Page 47 - Forbes Magazine-October 31, 2018

FORBES RICK CARUSO

cars. Caruso claims visitors stay for an average of three an Amazon Books. “We could take the whole Palisades
hours—the industry norm is 90 minutes—and 93% of them project, the retail portion of it, and put it inside the Nord-
make a purchase. strom at The Grove,” Caruso says.
Mall skeptics say frills cut into profit margins. But some Caruso made his first big move into residential devel-
of the biggest competition is coming around to Caruso’s opment in 2012 with a glamorous 87-unit rental proper-
way. Westfield reopened a 1.3 million-square-foot proper- ty, opened his first office building in 2016 and is now de-
ty in Century City last year after a $1 billion renovation. The veloping his first hotel, Rosewood Miramar Beach Monte-
property, about five miles west of The Grove, features land- cito, a five-star resort that’s taking reservations for January
scaped outdoor plazas with lounge areas, concierge services 2019. Every Wednesday, Caruso leaves his estate in Brent-
for stylists and costume designers, and open space for con- wood and flies up the California coast to visit the new hotel.
certs and film screenings. “What Rick Caruso has done is A partnership with Rosewood Hotels & Resorts, the proper-
where retailers are heading,” says Indy Karlekar, managing ty will have 161 rooms beginning at $695 for opening night,
director of real estate investments for Principal Global Inves- but even here, Caruso is leaning hard into the idea of com-
tors and an L.A. resident. munity. Unlike many high-end resorts, the campus will
be open to the public, inviting locals for movie nights and
IN SEPTEMBER CARUSO OPENED Palisades Village, a circa- beach barbecues, as well as to shop at the second store for
$200 million mall in Pacific Palisades, an affluent area on Gwyneth Paltrow’s Goop brand.
the west side of Los Angeles. When 7-year-old Sophie Her- Aboard his preferred dual-engine Sikorsky S-76 helicop-
ron learned that the nearby Baskin-Robbins was closing, she ter, Caruso turns into a tour guide, explaining the science of
started a petition with local kids to save the shop. The move- fog, calling out Venice Beach, Zuma Beach, the Getty Villa
ment failed, but when Caruso received her petition and and Malibu’s history as a dairy farm. There’s also the house
video, he knew just what to do. In September, McConnell’s he owns on the beach in Malibu and Invictus, his 215-foot
Fine Ice Creams, a 70-year-old brand from nearby Santa Bar- yacht. The boat’s name comes from William Ernest Henley’s
bara, opened its sixth shop in Palisades Village, just minutes 1875 poem—“I am the master of my fate. I am the captain of
from Herron’s doorstep. my soul.” Caruso’s kids chose it.
This, Caruso believes, is the future of retail. Good retail- When he’s not focused on real estate, Caruso remains de-
ers—and by extension good retail developers—cater to the voted to his alma mater. In May he became chairman of the
USC board of trustees. He is leading an investigation into alle-
gations of nearly three decades of sexual misconduct by a gy-
IF THE REAL-ESTATE- necologist and the school’s handling of the claims. That will
DEVELOPER-TURNED- make him more visible, although Caruso and his wife, Tina, a
former swimsuit model, are already pretty well known to ce-
POLITICIAN SCENARIO lebrity watchers in California.
SOUNDS FAMILIAR, Such a high profile has positioned Caruso well to run for
mayor of Los Angeles in 2022. Although he hasn’t made any
DON’T TELL CARUSO. public declaration of his intentions, he admits he’s serious-
ly considering it. When it comes to his properties, no de-
community. “That is why Amazon has done so well in the tail is too small or expense too big, so it’s difficult to see how
book business,” he explains. “They curate the selection based that philosophy would play in city hall—let alone in Sac-
on the data they have from that neighborhood.” ramento or Washington, D.C. (If the real-estate-develop-
Not every community has welcomed Caruso with open er-turned-politician scenario sounds familiar, don’t tell Ca-
arms. He was recently forced to scrap plans for a 200-acre ruso. The suggestion that he has anything more in common
mixed-use project in Carlsbad, near San Diego, after resi- with Donald Trump than being an American alive in 2018
dents rejected his proposal for its environmental impact. The mortifies him.)
residents of the Palisades have also extracted, besides an ice Loath to be typecast, the right-leaning Caruso has sup-
cream store, some more costly concessions: an extra level of ported Democrats, including California governor Jerry
parking in the underground lot, a 1,100-square-foot com- Brown. In 2016 Caruso donated $244,600 to New Day for
munity center and redesigns for shops abutting a residential America, a pro-John Kasich super-PAC. During the cam-
street so its homeowners (who paid as much as $5.7 million) paign, he even joked that Trump was banned from The
could forget they were looking at a mall. Grove. (He wasn’t.) And while the president may be wel-
At Palisades Village, Caruso combines 48 small high- come, Caruso did bar boxer Manny Pacquiao from visit-
end stores and restaurants with eight luxury residential ing The Grove for making anti-gay comments days before a
rental units. Forty percent of the merchants are firms that scheduled television appearance on the property.
started out in e-commerce; indeed, six have never had a Today, Caruso says, everyone is welcome at The Grove.
brick-and-mortar store before. A prime corner lot houses After all, it’s good for business. F

94 | FORBES OCTOBER 31, 2018