Rick Caruso says his love affair with real estate started when he was 5 years old. His family lived above Beverly Hills, and Caruso and his dad would look down on Los Angeles, from the Westside to downtown, enjoying the view. Young Rick would point to high-rises that he said he wanted to own one day. And he'd show his dad the land that he thought he could build on.

"I have always loved real estate," the developer said. "I remember as a kid going by buildings and looking at them and knowing what I liked about the design or what I didn't like about the design."

The boy who dreamed of owning buildings grew up he turned 50 in January to become one of L.A.'s highest-profile developers. His distinctive malls from Glendale to Thousand Oaks, including the landmark Grove in Los Angeles, have changed the way Angelenos shop, and have become gathering places for locals and destinations for tourists. Caruso has also been involved in civic affairs, serving as president of the city's Department of Water and Power Commission and the Police Commission. He's even considered running for mayor, and is seen as a viable candidate.

It's for his business success and his community involvement that the Business Journal has chosen Caruso to join its Business Hall of Fame. This is the eighth annual event, and he joins such local luminaries as Alfred Mann; Eli Broad; Richard Riordan; and last year's inductees, Peggy and Andrew Cherng.

Caruso draws inspiration for his projects from the energy he felt as a child, not only as he overlooked Los Angeles but also on family trips to Europe, where he watched people converge on the piazzas of Italy.

Nowhere is his developed aesthetic more apparent than at Caruso's most famous shopping center, the Grove. With its mix of shopping, restaurants, movie theater, open grassy area, dancing water fountain programmed to Frank Sinatra and even a trolley, it embodies what is known within his company, Caruso Affiliated Holdings LLC, as Caruso Style: clean, safe and family friendly.

Caruso Affiliated boasts that 20 million people visit the Grove annually: That's higher attendance than Disneyland, at 14 million. And at the Grove and other Caruso centers, shoppers spend more than they do at traditional enclosed malls.

His successful ventures have made him wealthy. In the Business Journal's annual Wealthiest Angelenos ranking, Caruso's wealth was estimated at $1.7 billion in 2008, putting him at No. 24 on the list. That was up from $1.2 billion in 2007. Although calculations have not been made for this year, Caruso's wealth likely has taken a dip given the swoon in real estate prices lately and the general downturn in business.

For that matter, not everything in his career has been a breeze. Caruso has had some big public scraps, on the civic front and in the business world. His developments sometimes are branded as culturally antiseptic, and his latest mall, Americana at Brand in Glendale, opened in May just as the economy was slowing. Americana, unlike the Grove, has a big residential component, but condominium sales there, Caruso admitted, have been "miserable."

Still, he has prevailed over most opposition. And even though he has emerged as a big figure in Los Angeles, he could have a much bigger profile in the future. Caruso had entertained the idea of running for mayor this year, and he hasn't ruled out the possibility next time.

Early start

Caruso grew up in the Outpost Estates neighborhood of the Hollywood Hills and later in the Trousdale Estates section of Beverly Hills, where his family moved when he was about 5. He attended Harvard School (now Harvard-Westlake) and then USC, where he earned an undergraduate business degree in 1980.

He wanted to get an M.B.A., but his father, Dollar Rent-a-Car founder Hank Caruso, instead convinced him to get a law degree. He graduated from Pepperdine University School of Law in 1983.

"His reasoning was, from his experience in business, a law background is very, very important," Caruso said. "It's good for the training of the mind, it's good discipline, and just the whole idea of understanding the legal aspects of a deal. And he was absolutely right."

Caruso joined the Beverly Hills office of the now-defunct law firm Finley Kumble and practiced real estate law for six years. While practicing law, Caruso dabbled in real estate, buying land near airports and leasing it back to his father's rental car company to use as parking lots. When Finley Kumble collapsed under a huge amount of debt in 1987, Caruso decided to focus on his real estate development full time.

He founded Caruso Affiliated in 1990 and opened his first retail center, Burton Place, better known as Loehmann's, on La Cienega Boulevard, in 1992. From there, he went on to build eight more retail centers, including the Encino Marketplace, Promenade at Westlake, the Commons in Calabasas and Lakes at Thousand Oaks.

But it was the opening of the Grove in 2002 that put Caruso on the map in a big way, for it was immediately popular, and gave Angelenos a conspicuous gathering place to shop, stroll, eat and play.

Caruso is not exactly your classic delegator. In fact, he took a particularly hands-on approach in building the Grove next to the famous Farmers Market at Third and Fairfax. He even chose the marble and glass for the project himself.

"I don't know anybody who pays more attention to detail as a developer, from the lamps on the streets to the painting to the trolley car," said rival developer Jerry Snyder, whose own retail projects include the West Hollywood Gateway and the Promenade at Howard Hughes Center.

"And his tenants follow him around from project to project, so that says something. I mean, I go to the Grove to hang out."

Not everyone has been as enthusiastic. Some see the Grove as a sterile environment not unlike Disneyland, which is a good or bad thing, depending on whom you ask.

"Developments like the Grove rip what authenticity L.A. has out of its sunny heart," wrote one Los Feliz resident to the Los Angeles Times in 2007.

A Culver City letter writer put it this way: "The Grove is tacky, phony and fake, full of monuments to vapid consumerism. It is more like Disneyland than a real place. L.A. does need places where people can get out of their isolating cars and interact with other people. But the plastic Grove doesn't do it for me."

To which Caruso replies that he wants to make Los Angeles a more livable city, with clean, safe streets and an eclectic mix of people. Just like the Grove and its newer Glendale iteration, Americana.

"What's wrong with a place being clean?" he asks.

Bill Allen, who heads the Los Angeles Economic Development Corp. and has known Caruso since high school, puts it another way.

"What he has done to brand L.A. has helped us," Allen said. "He has brought tremendous revenue into this region. The Grove and Americana are now international tourist destinations. Disneyland is not just a global attraction but a social gathering place where people go and create memories. I did that as a child, and I did it with my kids and will do it with my grandchildren someday. And I feel the same way about the Grove and Americana. He's creating places where people make and share and relive memories."

Appearances are paramount in Caruso's world. The company's 30,000-square-foot offices, which sit above the retail stores at the Grove, are decorated with expensive art (and some construction awards). And, of course, his headquarters has a landscaped courtyard comparable to what you'd find at his shopping centers.



Dressed for the part

Caruso dresses impeccably in custom-tailored Brioni suits, coordinating ties and pocket squares, diamond cufflinks and designer shoes. He drives a Rolls-Royce to work from his Brentwood home.

Though his 220 employees may not be able to afford the expensive clothes or cars, yet, they are expected to dress well and perform equally as well. Nate Smith, a 22-year-old management associate who helps with the upkeep of the Grove and Burton Place, was doing some work at Burton late one afternoon last month and was called to the office. But first, he dashed home and changed into a suit.

"I didn't want Rick to see me in jeans and a T-shirt," said Smith, looking at his natty attire. "And wearing this silver shirt not a white one was a risk."

Smith says he works 80 to 100 hours a week walking around the properties, sometimes solo but sometimes with Caruso, who checks in with security and guest services.

That's probably not surprising, considering Caruso Affiliated's mantra is "Urgency and Relentless Follow-Up." That motto is prominently displayed in raised letters on the wall of the company's conference room.

Caruso likes to talk about concierge desks, valet parking and a customer loyalty program at Grove and Americana. He visits all nine of his properties every month, talking to store owners and rectifying the smallest of imperfections: He has been known to ask "housekeeping" to scrape off a piece of old gum found on one of his mall's sidewalks.

If Caruso's approach to shopping centers brings to mind the attention to detail of high-end hotels, then his latest venture makes sense. He is turning the Miramar hotel in Montecito near Santa Barbara into a world-class resort in what could become a new direction for his business.

"I think there's certainly a synergy between what we do with the retail properties and the hotel," Caruso said. "But we're looking at it as a stand-alone business. It's something I've always wanted to do.

"And it's not just the hospitality business, it's really the resort business. I wouldn't see ourselves building or owning a hotel in downtown Chicago or Los Angeles or New York, not an urban property. But resort properties, a handful, a collection, that are irreplaceable I'd like to do."

He plans to keep both his mall and his nascent resort business in Southern California for now, he said. Northern California is possible in the future.

What he wants to do at Miramar is create a resort where families with small children are welcome at a five-star-quality property. That's something he believes is hard to find.

"In my experience, you go to a lot of these resorts, and yeah, the food's great and the service is great, but you're worried about your kid making a noise, so you're on pins and needles all the time," Caruso said. "There's very few places in the world that there's this feeling you're really in a relaxed state and the kids can enjoy themselves. We're going to tap into that. I think there's a big market for that because more and more families want to be together and travel together. That's what we do."

Family man

"We" means the Caruso family. Caruso and his wife, Tina Caruso, who used to work as a model and later as a children's clothing designer, have four kids, ages 8 to 19. They live on a two-acre estate in Brentwood with a large garden that Caruso said is a tribute to his grandfather's passion for landscaping. The family travels several times a year together, including spending a month in Europe every summer. They also enjoy long weekends at a second home in Newport Beach.

He tries to re-create the family atmosphere he remembers from his own youth.

"It was a very happy, fun household," he said. "We were very close."

Caruso goes to St. Monica's Catholic Church in Santa Monica every Sunday, and his wife and kids join him on alternate weeks. They sit with Gov. Arnold Schwarzenegger and his family. The Carusos have brunch at the Beverly Hills Hotel afterward. Sometimes the Schwarzeneggers and Monsignor Lloyd Torgerson come to the Carusos for Sunday dinner. The Carusos say grace at every meal and pray together every night.

"Religion gives you a definition of integrity and you're able to draw a line in the sand of what's right and wrong," Caruso said. "It gives people hope. It gives me hope."

Caruso's oldest son, Alex, is attending USC like his father and grandfather before him. Caruso is one of the university's trustees, and he pledged $6 million to help fund the construction of the USC Catholic Community Center. He hosted a pep rally in December at Americana for the USC-Penn State Rose Bowl game.

Alex Caruso is a student in the school of policy, planning and development. But Caruso said his son is interested in hotel management as well.

That doesn't necessarily means he expects Alex, or any of his children, to follow in his footsteps. Though his three boys the youngest, Justin, is 13 have interned with his company.

The sons work every summer for Caruso Affiliated. Last year, Justin thought it would be cool to sell old-fashioned soda bottles at Americana, so they set up a stand. It's still there.

But Caruso just wants them to follow what makes them happy.

"If they want to go make pottery on the beach because that's what they're passionate about, that's what they should do," he said. "As long as they're good people and they're productive and they give back to society, everything else is up to them."

Public service

Caruso found his calling in civic affairs in his 20s.

While having lunch with a friend, Caruso noticed a badge in the man's wallet when he opened it to pay the bill. When Caruso inquired, his friend said he was a fire commissioner for the Los Angeles Fire Department.

"And I said, 'That is really cool, and I'd love to do it,'" Caruso remembered. "He knew then-Mayor Tom Bradley and put my name into the mix, and I got appointed to the DWP Commission. I had never met Tom Bradley before in my life. It was pure happenstance and luck."

Caruso became the youngest commissioner in the history of DWP at age 25; he became its president two years later. During his 13-year tenure, he had some well-publicized battles with S. David Freeman, who was then general manager of the department.

For more than a year, Caruso fought Freeman, and the entire City Council, over creating a 1,300-acre nature preserve around the Chatsworth Reservoir. Caruso wanted to build athletic fields or housing on the property. In 1999, he finally backed down, but only after facing strong public opposition.

In 2001, Caruso once again fought Freeman, this time over a proposal to preserve 300,000 acres of DWP-owned land in the Eastern Sierra. He called Freeman's plan to sell development rights to the land "silly" and his selling price of $25 million "absurdly low." Then-Mayor Richard Riordan also disapproved of the plan. It was eventually scrapped.

Nevertheless, Caruso looks back on his time with the DWP fondly.

"It was a great experience," he said. "I love public service. I also love business, and this was the combination of the two. DWP is really a quasi-private utility. I learned an enormous amount there."

After that, he served on the Los Angeles Police Department's Police Commission from 2001 through 2005, and was president for the first two years. The commission serves as a citizen oversight panel.

Caruso led the effort to oust Bernard Parks as police chief and replace him with current chief William Bratton. He also did away with DARE, the anti-drug program, taking those police officers out of the classroom and putting them on the streets.

David S. Cunningham III, who served on the commission with Caruso, said he brought his business management skills to the job.

"He was big on the organizational chart. He knew what everyone's responsibilities were," said Cunningham, who had also worked at Finley Kumble with Caruso. "And he always supported people."

Cunningham was the only commissioner to back Parks. But he said Caruso never made him feel bad about his decision.

"Everyone else always brings that up, and he never ever brings it up with me," Cunningham said. "He didn't make a big deal out of it. He knew people could disagree, but that didn't mean you have to be disagreeable."

The ultimate civic duty, at least locally, would be to run for mayor, a notion Caruso toyed with but rejected in the recent election.

As a potential candidate, it's been asked if Caruso would try to apply his Grove aesthetic to the rest of the city. He scoffs at the notion.

"I would never want or expect the city of Los Angeles to look like a retail center I built. But Los Angeles needs a lot of help, and I think leadership has been somewhat misdirected."

He said he wasn't ready to run this year because it would have taken too much time away from his family life. But he said he is open to the possibility in the future, without making any firm plans or commitments.

Business battles

Caruso has also fought his share of battles for his company.

Many of his projects, starting with Burton Place, have encountered community opposition. But he has learned to win over neighbors in a simple manner: talking directly to them and asking them what they would like to see on their streets.

When Montecito residents opposed his plans for Miramar, he gave out his cell phone number to members of the public, asking them to call if they had any concerns. After nearly two years of contentious hearings before the Montecito Planning Commission, the Santa Barbara County Board of Supervisors gave Caruso the final go-ahead in December. He plans to break ground next year.

Other fights have come from competing developers.

Caruso scored a victory against General Growth Properties Inc., the development company behind the Glendale Galleria, for trying to discourage tenants from leasing space at the nearby Americana. A jury awarded $89 million in damages to Caruso Affiliated. General Growth appealed, then settled for $48 million in January. Caruso said he's putting the money into Americana.

He is currently fighting Australian-based Westfield Group, which manages the Santa Anita Shopping Center in Arcadia, over the planned development of his Shops at Santa Anita on the parking lot of the racetrack.

The recent Chapter 11 bankruptcy filing of Magna Entertainment, the racetrack owner, shouldn't change his plans, Caruso said. "We're confident. We're moving forward."

Last year, Westfield enlisted a group of Arcadia residents and business owners to fight Caruso's plans for a mall next to Westfield's. A lawsuit against Caruso Affiliated alleged its environmental impact report was deficient. A judge ruled that 11 points in the EIR would have to be revised. Caruso is working on the revisions, but is grateful for the delay as it's a good time economically to hang back.

Even with what seems like a full plate besides running the nine retail centers, he sits on the Los Angeles Coliseum Commission, which is overseeing an upgrade to the USC-adjacent stadium he still manages to drive his kids to school in the morning. He sings to them on the way, much to their horror, and makes it home for dinner most nights.

"When he works at home, it's after the kids go to bed," said wife Tina. "Sometimes he'll be up until 1. He has a lot of energy. He's nonstop. He can't sit still for long."

Caruso said he couldn't do it any other way.

"When you think about it, there are a lot of hours in the day," Caruso said. "I work late and I start early. Those Police Commission days were intense, and that was right in the middle of building the Grove. I thrived on the energy, the excitement and the challenges that were being presented at the time. And I never found it a burden.

"I think I would shrivel up and die if I had not a lot to do. I love going on vacation, I love taking a break, but to have a really casual schedule every day, I would go nuts."


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