Billionaire Caruso Looks to Spur California's Comeback From Wildfires

Rick Caruso has amassed a $5.8 billion fortune building open-air malls known for their relentlessly cheerful, Disneyfied aesthetic, with dancing fountains and sightseeing trolleys. He moonlighted in local California politics, emerging as a civic fixer for a series of mayors who turned to him when they had a difficult or distasteful task they needed done. Caruso vied for office himself in 2022, spending $107 million of his personal fortune on a run for LA mayor, casting himself as a centrist Democrat who had a businessman’s knack for problem-solving. He lost soundly and seemed to recede from view, a mogul without a public cause to champion.

The wildfires that ripped through parts Southern California in January have since thrust Caruso back into the spotlight, with the business mogul blaming the area's response to the fires on local leaders, including Los Angeles Mayor Karen Bass, the progressive who beat him in the 2022 election.

Caruso discusses his state's path to economic recovery as well as whether he plans to once again seek political office with Carol Massar and Tim Stenovec on Bloomberg Businessweek Daily, which was broadcasting live from Bloomberg Screentime in LA.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.

Speaker 2 (00:07):
You're listening to Bloomberg Business Week with Carol Masser and
tim Stenoveek on Bloomberg Radio.

Speaker 3 (00:14):
We are in the heart of Hollywood live at Bloomberg
screen Time. We're speaking to the moguls, celebrities, entrepreneurs, the
leaders defining the next phase of pop culture. One of
those leaders joins us now, Rick Caruso. He's the billionaire
real estate developer, the former candidate for mayor of LA.
He's the founder and executive chairman of Caruso. It's one
of the largest privately held real estate companies in the US.
He's a philanthropist. He's going to be here on stage

(00:36):
a little bit later for a conversation with our LA
Bureau chief John Gittlson. He joins us now ahead of
that conversation, Rick, Welcome back to Bloomberg Business Week. It's
been a bit since we last spoke to you. We
got to start with what LA Mayor Bass said last night.
Here she spoke with Sarah McGregor, Managing editor, National Desk
at Bloomberg. Here she is last night at screen time.

Speaker 1 (00:56):
Racruso, who you defeated in twenty twenty two and the
mayor's race, and has been one of your most vocal
critics around the fires. He released a statement today after
the arrest, saying it shows the disaster was preventable and
in his words, calling it a failure of government on
an epic level. Starting with Mayor Bass, he'll be with
us on this stage tomorrow. How do you respond to that?

Speaker 4 (01:18):
Well, the he characterized me sounded like Trump, But I
just was saddened by it, honestly, because I think that
that response was beneath him. And we actually was in
my office a couple of weeks ago. We're working on something.
We're working on a couple of things together. But I
think that he is sad and bitter, and I think

(01:40):
that it is really sad to exploit you guys laughing
about that. I feel like it's exploiting tragedy, it's exploiting grief.

Speaker 3 (01:54):
Well, there you have. It was Lama or Karen Bass
last night here at Bloomberg screen time. Rick Caruso joins us,
and now Rick, your turn to respond to criticism of
your criticism from the LA mayor. What do you make
of it?

Speaker 2 (02:06):
Listen, I said what I think so many people around
Los Angeles, throughout LA and this whole region feel, especially
after reading the after action report. I don't know if
any of you have read it, but it's very clear
that this fire was preventable, and it's very clear that
they didn't have a plan to do anything about it,

(02:28):
because if she had a plan, she would have responded
in that question by saying, this is the plan I had,
and you know, we did our best to implement it.
But you know, going forward, we've got to solve these
problems because when you read that after action report, glaring failures,
systematic failures of our system, our city are outlined in there,

(02:53):
and there's solutions to all of them, and you know,
the focus has got to be making this kind of
thing doesn't happen again. But I'm not going to dwell
on the fact that the city failed, because boy, it's
in black and white now and very clear.

Speaker 5 (03:15):
Well, Rick, just to follow that, Mayor Bass said that
you guys were together just recently, working together on things.
So I'm just curious. You know, conversations sometimes are things
we hear in public versus things we hear behind the scenes.
I mean, one of the things we got from Mayor
Bass is talking about members of the Trump administration that
certainly La California in general have clashed with, but that

(03:36):
she talks to them on a regular basis, people she
knew from her time certainly in DC. So I'm just curious,
what are the conversations or what can you share with
us about maybe the constructive conversations you're having with Mayor
Bass behind the scenes about what happened, what can be
done better going forward.

Speaker 2 (03:54):
Yeah, well, here's something that's really important that you said.
In the next question. She said politics is performative, and
you know they would go out beat each other up
and then go have dinner something like that that you
talked about. I don't think politics is performative. I think
what we learned from this fire is the leadership matters.

(04:16):
That these positions, when you're the head of a city,
the head of a state, in any kind of very
important elected office, you actually impact lives and it's not
about putting on a show. It's actually about making a
difference in people's lives every day. So I was really
stunned by her statement. And listen, I have met with her.

(04:39):
My job through Steadfast, we are working very hard with
the city, with the county, with the state to get
people back in their homes quickly and safely, get these
neighborhoods rebuilt. And so we have a number of initiatives
that we have delivered to the city to help them
do their job better and quicker. And I have met

(05:00):
with her, and I will work with anybody to help
rebuild Altadena, Malibu and the Palisades and do that with
great honesty, great dedication, because that is the mission right now,
is to get people's lives rebuilt that have been shattered.
But it's not performative, it's real. And it's also real

(05:24):
in my criticism because that criticism is factually true, And
I think what we need to be doing is spending
a lot of time, like I just said, going through
that after action report, asking some really tough questions, how
could this have happened and what are the solutions so
it never happens again, whether it's a fire or an

(05:46):
earthquake or a flood or whatever may be. It clearly
points out that there wasn't a plan and the system
failed and a community burnt down and eleven people died.
Let's not forget about that. So, you know, so are
there tens and tens of thousands of people who are
sad and angry. They sure are, And yesterday after that

(06:07):
announcement came out, it re triggered a lot of emotions
and a lot of people, and I stand with them.
I understand it because of the losses that we incurred.
That my daughter lost her house, my son lost his house,
and that emotion is a true, raw emotion. It's important
to recognize and it's frankly important to sympathize and be

(06:31):
compassionate about because people are really hurting. I'm fortunate we
have a number of options, but the far majority of
the people that lost their homes or lost their jobs,
they don't have options, and they need help and help quickly.
And that's what we're doing at Steadfast, is making a
real difference in people's lives, and I'm proud of it.

Speaker 3 (06:51):
Well, Rick, last time you were on with us, it
was just over a month ago. You said you were
still deciding whether or not you were going to run
for mayor or for governor. Have you made up your
mind yet?

Speaker 2 (07:04):
No, But I'm working hard at it. I've been spending
a lot of time going across the state. I was
in San Francisco last night at a great dinner with
a bunch of tech executives and entrepreneurs. And I was
in Bakersfield, and I've been all over the place. So
I'm doing what i want to do. Meaning I'm on
this tour of the state and the city. I'm meeting people,

(07:25):
I'm listening to people. I'm understanding what the issues are,
developing policies where we could make a big difference, whether
it's the city or the state. And at the right time,
I'll make my decision and I'll announce it and you
guys will be one of the first to know.

Speaker 3 (07:45):
Thank you.

Speaker 5 (07:46):
We are talking with Caruso, Founder and executive chair of Caruso. Wait,
having said that, you know, I'm not going to let
this go completely. You said you're in San Francisco talking
to tech executives, You're in Bakersfield, You're all over the place,
You're in LA right now. That sounds to me like
a broader scope. So are you leaning maybe towards being
governor versus mayor just you know, I'm just curious, are

(08:11):
you leaning a little bit?

Speaker 2 (08:12):
That is a great follow up. I love you, but
I am keeping both options very open. I have two
different teams. I have two different teams that are working
on both, and both are really important positions, and I
want to do my best to end up in a
position where I could do the greatest good, to make
a difference in people's lives. And that is my motivation.

(08:34):
It's not a career move for me. It's really to
give back, like I've done before, working with three different maris.
And you know you're la lead guy, John, who just
wrote the article about me. You know there was a
great statement in there that three mayors turned to me
to help with critical problems that needed to be fixed

(08:54):
at the time, and I was honored to be able
to do that. So to me, that's what public service
is all about, is having the trust of people and
really making a difference in people's lives. And I'll let
you know where I end up when I make a decision.

Speaker 3 (09:12):
Well, John Gittlson is going to be speaking with you
on stage here at screen time just a little later.
If you have not yet seen that story in Bloomberg Business,
we check it out at Bloomberg dot com and on
the Bloomberg terminal as well. I want to talk a
little bit about Hollywood and what you think the fix
is here as we know, the film industry has been
under tremendous pressure, COVID, the fires, technological disruption. What is
the right fix.

Speaker 2 (09:33):
We've got to be competitive with Atlanta. We've got to
be competitive with New Jersey. We've got to save the
film industry. You know, people that are blow the line
are just getting destroyed. You know, the floor is the drivers,
all of the people that support the entertainment industry. There's
an arrogance I think in our leadership that the entertainment

(09:55):
industry was born here, it's going to stay here. That's
just not dealing with reality. And this is where I
think leadership and executive skills really matter. Identify a problem
and solve it. If we're the fourth largest economy as
a state in the world, let's act like it. And
let's give the resources to keep the entertainment industry in

(10:17):
California and in Los Angeles. And we've got to be
competitive and not allow and force people quite frankly, to
go to London. Like I said, donor in New Jersey,
I mean the mayor of New Jersey. You know, Phil
did a hell of a job getting Netflix. Gave him
a lot of money to build a studio there and

(10:39):
that's a sucking sound of jobs coming out of California.
So I would reverse that course immediately so that we're
competitive and keep people in our state. So this is
why I'm not.

Speaker 5 (10:52):
Twenty seconds very quickly. Do you think of terrified movies
made outside of the United States makes sense? And forgive
me really quickly.

Speaker 1 (11:00):
No.

Speaker 2 (11:01):
No, let's just be competitive and let's not be punitive.
And if we can't win the industry by being competitive,
shame on us. I think we can, all right

Speaker 5 (11:11):
Rick, you know where to find us when you're ready
to renounce.