By Tim Kawahara, Executive Director, UCLA Ziman Center for Real Estate
At long the last, the NFL is back in Los Angeles. A new $1.86 billion, 80,000-seat stadium and 6,000-seat performance venue is currently under construction in the City of Inglewood. The stadium will serve as home to the Rams, and possibly a second NFL team in the near future. These are the stories grabbing the headlines, but the NFL’s return to Los Angeles is just part of a larger economic revitalization effort underway in Inglewood.
The stadium is part of the City of Champions Revitalization Project, a massive 298-acre mixed-used real estate development which includes retail, office, residential, hotel, and park space. The development is being built on the former site of the Hollywood Racetrack and Casino, the largest parcel of undeveloped land in the greater Los Angeles area. The development is a joint venture of San Francisco-based Stockbridge Capital and Missouri-based The Kroenke Group under the entity Hollywood Park Land Company.
Projects of this magnitude have the potential to be economic catalysts for communities in which they rise. And, Inglewood, a city of 110,000 residents, is in desperate need of revitalization. It suffered through the 1992 riots, the recession of the late 80’s, and the Great Recession. With a deficit of $18 million, the city was on the brink of bankruptcy just months ago, and the school district was taken over by the state for financial and performance issues. In popular culture, Inglewood has a long-held reputation as a rundown crime-ridden city.
Today, there is new excitement for Inglewood’s future. The city already enjoys some innate advantages. It has good proximity to LAX and two major freeways, the Crenshaw-LAX rail line is under construction and will run through downtown, and the city is adjacent to LA’s pricy Westside. The Forum, former home of the Lakers, recently underwent a major renovation by the Madison Square Garden Group and is now a major concert and sports venue.
The City of Champions Revitalization Project is the centerpiece of Inglewood’s urban renewal efforts. The development is projected to create thousands of construction jobs, with 35% of the jobs being sourced from the local community, and thousands of permanent jobs when the project is completed. The project is estimated to deliver $25 million in permanent annual tax revenue to Inglewood.
Super Bowls, Final Fours, concerts, and other special events will bring additional dollars into Inglewood and the Greater Los Angeles area. The stadium will also strengthen Los Angeles’ bid for the 2024 Summer Olympic Games.
This all sounds good, but this creates a potential inverse consequence that needs to be addressed as well, namely the effects of gentrification. Many areas in Los Angeles have experienced recent gentrification—Echo Park, Silver Lake, Atwater Village, Downtown, Highland Park—and the displacement of residents priced out of the neighborhoods in which they live and have established deep roots. Inglewood homeowners and commercial real estate landlords are already seeing increased property values, and many speculative investors have placed a sharp focus on the area. Sixty-four percent of Inglewood residents are renters who will not experience increased home equity through price-appreciation, and will at the same time face significant rent increases.
The UCLA Ziman Center recently participated in a unique outreach event that connected UCLA to residents of South Los Angeles and Inglewood. Partnering with the American enterprise Institute and African-American church leaders, the Center developed a program, “Our Changing Community,” to address the questions and concerns of local residents about the transformational NFL stadium and related development in the area.
I recently attended the City of Inglewood’s sold-out State of the City Address at The Forum. This year, Mayor Butts was joined by Stanley Kroenke, owner of the Rams, Jerry Jones, owner of the Dallas Cowboys, and a host of celebrities, media personalities, corporate representatives, and civic leaders. Inglewood is clearly on the precipice of a new era. Will new development bring economic prosperity to the entire City? Or will the new development become an island of prosperity surrounded by continued blight? Will current residents find a way to participate in the economic boom? Or will they be forced out by increased property values and rents? Time will tell…