Rick Caruso: Accelerating LA’s Recovery & Restoring Trust

The Planning Report shares a candid and timely interview with Rick Caruso, who reflects on lessons from decades of community-centered development and elaborates on the work he’s undertaken to assist LA’s wildfire recovery. Drawing from his post-disaster initiative, Steadfast LA, Caruso—the founder and Executive Chairman of Caruso®, one of the largest and most admired privately held real estate companies in the US—emphasizes the urgent need for local and state action to accelerate recovery, restore trust, and deliver a solution-oriented path forward for LA.

"Leadership means showing up. If I were mayor or governor, I’d be walking the halls of Congress and knocking on the White House door."

Rick, in our first interview with you in June of 2000, you described to us the unanimous City Council approval for The Grove, you said: “We work very diligently with city officials and the community, and we've been very lucky. Every project we've built has received unanimous approval. It comes down to one simple thing: we take the time to meet with the community and give them what they want. Because of this, we gain trust, and we don't have any community opposition.”

Two decades later, given the need for wildfire recovery, which claimed not only your family home but also both of your children’s, how are you applying those principles now to secure community buy-in and ensure the work you're undertaking through Steadfast LA has legitimacy and lasting impact?

It's a great question. David, the principles I used two decades ago, and I can't believe that interview was two decades ago, but the principles we used then are the same ones we use today in everything that we do.

We just got a project approved up in Santa Barbara, in Montecito, which is an expansion of our resort up there, adding shops, workforce housing, and market-rate housing. Believe it or not, with a 5–0 vote at the Board of Supervisors, the Planning Commission, and the Coastal Commission. But it took a lot of time in the neighborhood, with residents, elected and appointed officials, working and walking through the project.

We're applying those same rules and approach to the Palisades. We’re very close with the residents up there, the community organizations, the councilmember, etc. We don't know how to do it any other way, and frankly, we know it’s the right way to do it, because we respect the neighborhoods that we build in. If you respect the neighborhood, you've to take the time to listen to it.

Pivoting back to your efforts to accelerate LA’s wildfire recovery, describe the mission & work of Steadfast LA, which you mobilized quickly after the fires. Elaborate on its goals, how it's structured, funded, and who you've brought on board to help lead and resource it.

Steadfast LA was created about a week or two after the fires. It's a nonprofit, and we have both a 501(c)(4) and a 501(c)(3). I'm funding it, so all the dollars that go into Steadfast, including donations, 100% go back out into the communities of Altadena, the Palisades, or Malibu.

What we’ve done is build a full-time staff of very smart people. The executive director is a gentleman named Nick Geller. Nick’s a lawyer by training, and he also lost his home in the Palisades, so he has a real understanding of what happened up there. He has a full-time team under him.

Then we’ve put together, for lack of a better word, an advisory board, but it's really composed of the best, brightest, and most talented people across different industries: architecture, engineering, design, law, insurance. All of them are donating their time and talent.

We’re taking discrete problems — issues the state, county, or city are dealing with — and solving them. We come up with actionable plans and literally hand them off to different agencies so that we become a thought partner in getting problems solved with urgency and expertise, and it’s going very well.

You’ve often articulated the value of public-private partnerships. What are the lanes each should be in: public, private, and civic?

Well, there are things we can’t do on the private side because we don’t have the authority that an elected or appointed official has…so we stay in our lane.

But I’ll give you an example. The Mayor of L.A., Mayor Bass, wanted to find a way to exempt people who lost their homes in the Palisades from the ULA tax. It’s a great goal, but she couldn’t find a path to do it. We took that issue, brought in lawyers, found a legal way to do it, and delivered that to the Mayor and the City Attorney. We’re hoping they adopt it because that’s needed relief, not just for Palisades families, but anyone recovering from a natural disaster. We can solve problems, but we just can’t always implement them.

On the flip side, we partnered with JJ Redick, the new Lakers coach, to rebuild Palisades Park. That’s city property, but we’ve reached an agreement to rebuild it as a private foundation project. We’ll oversee the construction and also the operation of it.

Rick, you’ve been candid in calling out leadership failures in the response to the January 7th fires. As you know, metro Los Angeles and even the Palisades & Altadena are governed by overlapping local, regional, state, and federal decision-making. What structural reforms locally do you see as most in need of reform to enable faster, more resilient, and equitable rebuilding of what was lost?

Well, David, I’d say this regarding Los Angeles: you pull your department heads together — anyone who has a hand in issuing a building permit, residential or commercial — Building and Safety, Zoning, all those departments, and you say: “I want building permits issued within 30 days of submission. Tell me what you need to make that happen.” Then eliminate the red tape you don’t need.

We’ve got red tape on top of red tape on top of red tape. Many of those rules were probably well-intended, but a lot are just archaic. A simple example: we’ve had people call us who are trying to rebuild the same home that burned down. They submit the same plans that were previously approved, and they’ve been rejected two or three times. We’ve had to make calls to bring attention to it, and only then do they get approved.

The simple fix? If you're rebuilding what you already had, stamp it approved. If you're rebuilding within zoning compliance, there should be a 30-day window on that. Cut all the red tape out.

The Governor has done a pretty good job issuing executive orders that eliminated Coastal Commission oversight for some of this. We haven’t done that locally. The Mayor still hasn’t waived the plan check fees for people trying to rebuild. It’s still sitting in a City Council committee — it’s been six months.

Let’s get some urgency. You know, get a little rocket in your belly, and let’s get going here.

From your comments years ago at VerdeXchange, you are supportive of incorporating resiliency materials, energy efficiency, and safety features in your developments. 

Ought not “safety and resiliency” measures be required for rebuilds, in addition to accelerating the permit process?

Well, I wouldn’t make it a mandate. I would encourage people to do it. I would reward them for doing it. I’d point out why it makes sense, including lowering your cost of insurance and having a safer structure. But to change the building regulations now, especially six months later? Maybe that’s a conversation we could’ve had two weeks after the fire. But right now, you’re just going to slow down progress.

I think the city should find ways of saying: “If you build with non-combustible materials, or you design your home in a certain way, maybe you get a density bonus.” There should be some incentive to do it, but I wouldn’t make it mandatory. We were able to save almost every building up and down the block and across the street because we unleashed our team on that whole area. That freed up the L.A. City firefighters to go do other things.

Even buildings that didn’t have non-combustible materials, we were able to save. Which tells you something. It tells you if you had water and the right equipment, you would have saved most of this town.

Unlike Richard Riordan—an experienced business leader before being elected Mayor of LA—you would bring to any elected office prior experience with public service as President by appointment of both the LA Police Commission & Board of LA’s Department of Water and Power; as well as Chairing the USC Board of Trustees. What knowledge have you gained from those experiences that applies to the challenges now facing elected city and regional leadership?

Well, you know Dick [Riordan] and I—and listen, I’m honored anytime to be mentioned in the same sentence with Dick—but Dick and I both came to our positions with real-world experience, and that was very helpful. The last two mayors we've had in Los Angeles have had no executive experience, and we’ve paid a price for that.

When you're involved with departments in a leadership role, what’s helpful is that you understand how government works, and also how it doesn’t work. When you're a commissioner or involved in agency leadership, you see both sides of that. It informs you, and it makes you a better manager of people, because you know what works and what doesn’t.

Then, if you can apply some of the principles you’ve learned from executive skills in business, all the better in moving the needle. I think that’s why Dick was so effective as a mayor. He knew how to lead people. He understood governance and management protocols.

This week, a candidate for U.S. Senate in Iowa, Don Osborne—an independent—announced he will be challenging the incumbent Republican Senator—a billionaire—with the campaign theme: “billionaires aren’t going to come and save us.” To quote his opening advertisement: “we’re running against billionaires.”

How does a candidate for office in California, who is a billionaire, rebut the label, and move public attention onto one’s personal beliefs, values, and record of accomplishment? 

You know what’s interesting? I don’t believe that most people in the United States are angry at people who are successful, or that they disrespect people who are successful. I just have a different take on that. Whether you’re a millionaire or a billionaire, who gives a damn? The real question is: Do you have the competency and the experience for the job?

I look at people I admire, who are incredibly successful at what they do. They don’t make a lot of money, and that doesn’t matter. They’re just highly qualified. I wouldn’t go to a doctor and ask what their net worth is before they perform surgery on me. 

I think people should be out of the business of asking what a candidate’s net worth is. Instead, they should be asking: What’s your track record? How does your track record show that you can perform the job you’re running for? That tells you everything. And I could apply that test to every mayor we’ve had…some who’ve done a good job, and some who haven’t. I think that’s a really good test.

I’ll say this too, David: after the fire, there was a shift in a lot of people’s thinking. I’ve heard it again and again: “I thought ideology was really important, but... not so much right now.”

Your response offers a perfect segue. Pollsters increasingly find that there’s a wide swath of the electorate that isn’t ideologically committed to any party; the common finding is that most have lost trust in their leadership, civic institutions, and in government. As you well know from Caruso® development projects, “trust” is essential. 

How then does a public leader, confronting a constituency that distrusts, build trust?

Great question. You know, I think it’s no different than what anyone does in their day-to-day life. You can’t walk into a room and just assume trust. I remember, I’ll take you back. I’ll never forget this day as long as I live.

When I was appointed to the Department of Water and Power Board of Commissioners by Tom Bradley, who was the mayor at the time, I walked into this meeting. Paul Lane was the General Manager of the Department of Water and Power. There was this long boardroom table, everyone sitting around, and I walked in, 26 years old. I didn’t know a damn thing about water issues or power issues.

Paul walks up like a gentleman, shakes my hand, and says: “I’ve worked here longer than you’ve been alive.” I thought to myself, fair enough. What I need to do is work hard to earn his trust, to prove I understand the issues, and that I can be a good partner in moving the department forward.

To your point, you can’t assume trust. You have to earn it.

Regarding the challenge of earning public trust, especially in L.A. right now… 

How do you respond, as a prominent business and civic leader—as well as a man of faith—to your City having a federal “target” on its back: i.e., the National Guard being federalized and stationed, indiscriminate raids of workplaces by masked ICE agents refusing to identify themselves? How does an elected leader, given the provocation, build back public trust? 

What’s happening to L.A. is wrong, and it’s unfair. I’ve been very vocal about that. What I would do to start, if I were mayor or governor (and I think both should do this), is get on a plane and go to Washington. 

The President may not take the meeting, but you need to go, meet with whoever is available, and say: “We’ve got to work together and figure this out, because what’s happening in Los Angeles is just wrong.” See if there’s some common-sense compromise that can be made. But you’ve certainly got to try. I would strongly suggest: get out of the name-calling business. That doesn’t get you anywhere.

I watched the Mayor and the Governor, calling the President names — whatever names. Could you imagine, in my business, if I wanted to do a deal with Nike, and I said, “You know, that CEO of Nike is just the dumbest guy I’ve ever met... but anyway, I’d love to lease some space at The Grove.” Where do you think that’s going to get you?

That may be a visceral reaction, and you may feel that way, but as a leader, you don’t act that way. You take the high road. We need to do something. We need to get our elected officials on both sides of the aisle together and say: There has to be a pathway to legal immigration.

We need to channel Ronald Reagan, whether you like him or not, and have an amnesty program. If people are working here, being productive, adding to our economy, and not criminals, we need them in our economy. Get rid of the criminals and go after them, but what’s happening right now is just terrible for the families, for the individuals, and for the city. But we’re not going to solve it this way. 

I would take a very different tack. I’d walk the halls of Congress. I’d knock on the doors of the White House. I’d do whatever I could to tone the temperature down so that more reasonable minds can hopefully find a way to stop the insanity that’s happening on our streets.

Given your genuine response, many reasonably suggested last January after the fires that Mayor Bass appoint you to lead the city’s response, as a sort of “recovery czar.” She didn’t. But would you have accepted the role if she had asked? What could or would you have done? 

I wouldn’t have accepted the position. I would do everything asked of me, other than being in an official role, to support the rebuilding and support the city’s efforts. The reason I wouldn’t be in the lead position is, quite frankly, and this is going to sound mean, and it’s not intended to be mean, it’s just the way I operate: I’m not going to go work for somebody I don’t feel is qualified to be in the job. 

I had great respect for Tom Bradley, and I was honored to work for him. Great respect for Dick Riordan and Jim Hahn, honored to work for them. I didn’t have the same level of respect for Antonio Villaraigosa, and I stepped down as Police Commissioner when he became mayor. So, I just have a very bright line. 

Would I work my tail off, around the clock, to support the city? Of course I would.

But I’m not going to report to somebody that I don’t believe is equipped to make the decisions that need to be made to rebuild the city. Because she certainly didn’t have the equipment to prevent the fire.

Pivoting: many in the Palisades and Altadena were underinsured or not insured at all. They’ve consequently faced serious insurance questions, repair and rebuild permit delays, and mounting costs. What role could or should leadership at the state level, and in the finance and insurance industry, play in collaboration to address those challenges?

You know, what’s happening in the insurance industry is horrific, and it’s one of the biggest problems that needs to be solved. 

In the interim, I go back to what I said earlier about dealing with the President: The Governor needs to call every CEO of the insurance companies — and show up in their offices, and say: “I’m begging you to process claims quickly and be generous.”

These people have paid their premiums, probably for decades, and now they need you. Be there for them, and that pressure…eyeball to eyeball, two executives sitting in a room, that makes a difference.

Secondly, we need to change how we appoint leadership in insurance oversight. California’s Insurance Commissioner should be an appointed position by the Governor, not elected. Because you want the Governor to be held accountable for that commissioner’s actions. You don’t want a situation where the Governor says, “I can’t control that person.”

Third, we need a program like we did for flood insurance. Flood insurance became impossible to buy, so the federal government, along with the state, stepped in to provide a solution. We need that kind of program for fire insurance.

Finally, we need to change the market conditions in California that are driving insurance companies away. We need to encourage more competition. You can’t put a cap on rates. That just doesn’t work, and we’ve seen it fail. What we need is more competition, not more restrictions.

Given how Caruso® developed the Palisades Village, The Grove, and The Americana, who should be the ultimate steward of the built environment as Angelenos rebuild? Who in authority should be thinking about place, about quality, and about creating the kinds of community environments that were so successful before the fires in Altadena and the Palisades? 

Who’s actually charged with that responsibility — if anyone?

Well, in Los Angeles, that has to be the mayor. That tone has got to start from the top, like in any organization. In Altadena, it’s got to be the County Supervisor Kathryn Barger.

It’s got to be a message of: “We are here with you. We’re going to stand alongside you. We’re asking you to rebuild, to reinvest — whether it’s your home or a commercial building — and we’re not going to leave you behind.” We’re not going to make it more difficult. We’re going to be your partner. We’re going to be a steward of all the good things the Palisades and Altadena had, and we’re going to make sure we understand what you need and bring that back.

There’s got to be a sympathetic message, that we’re all in this together, and that’s not what I’m hearing. I think that kind of message would make a world of difference for people. Because when you want to rebuild your home, you have to believe that your community is coming back.

It’s not just about your home. It’s about the lifestyle that was also lost on January 7, and that can only come back if everybody’s on the same page.

Rick, there are not only toxins in the soil, but there are toxins in the civic and political environment. You don’t need to run publicly for any office to be personally successful. Indeed, fewer and fewer people appear willing to stand up and step into that toxic environment and try to lead. What motivates you?

A deep sense that all of these problems we’re facing — they can be fixed, and I have a great love for this state. I have a great love for Los Angeles. It’s where I built a business. It’s where I raised my family. I think it’s the greatest. I truly do, and it pains me to see us failing the way we’re failing.

If the city were on a great trajectory, if it wasn’t suffering the way it is, I probably wouldn’t have the same level of interest. But I want to give back, and this is a way to do it. I’m going to give it a lot more thought over the next few months…and then make a decision.

Because of time & space limitations, we must conclude. 
We hope, however, with your consent, to continue a like conversation later this year.