“Magic” Johnson Is Setting His Sights on Infrastructure Deals

NBA champion and dedicated urban developer Earvin “Magic” Johnson Jr. is targeting a new prize—infrastructure. “If you look at infrastructure in America, it’s old,” he told the audience at the 2017 ULI Fall Meeting’s closing session.

Earlier this year, Johnson announced the formation of a fund reportedly worth more than $1.3 billion to exclusively focus on infrastructure deals. The new entity has already made investments in Denver International Airport and LaGuardia Airport in New York City.

“We’re going to be real active” going after infrastructure deals, including roads, bridges, and colleges, Johnson said. “All these things are coming up for sale or RFP [request for proposals],” he said.

Since retiring from the NBA, Johnson has focused his business on underserved urban communities, in addition to an ownership stake in the Los Angeles Dodgers baseball organization and his new role as president of basketball operations for his old team, the Los Angeles Lakers.

Part of his strategy has focused on taking familiar brands such as Starbucks, Burger King, and 24 Hour Fitness into inner-city communities. He ultimately owned 125 Starbucks stores.

“We gave minorities a meeting place [with Starbucks] in the urban area, at a time when they didn’t have a meeting place,” Johnson said during the ULI discussion, moderated by Clare De Briere, cofounder of C+C Ventures and chair of ULI Los Angeles.

Working with Canyon Capital Realty Advisors, Johnson was involved in the purchase and sale of the 32-story Transamerica building in Los Angeles, as well as the development of the Sunset+Vine apartment and retail complex in Hollywood.

Canyon and Johnson also developed One Santa Fe, a pioneering mixed-use transit development in east Los Angeles. The project, which helped spark development in the area, benefited from tax breaks and a desire to develop community amenities. Twenty percent of the residential space in the project was dedicated to affordable housing, he said.

“The secret sauce [on One Santa Fe] for us was to make sure we had a partnership with the city,” he said.

Johnson said that the key to many of his projects is outreach to the community at an early stage.

“Especially in urban areas, you have to go to the community leaders and explain to people in these communities what you are bringing to the table.”

These days, Magic Johnson Enterprises is an “investment conglomerate” valued at an estimated $1 billion, according to the company website. The current portfolio includes controlling interest in EquiTrust, a financial services company; ASPiRE, an African American television network; and SodexoMAGIC, a food service and facilities management company.

But Johnson, who spent most of the discussion walking among the audience as he spoke and posing for selfies, said he couldn’t get anybody to back him when he first quit playing.

“Magic Johnson [the sports legend] hurt me for years,” said Johnson. Investors, he noted, would take meetings and want to get their pictures taken with him, but they didn’t want to invest.

“I had to prove myself,” he said.