Black community group battles Baldwin Hills Crenshaw Plaza redevelopment plan
Baldwin Hills Crenshaw Square has long roots in the historically black community of South Los Angeles. Paul Yelder and his family moved to the area in 1963, when Paul was 4, and the square was the only shopping center for miles. It has remained a community gathering place for decades. The square was one of the first regional malls in the United States when it just opened after the Second World War, and it has retained its iconic Streamline Moderne buildings even as the 42-acre property expands to include an indoor mall and multiplex over the decades. When the property went up for sale three years ago, Yelder and hundreds of community members mobilized to take control, redevelop and reinvigorate it as a community center.
“We’ve all said we have to get this or else a developer will come in and do something that we don’t need and don’t fit, and wipe out this crossroads, our downtown core, if it’s done badly,” said Yelder at Capital & Main.
Yelder’s fears could come true, however, now that a large developer known for building high-end housing in Los Angeles has purchased the property, leaving Yelder and a community coalition who have fought to buy the complex fearing unwanted gentrification. . They say racism played a role in the rejection of their higher bid, and they plan to take legal action to prevent the project from going ahead.
Like many shopping centers across the country, the place has been in crisis for years. In 2006, the Chicago private equity group Capri Capital Investments bought the property for $ 136 million and spent $ 35 million on improvements over the years. After improvements failed to boost foot traffic – the latest blow was the loss of Sears in 2019 – Capri turned to Deutsche Bank subsidiary DWS to liquidate the property and award the development contract . the local Yelder consortium, Crenshaw Town Center, hoped to develop property and create worker-owned cooperatives, small businesses and green spaces. The group also pledged that 80% of the homes would be sold at a price below the market rate. The group has $ 60 million to the bank and the support, both moral and financial, of community groups and local clergy.
“At the end of the day, you have a corrupt bank that accepted a lower offer from a failed developer.”
~ Damien Goodmon, Board Member for Downtown Crenshaw
In July, Downtown Crenshaw submitted its own offer – $ 115 million and a business plan – to buy the property. But last month a lower supply of $ 111 million speak Harridge Development Group, a Los Angeles-based “urban infill” developer has been accepted by the deal broker, DWS. In a separate deal, Harridge also bought a Macy’s department store next door for $ 30 million. This gives Harridge control of a 42-acre site straddling Martin Luther King Jr. Boulevard and Crenshaw Boulevard. The entire project is valued at $ 1 billion, said Harridge CEO David Schwartman. Los Angeles Times, and will take seven years to complete. Contrary to downtown Crenshaw’s plans for community co-ops and low-income housing, Schwartzman said Harridge redevelopment plans include offices, retail and restaurants and 961 housing units – a mix of condos and apartments, with 10% of condos for sale at below market rates and 10% of apartments for rent below market to low income and very low income tenants.
Niki Okuk, chairman of the board of directors of Downtown Crenshaw, said that in addition to having the highest bid, her group offered more money up front for the close, a longer closing period. short and was fully funded. “A lot of developers would bid, be awarded a sales contract, and then raise money,” she said. “We did the opposite. We raised all the money and got all the funding before we made our offer, which in my opinion makes us pretty credible. “
In an email, a spokesperson for DWS said the successful bidder “was selected on the basis of a number of factors which include both the purchase price and proof of adequate funding. , as well as development expertise “.
Members of downtown Crenshaw dispute that DWS chose the group with more experience, saying their team, including SmithGroup, which was one of the companies that designed the National Museum of Afro History and Culture -American in Washington, DC, has more collective experience than Schwartzman in building similar projects, although this team has never worked together on a large project.
“At the end of the day, you have a corrupt bank that took an inferior offer from a bankrupt developer,” Damien Goodmon, board member of Downtown Crenshaw, whose activism also includes the Crenshaw Metro Coalition, said Capital & Main. “Schwartzman doesn’t build things. He allows things to be built, then sells them in pieces or whole. He has never been involved in building a project like this.
Last year, CIM, a development company believed to have close ties to Jared Kushner, won its offer to buy Baldwin Hills Crenshaw Plaza, but withdrew following protests from neighborhood activists.
In 2009, a Hollywood redevelopment company in which Schwartzman was the majority shareholder had to reorganize after personally filed for bankruptcy. Since then his projects have come under heavy criticism, one to squeeze Korean businesses in a shopping mall in Koreatown. Another deal was the resale of the historic LA Times building rather than a redevelopment. The Harridge Group was sued for violate tenants’ rights and move communities of color, both in 2019. In 2017, he announced with fanfare his intention to build a gated community near Inglewood NFL Stadium. To date, this project has not been completed.
Neither Schwartzman nor Capri responded to multiple requests for comment.
Downtown Crenshaw has been excluded more than once from the sale of the Baldwin Hills Crenshaw Plaza property. Last year CIM, a development company believed to have close ties to Jared Kushner, also won its bid but pulled out when Downtown Crenshaw and other neighborhood activists protested. Then the project was awarded to LivWrk, a New York-based developer who ultimately stepped down, leaving DCR still standing and still rejected.
Okuk speculates that there might be a racial aspect to the sale, claiming that DWS would not take calls from downtown Crenshaw but responded when a white development partner called on behalf of downtown Crenshaw.
“We know there have been other credible black teams that have made offers on this mall,” Okuk said. “And it’s interesting that in three or four rounds of the bidding, it has never been awarded to any of the incredibly credible, professional and well-capitalized black teams.” She added that Downtown Crenshaw never received a direct response from DWS regarding its offer.
Another local Black developer who lost the bid for the property also brought charges of racial bias and an unfair bidding process.
Crenshaw town center said it was assessing legal options against Harridge, and will also sue DWS for breach of fiduciary responsibility by not selling to the highest bidder.
LA Mayor Eric Garcetti said the city had no interest in a private transaction, but stressed that he hoped whoever redeveloped the property cared about “affordable housing, not gentrification of the land. community ”.
Downtown Crenshaw has led protests against Schwartzman and the Harridge Group, including one outside Schwartzman’s mansion in Beverlywood. But local activists say neither their tactics nor their plans to remake the property should matter to the sellers. “If I sell my house, I don’t care if you turn it into a multi-family building. I want to get the best price for it, ”Yelder said.
Members of downtown Crenshaw point out that the most important issues are community control and the prevention of gentrification that could displace long-term tenants in the area. Although the LA County Supervisor Holly mitchell and City Council member Mark Ridley-Thomas pleaded for community participation in the redevelopment of Baldwin Hills Crenshaw Plaza, the latter using the hashtag # 40acresandamall, neither of the two organizations intervened to stop the sale of the property to external developers.
LA Mayor Eric Garcetti only said the city had no interest in a private transaction, but stressed that he hoped whoever redeveloped the property cared about “affordable housing, not gentrification of the community “.
Goodmon said city leaders should have intervened. “It’s an important asset that will have a profound impact on the future of the community, and you say you don’t have a say? The town hall could have made it clear that community ownership was imperative.
Members of Crenshaw town center note that the pension funds that make up the Urban Investors Capri portfolio includes the Los Angeles Fire and Police Board Pension Commissioners and the University of California Board of Regents.
“These were funds that were paid in by the public sector, and a large majority (of the money) came from people of color,” Goodmon said.
Goodmon said downtown Crenshaw is using the $ 60 million it raised and plans to raise even more with the aim of using any means, including lawsuits, to push Harridge out of the project . Using the example of a community coalitionSan Francisco’s seven-year struggle to wrest a project from a developer, Goodmon says Downtown Crenshaw is up for the long fight. “We’ll be ready to buy the mall when we can. It’s more than a mall, however. It is a movement, rooted in the community.
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