A major national theater chain and a black-owned Los Angeles theater have agreed to a joint venture to operate movie theaters in South Los Angeles, promising a major boost to the area’s regional shopping mall and a significant expansion of its entertainment options.
The deal between the Baldwin Theater--the nation’s only first-run, black-owned movie house--and Kansas City-based American Multi-Cinema Inc., which operates 1,600 theaters in 24 states, will bring an eight-screen movie complex to the Baldwin Hills Crenshaw Plaza.
The joint-venture also will operate the Baldwin Theater on La Brea Avenue and another multiplex in Hawthorne Plaza.
The arrangement is being touted by city and industry officials as a model approach to solving the nagging problem of attracting new businesses into the city’s beleaguered urban core.
“If we can joint venture with major companies and not come out on the short end of the stick, then it gives us that much more clout or strength (in revitalizing our own communities),” said Lance Drummond, chairman of Economic Resources Corp., a nonprofit Lynwood-based company that owns the Baldwin Theater.
Negotiations to form the joint venture began in earnest last year as officials of the Baldwin Hills Crenshaw Plaza struggled to find ways to strengthen the mall, which was developed jointly by Alexander Haagen Co. and the Community Redevelopment Agency.
Since the mall opened in 1989, Haagen officials have been seeking to recruit a nationally recognized theater chain to the plaza as a way to attract major retailers and boost foot traffic.
Efforts to negotiate a deal were hampered by the reluctance of major exhibitors to locate in the largely middle-class African-American community and by neighborhood pressure to bring in a minority theater operator.
Before the recent riots, the deal showed signs of unraveling, as both sides expected a tough fight to win City Council approval for the public financing required to complete the package.
Yet in a way, the unrest helped seal the deal.
The Baldwin Theater, which struggled for years to bring first-run movies to the largely black community, was untouched in the disturbances, though several nearby buildings were destroyed.
“From my office in Century City, I had a view of the fires, and I could see plumes of smoke emanating from the Baldwin Hills,” said Alan Benjamin, a vice president of American Multi-Cinema. “I had a great concern about the future of the agreement--whether the civil disturbance would cause us to question our commitment.
“The fact that the Baldwin Theater and the mall stood unscathed reinforced our belief in our partner and landlord,” Benjamin added. “It was a trial by fire, literally.”
Now, the City Council is expected to approve the project when it comes up for consideration. The deal calls for $2 million in financial backing from the Community Redevelopment Agency, the city’s Community Development Department and Mayor Tom Bradley’s Office of Business and Economic Development. In addition, Haagen Co. has agreed to kick in $3.9 million in mall improvements.
Fred Bruning, Haagen Co.'s chief of staff, said the agreement between AMC and Baldwin Theater offers the best of both worlds. “It’s the wave of the future,” he said. “You just can’t bring in a business from the outside without getting the community involved as partners.”
Bradley, whose office played a major role in sealing the agreement, said the joint venture will “generate new entertainment and economic opportunities for South Los Angeles.”
Theaters have fled central cities even more than banks and major retailers have, following the trail of white flight in the 1960s to suburban communities. The flight from South Los Angeles was so complete that from the Santa Monica Freeway to the South Bay, the only major movie houses are the Baldwin and a complex near USC.
The joint venture comes at a time when the Baldwin Hills Crenshaw Plaza has been coming into its own. A new Lucky supermarket--the first major supermarket to open in South Los Angeles since the Watts riots--has attracted crowds of shoppers, becoming one of the most successful stores in the chain. National retailers, too--including Gap and Disney Store--are negotiating leases.
Inner Cities Cinema Inc., the newly formed joint venture group, is 51% owned by Economic Resources Corp. The partners say they plan to use the joint venture as a blueprint to open theaters in inner cities across the country.
“We think there is money to be made,” said AMC Vice President Gregory S. Rutkowski. “This is going to be a total home run.”
A network of movie houses across the country eventually could give blacks more influence over the kinds of movies being made, the new theater operators say.
“This is the first time there has been a joint venture partnership put together between a major operator and a minority operator,” noted Ken Lombard, president of Inner Cities Cinema and an executive at Economic Resources Corp. “We have enabled ourselves to get the horsepower necessary to build a circuit that could eventually expand to 100 screens.”