Shaquille O’Neal once turned down what later became a lucrative deal for someone else.
Starbucks franchisee opportunity: During an episode of Drink Champs, O’Neal explained Starbucks CEO Howard Schultz once offered him a chance to become a franchisee of a location that would open in the hood.
O’Neal on the opportunity: “I could have been the first one to open up a Starbucks in the hood — that’s the keyword. So, the owner of Starbucks, he came, he said, ‘Shaq I want to open up a Starbucks in the hood.’ And I’m thinking about where I’m from. I’m like ‘That ain’t gonna work in the hood.’ I told him to his face,” he explained.
Why O’Neal declined: He simply didn’t feel as if the business decision would be in his very best interest when he considered his family and the people from his neighborhood, who he doesn’t recall being avid coffee drinkers.
“Cause like I’m thinking hood, but I ain’t know nothing about regentrification and all the stuff they doing. So, after I turned it down and Magic Johnson did it, you know, made a lot of money. You know, I was just trying to stay true to my roots ’cause nobody in my family drank coffee,” O’Neal said.
Magic Johnson wins big from Starbucks deal: Although Schultz wasn’t able to convince O’Neal to pursue the venture, he did close a deal with another basketball star in 1998. Unlike O’Neal, Magic Johnson saw merit in opening a Starbucks location in the inner city.
“When you think about African Americans now — over $1 trillion spending power — Latinos, over $1 trillion spending power, and moving even higher — there was nobody really building businesses and going after their disposable income. So my company was able to provide jobs and access to these retailers who were not coming in before, but now they hit a home run when we partnered and they came into the inner city,” Johnson explained, according to CNBC Make It.
Johnson reportedly secured over 100 locations. He later sold his franchises, shortly after selling his share of the Los Angeles Lakers.
Magic Johnson reportedly earned $100M from selling Starbucks franchises & stake in LA Lakers: http://t.co/yYk09xUrUQ pic.twitter.com/uhuLQDVCbX
— Forbes (@Forbes) June 14, 2014
“That deal changed everything,” Johnson said, according to CNBC. “We built 125 stores. We made that deal happen and that’s what really put me on a path of success. … It showed everybody that I could drive ROI in urban America.”
No regrets for O’Neal: Still in hindsight, even after seeing the success that Johnson had, it doesn’t appear that O’Neal has any regrets about his decision. He has found other ways to invest in his neighborhood.
O’Neal’s hometown: “That’s why when we say educate yourself, it’s not all about going to school. It’s just like learn, like you gotta know what’s going on in your neighborhood,” O’Neal expressed. “I know where regentrification is now and Newark cause I’m doing it. Me and my group, the Boraie group, were responsible for tearing down the projects and building condos…so we charge some people but we let people do the Section A thing. We giving people jobs so we’re beautifying the city.”
Development property on the way: O’Neal is a man of his word. Most recently he worked alongside the Boraie Development to construct a 33-story tower with a 370-unit apartment building in downtown Newark. The location, called Shaq Tower 2 will also include 12,000 square feet of retail and restaurant space. More importantly, the building will consist of 20 percent affordable housing.
“Today, when we have billions in development going on, it may be easy to forget that not so long ago, Newark was a city where developers feared to come and invest, where the entire city had a heavy red line around it,” Newark Mayor Ras J. Baraka said, according to Real Estate NJ. “This is a time to honor those who had the vision to invest in Newark when others did not. Today is a day to salute Boraie Development, Shaquille O’Neal, Goldman Sachs, Prudential and our new finance partners to the city of Newark, Citibank and Bridge Development Group, for their continued investment in our city.”
Shaq Tower 2 is expected to open in May 2023.