Magic Johnson Reaches Tentative OK to Build Multiscreen Theater : Business: Former Laker’s company is finalizing a deal for a complex in the Baldwin Hills mall. It would be the country’s largest black-owned cinema.
Credit another assist to Magic Johnson.
The former Lakers star has reached a tentative agreement to build an eight- to 12-screen theater complex at the struggling Baldwin Hills Crenshaw Plaza, the mall located in the nation’s wealthiest African-American community.
Developers and investors have tried unsuccessfully for four years to bring a black-owned movie theater to the mall. But mall developers and Johnson confirmed Wednesday that a company owned by the ex-Laker is close to clinching a deal to open by next summer what would be the country’s largest black-owned theater complex.
“These people here have been waiting for a long time,” said Johnson, who retired from basketball last year after he was found to be carrying the virus that causes AIDS. “They’ve been asking for it and now it’s time for action rather than lip service. They deserve it.”
The theater complex proposed by Johnson, who owns the “Threads for Life” clothing store at the mall, would cost $6 million to $8 million.
The agreement between the Manhattan Beach-based Alexander Haagen Co. and the Johnson Development Corp. comes several weeks after a previous joint venture between American Multi-Cinemas and the Lynwood-based nonprofit Economic Resources Corp. collapsed when AMC sued its partner, alleging financial misdealing.
“We are closer than we have ever been,” said an obviously pleased Mark Ridley-Thomas, the area’s councilman who oversaw the Johnson deal as chairman of the Community Redevelopment and Housing Committee. “This project has been in waiting for much too long.”
In contrast to the on-again, off-again theater plans of the last several years, the proposed project between Johnson Development and Alexander Haagen was struck quickly. Fred Bruning, chief of staff at Haagen, said the developer received a business proposal from Johnson three weeks ago and accepted it within two days. Only the size and space of the movie complex remain to be worked out before the deal is finalized, he said.
“The economics have all been agreed to,” said Bruning, who estimated that two-thirds of the proposed costs will be borne by Haagan, with the rest coming from Johnson Development and the Community Redevelopment Agency. “We really love the fact that (Johnson) is involved. He’s been a major supporter of the mall for the last two years.”
Plaza and CRA officials are hoping the multiplex will turn around the fortunes of the $120-million plaza, which has been a money loser since it opened five years ago. Presently, the plaza is about 80% leased, while foot traffic, according to general manager Glenn Clark, has been “a roller coaster. Heavy at times, not heavy at others.”
Johnson has been a vocal proponent of investing in areas damaged by last year’s riots. He said he first considered investing in the multiplex four months ago upon learning of the problems facing the AMC-Economic Resources Corp. venture.
Construction could begin in October, contingent on City Council approval, Johnson said.
Until his intervention, the future of the Baldwin Hills theater complex looked doubtful.
Last September, AMC theaters and the Economic Resources Corp. formed a joint venture called Inner City Cinemas to operate the multiplex. But the partnership soon became fractious and communication between the two parties broke down, stalling the project.
In March, Haagen informed Inner City Cinemas that it was seeking other bidders for the movie complex. Two months later, AMC filed suit alleging that Economic Resources Corp.--which owns the three-screen Baldwin Theater in Baldwin Hills--provided false financial information, and that Economic Resources Corp. was using joint venture funds to pay off its debts.
The issue of the availability of films to African-American audiences has been a sensitive one around Los Angeles in part because of the reluctance of some theaters to show black-themed films. Last month, the massive Cineplex Odeon complex in Universal City delayed showing the film “Poetic Justice,” a spokesman said, because “the theater is programmed with an upscale demographic.”
“No question, all the Afro-American films will definitely be played there. That’s a given,” Johnson said of his theaters.
Of course, he added, blockbuster first-run films will also be shown.