Santa Barbara Plaza has been whitewashed, boarded up, security gates padlocked. Most of the 240 small and large shops once here have been relocated, were bought out or have gone out of business.
Yet this Los Angeles shopping center -- the size of 20 football fields, larger than the footprint of the Century City mall -- just sits there waiting for a bulldozer. (Read the accompanying story: One of these do not belong.)
The vacant lots and decaying storefronts have long been sore points for the residents who live near the corner of Crenshaw and Martin Luther King Jr. boulevards.
Attempts to rejuvenate the complex known by many as Marlton Square have been a complicated failure spanning more than two decades. The reasons are plenty: litigation, backstabbing, unstable developers and perhaps even the naiveté of the Los Angeles City Council.
A ray of hope seemed to have broken the clouds once again in 2010. After years of silence on the project, the L.A. Community Redevelopment Agency issued a request for qualifications (RFQ), a step in the process of finding a developer.
But hopeful applicants may be in for a disappointment; the job they are applying for does not yet exist.
Currently, the CRA owns one-third of Marlton Square. The rest has been victim to a struggle over ownership rights since the city’s chosen developer abandoned his post, leaving a trail of paperwork and angry constituents. Litigation has been continuous since April 2006, when the bank responsible for lending the cash to buy up the rest of the Marlton Square parcels - USA Capital - went bankrupt. Two years later, the developer followed suit.
According to 8th District Councilman Bernard Parks, it could be years before the city sees any movement in the direction of progress at Marlton Square.
“The bankruptcy dictates everything,” said Parks. “If all goes well, it would be a miracle if you had a product in five years.”
There is no way to know who will come out of the USA Capital court proceedings as the owner of the remaining properties that cover an area equivalent of nearly 11 football fields. Until the CRA can begin negotiating with the new ownership, little can be done. Beginning the search for qualified developers is a way of scouting talent in the mean time, but the job comes with no set start date.
“The purpose of the RFQ is to determine the types of firms that would have the capacity to potentially complete a retail/commercial development at a later date when the other parcels are out of litigation,” said Carolyn Hull, the South L.A. regional administrator for the Community Redevelopment Agency. “The timetable for development of Marlton Square is dependent upon the litigation schedule on the otherparcels. At the moment CRA/LA is not a party to that litigation and does not have any credible information as to when those cases will be adjudicated.”
All Tied Up
With the Baldwin Hills Crenshaw Plaza mall across the street, Marlton Square seems a prime location for redevelopment. The mall owners have just begun a $30 million upgrade at the same intersection where the blighted Crenshaw Discount Swap Meet in Santa Barbara Plaza has sat vacant for years. Decades of neglect have rendered the area an embarrassment in contrast to the community around it, hip Baldwin Hills, artsy Leimert Park and swanky View Park.
“The area has changed a lot,” said Rashod Conkrite, who walks through the rubble of Santa Barbara Plaza on his way home from work. “If you know anything about the area back in the ’80s and early ’90s, it was drug infested. Now they cleaned it up a whole lot. You are seeing more diversity. I think it could prosper.”
But the complex conundrum of Marlton Square is a difficult one to solve,even for a company like Capri Capital Partners, owners of the Crenshaw mall.
“I’ve watched Marlton Square personally for a number of years,” said Ken Lombard, a partner at Capri. “We have a tremendous amount of interest and would love to be involved at the point that the project is ready to go.”
Lombard probably knows the project as well as anybody. He worked with Magic Johnson in the late 1990s when they were on the cusp of getting the needed government subsidies to take on the Marlton project. Today the fractured development area is a red flag even for Lombard, whose company bought the Crenshaw Plaza mall for $136 million in 2006.
“I would have concerns about getting involved in any development that would not include the entire parcel,” said Lombard, whose company did not submit an application to the CRA during the request for qualifications. “Our plan was to wait and see. My hope is that with time things will be worked out.”
A History of Disappointment
The past is strewn with moments of hope for Marlton Square, quickly followed by disappointment.
Star power brought the project into the spotlight throughout the late 1990s and early 2000s. Basketball-star-turned-developer Magic Johnson won the exclusive right to negotiate in 1996, only to lose the deal to football star Keyshawn Johnson.
Lombard said the lack of cooperation from the 40-plus owners of Santa Barbara Plaza dissuaded his team from taking on the project. Unable to obtain control of the parcels, the Johnson-Lombard team suffered a major setback when Walmart pulled out.
“We decided to move on,” said Lombard. “Marlton Square is a critical component to the overall successful development of the Crenshaw corridor. This is a tremendous community that deserves the best options.”
Amazingly some of the campaign contribution checks bounced even prior to the Marlton Square deal. Investigations in 2004 found that Hammond had bounced more than $200,000 worth of checks
across the city, including campaign contributions. His loans went into default, and despite spending millions of dollars, Hammond failed to secure enough property to see the project through.
City Controller Laura Chick criticized the CRA for failing to run thorough background checks on Hammond, his partners, and Capital Vision Equities. By then Hammond was already deep into borrowing money, buying up properties and even building.
When Ridley-Thomas chose Hammond, the councilman was on his way to Sacramento, winning a seat on the state assembly, then the state senate; today he’s a county supervisor. All the while he has represented the area that includes Santa Barbara Plaza. Though he did not respond to requests for an interview about the state of Santa Barbara Plaza, it was once his priority: “As for my own efforts, I will not rest until there is economic vitality once again at Sant....”
There were supposed to be three buildings with 180 beds. Only one stands, has 70 beds, and is uninhabitable. The U.S. Department of Housing and Urban Development last year found the city failed to have a competitive bidding process or scrutinize Hammond’s financial equity.
The audit accused L.A. officials of failing to responsibly oversee the development of Buckingham Place. It only took a month for the city to respond and agree to ensure compliance to federal rules and improve administration.
The federal government had given $8.5 million to the city - which “lacked written procedures and had insufficient monitoring controls in place for projects.” The city, in turn, gave the money to Hammond. And if the city doesn’t finish Buckingham Place by 2012 the feds want the money back.
As the pink and green senior complex rose, Hammond borrowed millions from private lenders. By 2006, Hammond’s had secured about 25 properties- about half of Santa Barbara Plaza.
But Hammond was stringing everyone along those five years, creating an intricate financial knot that the city cannot untie.
Breaking the Bank
The knot became Gordian when Hammond’s bank went bankrupt itself in 2006. Hammond had taken a $36 million loan from the Las Vegas-based USA Capital to buy the parcels, all the while soliciting cash from multiple investors. When USA Capital dissolved, it made history as the largest company in the state of Nevada to go into bankruptcy, leaving a mess comprising $962 million in assets and more than 6,000 investors. Convicted of fraud, former owner Joseph Milanowski was sentenced to 12 years in prison in April this year and ordered to pay $86.9 million in restitution.
The deeds to the parcels are trapped under the name of MS Acquisition Company LLC, a venture created by Hammond and his retail business partner Jeff Lee, owner of the Lee Group Inc and Lee Homes in Marina Del Rey. Documents show that there are 300 investors tied to the MS Acquisition loan. The battle over which creditors control which assets continues. Marlton Square is not the priority.
According to Parks, the city only lost around $7 million by investing in Hammond, only because of safeguards within the contract, created with a sense of mistrust, the councilman Parks said.
“In my judgment there was little confidence in him the way (the city) wound the deal so tight. They were adamant you cannot get a dime of city money until you accomplish this."
The city would invest $7 million until Hammond could secure 80 percent of the Marlton Square property. A further $40 million was at the ready, but Hammond never got his hands on it as he defaulted on the project in 2004.
Though the city hedged its bet and “only” lost $7 million, the decision to go with Hammond cost the neighborhood 10 extra years of living amid the crumbling ruins that attract crime and repel opportunity.
Councilman Parks said that although the lack of progress can be disheartening, his mode of operation has been to think “long term” by buying as much land as the CRA can afford, and stockpiling for a time when the nearly bankrupt city has more money to invest in redevelopment.
“The project, if you had to do it over again, you would do like we are doing now,” Parks said. “All the property along King Boulevard, the city has found money to purchase it. They own everything but two properties along King. With ownership, you have site control.”
For residents hoping to see change, a ghost town covered in graffiti will remain the status quo. Living within sight of the eyesore incites anger and disappointment, and after decades, indifference in many.
“Now it’s just a big sewer,” said Deborah Johnson, who lives nearby and uses Santa Barbara Plaza as a shortcut on her bike. “People come in pretend they are going to start something and they stop. It just brings down the whole neighborhood, you know. Don’t nobody want to come over to an area where you turn down the street and you see all this. It looks like a war zone. I don’t think in any other neighborhood, this mess would be like this for this long.”
Chris Hammond could not be reached for comment. He represented himself in bankruptcy court and a lawyer representing Chris Hammond could not be found. Jeff Lee, Hammond’s partner in the residential part of Marlton Square, did not respond to requests for interviews.
On the business index for Hammond's Capital Vision Equities, LLC, Minnie Talton is listed with the California Secretary of State's office as agent for service process. The company’s status is suspended. Talton said she left the company in 2006 and was surprised to find she was listed as the person who would get a subpoena for the company in the event of lawsuit. She wouldn't talk about the company. As to Chris Hammond's whereabouts, she repeated what others have said.
"I haven't talked to him in years; I don't know how long," Talton said. "I don't know where he is. Sorry."
This crowdfunded, crowdsourced piece of investigative journalism was funded through Spot.Us.
Today from noon to 5 p.m. - free burritos and a preview of a community amenity that's on the way! Have you heard the good news about the Hoover Union gateway triangle place park (the name has yet to be decided) that is being rethought, remodeled, reimagined and refunded?
Come by today and…
""Sherri Franklin, founder of the Urban Design Center, has spent a quarter-century devoted to the development of affordable housing, community facility, recreational, open-space, infrastructure, economic-development, and social-enterprise…"
Storytime is a special time to make new friends and share stories, songs, play and more. This program is for children 0-5 years of age. Babies, toddlers and preschoolers are all welconme. No registration is required. Spring session will begin Wednesday, April 22 and end on June 10, 2015. Summer session will then begin on June 24, following a one week hiatus.
Space for stortyimes generously donated by the City of Culver City's Parks, Recreation and Community Services Department…
"Friends of Jazz
The Thelonious Monk Institute of Jazz Performance at the UCLA Herb Alpert School of Music presents Brownie Speaks A Screening of the Clifford Brown Documentary Featuring a Q&A with filmmaker Don Glanden Wednesday, April 15…"
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Come see these amazing youngsters perform at Newman Recital Hall!
Performers will include elementary jazz choirs from 32nd Street and Science Center Schools, jazz band and pop combo from Foshay Learning Center, the Los Angeles Youth Jazz Ensemble and a performance by USC Thornton mentors.
Dinner will be served at 6pm and the concert is at 7pm.
World Mural Renovation April 16 - 20th! Earth Day Week is the PERFECT time to get out in the fresh air and give our mural a fresh face!Sign up for multiple days if painting is your gig and you want to really get your brushes funky.(All brushes and paints supplied!) We will have snacks & drinks for all of our volunteers.
"Sat Apr 18th - Chuck Johnson Quartet
Trinity Lutheran Church of Hawthorne
6:00 pm, Donation
Chuck "Bari" Johnson-saxophones
4783 W. 130th Street, Hawthorne, CA 90250
The 6th ANNUAL WALK FOR LIFE & COMMUNITY FESTIVAL is hosted by P.C.I. People for Community Improvement. The Walk will also feature a Health Fair and Entertainment. This year's theme is: PROSPERING THE COMMMUNITY THROUGH UNITY. We prosper the community through highlighting Community Resources that assist in building wealth and incorporate the goals of First Lady …See More
The California African American Museum (CAAM), in collaboration with The Eli and Edythe Broad Stage at the Santa Monica College Performing Arts Center invites you to a very special evening panel discussion anchored by the topic "Finding Beauty Through The Struggle," which explores how the inherent and resilient strength of the human spirit can give rise to creativity. The panel will feature playwright, actor, and professor Anna Deavere Smith who can be seen in the upcoming Broad Stage…See More