New player at the Forum – Forum Enterprise Inc., on behalf of the Faithful Central Bible Church, buys the Great Western Forum in Los Angeles, California – Brief Article
Paula M. White
Church spends more than $20 million on former L.A. Lakers building
The Great Western Forum, a 17,500-seat arena that is the former home of the Los Angeles Lakers, has a new owner, Faithful Central Bible Church. The church’s for-profit arm, Forum Enterprise Inc., bought the facility for $22.5 million.
The 10,000-member congregation will primarily use the building for its Sunday morning worship service. The L.A. Arena Co., which sold the building to Faithful Central, will remain the exclusive booking agents for sports and entertainment programming for the facility. The church receives profits from all revenues of the facility, and a percentage goes to the L.A. Arena Co. pursuant to the individual booking agreements. The Forum hosts events such as ice shows, concerts, circuses, and spiritual conferences. It also serves, for now, as the home of the WNBA Los Angeles Sparks, as well as the new ABA’s Los Angeles Stars. The purchase makes the Forum the only multipurpose venue of its kind owned by African Americans and by a church or faith-based organization.
For Bishop Kenneth C. Ulmer, pastor of Faithful Central, though the move into the Forum was admittedly a big step for the church, the transition was just as much in line with his pragmatism as it was with his philosophy of providing opportunity in the community. He explains that before ever learning that the Forum was up for sale in October 1999, plans were being made to build a new 5,000-seat sanctuary for roughly $18 million. However, upon learning that a housing developer was quietly trying to make a deal on the Forum and its 29 surrounding acres, with plans to tear it down, Ulmer decided to express his interest in the property.
“The Forum was the only place in town that could hold our congregation at one time,” explains Ulmer. “It wasn’t cost-effective to build a new building that would still be too small.”
The purchase seemed perfectly logical to Ulmer and his advisors; however, many in the financial world scratched their heads trying to figure out just how such a transaction would work or if it was even possible. “The vision for this building was out of the box,” says Ulmer. “Our biggest challenge was that financiers didn’t understand what we were trying to do. It wasn’t a neat church deal or a neat real estate deal or a neat arena deal. It was a synthesis of all of those concepts, and that was hard to communicate.”
According to Lem Daniels, first vice president of Salomon Smith Barney, a member of Citigroup, which was one of the financers, “It was definitely a new investment concept. There is a trend toward faith-based lending, but it’s usually in something like housing developments, not entertainment centers.” However, Daniels says there were several factors that made the difference for Faithful Central.
“It was a good credit risk and we liked the fact that there were certain strategic partners involved in the transaction–like the city of Inglewood and the former management team of the Forum–who were willing to work to try to make this venture a success,” explains Daniels.
For much of last summer, Ulmer and his financial team were busy taking meetings. After agreeing on the price for the deal in June, $1.2 million was gained through a 60-day church campaign. A bank syndicate formed of several lenders, including Citigroup and Bank of America, came up with $18.5 million. Added to the church’s contribution of an additional $2 million, Faithful Central had enough to purchase the Forum by December.
Craig J. Walker, managing director of Entertainment Finance Associates, a minority-owned financial advisory firm, who worked on the church’s financial team, says that the deal was a difficult one for several reasons. “Church lending is specialized, and for many of the lenders involved in this deal, it was their first real church loan of any significance,” says Walker. “Nobody wanted to be in the position of potentially foreclosing on the church if they weren’t able to pay.” Walker also adds, “Between June and the end of last year, there was a tightening of credit and the stock market slowed down, making it more of a challenge to get these large institutionalized lenders to lend $20 million to this black church in Inglewood.”
COPYRIGHT 2001 Earl G. Graves Publishing Co., Inc.
COPYRIGHT 2001 Gale Group