realestate

Crenshaw Mall: Black Group Claims Racism Sunk $115M Bid

South Los Angeles group files lawsuit against DWS Group over failed $115 million bid for Baldwin Hills Crenshaw Plaza in 2021, alleging racial bias towards White buyers in complaint.

T
he Baldwin Hills Crenshaw Plaza in South Los Angeles was once home to a failed $115 million bid by the Downtown Crenshaw Rising group in 2021. The group is now suing Deutsche Bank's DWS Group for allegedly showing preference towards White buyers. The complaint was filed on August 26th, along with an organization called Members Against Anti-Black Racism at Pension Funds. The defendants include DWS, Chicago-based investment Capri Capital Partners, Eastdil Secured, Harridge Development Group, the Regents of the University of California, and retirement funds for government workers in California, Texas, New York, Michigan, and New Jersey.

    Quintin Primo, head of Capri Capital, the previous owner of the mall, declined to comment on the case, stating he had not yet seen the complaint. According to court records, DWS was responsible for overseeing the sale.

    In its petition, Downtown Crenshaw Rising claims that DWS showed preference for White developers, particularly those linked to former President Donald Trump. In 2020, LivWrk, a firm led by Trump's son-in-law Jared Kushner, submitted a bid for the property located at 3650 West Martin Luther King Jr. Boulevard. This deal fell through, following the failure of a $100 million bid from CIM Group. CIM Group has closed several deals with Trump and people in his orbit; they own the former Trump SoHo hotel, now known as the Domick, in New York. They also entered a joint venture with Kushner for the 2016 acquisition of the Jehovah’s Witnesses Watchtower building in Brooklyn.

    The Crenshaw mall was eventually sold to billionaire Len Blavatnik, who owns Warner Music Group. Blavatnik donated $1 million to Trump's inaugural committee in 2019, according to a previous report from Quartz.

    Downtown Crenshaw Rising claims that their offer was superior to Blavatnik's firm, Harridge Development Group's $111 million bid. Their offer included an $11 million nonrefundable deposit and had a quicker closing period.

    In their complaint, they argue that Deutsche Bank/DWS engaged in racially discriminatory practices in violation of civil rights laws by denying the Black community-led organization the opportunity to acquire and redevelop its own '40 acres and a mall.'

    DWS Group disputes these claims, stating that they welcomed bids from all parties. They claim that all bids were evaluated based on objective criteria such as price, timing, and availability of capital to close the transaction, as well as development experience. They maintain that their process produced a buyer who closed on the transaction in 2021.

    According to a 2020 New York Times article, Downtown Crenshaw Rising's plans for the site were about building and keeping Black wealth in the community. This included revamping the property into an "urban village" with a boutique hotel, production studios, retail, and affordable housing.

    Downtown Crenshaw Rising is not seeking a court order to undo the sale; instead, they are seeking an unspecified amount in compensatory damages. In September last year, Harridge proposed a 647,000-square-foot mixed-use redevelopment with 636 apartments at the site.

    Downtown Crenshaw Rising has organized petitions to oppose selling the mall to "outside" companies. The organization describes itself as a coalition of "homeowners, renters, houseless, merchants, property owners, neighborhood associations, faith-based institutions, civil rights organizations, business leaders, civic leaders, scholar-activists, artists, and affinity groups" on its website.

    Baldwin Hills, unofficially known as "the Black Beverly Hills," is an upscale African-American market. From 2007-2009, the BET reality TV series "Baldwin Hills" chronicled the lives of teens in the neighborhood.

Crenshaw Mall investors claim racism led to rejected $115 million bid proposal.