A $750 million retail development on Century Boulevard in Inglewood that is expected to bring in a 16-screen theater, fine dining and top-rate stores, is also being touted as a project that will simultaneously improve the economic circumstances for many residents of the city.
The Inglewood Promenade, is projected to stretch from Prairie Avenue east to Yukon and encompass 1.8 million square feet, about 650,000 of which will be devoted to retail use.
The center, which has been four years on the drawing board, is expected to generate about 4,700 union construction jobs and 3,500 post construction positions. Other community-related options include a meeting room, a child care center, computer lab and a scholarship fund for students created by the theater owner.
Confirmed tenants for the Inglewood Promenade include J.C. Penny, Shoe Pavilion, Toys R Us/Babies R Us, PetCo, 24 Hour Fitness, Mimi’s Cafe, Appleby’s, the Elephant Bar, Johnny Carino’s (Italian restaurant), a Bank of America and Rite Aid.
Other amenities planned for the center include a book store, 300-room hotel, several multiple story office buildings, a parking facility expected to be operated by Los Angeles World Airports, and a police substation.
What makes this model so different from previous development efforts, said John McDonald, managing partner of Imperial Partners, the company developing the property, is how the deal has been structured financially and at what point community residents will benefit.
“In a lot of developments in the urban market, the people who live in the (area) get left out; they end up being merely consumers,” explained McDonald, an East Texas native, who began his real estate career in the Long Horn state some 20 years ago. “We’ve set different goals and different opportunities.”
One of those different goals is to make sure that local residents are hired and trained for both the temporary construction jobs and the permanent jobs created once the center is completed.
According to Nation of Islam’s Minister Tony Muhammad, the project will work with entities such as the Urban League and the unions to provide training and all the various wrap-around services needed to help interested local residents obtain jobs.
Another goal is to insure that minority contractors have the opportunity to be deeply involved in the building of this proposed $700 million shopping center. In order to do this, Imperial Partners is working to remove some of the obstacles that traditionally hinder these firms such as bonding and access to capital.
To ease this often strangling problem, Imperial Partners will work with insurers to provide the bonding needed. The developer has also eliminated the bidding process. Instead, the company will compile a list of contractors interested in working on the project along with their skills sets and then try to match them to the work available.
“We’re not going to tell them to come in and do competitive bidding, we’re going to negotiate,” said McDonald, “We know what the cost of the job is, and we’ll find out what they want to make in profit. And if we think a price is too high, we will negotiate with the contractor.”
One reason McDonald is able to take such a tack is the financial structure of the project. About $150 million is an investment made by the National Electrical Benefit Fund, which is a multi-employer, defined benefit pension plan that provides retirement benefits and related benefits to employees in the electrical industry. Another $60 million in New Market Tax credits counts as an equity investment, and the balance is debt financing.
The New Markets Tax Credit (NMTC) Program permits taxpayers to receive a credit against Federal income taxes for making qualified equity investments in designated Community Development Entities (CDE). Substantially, all of the qualified equity investment must in turn be used by the CDE to provide investments in low-income communities.
The next step in the Inglewood Promenade project is to begin the environmental impact studies, which should be completed in early November. Ground breaking has tentatively been scheduled for spring 2009, and retail construction is slated to be completed in August of 2010.