Professional sports stars often use their prominence to influence public opinion and advocate change, including in real estate development. One standout is LeBron James, the Los Angeles Lakers forward and four-time National Basketball Association champion.
In Akron, James is building a model for advancing education and social assistance in the West Market Street neighbourhood, where he was raised. A new school, three residential buildings and a sports-and-entertainment complex represent more than $20 million in investment by the LeBron James Family Foundation and its partners.
In building projects that serve the public interest, James has joined an expanding movement of developers around the country who mix new ingredients into the formula for socially responsible development. The term was initially defined by advances in design like energy efficiency, environmental safety and affordability. Developers now construct buildings and neighbourhoods that make those assets and others — health care, recreation, good schools, safe streets — accessible to residents in neglected communities.
Examples are numerous. Among them is the East Harlem Center for Living and Learning, a mixed-use project on 104th Street in Manhattan. The $84 million building, completed in 2015, includes 89 affordable housing units, office space and the Dream Charter School for 500 students from kindergarten through the eighth grade. The project also includes a renovated public park.
“LeBron James is part of a movement of community revitalization,” said Jonathan F.P. Rose, president of Jonathan Rose Cos. in New York, the centre’s developer. “He’ll find the more he does, the more these pieces connect and make a difference.”
Other sports stars invest in struggling communities. Magic Johnson Enterprises, the former NBA star’s company, has invested in movie theatres, Starbucks franchises and restaurants in underserved neighbourhoods across the country. In 2015, Magic Johnson Enterprises joined with Loop Capital to form JLC Infrastructure to invest in urban transportation, utilities, communications and energy.
Mo Vaughn, who spent part of his baseball career with the New York Mets, is a co-founder of Omni New York, which specializes in buying and renovating apartment buildings for affordable housing in struggling neighbourhoods in and outside the city.
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Sports stars can leverage their personal prominence to help move projects along. When he was the mayor of Sacramento from 2008 to 2016, Kevin Johnson, a former NBA All-Star, led the campaign to keep the Sacramento Kings in California’s capital. He worked closely with Vivek Ranadive, the team’s majority owner, to build a $500 million arena that is the centrepiece of the $1 billion mixed-use Downtown Commons, which turned empty central city blocks into an active centre of entertainment.
James’ model of development, real estate authorities say, differs from those efforts because it relies on his stature to recruit public and private capital to embrace a suite of social goals, and then build projects to pursue them. The value proposition is to develop projects that help curb family disorder and instil learning, life and work skills so that underperforming children graduate from high school, attend college and have a successful career. The individual pieces, though, are owned and managed by different agencies.
“It’s a promising model for community redevelopment at a holistic level,” said Jeff Levine, a lecturer of economic development and planning at the Massachusetts Institute of Technology. “It delivers high-value development in places where there aren’t resources for people to do it themselves.”
The source of the idea, James says, is the uncertainty and disruption that he experienced early in his life, like when he missed 83 days of school in the fourth grade. That challenge, and others he faced as an underprivileged child, inform and guide the foundation’s development decisions.
“When we started this work in education with my foundation, we never dreamed we’d be owning buildings and developing new properties,” James said in an email. “As we dug deeper into the work, we learned what it takes to create real, visible change. And that’s listening to what our community needs and then rolling up our sleeves and getting to work.”
The foundation’s latest and largest project is the $2.875 million it paid in December to buy the Tangier, an entertainment and events centre in Akron. Renovation of the 60,000-square-foot building, renamed House 330, started in January and is expected to be completed next year.
The project will provide training and jobs for students interested in careers in food service, hospitality, management, maintenance, finance and other professions. It is also the first to develop a revenue stream for the foundation’s work, said Michele Campbell, executive director of the LeBron James Family Foundation.
House 330 is attracting prominent partners. JPMorgan Chase is opening an office there to provide families with financial advice and resources. The J.M. Smucker Co. and Old El Paso, a General Mills brand of Tex-Mex foods, each donated $1 million for restaurants. Dick’s Sporting Goods Foundation committed $1 million more to build a sports complex on the top level of the 500-space parking deck alongside the project.
James’ development career began five years ago when he recruited support from Akron Public Schools to start the I Promise School for underperforming elementary and middle school students. His foundation spent more than $2 million to renovate a former McDonald’s office building for the school. It opened in 2018, serves third through eighth graders and will reach its 720-student capacity in 2023.
The school inspired Cheryl L. Stephens, CEO of the East Akron Neighborhood Development Corp., to get involved with the city and the foundation to build I Promise Housing, a $14.5 million, 50-unit affordable housing project that starts construction in the spring on 1.75 acres the city donated.
“He talks about inspiring people to do more,” Stephens said. “I thought we should do more. We should do affordable housing.”
I Promise Housing is close to I Promise Village, a 22-unit apartment building that provides temporary housing at no cost to families in crisis. It opened in July and includes space for social services and community events. Graduate Hotels, a Nashville, Tennessee, developer, spent $850,000 in 2019 to buy the 98-year-old, four-story brick building. Ben Weprin, the company’s CEO, then went to work with his staff to recruit suppliers and contractors to donate materials and labour to complete a total renovation and furnish the apartments.
The parent company of Graduate Hotels, AJ Capital Partners, donated the finished project to the foundation. After it opened, the foundation, which has nearly $5 million in assets, spent $52,500 to buy a house across the street. It is being renovated for use by Shannon Shippe, the foundation staff member who manages the housing and services program.
“The impact LeBron is having in Akron — it’s amazing,” Weprin said. “He’s doing this while he’s winning championships.”
Recognizing that his approach might have merit in other cities, James and the foundation staff convened a three-day “huddle” in Akron in October to describe the I Promise model to attendees. About 200 educators, philanthropists, activists, city leaders and development professionals showed up.
“This work requires a long-term investment, a lot of heart and a lot of hard work,” James said. “There are people across the country who are willing and want to be a part of that in their own community.”