Mall to Get Theaters; City to Be Paid : Neighborhoods: Tentative compromise would end stalemate over Baldwin Hills center. Multiplex is seen as key to its success.

The Baldwin Hills Crenshaw Plaza shopping center will get a long-awaited multiscreen movie theater and the city of Los Angeles will get a share of the mall’s profits under a tentative agreement announced by city officials Thursday.

The arrangement was hailed as a tonic for the drooping fortunes of the first major mall in the United States built in a predominantly African American community and as insurance that the city will receive a return on its decade-long investment in the shopping center.

The tentative pact announced by Stanley Hirsh, chairman of the city Community Redevelopment Agency, ends a monthlong feud that began when mall developer Alexander Haagen said he was closing the door on his long partnership with the city.

Haagen company officials said in March that the city lost its 50% claim on the plaza’s profits, despite its $50-million investment, when the company was sold to a real estate investment trust.

But city lawyers said the change in ownership was largely a paper transfer to a publicly traded concern in which Haagen maintained a controlling interest. They argued that a previous contract entitled the city to half the proceeds, despite the transfer.

Fred Bruning, a vice president of the new Alexander Haagen Properties, denied that Haagen had kept his controlling interest in the company. He said that a 94% interest is now owned by shareholders in the trust’s stock.

Bruning, who said last month that the city “has no ongoing interest” in the mall, said Thursday that there had merely been a misunderstanding and that the city is “entitled to 50% of the profit in the center, once the debt expires.”

Mayor Richard Riordan and others said they were particularly upset by the developer cutting them out of the mall operations, because the action came just as the CRA was moving ahead to bring a 12-screen movie theater into the shopping center, located at Crenshaw and Martin Luther King Jr. boulevards.

The multiplex is widely predicted to help the plaza turn a profit for the first time since its 1988 opening.

Hirsh said the dispute was tentatively resolved with an agreement that assures the city will get half the mall’s profits.

It also promises that the city will expedite approval for the multiplex theater, which is to be built by a partnership headed by basketball great Magic Johnson.

The city has agreed to let the mall keep all profits, if any, for the next two years. The start-up period will give the Haagen company more time to attract lucrative tenants and permit a partnership headed by Johnson to establish the theaters, Hirsh said.

“Everybody’s cool. Everybody is happy,” said Hirsh, adding that the tentative agreement heads off what could have been a protracted legal struggle. “In two years, the city’s share will be equal to their share.

“And in the process, we want people to enjoy the mall and for the mall to attract more major tenants.”

Many residents of the affluent Baldwin Hills community have complained that they will not shop at the Art Deco shopping complex until it attracts more national retailers. Hirsh said that such outlets, including a Gap clothing store, are on the way.

The agreement between the CRA and the Haagen trust will not become final until it is approved by the agency’s board. Officials predicted it could take as much as a month to hammer out the details.

*

But city officials were celebrating Thursday.

“The mayor is very excited,” said Riordan’s legal counsel, Karen Rotschafer. “This is a win for everyone involved. It’s a win for the city and a win for the community.”

Councilman Mark Ridley-Thomas, who represents the Crenshaw area, said the theaters will be a “linchpin that will stimulate trade in the rest of the mall and create entertainment options that are not available at present in that part of the city.”

Haagen company officials could not be reached for comment.