Mayor Acts to Give Blacks Share in Crenshaw Mall

Los Angeles Mayor Tom Bradley, seeking to fulfill a promise to see that blacks are given a share in the ownership of the $120-million Baldwin Hills Crenshaw Plaza shopping center, has asked the Community Redevelopment Agency to sell a portion of the city’s $24-million stake in the project to black investors.

The details of the mayor’s plan and other proposals for development in the Crenshaw community were outlined Tuesday by Bradley and Councilwoman Ruth Galanter at a news conference in the 800,000-square-foot shopping center, which is scheduled for completion late next month.

“The Baldwin Hills Crenshaw Plaza will be the first mall ever built in a predominantly black community,” the mayor said. “When we announced this exciting project, I pledged that minority investors would have the opportunity to profit from this mall by sharing in the ownership. We have followed through on this pledge.”

The Community Redevelopment Agency’s commissioners are expected to take up Bradley’s request at their meeting today. Jim Wood, the board chairman, said the request is expected to be approved, but it will take 90 days to complete a financial package for the sale.

Joint Venture

Construction of the mall is a joint venture between the agency and a group put together by developer Alexander Haagen. The agency invested $24 million in the project and will share 50% of the profits with Haagen’s group, which has spent more than $50 million.

Previously, the city had attempted to negotiate a deal for black investors to receive a share of Haagen’s interest. But investors shied away when they learned that the project could lose money for six to 10 years before turning a profit and that investors would be held responsible for losses.

But the redevelopment agency will not be held responsible for any of Haagen’s losses, and therefore, an agreement for investors to receive shares from the agency is considered more attractive.

The proposal was met with “an enthusiastic response” when it was outlined to a number of potential investors at a City Hall meeting Monday, said William Elkins, a special assistant to the mayor. “There will be some takers,” he said.

A year ago, the city and the developer were being criticized for not doing enough to provide blacks with jobs, leases and the opportunity to own a piece of the mall. On Tuesday, Bradley described the issue of black ownership in the mall “as the one missing piece we have debated and agonized over for a long time.”

Specialty Shops

The two-story project at Crenshaw and Martin Luther King boulevards will include the existing May Co. and Broadway department stores in a fully enclosed mall with a new Sears store and more than 100 other specialty shops and restaurants.

Forty years ago, the Crenshaw shopping center was among the nation’s first. Years of neglect drove many customers away.

The success of the mall will depend on its ability to bring back shoppers from the largely black middle- and upper-middle-class communities of View Park, Baldwin Hills, the Crenshaw District, Leimert Park and other areas within a three-mile radius, where the average household income is $34,000, according to the developer.

To date, blacks comprise more than 40% of the construction work force and, overall, minorities make up 75%, according to the redevelopment agency. Also, of the $6.6 million in construction contracts, firms owned by minorities or women have received nearly 40%.