Crenshaw Plaza Movie Theater Talks Collapse : Revitalization: Potential operator withdraws, saying house would not be large enough to succeed. Move is blow to CRA and mall shops.

Negotiations to put a movie theater in the hard-pressed Baldwin Hills Crenshaw Plaza have collapsed after the Baldwin Theater, the nation’s only black-owned, first-run theater, withdrew its bid, saying the deal was not economically viable.

Theater officials said they pulled out of negotiations with the Community Redevelopment Agency because the planned 1,100-seat movie house was not big enough to generate the revenue needed to cover the lease on the space and debt payments on a $2-million loan to improve it.

“It just didn’t pencil out,” said Kenneth Lombard, executive vice president of the Economic Resources Corp., a Lynwood-based nonprofit company that owns the Baldwin Theater. “According to our estimates, it would take 10 to 15 years to make a profit.”

The theater’s decision to withdraw is a blow to the Baldwin Hills Crenshaw Plaza, which has been trying to bolster its operation by increasing foot traffic and attracting national retail tenants.

“We are very sorry that the negotiations have fallen through,” said Andy Natker, a spokesman for the Alexander Haagen Co., which developed the plaza with the Community Redevelopment Agency. A multiscreen movie theater, he said, is considered essential to the mall’s efforts to increase its drawing power in the largely middle-class African-American community.

For that reason, he said, the plaza will begin a search for another theater operator. “We have an obligation to the community and our tenants,” he added.

But an attempt to bring in a white-owned theater chain is likely to cause other problems.

Since the plaza opened its doors in 1988, the Haagen Co. and the Community Redevelopment Agency have been under political pressure not to bring in a theater that would compete with the Baldwin Theater, which operates a three-screen movie house on nearby La Brea Avenue.

Assemblywoman Gwen Moore (D-Los Angeles) became so angry at the prospect of a competing theater that she warned that she would “be the first person to join a picket line” if the Baldwin Theater did not get first crack at the mall space.

The negotiations to bring the Baldwin into the mall spanned nearly two years and involved Mayor Tom Bradley’s office.

The planned theater’s size played a large part in the failure of the negotiations. Because it would be relatively small, the profit margin would be limited.

he Haagen Co. had planned a larger theater as part of a separate phase of the project when the plaza solicited another major department store. But the fourth anchor never materialized, and the lukewarm response from retailers prompted the developer to seek ways to squeeze the theater into unleased store spaces.

The failure to sign a theater is the second setback for the mall in recent weeks. Earlier this month, Lucky Stores Inc. said it will delay the opening of its supermarket in the plaza until Bank of America moves a temporary branch from the supermarket parking lot.

That problem is expected to be resolved when the bank completes a permanent branch sometime next year.

The dispute over the theater threatens to have more lasting consequences.

Even now that negotiations have broken down, Moore said she continues to be adamantly opposed to another theater coming into the community. “These people came into this community and struggled for years to bring us first-run products, so we ought to support them,” she said.

Lombard said he hopes the community will remain loyal to the Baldwin Theater, which is expanding to five screens. He did not rule out further negotiations and said that if Haagen decided to sweeten the offer to attract outside theaters, Baldwin should again be contacted.

“It is our hope that the community will continue to support the idea that if there is going to be a theater in the Baldwin Hills Crenshaw Plaza, it ought to be the Baldwin Theater,” Lombard said.

But some say it doesn’t matter who runs the new theater or what race they are.

“Sure it would be beautiful to have a black-owned theater in the mall,” one resident said. “But if they don’t have the money, they don’t have it. I’m sure there are several other companies willing to come in and, besides, there are black-owned businesses in the mall that are suffering.”