Rick Caruso Talks COVID, L.A. Fire Response and His Political Future

It appears that all eyes in Southern California’s commercial real estate industry are on Rick Caruso.

The billionaire founder and executive chairman of the namesake development firm has appeared almost everywhere lately — launching a nonprofit aimed at assisting Los Angeles Fire rebuilds, preparing his Palisades Village shopping plaza to formally reopen next year, making appearances on podcasts and television shows, and artfully sidestepping questions about his political aspirations. 

Caruso was the keynote speaker at Connect CRE’s Connect L.A. 2025 conference earlier this week, engaging in a question-and-answer-style conversation with Lew Horne, president of CBRE’s Greater L.A., Orange County and the Inland Empire regions. Horne and Caruso discussed the latter’s response to the pandemic and the L.A. wildfires, the impetus behind the Steadfast L.A. nonprofit, and when the former L.A. mayoral candidate may decide to throw his hat back into the political ring.

This conversation has been edited for length and clarity.

Horne: When you think about COVID-19 and the fires, you manage one of the largest businesses, retail businesses, certainly, in the United States. Tell me a little bit about how you got through COVID, how you conducted the operations of your company. Maybe give us a little bit of color that we might not know, and then how you came through it.

Caruso: COVID, for all of us, was obviously one of the most challenging times in our lives. I’m sure for many who have been impacted by the fires in Malibu, or Altadena, or the Palisades, I share with you that, I thought after COVID, we’re not going to go through a situation that was going to be shutting down businesses, shutting down lives and all of those kind of things. 

And, lo and behold, within a short span of five years, we’re back into something where there are no guidebooks. There’s nothing to turn to. What we did in COVID is, we had a few fundamental principles that we stuck to. And as you know, in my business — whether it’s our retail centers, our resort up in Montecito and our apartment portfolio that we have — we’re dependent on people. We’re dependent on people, connecting, living, experiencing life. So we had to shut everything down for the most part. But what we did is, we said all of our properties are going to remain open for people to enjoy. That was our first principle. 

In a very safe way, the fountains are on, the music’s on, the flowers are maintained. The lawn is maintained, all of those kinds of things. Because it was very important for us being a member of the community that we love so much, that we provided a safe place for people to get out, walk, see other people. because if you remember, the idea that you have to stay in your homes didn’t make sense then, it makes less sense now.

From a business standpoint, I put together a very small team of executives, and we had to go to battle every day, meaning we had to save the company. Like every other company, we were burning cash. Our income went from 100 percent probably down to about 10 percent portfolio wide, but none of our expenses changed. And in fact, in many areas, our expenses went up because we needed to have more security. And the rule behind that was that we were going to get every retailer over the bridge with us, along with all of our employees. 

We were all going to do it together, and we created a system where the larger retailers had to continue to pay rent, like Nike, like other big companies. Smaller retailers, independent retailers, their rent was waived. In fact, not only did we waive rent for the smaller retailers and our independent retailers, we wrote it off. We never went back and charged them, even when they reopened.

We know that you opened all your centers for the community, and they became a safe haven where people could go and connect, and keep a distance, but at least feel human. What people don’t realize is how you handled yourself or how you handled your staff. You own a lot of those restaurants — tell us a little bit about that, because I think it really speaks to the heart of Rick Caruso.

I think every good business person certainly wants to do this, tries to do this. And those who can, they do it. We kept everybody paid. We kept everybody employed. It’s the right thing to do and we’re doing it now in the Palisades with our employees, and there’s other companies that I know that are doing the same thing. It’s not [the employees’] fault what happened, right? And people that really have no safety net need the most help, and that’s just the way I look at it.

Then the fires hit you. Would you describe what happened that evening and really how you pivoted your company and yourself, your own energy, into a new phase of Caruso, a new venture.

When we were building the Miramar hotel, we had the Thomas Fire. The Miramar hotel was being built about six months ahead of [Palisade Village] starting. We opened them pretty close in time. When the Thomas fire was starting, we were just in framing, and I called our head of security and special services, a guy named Banyon Hunter, and I said, listen, I don’t know what you have to do to protect our property, but come come up with a plan and let me know what it is. Because the one thing I know from my time working in civil service for the city, the fire department is going to have to protect, and should protect, the homes before they protect the commercial buildings. We’re not going to be protected up here. 

So, lo and behold, he identified and mobilized a private fire department, fire retardant and private water tanks, and we had them stationed up at Miramar. The Thomas Fire didn’t touch the Miramar, fortunately, didn’t get that close to it. And then, of course, after that, we had those torrential rains, if you remember that, up in Santa Barbara … So, obviously, what we said is, we’ve got to be prepared for natural disasters.

So, Banyon and his team go out and they put together a volume of these books that, depending on the disaster, you pull it off the shelf. Okay, catastrophic winds are coming in [this January], there’s a high chance there’s going to be a fire. There was a fire one week before [the Palisades Fire began] in Malibu, and a week before in Palisades, that they were able to put out. 

The manual comes off, the team mobilizes. We have private firefighters, retardant and private water tanks. I think we had like 20 water tanks up there. And before then, from our experience up at Miramar, we built the Palisades without any combustible materials other than maybe awnings. What looked like wood to most of us was really concrete formed like wood. We didn’t have venting systems that an ember can get into, all of those kinds of things. We’ve got everybody out there two days before the winds come up and we’re ready for it.

 And what we were able to do is we were able to not only protect the village that we built and owned, we were also able to save all of the commercial property across the street and down the street from us.

I’ll end with this: We’re sitting here, almost on the six month anniversary, July 7 will be the six month anniversary [of the start of the Palisade and Eaton fires]. Do we have an after action report? Has anybody heard what caused it? Has anybody heard what we could have done better? Has anybody heard what mistakes were made? 

County or city, they’re both complicit in this, and I just think that’s so wrong and is basically an insult to everybody that lost a home, lost a job, lost their school, lost their church, lost their synagogue. The lack of accountability, the lack of anybody saying, I’m sorry we failed in doing our job, protecting your community, I think, is unforgivable.

So Rick, you’re still running this massive business. You do a pivot. Tell us about Steadfast.

When you have a large natural disaster, the government, no matter how good they are, just can’t do it alone. So Steadfast L.A., which you’re a part of, Lew, and thank you, is a nonprofit that’s organized solely to get people back in their homes and communities as quickly and safely as possible. To be a partner with a city, state or the county to solve problems. It’s a team of people that I called up, the best and brightest in their industries, and said, ‘would you donate your time to come solve problems.’ Like how to put the power underground and how to finance it. 

Solving problems like — we developed, thanks to our great friend, who’s part of a team at Amazon, an AI model that will plan-check your home now in a matter of hours in what typically takes in the city of L.A. six to eight months. We raised the money and actually donated it to the city, donated it to the county, and we think it’s happening in Malibu also. So we have a series of things, rebuilding the park, reimagining the downtown. We’re doing all of that at no cost. I’m underwriting it, and I got an incredible team of people that are leaning in.

So Rick, you ran for mayor …

Lost. (Crowd laughter). Did not work out the way I wanted it to work out. That’s okay though, I learned a lot. 

It’s obvious that you demonstrated an interest in civic service. Just a quick history: youngest Commissioner ever in the city of Los Angeles as Head of Department of Water and Power, Commissioner of the police department. You have been a master philanthropist at USC, at Pepperdine, you’re giving hundreds of scholarships on an annual basis, the USC Keck Center … you’ve always had a civic leadership role since I’ve known you, which goes all the way back to your twenties. You’ve talked about the governor position. You’ve talked about the mayor’s position. What are you thinking?

What I know is, I love public service. I think public service is a really great thing. I was really lucky, I served three mayors, which very few people are lucky enough to do. I served under Tom Bradley, I served under Dick Riordan, I served under Jim Hahn, and I learned so much from each of them. 

I look at public service, and why I was interested in running for mayor the last time is that I’m not looking for a career. I’m not worried about getting reelected. I just love this city and I love this state. So whether there’s a path to the governorship, we’re looking at that. There’s a path to the mayor, we’re looking at that. I’ll make a decision at the end of summer sometime, because right now, I just want to focus on Steadfast. I just want to get these towns started and moving that flywheel so it just carries on.

Nick Trombola can be reached at ntrombola@commercialobserver.com.