Crenshaw real estate development on the upswing

By Matt Pressberg

When Ken Lombard gives advice on developing inner-city real estate, it’s worth paying attention.

A longtime partner of Magic Johnson, with whom he helped bring companies like Starbucks and T.G.I. Friday’s to underserved urban communities, Lombard recently came out of retirement and joined Capri Capital Partners, LLC to purchase and operate the Baldwin Hills Crenshaw Plaza mall. He had some rather counterintuitive words about the challenges facing the neighborhood during an interview at his new project, which sits on the corner of Crenshaw Boulevard and Martin Luther King Boulevard.

Where others had gone wrong trying to play to less informed perceptions of the neighborhood, Lombard chose to defy the conventional “wisdom.”

“You cannot be successful here if you come in and you try to treat it as if, for lack of a better way to describe it, you’re on Crenshaw and King,” he said.

The Crenshaw District has been a symbol of black Los Angeles since the 1970s, and has not always been cast in the most flattering light. Its demographics and reputation as a hotbed of crime and gang activity, often belied the richer complexity of the area.

Even as South Los Angeles endured high crime and the loss of many blue-collar jobs in the ‘70s and ‘80s, middle and upper-class black Angelenos were establishing a thriving community in the Baldwin Hills and View Park neighborhoods overlooking Crenshaw, and the Leimert Park area was developing into a cultural and art center. The WWII-era Crenshaw Center shopping plaza got a full remodel and reopened in 1988 as Baldwin Hills Crenshaw Plaza, the area’s first indoor mall. As the ’90s approached, the commercial strip along Crenshaw Boulevard was starting to attract more vibrant businesses to serve a long-ignored community.

Then, on April 29, 1992, a Simi Valley jury made its fateful decision and Crenshaw went up in flames. Rioters expressed their understandable outrage in the heart of their local economy, and despite the affluent neighborhoods within and close by, the Crenshaw District was one of the hardest-hit parts of Los Angeles.

Twenty years later, the Crenshaw corridor remains an important nexus of black commerce in Los Angeles. Its redevelopment was a high-priority concern after the riots, and politicians, community leaders and businesses alike banded together to rebuild the neighborhood.

Two decades is no time in real estate, but taking a critical look at the evolution of the Crenshaw business district since it hit rock bottom provides insights into how to achieve better urban development and a better Los Angeles. The first step is understanding Crenshaw itself, and the only way to do so is to experience it firsthand.

“It’s always this idea of what they see on TV or what they hear, and the perception that this is like ‘South Central,’” Lombard said, describing many retailers’ initial concerns about the neighborhood. “But you got to touch it, you got to feel it, you got to drive around.”

Unfinished business

The commercial strip along Crenshaw Boulevard, whose core is roughly between Exposition Boulevard and Leimert Park, looks a lot different than it did in 1992, and also a lot different than one might expect it to look today.

imageThe recently renovated and noticeably clean Baldwin Hills Crenshaw Plaza is downright bustling on a pleasant Thursday afternoon, and in architecture and vendor selection, looks almost indistinguishable from any other modern Southern California shopping mall. The new Debbie Allen Dance Academy seems to be bringing in plenty of traffic of its own to its corner of the property, and in a building that used to house a fried chicken joint, a world renowned chef is reimagining the possibilities of the Crenshaw food scene.

Brad Johnson, a noted club and restaurant proprietor in Los Angeles, who formerly ran Georgia on Melrose, was approached by Lombard to open an upscale restaurant at the Baldwin Hills Crenshaw Plaza Mall. He was very much skeptical at first, but when he spent time in the neighborhood, he recognized an opportunity to fill a need.

“It didn’t take long to see that there’s a lot of money, a lot of people and not much to choose from in this area,” Johnson said.

Lombard, Johnson and their partner, chef Govind Armstrong, opened the Post & Beam adjacent to the mall three months ago to overwhelmingly positive reviews. Lombard followed his own advice and did not stereotype the neighborhood when deciding on a restaurant concept. He and Johnson traveled to Seattle and Scottsdale, Ariz., two places not normally associated with Crenshaw, to get inspiration and ideas for the Post & Beam. Thinking outside of the box has proven the existence of a market—fine dining on Crenshaw—that an analyst in a distant office crunching numbers would be highly unlikely to predict or justify.

“Most real estate you can’t [analyze] at 30,000 feet,” Lombard said. “This piece, you really can’t do it. This is a very unique location that you have to get your arms around.”

Johnson agrees. “There’s a lot of pride and a lot of culture,” he said, describing the neighborhood’s enthusiasm for something beyond fast food. Also, given the geographic centrality of Crenshaw, the Post & Beam is attracting commuters and even people heading to the airport, looking for a place to have dinner before a red-eye.

“This is not that far out of the way for a lot of people,” Johnson said, and he hopes that giving people a reason to come to the area can serve as a reminder of its relative convenience, and inspire repeat visitors from all over Los Angeles. He isn’t completely sold on the forthcoming Crenshaw Line light rail, but mentions that other business owners around the area are excited about the potential new traffic that might bring.

Lombard is pleased with the way the mall has turned out, but he has no plans to stop there, continuing to push for new businesses in the area, ones that are more aspirational than stereotypical. He mentions an eight-acre patient care center that Kaiser will be opening along Crenshaw and a new Target near Interstate 10 as very encouraging signs, but this is a part of town that corporate retailers are still getting to know and have to get comfortable with.

Lombard talks about the neighborhood tour he has been giving to retail agents for more than 20 years, a circuit he calls the “good, bad and ugly,” and while many of these people expect to see the latter two, without fail, they had no idea the “good” parts existed.

“The stigma that has been associated with this part of town is also part of what makes it attractive,” Johnson said. For many investors and retailers, it’s also what makes the local market and real estate within it potentially highly undervalued, having lost much of its natural growth and appreciation to the shock trauma of the riots. As much of the Southwest went through a real estate bubble of epic proportions, Crenshaw remained economically flat, only in the last few years having picked up where it left off in April 1992.

“This was unfinished business for me,” said Lombard, when asked why he had come out of retirement. “I wanted to come back and take this particular project back to the quality level it’s supposed to be”

Challenges and missteps

The Baldwin Hills Crenshaw Plaza looks to be well on its way, but its neighbor across Marlton Street tells a different story.

imageMarlton Square, formerly known as Santa Barbara Plaza, has been an eyesore and a quagmire for over 20 years. It is an abandoned shopping center with a footprint larger than Westfield Century City that has been plagued by questionable decisions, financial insolvency, opaque politics and fractured land holdings.

Unlike Baldwin Hills Crenshaw Plaza, which is carved up into large parcels, allowing a single owner to control a large area, Marlton Square’s real estate is much more fragmented. Assembling all of the parcels necessary to fully redevelop the center as a unified entity has been a major challenge. The Community Redevelopment Association Los Angeles had invested $17 million in putting part of this puzzle together, but with the plug having been pulled on that agency, Marlton Square remains unsettled.

Lombard sees a resolution to the Marlton Square saga as a top priority. He said Capri plans to make a run at the property, but even if someone else wins out, it will be a long-awaited victory for the neighborhood.

“Even if it’s motivating others to come in and try to do it right, that’s an accomplishment for us,” he said. “Hopefully we get it, but if we don’t, then knowing that it’s going to be developed, and knowing that that blight has gone away is enough satisfaction.”

A few blocks north, at the corner of Crenshaw and Coliseum Place, a vacant building stands where the Los Angeles Urban League had partnered with Toyota to develop an automotive training center in the immediate aftermath of the riots. It opened to much fanfare, including a visit from Prince Charles in 1994. A little more than 10 years later, the center was quietly closed.

A 2006 Toyota marketing brochure hints at one of the main causes of the center’s demise. In a PR piece that praised the center as “a symbol of successful redevelopment in the inner city,” Toyota conceded that finding prospective candidates with eighth-grade reading and math skills “has been a challenge” that required the company to establish an adult education course in February 2005.

The two high schools serving the neighborhood, Crenshaw and Dorsey, are among the lowest ranking in the Los Angeles Unified School District, according to the Academic Performance Index. The automotive training center’s failure underlines the importance of decent schools in preparing a community for decent jobs, a lingering problem in this part of town.

It also must be said that while crime is down as of late, the Crenshaw area, particularly the Hyde Park neighborhood by Crenshaw and Slauson Avenue, is known for gang activity. Random crime can happen anywhere, but even as it has become safer, Crenshaw is still not Beverly Hills, and the omnipresent security guards at Baldwin Hills Crenshaw Plaza serve as a reminder that the fight against crime remains a long one.

The next 20 years

Solving the Marlton Square problem is the most pressing concern for the Crenshaw business community. Looking further ahead, Lombard stresses the “need to go further south,” down to Slauson.

A Crenshaw Line stop is planned for Slauson, a major east-west car and bus traffic corridor. The southeast corner of that intersection is currently home to a large shopping center anchored by Ralph’s and Rite-Aid, but the stretch of Crenshaw connecting Slauson to Leimert Park has no other large businesses, just a haphazard arrangement of private homes, apartment buildings and small independent storefronts.

“It’s a little bit more difficult [to develop this area] because you don’t have any sizable parcels that you could really bring in,” said Lombard.

National retailers tend to favor occupying larger stores where they can do more sales volume as well as being part of a shopping cluster that benefits from shared traffic. The disparate and mostly longtime owners of commercial property along this section of Crenshaw, who have no remaining tax basis, no debt, and are happy to collect checks, have “no real motivation to sell,” Lombard openly admitted.

Crenshaw faces another challenge, that of the changing demographics of South Los Angeles. It remains a majority-black area, but the Latino population is on the rise and that is not without tension. Lombard mentioned a black community that is “truly very territorial” about Baldwin Hills Crenshaw Plaza, and a need to “crack the code” on a racially inclusive experience that accommodates all Angelenos. Managing this dynamic, which in many ways is shaping the future of South Los Angeles, will be a defining issue for this neighborhood for years to come.

Business at the Post & Beam has exceeded expectations thus far, and Johnson is proud that it has caused the restaurant establishment to take notice of the neighborhood. That means a lot to him. The fact that this is happening just now, a full 20 years after the riots, means something too.

“It points to what has not happened,” he said. “There’s a need for this part of town to somehow become part of L.A.”


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