Rick Caruso’s been asked ad nauseum if he’s running for mayor or governor (he’ll decide at the end of the summer). One question that hasn’t been posed as much: If he was California’s next governor, what would he focus his time and energy on?
That’s precisely what the developer was asked during his keynote at the Connect Los Angeles conference last week in Downtown Los Angeles.
In a word, Caruso’s answer was regulations. That is, cutting them.
In a room full of real estate executives, it may have been pandering given that’s the industry’s kryptonite, but Caruso offered an explanation.
“All of us feel in the state we’re over regulated. We’re overly taxed and we don’t have, which I think is critically important in the state and the city, we don’t have affordable housing,” Caruso said in response to the question. “And when I say affordable housing, I mean affordable housing at every entry point.”
The key to keeping businesses in the state is found in housing for employees, Caruso added.
Still, “there’s a whole bunch of things we need to be doing” underneath that umbrella of reducing regulations. He noted the state’s power grid, cost of gasoline and the shrinking film industry.
“If I could do nothing else but unbundle the place and let industry grow, it would go crazy,” he said.
He also tacked on the element of safety and embedded in that, the homeless population and moving people into shelters.
He shared his thoughts as he and his team explore paths for both the governorship or L.A. mayor, Caruso confirmed to the crowd. Ultimately, he stressed a point he has said publicly before: His immediate focus is jumpstarting rebuilding in Altadena, Pacific Palisades and Malibu so that should he run for office the fire recovery “flywheel” is in process and “carries on.”
Silent majority
The theme of safety in Caruso’s talk also trickled into the subject of what to do about downtown.
“Downtown saddens me,” the developer said before casting blame on local leaders for not cleaning up the streets and increasing law enforcement’s presence to attract more companies to the central business district.
Other suggestions included having the city, county or even state buy Oceanwide Plaza — which he referred to as the “beautiful graffiti towers”— and turn them into workforce housing.
The bankrupt mixed-use project developed by China Oceanwide Holdings stalled amid construction, leaving it abandoned and unattended as trespassers used the towers as a blank canvas for graffiti. Images of the marked towers went viral last year.
“Our city leadership has an obligation to all of you to keep you safe. It’s a simple system,” Caruso said. “What I think has happened in Los Angeles that’s unfortunate is we’ve got a silent majority, but they’re silent. And I hope to God, not that this is going to be a payoff for the fires, I hope to God that was the biggest wake-up call ever that competency actually matters in your elected officials, not ideology.”
Caruso, who served on the Los Angeles Police Commission and later Water and Power Commission across three mayors in the city (Richard Riordan, James Hahn and Tom Bradley), criticized elected officials for not doing enough to encourage businesses to be downtown.
The neighborhood’s office leasing activity dropped 41 percent to 395,000 square feet in the first quarter compared to the fourth, according to CBRE’s most recent market report. That’s nearly flat from the year-ago comparison of 385,000 square feet.
Overall office vacancy was nearly 34 percent in the first quarter, which is up from 29 percent in the year-ago period, CBRE reported.
“I remember downtown when every major headquarters building had a name of the company on top,” Caruso said, “and we should get that back.”
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