Press Releases
EARVIN "MAGIC" JOHNSON AND CANYON CAPITAL REALTY ADVISORS' CANYON-JOHNSON URBAN FUND ACQUIRES A 650,000 SQUARE FOOT NEIGHBORHOOD POWER-CENTER IN CLEVELAND HEIGHTS, OHIO
Los Angeles, CA, April 4, 2002 - The Canyon-Johnson Urban Fund has completed its acquisition of the Severance Town Center, a 650,000 square foot retail power-center located on approximately 70 acres in Cleveland Heights, Ohio. The Los Angeles based Canyon-Johnson Urban Fund, a partnership of Earvin "Magic" Johnson's Johnson Development Corporation and Canyon Capital Realty Advisors, purchased the retail center from Winmar Corporation of Seattle, a subsidiary of Safeco Inc. The center is anchored by a Home Depot, Wal-Mart, 14-screen Regal Cinema, and a Tops Friendly Markets and is approximately 82.4% leased.
"The viability of inner city neighborhoods and their surrounding metropolitan areas is a critical issue to building a strong America," Earvin Johnson said. "The Severance Town Center deal highlights Canyon-Johnson's ability to work hand in hand with local community leaders in an effort to deploy our national expertise and capital to re-develop urban neighborhoods.
The acquisition also brings to an end the lawsuit filed by the City of Cleveland Heights against Winmar for nuisance and negligence arising from the alleged disrepair of the ring road surrounding the center. Prior to closing, Canyon-Johnson worked with city officials to create a $4.7 million infrastructure improvements package which will be used to improve the road encircling the property by widening the existing thoroughfare, adding new curbs, signalization, pedestrian walkways, decorative lighting and new landscaping. "The new infrastructure improvements will significantly enhance the appearance and accessibility of the center and meet the urban planning objectives of the community by better integrating the center into the surrounding neighborhoods," noted Bobby Turner, Co-Managing Partner of Canyon-Johnson.
The Severance acquisition is the second investment of the Canyon-Johnson Urban Fund, a national urban real estate fund launched in September, 2001. The Fund's investment strategy is to enhance and capture value through the acquisition, development, and redevelopment of urban real estate. In addition to meeting its investment objectives, the Fund expects to provide for and foster economic opportunities for the largely under-served residents of urban neighborhoods. For its first investment, the Fund partnered with Milwaukee based Boulder Venture to redevelop the 55 acre, approximately 606,000 square feet Capitol Court Shopping Mall located in Milwaukee, Wisconsin. The $53 million project, to be renamed Midtown Center, is currently under construction and will include a class "A" retail space anchored by a 150,000 square foot Wal-Mart store, a 56,000 square foot "Pick and Save" grocery store and feature national credit retailers, entertainment components and restaurants.
Canyon-Johnson was praised by City of Cleveland Heights officials for its participation in the Severance deal. Officials expressed optimism that Canyon-Johnson's involvement would revitalize the Severance Town Center, putting it on par with other retail centers in the area.
"The interest and commitment of the City made the deal attractive at first glance," said Ken Lombard, Co-Managing Partner of Canyon-Johnson. "Canyon-Johnson relied heavily on our public sector expertise to resolve the ring road issue and looks forward to working with the City of Cleveland Heights in transforming the Severance Town Center into a premier retail power center."
Canyon Capital Realty Advisors LLC, and its affiliates, including Canyon Capital Advisors LLC, are money management firms and registered investment advisors headquartered in Los Angeles, California with over $1.75 billion under management. The Canyon family of funds seek above average gains, both capital appreciation and current income, with moderate risk by employing a value-oriented, "bottom up" approach to event-driven opportunities. Since 1990, the principals of Canyon have invested over $1.3 billion in transactions involving more than 150 real estate and mortgage assets ranging from the origination of mezzanine and bridge loans to the acquisition, development and re-development of fee simple real estate. These investments encompass a diverse mix of property types including retail, entertainment, multi-family, industrial, office, hospitality, mobile home, and mixed use.
Johnson Development Corporation was founded in early 1993 by Earvin "Magic" Johnson to provide for and foster economic growth and financial empowerment in urban communities through real estate investment and development. Since its inception, Johnson Development has built a $500 million empire which includes shopping centers in Las Vegas and Los Angeles; a partnership with Loews Cineplex Entertainment, Starbucks Coffee, TGI Friday's Restaurants, Fatburgers Restaurants, and 24-Hour Fitness. Johnson's conglomerate also includes Magic Johnson Music, an R & B label, launched in conjunction with MCA, and co-ownership with Jheryl Busby and Janet Jackson of Founders Bank of Commerce, which has assets of $300 million. In addition to providing potentially strong anchor tenants for many of the Urban Fund's investments, Johnson Development has extensive experience in the development and redevelopment of retail and entertainment properties in urban communities and federally designated enterprise zones.
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Steve Sugerman
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steve@sugermangroup.com
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