Tired of Robberies, Billionaire Mall Owner Considering Run for Mayor of L.A.
(Bloomberg) -- Billionaire real estate developer Rick Caruso is fed up with the way Los Angeles officials are handling crime, homelessness and other issues and that’s got him considering a run for mayor.
Caruso has added coiled fencing and armed guards at the Grove, a popular shopping center he owns. A mob of thieves smashed windows and stole merchandise from its Nordstrom Inc. department store last month. The incident was part of a spree of large-scale “smash-and-grab” robberies that are hitting upscale stores across California and other states.
Three suspects were arrested, charged and released without bail, which Caruso said was a lax outcome that’s contributing to rising crime rates and growing distrust of public officials. Caruso, a former president of the Los Angeles Police Commission, has criticized a state law approved by voters, known as Proposition 47, that reduced sentences for some nonviolent crimes.
“We’ve emboldened the criminals,” Caruso said. “They get arrested and get let out. It sends a message there’s no consequences.”
Crime has become a growing concern for U.S. mayors as homicides, theft, drug dealing and general lawlessness seem increasingly out of control. New Yorkers elected Eric Adams, a former NYPD captain, as mayor last month. In San Francisco, Mayor London Breed this week called for stepped up police intervention to end an outbreak of crime “that has destroyed our city.” California Governor Gavin Newsom on Friday unveiled a $250 million plan to combat retail theft, including funds to prosecute the criminals and to help small businesses repair the damage from break-ins.
While Caruso would bring his business acumen to the race, he’d compete as a wealthy White man in a city where minorities are the majority of the population. His opponents include U.S. Representative Karen Bass, a Black woman, and Latino city councilman Kevin De Leon. Caruso said he’ll decide whether to run after looking over more polling data and research that he’s hired advisers to collect. The election to replace Eric Garcetti, who had his Senate confirmation hearing this week to become U.S. ambassador to India, is scheduled to take place Nov. 8, 2022.
“I don’t leave things to chance,” Caruso said, dressed in a tailored suit, a monogrammed white shirt with French cuffs and a perfectly knotted necktie.
The LA mayor’s office is non-partisan. Caruso has made campaign donations to Republicans and Democrats, including Newsom and former state Attorney General Xavier Becerra, according to California Secretary of State records and OpenSecrets.org.
Business is booming at the Grove, which plays to its strengths as an open-air mall in sunny LA. Consumers are coming back to stores, undeterred by county rules requiring masks to enter shops and proof of vaccination at restaurants.
“As a company we’re having our best year ever by a very wide margin,” said Caruso, 62. “Best-in-class retailers want to be in the environments we create. We’re able to increase rents significantly.”
U.S. retail sales are forecast to rise at their fastest rate in three decades, amid positive consumer sentiment and fattened personal finances, according to Bloomberg Economics.
Before the pandemic, the Grove had the second-highest sales per square foot of U.S. malls tracked by real estate analytics firm Green Street Advisors LLC, behind the Bal Harbour Shops near Miami. The Green Street number, $2,632 per square foot ($244.52 per square meter), is “low but in the ballpark,” Caruso said. It predates a massive Apple Inc. store that opened in November to become the Grove’s biggest revenue generator on that basis.
“Probably one of the best brick-and-mortar retailers is Apple,” Caruso said. “They’re very committed to their stores because they want to have that guest experience. You can’t do that online.”
Nike, Sephora and Lululemon stores are his next-biggest sales generators. The vacancy rate is less than 1%, and 10 vendors typically line up for every new opening because of the center’s strong sales, Caruso said.
Revenue -- bolstered by parking and advertising fees -- is setting records at other centers owned by Caruso in Glendale and the Pacific Palisades. Shoppers feel more comfortable during the pandemic at the outdoor settings, he said, although, given Southern California’s temperate climate, the model doesn’t work everywhere.
Caruso adapted his malls to Covid by adding drive-through pick-up locations for online orders, more concierge shopping and valet parking.
He sat for an interview at an outdoor cafe in front of the Apple store. At 5 p.m., fake snow began to fall and a man in a Santa suit waved at Caruso from the trolley that rolls through the mall. Despite the cheery setting, the robberies and public safety were still on the businessman’s mind.
“These aren’t victimless crimes,” he said. “Residents are at the point of frustration.”
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