Community Redevelopment Agency board members are giving mall developer Alexander Haagen until April 7 to reinstate the city's rights to the Baldwin Hills Crenshaw Plaza or face a possible lawsuit, a CRA official said.
The board met last week in closed session to discuss a plan of action in response to Haagen's recent sale of the troubled Baldwin Hills Crenshaw Plaza to a Haagen-controlled real estate investment trust.
The move effectively ended Haagen's partnership with the CRA, which put up $50 million to help construct the mall in 1984 and was to receive half the profits under an agreement with Haagen.
Haagen sold the mall to his publicly traded company, Alexander Haagen Properties, last December.
Haagen officials argued that the mall was sold at a loss and therefore had no profits to share. CRA spokesman Marc Littman said the redevelopment agency, along with several City Council members, immediately questioned the legality of the sale.
A team of CRA administrators, led by board chairman Stanley Hirsch, were negotiating with Haagen representatives last week to protect the city's interest in the mall. Littman said the city attorney's office is preparing to take legal action if the city cannot come to an agreement with Haagen by April 7. "We want to resolve this as soon as possible," Littman said. "We would like to settle it without going to court, but we are preparing for that possibility. We'll be ready to take legal action."
Councilwoman Ruth Galanter, who represented much of the Crenshaw area until district lines were redrawn in 1992, said she hopes that the negotiations will clarify the city's rights in the matter. "The original deal between the redevelopment agency and the Alexander Haagen company sounded as if it provided something for the city, and it's not all that clear that it really did," she said.
Haagen officials have said the mall has already benefited the city by creating a new tax base and contributing to increased economic activity in the Crenshaw area.
The mall has been losing money since opening in 1988. City officials had hoped a $12-million theater multiplex would turn the plaza around financially. But the dispute with Haagen has thrown into question whether the city will grant a $1.5-million loan that would make the theater, to be developed by Haagen and Earvin (Magic) Johnson, possible.