Harridge Development purchases mall; the community demands more Black equity in ownership group
Crenshaw Boulevard is considered by many as the heart of the African American Community and believe the Crenshaw Mall is the catalyst to economic stimulus and economic revitalization within our community. On Friday, August 20, 2021, DWS (an asset management company in charge of operating and selling the mall) transferred ownership of the Baldwin Hills Crenshaw Mall to the Baldwin Hills Crenshaw Plaza Partners (BHCPP), a partnership between Harridge Development, Access Industries, and Silver Peak with David Schwartzman of Harridge Development as the managing member. Many in the community were heartbroken outraged.
For the past several years, the mall and its impending sale has been of great debate throughout the African American community. And while numerous groups have shown interest in purchasing the site and even more have discussed purchasing it, until now, none of the bidders had been willing or able to close on the mega retail property, which over 50% of its retail space is vacant, in part due to the COVID-19 pandemic and corporate downsizing.
In 2017, Capri Capital started the process of drafting an Environmental Impact Report in order to change the outdated retail space into a 24-hour mixed-use complex with commercial, office, and residential structures. In 2018, the Los Angeles City Council approved the project entitlements, but by April of 2020, the mall was for sale and CIM Group had agreed to buy the mall for more than $100 million with plans to convert the former Sears and Walmart into offices to drive more foot traffic into the remaining retail stores. However, in June 2020, the sale was cancelled due to community opposition to the plan without the residential component.
In 2020, the mall was temporarily and partially shut down due to the COVID-19 pandemic. During the pandemic, LIVWRK and DFH Partners put in a new offer to purchase the mall with plans of closing on the property by the end of 2020. However, during the transition to a new ownership group, community groups expressed concern about the lack of African American ownership and participation in the project. The mall ownership group had been seeking a buyer who would build out the approved plan but the sale to LIVWRK and DFH Partners was scuttled after meeting with community protests.
A local group called Downtown Crenshaw Rising (DCR) lead by Damian Goodmon is said to have made an offer to purchase the mall through a community land trust, but the mall ownership group (DWS) chose Schwartzman and the Baldwin Hills Crenshaw Plaza Partnership group instead because of “their ability to complete the sale and previous development experience.”
In a statement to KABC-TV, DWS said, “We welcomed all potential buyers, including community groups, to participate in the bidding process. The winning bidder was selected based upon a number of factors which included both purchase price and proof of adequate financing, as well as development expertise.”
In response to the DWS state Goodmon said, “We have $30 million in a bank account, far more than is necessary for a deposit, are backed by multiple socially responsible investors, and have some of the largest names in philanthropy, and 300 community groups and leaders backing us,” Goodmon said. “This is a no-brainer for anyone who actually wants to sell the mall.”
But sell the mall they did, and while opinions vary on who was and was not qualified to purchase the mall, the reality of the situation is the 40-acre mall site has now transferred title and the new owners have begun the work they deem necessary in order to move the project forward. On Tuesday, August 24, 2021, less than 24 hours after the property title had been recorded, David Schwartzman and his team including David Lombard (the current manager of the mall, who is being retained by the new ownership group and does have an equity interest in the development) met with several local community groups including the Baldwin Hills, View Park, Leimert Park and Crenshaw Manor Homeowners Associations to discuss their vision for the mall, solicit more community input and layout their plans for community inclusion. After the meeting, one of the HOA members who was in attendance at the meeting said, “I am sorry to see that Downtown Crenshaw Rising (DCR) was not able to purchase the mall, but I hope that they take all of the money they have collected so far and invest in another piece of property along Crenshaw. There is a lot of work and a lot of opportunity all along Crenshaw.”
David Schwartzman, BHCPP’s managing partner also carved time out to discuss his vision for the property with the Sentinel in hopes of getting his message directly out to the community about his group’s vision for the site, including his experience in turning around underperforming assets like the mall, and how he plans to earn the communities trust and respect by bringing forth a quality, first-class development that everyone will feel good about.
Right out of the gate, Schwartzman pointed out Jason Lombard has been retained by his group after formerly working for Capri Capital (Capri Capital was the managing partner of the mall on behalf of the Equity Partners LACERA, UC Board of Regents, Texas Teachers, NYCERS, NYC Teachers & LA Police & Fire Pension Fund) is a part of the leadership team and has an equity stake in the group. Schwartzman says his group is also working on putting together a program to allow other local businesses the opportunity to be a part of their group but says “this plan is still being worked on and we intend to roll it out in the very near future.”
Schwartzman believes that what made his group the selected developer was more than just their ability to finance the project. He said that the previous ownership group was looking for a developer who was and could work within the constraints of the existing “development agreement” that was able to follow through with the existing plan that the community had worked so hard to put in place, and Schwartman says they will do just that. “This project already has entitlement in place that many in the community fought long and hard to put in place and we intend to follow along these lines and build the project that has already been approved.” These approvals will make the project a mixed-use development that will not only have shops but will include plans for 961 housing units.
Currently, the plan calls out for 551 condominium units and 410 apartments, but the developer does have the flexibility to adjust for sale units versus rental units but cannot exceed the approved 961 total units. Schwartzman also points out that part of this existing plan, he does have a mandate to make 10% of these units affordable (5% for very low-income residents and 5% for low-income residents) as well as a requirement to have a portion of the for-sale housing set aside as workforce housing which is targeted for teachers, first responders, and other working families at a price below market rate.
Schwartzman says BHCPP will focus on repurposing of some of the existing vacant boxes within the mall including the Sears and the Broadway spaces which have been sitting vacant within the mall footprint for years. “We need to look at uses that we think will revitalize the retail space already inside the mall. We need to look at Job creators, technology type-based industries to go into creative space, things like vocational schools and other uses that will repurpose those department store boxes into new use that we think are better for what’s going on in the world today.”
Schwartzman believes Harridge development and his partners are the right developers for this project. “We have done a number of developments throughout the Los Angeles area over the past several years, projects that have been sitting dormant in communities that desperately need revitalization,” he said. One project he points out that his company developed the former Daniel Freeman Hospital site in Inglewood. “We were able to reposition that site, make the entitlements less dense. We did all the land development and actually are now building homes in Grace Park. That was a project that sat dormant for a long time. We worked closely with the City of Inglewood and to date, we have between 160 and 170 people who have now moved into the project and by the end of the year or early next year, the entire development will be completely sold out.”
Schwartzman says that throughout his due diligence period and as he researched the site, he was actively seeking input from the community. “Before we even went into contract, we met with a number of the homeowner’s associations; we met with local business owners, we solicited their input, we heard what their concerns were, all in order to put together a development plan that included what they believed were important. We are respectful of the existing development agreement which appears to have been a major component to us winning the bid. We can work within the constraints of the current entitlements and are not looking to change the entitlements,” Schwartzman stated. He says their intent is not to start over. “By working within the confines of the current development agreement, we can deliver a project much sooner and we intend to fully honor the development agreement as is currently laid out.”
BHCPP wants to revitalize the retail in the mall. He wants people to understand that the world of retail today has changed, that the malls of the past are the “experience centers” of the future. “We intend to address the communities need for retail for shopping, but we do feel that the current configuration of the retail has got to change, to become more updated and have a new feel in order to make it successful.”
BHCPP also wants this venture to be a job creator. “What L.A. is famous for is entertainment, tech, and we need to make this project adaptable to that need. We think these big boxes to become technology centers, incubators and job creators, which I know is very important to the local community.”
Schwartzman says his group has met with a lot of groups, including those that have been in opposition to them purchasing the property. But they have also engaged a lot of community groups. “We have engaged a local community outreach firms to work with us to help guide us through this process and we will continue to work to engage the business and local community to deliver a project that people feel good about, that are proud of and that want to shop, do business and live in.”
“We understand the significance of the mall to the community and we want to be sensitive to their needs. We heard the communities’ voices and we consider the tenants and community as our partners and we will hear their voices and include them in the project. We have met with and had serious dialogue with the African American businesses already in the mall, including businesses and business owners like Kim Prince and Greg Dulan of Hotville Chicken, Malik Muhammad of Malik Books, John Cleveland with Post and Beam; we have let them know we want them here, they are really the people and businesses who matter and we want to work with them and others to keep the local businesses within the mall.”
While BHCPP has been out working to garner community support, there is still a large contingent of advocates who want to see more African American ownership as part of the deal. Reverend William Smart, president of the Southern Christian Leadership Conference of Southern California said, “Late last Friday, the Baldwin Hills Crenshaw Mall was quietly purchased by Beverly Hills-based developer, David Schwartzman, president and CEO of Harridge Development Group, the deal included NO significant Black ownership!!
“Although the mall was purchased by these outsiders with NO significant Black ownership, we will inform the community about this terrible deal and demand the project NOT MOVE FORWARD until the deal includes at least 50% Black ownership,” said Smart.
Damian Goodmon of Downtown Crenshaw Rising (DCR) also released a statement, “The only reason corrupted and racist, David Schwartzman was able to buy our Black mall is because he was provided special treatment that was never afforded to Downtown Crenshaw or any other Black bidder for that matter, he said.” (Damian Goodmon’s partial statement, see full statement on page C1).
In response David Schwartzman stated, “We are excited to see this project come to fruition after years of community input and extensive process that arrived at the approved entitled project.”
Schwartzman also points out that the mall is open, that vital businesses like Albertson’s will remain open throughout the construction of the project. He and his group hope to break ground and says the community will begin to see major improvements to the site within the next 15 to 18 months, and that a new website will be launched shortly informing the community of dates for community meetings and to keep everyone updated on the mall’s progress.