, including Staples. AEG called the claims meritless.

Unhappy with AEG, the church turned to another concert venue operator, SMG, which happened to be AEG’s arch rival. SMG manages more than 200 convention centers and venues around the world and vowed to boost business at the struggling L.A. arena. The firm was hired in 2003 as the new manager and even paid $500,000 to help the church in its costly litigation against AEG, according to court documents. The case was eventually settled.

The Forum appeared to bounce back in 2008, drawing 15 concerts from such acts as Coldplay, Kanye West and the Eagles. By 2009, however, the facility posted a loss of $1 million, according to court records. In April, Forum Enterprises notified SMG that it could no longer afford to make its payments to SMG, which sued the company for failing to honor terms of a management agreement.

Forum Enterprises countered in a cross claim that SMG had neglected the Forum — which has had three managers in five years — and charged exorbitant fees that climbed as high as $403,000 in 2008.

“It’s very clear that SMG could never do the things they promised,” said Marc T. Little, chief operating officer and general counsel for Forum Enterprises and Faithful Central. “They sold me on their largess.”

“We completely disagree with that,” SMG’s Burns said, adding that his company had deferred and lowered fees in an effort to work with Forum Enterprises. “We scaled back our staff considerably to try to cut costs but continued to provide every bit of support operating that building, and felt we were doing a good job.”

A judge recently imposed a lien on the building that church officials say has complicated efforts to refinance the loan on the property with Evangelical Christian Credit Union. A spokesman for the Brea-based credit union said Faithful Central, which invested $4 million into the Forum, is current on its mortgage.

To save money, the church hasn’t held regular services at the Forum in nearly two years. It is negotiating with a new operator to run the Forum, and has hired a former SMG manager help revive the business.

Ulmer remains upbeat that the church’s travails with the Forum shall pass. “As always,” he said, “God is going to bring us through this.”

richard.verrier@latimes.com