The Magic Touch

Earvin Johnson has worked his wizardry on his urban movie theater chain. But will his mastery continue as he seeks to become the country's leading entertainment entrepreneur?

Los Angeles International Airport. JDC has committed to opening an additional seven stores with Starbucks nationwide in 1999. Johnson followed that up by partnering with T.G.I. Friday’s. Each put in $750,000 to debut their first collaboration in Atlanta this summer. In the interim, other Magic/T.G.I. Friday’s sites are being scouted for future development.

Perhaps Johnson’s most ambitious business venture is real estate. First there’s JDC Las
Vegas. A 50-50 partnership created in 1994 with Raul Walters Properties, it was responsible for creating Westland Plaza, touted as the first development project in West Las Vegas in the past 30 years. The 235,000-square-foot mall counts among its tenants Pizza Hut, Mail Boxes Etc. and Norwest Bank.

Johnson followed up that venture by partnering with CalPERS and MacFarlane Partners in 1996 to identify and purchase retail properties in urban areas in California. Johnson/MacFarlane committed $1.5 million to join with CalPERS to purchase retail mall complexes in Los Angeles, among them the Ladera Center and Margarita Plaza. The partnership has also acquired the development rights to Santa Barbara Plaza in Los Angeles, and is targeting Home Depot, Old Navy and Bed, Bath & Beyond as tenants.

“If you look at how we’ve expanded, it’s been on a very controlled growth pattern,” says Lombard. “We’re looking at specific locations with specific economic criteria. We’re teamed with partners, but we’re involved in every decision with respect to the operation of these entities,” he says. “It’s a lot of work, but right now we are in an excellent position to manage the growth of each of these businesses.”

Ken Smikle, president of Target Market News, a Chicago-based marketing research firm that monitors consumer trends in the African American community and publishes a trade paper of the same name, says Johnson’s success could ultimately lead to corporate America looking for more African American partners to help it break into the urban market.

“He’s opened the door for creating partnerships with major retailers interested in black consumers,” says Smikle. “Many are interested, but they don’t understand [the market] and frankly are a little frightened by it. So there’s a possibility that because of his success, corporations will look for a Magic to help them do their deals in the urban community.”

With so many concerns to operate simultaneously, another stigma Johnson deals with is the perception that he doesn’t actually run his own businesses. Some believe him to be only a figurehead, with others like Lombard actually making the decisions behind the scenes. He says differently. “You don’t build what I have if you’re not a hands-on businessman. I have to have some knowledge and I have to know my figures. I don’t need Ken or anyone else to talk for me because when I go out to talk to Loews or Starbucks, Ken can’t tell them anything because they want to hear it from me,” he says. “I go in and I make my own deals because I can do that.”

Lombard agrees. “I think initially anyone would probably walk into a business meeting with

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