Purchasing Power: Merchants in Leimert Park join forces to buy their building
As the Metro’s expansion on the K-Line accelerates real estate speculation along the Crenshaw Corridor, businessmen in Leimert Park use group economics as a front-line defense against crowding out.
Four retail tenants closed in September – Akil West (Sole Folks), Anthony Jolly (Hot and Cool Café), Ade Neff (Ride On! Bike Shop) and Dr. Adrian Dove (Kingdom Day Parade) – a deal to purchase the 12,000-square-foot retail property that houses their shops.
With billions of dollars of investment capital pouring into South Los Angeles, the sale of a 70-year-old building in dire need of repair may not mark a pivotal moment in Black Los Angeles’ future.
However, unlike other deals that do not typically focus on the existing community, this transaction provides both stability and equity for companies that have been instrumental in the recent resurgence of Leimert Park, which is an aspect longtime merchants in the village are interested in recognize as crucial to his future.
“Owning the property in the neighborhood is very important. If you don’t own the property, you could always get upset,” said Sika Dwimfo, a local entrepreneur who has run a popular jewelry store in Leimert Park since 1992.
Even more notable about the deal is that a collection of retail tenants with no prior ownership experience completed a $6.5 million property without spending a single dollar.
More importantly, at least to those involved in the deal, the real meaning goes far beyond that single purchase.
“It’s an example of what the community can do when we come together,” said Neff, a transport policy advocate who has run his bike repair shop in Leimert for years.
For Hot and Cool’s Anthony Jolly, the principles of group economics are reminiscent of his experiences growing up in Washington DC.
It’s also a message he believes carries added weight given Leimert Park’s position as the cultural epicenter for Black Los Angeles.
While Jolly was admittedly hesitant when Sole Folk co-founder Akil West first approached him with the idea of purchasing the building, Jolly knew the opportunity to build real equity in Leimert was just too good to pass up allow.
“Where else can you find a collective group of people who are black and able to endorse products and services and come together in LA?” asked Jolly.
Read More: https://inthebuildingla.com/akil-west-mobilizes-business-owners-to-purchase-building-in-leimert-park/
Changing The Narrative
While the sale directly challenges stereotypes that often limit greater ownership of real estate, the group’s delivery from concept to completion provides a framework for other Black people to follow.
“Joint ownership of commercial real estate is common in other communities,” explained Matthew Gates, a commercial real estate agent who represented buyers in the purchase.
“Unfortunately, based on our experience in this country over the past 450 years, it is sometimes difficult for us to build the necessary trust to do business together. Every day this group worked to build that trust. Ultimately, that’s why they were able to close this deal.”
To guide the buying process, the group tapped into several community partners who provided strategic help, including George Fatheree (Sidley Austin), Prophet Walker (Treehouse), and Shanita Nicholas — an attorney and co-founder of Inglewood’s Sip and Sonder, the helped the group draft their formal operating agreement.
“Bringing parties together around a unique vision requires a level of selflessness and forward thinking that each of the members embodies,” said Nicholas. “I am proud to have had the privilege of being involved in the transaction process.”
Finally, in an effort to add some technical expertise to the team, the traders have also brought in an up-and-coming development firm, Akin Co. LLC, as lead developer and equity partner.
“We needed someone who had the language and history to make things happen,” admitted West.
Founded in 2014, Akin has worked on several high-profile projects across the region, including Hilltop Coffee + Kitchen in Inglewood and Treehouse Hollywood, the first residential community from scratch in Los Angeles.
By the time Treehouse’s Koreatown building opens in spring 2023, Akin will have developed approximately 72,000 square feet of commercial projects.
According to Akin CEO Ariel Lawrence, being able to participate in this project aligns with the company’s mission to “disrupt the industry” and “make good projects in meaningful places for people and with people who look like us.”
“We hope to do so with pride and do a job of which we can be very proud, knowing we made a difference, knowing that it reflects us into our truest selves and will impact generations to come.”
However, even with a Rockstar team on deck, the group’s ability to close the property remained an open question.
For starters, the building belonged to an arms dealer who had previously sold guns and other “security gear” from his properties in Leimert Park to law enforcement officials.
Although their time as tenants provided some competitive advantage during the negotiation process, there was never a guarantee that the potential buyers would pry the property away from the notoriously difficult seller.
Ultimately, the group agreed to a purchase price of $6.5 million, which was $2 million more than the property’s current value — a significant price to pay for self-determination.
Aside from some challenging negotiations, traders have yet to raise the necessary capital, a difficult task given the inflated valuation.
After receiving an initial $2.5 million grant from Wells Fargo and an additional $1.5 million in pledges from an LA-based CDFI and other nonprofit donors, the group received a major boost from County Supervisor Holly Mitchell.
Thanks to public support and concern about evictions, the Los Angeles County Board of Supervisors approved a motion to establish a statewide small business anti-eviction program.
The program comes at a particularly poignant time as the entire community has been stunned by a market rate development project that seemed to pop up overnight.
“We are in danger of losing the heart and soul of our city,” said Dr. Dove when asked about the $4,000-a-month housing units being built around the corner along West 43rd Street.
The Mitchell-drafted proposal provides blacks and other POC-owned businesses with $12 million to purchase the retail properties they lease to operate their stores.
“When Holly Mitchell came on, the momentum changed, things actually started to look promising from there,” Jolly said. “If she hadn’t been involved in fighting for us, this would never have happened. Leimert Park has a special place in her heart.”
With funding from the new program, the group was able to fill the gap and eventually close the deal.
Looking To The Future
Although no official plans have been put into motion, the group intends to eventually rehabilitate the property, which was built in 1948. For now, a number of repairs are set to begin in the coming months.
While the overall vision for the property includes affordable retail space for black merchants as well as housing, West insists that any future redevelopment will include community input.
“Rehabilitation doesn’t mean gentrification,” said West, who also serves as president of the Black Owned and Operated Community Land Trust — the umbrella organization acting as the registered owner for the Degnan purchase.
To ensure long-term residents benefit from whatever is ultimately built on the property, West emphasized that economic development will remain at the heart of the building’s mission.
“Affordable housing is a great way, but not the only way, to rejuvenate or regenerate a community,” West said. “The Black-owned and operated Community Land Trust will focus on addressing disadvantage through quality education, access to clean food and services, and most importantly, health and care issues as we expand this project.”
Originally Published in L.A Standard Newspaper and InTheBuildingLA.
Written By Tina Sampay and Matthew Gates.
