The Grove: Latest Example of Caruso's Main Street Feel

By DEBORAH BELGUM
Staff Reporter

Call it Rick Caruso's coming of age. The brash developer, still only 43 years old, has just taken the wraps off The Grove at Farmers Market, a $160 million, 575,000-square-foot retail project that may change for the better the entire Fairfax district.

It's the heady sort of stuff one might expect from the president of the Los Angeles Police Commission (who is smack in the middle of the controversy over extending Chief Bernard Parks' contract), though a few years ago that, too, might have appeared beyond the ken of young Caruso.

President and chief executive of Caruso Affiliated Holdings and scion of an automotive dealership and car rental empire, Caruso cut his real estate teeth more than a decade ago when he took over property that once housed the aptly named Millionaire's Club, a rowdy nightclub on La Cienega Boulevard.

"He was insufferable at the time," said Diana Plotkin, a nearby resident who was among the many petitioning Caruso to terminate the club's lease. "He was younger and more inexperienced and his attitude was, 'Who are these people trying to tell me what to do?'"

Harold Hahn, president of the Burton Way Homeowners Association, remembers a young businessman with sharp edges and a puffed-up ego.

"We had fights," Hahn recalled of Caruso's negotiations with the surrounding neighborhood associations. "When Rick said he was going to continue renting to The Millionaire's Club, we almost keelhauled him."

Today, those same people are in Caruso's corner.

"I don't have a very high opinion of most developers in this city," said Plotkin, now president of the Beverly Wilshire Homes Association, in remembering discussions over The Grove project. "But I gave Caruso a very, very good recommendation."

Construction of The Grove and Caruso's choice as developer of the 13-acre Glendale Town Center were pivotal in his selection by the Business Journal as the developer having the most influence on L.A.'s changing face.

Change in attitude

Caruso's Grove looks like someone sliced a section out of a European town and placed it next to the old Farmers Market, whose decades-old charm is based on its clapboard structure and warren of food stands and fruit and vegetable stalls.

One of the unusual features is a double-deck green trolley that travels on a quarter-mile track between The Grove and the old Farmers Market. The predominant attraction is a town square that includes a park, a pond spanned by an arched pedestrian bridge, pear trees, hedges, 900 rose bushes and outdoor cafes.

"A lot of what I incorporate comes from the way we were raised," said the ever-tan and nattily dressed Caruso while sitting at an outdoor caf & #233; at The Grove last week. "When I was a kid we traveled to Europe. We had a lot of cultural influence, and being Italian, we had a lot of time spent with other people and family."

The Grove is likely to become one of the city's most popular shopping centers, attracting both residents and tourists with its specialty retail stores, the largest Barnes & Noble site on the West Coast, a Nordstrom department store and a 14-screen Pacific Theatres cinema. Five sit-down restaurants dot the center.

"He has a good sense of urban design. And urban design is as much intuition as it is academic," noted Larry Kosmont, an economic development consultant and president of Kosmont Cos.

"A lot of people will say Rick is the foremost developer in the state of California," said Kenneth Lombard, who served with Caruso on the L.A. Department of Water and Power Commission and who is president of Magic Johnson's Johnson Development Corp. "He builds an impeccable project. He has an incredible eye for detail."

'Dad, see those buildings?'

His father, Henry Caruso, said Rick always had a knack for real estate. "I remember when we moved up to Trousdale Estates, a new area in Beverly Hills which still had vacant lots around," Henry Caruso remembered. "I would take him out to play ball when he was 4 or 5 years old. He would look down on the city below and say, 'You know, Dad, see all those buildings? I own all those buildings.'"

He didn't, of course, but he understood possibility.

Thirty-five years ago, Henry Caruso started Dollar Rent-A-Car, turning it into one of the nation's largest privately owned rental car companies. In 1990, he sold the business to Chrysler Corp.

Henry Caruso's success helped send Rick, his middle child, first to Catholic schools and then to Harvard School for Boys (now Harvard-Westlake School) in Coldwater Canyon. Rick Caruso attended the University of Southern California where he was the president of his fraternity and already had his eye on real estate. While an undergraduate, he bought a very small apartment complex in Westwood.

After graduating from USC, Caruso earned a law degree from Pepperdine University, practicing briefly before deciding that his true calling was developing real estate. He started with industrial projects and later transitioned to retail projects starting with the former Millionaire's Club site that had a sleazy mud-wrestling club. "That was my first retail project and I probably was a little rougher around the edges," he recalled.

The property eventually was torn down, replaced by the retail space now housing Loehmann's and topped with multi-storied parking. It wasn't the fanciest retail project around, but it pleased most of the neighbors and was a beginning.

Caruso, who devotes great attention to detail and whose projects charge higher rents than most, then opened Encino Marketplace in 1994, the Promenade at Westlake in 1996 (the largest retail development to be approved and completed in Thousand Oaks in 20 years), and the Commons at Calabasas in 1998.

The Grove site, however, was no easy nut to crack.

For five years, A.F. Gilmore Co., which owns the land occupied by the Farmers Market and The Grove, floated several plans to develop the surrounding area. One version included a hotel and office building and would have dumped more than 2 million square feet onto the site.

In 1991, the Los Angeles City Council approved a plan to build 700,000 square feet of shops, restaurants, department stores and senior citizen housing that was to be built with Chicago-based JMB/Urban Development Co.

On to Glendale

But the recession did away with that project. When Caruso stepped in to take a run at the languishing site in the late 1990s, his scaled back development plan was met with cautious approval by neighbors.

Now that the finishing touches are being put on The Grove, Caruso is focusing on his next project. Last year he was selected by the Glendale City Council to build that city's long-stalled Town Center a 13-acre outdoor project that will have retail outlets, restaurants and offices.

Again he envisions incorporating another trolley that would pick up customers at the surrounding office buildings and bring them over to the center. Many of Caruso's touches of European-style buildings and fountains will be implemented.

Caruso beat out fellow developer Jerry Snyder on the Glendale project, but Snyder said he harbors no ill feelings. "He's great competition," Snyder said. "I think he has his own style and personal touch that are seen in his developments. My only complaint is he's too tall."

L.A.'s Most Influential Developer

Project: The Grove at Farmers Market
Player: Rick Caruso, founder and president of Caruso Affiliated Holdings
The Deal: After developing several upscale retail projects in Southern California, Caruso is being hailed as the developer who is reinventing local shopping centers. The Grove, at a cost of $160 million, is a 545,000-square-foot retail center that recreates a European-style center surrounded by specialty stores, sit-down restaurants and a flagship FAO Schwarz and Barnes & Noble. Caruso has a reputation for taking projects that have been languishing and getting them done quickly and creatively. Instead of enclosing retail stores inside a boxy mall, he opens them up so that customers can stroll outdoors and enjoy Southern California's mild climate. His next project is the 13-acre Glendale Town Center.

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