$123-Million Crenshaw Project Goes to Council

Billed as the linchpin for revitalizing southwest Los Angeles, the Marlton Square commercial and housing development is likely to be approved by the City Council today despite questions about its $38-million public subsidy and the close political ties between the developer and its City Hall supporters.

The project is being pushed by outgoing City Councilman Mark Ridley-Thomas and Mayor James K. Hahn, who has made it his top economic development priority.

The development firm Capital Vision Equities, its employees and family members contributed $30,000 to Ridley-Thomas’ recent Assembly campaign. Those involved in the project also gave $25,000 to Hahn’s anti-secession campaign, although Hahn later returned $15,000. The firm’s chief executive, Christopher Hammond, said the money was returned to avoid the perception of a conflict.

Hammond is married to an executive with the Community Redevelopment Agency, one of the main sources of financing for the project, although officials said his wife has not been involved.

Hammond’s firm also has hired former CRA chief John Molloy, who left the agency three years ago, to press its case at City Hall.

To some critics and City Hall observers, the mayor’s support is seen in part as designed to win back standing in the African American community that he lost when he refused to give former LAPD Chief Bernard C. Parks a second term.

Development ‘Overdue’

Hahn rejected that description of his motivations, saying the development is long overdue and that the community deserves to be a priority in city government.

He acknowledged that the funding for the $123.1-million project is unconventional mainly because it relies heavily on committing anti-poverty funds from the city’s federal Community Development Block Grants for the next 18 years.

“This kind of [project], though unusual, is a way to demonstrate a commitment by the city to this community,” Hahn said in a recent interview. “I can’t think of a better use for these CDBG funds. This is my top priority for economic development.”

Formerly known as Santa Barbara Plaza, the project is the swan song for Ridley-Thomas, who leaves office in two weeks to join the Assembly.

Despite the steep public subsidy, the project has been on the fast track; it bypassed two council committees as well as other normal processes so it can be approved before Ridley-Thomas leaves office.

Some say that is because it is not known whether Parks, a front-runner to replace Ridley-Thomas, would be as enthusiastic about the development. Parks did not return calls for comment, but others seeking the council seat have raised questions about the project, even though they support it.

Although the concept of Marlton Square has broad support in the community, 8th District council candidate Robert Cole, a public relations executive, said the size of the public subsidy is a concern. “It does seem high,” he said.

Another council candidate, businessman Kevin Melton, said he is troubled by the way the city chose the developer for the project and by that firm’s ties to city politicians, including Ridley-Thomas. “The concern is that it’s a good-old-boys network and we’re not giving businesspeople in the community a share,” Melton said.

Ridley-Thomas said that Hammond’s firm is headquartered in the 8th Council District and that he received the job through a competitive process.

Although seven firms submitted proposals, only Hammond’s company proposed developing the whole site, city records show. Others dealt with smaller portions.

Ridley-Thomas predicted that the council will approve the development and the public subsidies, saying it is an important investment needed to replace the dilapidated Santa Barbara Plaza shopping center.

“This will be the catalytic project for the Baldwin Hills, Crenshaw communities,” Ridley-Thomas said.

Plans for the 22 acres include 140 detached, single-family homes; 180 rental units for low-income senior citizens and 140,000 square feet of retail space that would complement the nearby Baldwin Hills Shopping Center and the Magic Johnson Theaters in the area. It would also include a 40,000-square-foot community facility.

Working with Hammond’s firm on the project is Keyshawn Capital Development, headed by pro football player Keyshawn Johnson.

The project has been in the works for more than a decade.

‘Magic’ Touch?

Former Laker star Earvin “Magic” Johnson was originally interested in developing Santa Barbara Plaza several years ago. But he was unsuccessful in getting Ridley-Thomas to endorse the project, which also would have required substantial public subsidies.

Ken Lombard, president of the Magic Johnson development company, said he is pleased the project is finally moving forward. Magic Johnson has provided a letter of interest indicating he may want to put a 24-Hour Fitness health club in the new development, according to Hammond.

Hammond said the size of the subsidy has precedent, including the $43-million public subsidy approved last year by the city for the NoHo Commons project in North Hollywood.

Still, the financing has raised some eyebrows in and out of City Hall.

“I’m suspicious any time they say they need public subsidies for projects that otherwise wouldn’t be funded by the public sector,” said Jon Coupal, president of the Howard Jarvis Taxpayers Assn.

In a report to the council, City Administrative Officer William Fujioka and Chief Legislative Analyst Ron Deaton singled out for special attention the fact that the project will take $1.1 million annually from the block grant funds even though there are not enough anti-poverty dollars to meet the needs already identified by the city. Other funds would come from the Housing Authority, a federal economic initiative grant and taxes generated by the project.

“The project requires the use of significant CDBG funds over 20 years,” the two said in a report to the council, calling it a “significant policy decision.”

Ridley-Thomas said the funds being tapped are supposed to help blighted communities, so the project is justified.

Hahn agrees. The mayor grew up in the Crenshaw area and said he recalls going to Santa Barbara Plaza with his parents. He said it has been run-down for too long.

“I think it’s really stuck out as a sore thumb there,” Hahn said. “I’m very excited that in a year and a half, we’ve been able to get this moving.”