De La Hoya Turns Eye to Real Estate Projects
A man who made a fortune landing hard punches in the ring will now do some tough negotiating in the bruising world of real estate.
Boxer Oscar De La Hoya and a Los Angeles developer announced plans Wednesday to invest $100 million over the next three years building housing, stores and entertainment complexes in urban Latino communities, mostly in California.
De La Hoya and John Long, founder of Highridge Partners, said they were in discussions with officials in several communities and expect to announce their first project in the coming weeks.
In forming Golden Boy Partners, a nod to the nickname De La Hoya earned during a career that started with a gold medal in the 1992 Olympics, the boxer-turned-developer is taking a page from another local superstar athlete, Lakers Hall of Fame guard Earvin “Magic” Johnson.
Starting with one movie theater in Baldwin Hills, Johnson has built a multimillion-dollar empire with holdings in real estate, restaurants, gymnasiums and theaters, most of them located in inner cities.
“He’s making money but also giving back” something to the community, De La Hoya said Wednesday, citing Johnson as an inspiration.
De La Hoya and Long’s new venture is part of a trend toward investment in the nation’s inner cities, which is more risky than suburban development because builders must grasp the interests and needs of central city residents, said John McIlwain, a senior fellow at the Urban Land Institute in Washington.
“When it’s done right, the returns tend to be very high,” McIlwain said. “There are a lot of spendable dollars in these communities” that are now being spent outside of those areas.
Bobby Turner, managing partner of the Beverly Hills-based Canyon-Johnson Urban Fund, which has raised almost $900 million for urban developments, said there was “such an obvious mismatch between supply and demand for capital in these markets. We wish Oscar and John the very best of luck. The market is large enough for lots of people.”
Golden Boy Enterprises, a separate De La Hoya company, recently jumped into the real estate business with the purchase of a 12-story office building in downtown Los Angeles. The firm also has interests in Latino newspapers in New York, Chicago and Los Angeles.
De La Hoya’s personal fortune has been estimated at more than $150 million.
Long founded Highridge Partners in 1978. The private investment company has acquired, developed or financed more than $6 billion of real estate. Hugh Jackson, an executive with a Highridge Partners affiliate, has been named president of Golden Boy Partners.
In addition to real estate development, Golden Boy Partners also may help finance new and existing businesses in inner cities in order to develop the mix of services that residents need and to create jobs, particularly for young people, De La Hoya said.
Such financing may be necessary for those developments to succeed, McIlwain said.
“The key to their success will be finding the right retailers who understand the market,” he said. “That’s a challenge because there aren’t a lot of large ones yet. It’s going to take some time and patience to make this work.”
Another challenge in the new company’s bid to build housing for working families is the rising cost of construction, McIlwain said, but there is no shortage of demand. Latinos are the largest and fastest-growing minority group in the country, he noted.
De La Hoya and Long were each raised in an inner-city neighborhood; De La Hoya in East Los Angeles and Long in South Los Angeles.
“We both grew up without much, but a lot of family support,” said Long.
De La Hoya, a nine-time world champion, is scheduled to fight next on Sept. 17 against an unspecified opponent.