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Rick Caruso on California’s Collapse: Broken Leadership, LA Wildfire Failures & the Fix Podcast Episode Description
(0:00) Introducing Rick Caruso
(1:03) Reflecting on the disastrous 2024 LA Wildfires: Karen Bass failure, saving the Palisades Village, failure to rebuild
(11:20) California’s incompetence, running for CA Governor vs LA Mayor
(14:21) Attention to detail
(17:04) State of California: What it should be, homelessness, National Guard, policing
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Rick Caruso on California’s Collapse: Broken Leadership, LA Wildfire Failures & the Fix Podcast Episode Transcript (Unedited)
Speaker: 0
00:00
For people to know who Rick Caruso is, he’s a great developer. You walk into one of Caruso’s places and it’s safe, it’s clean, you wanna bring your kids.
Speaker: 1
00:08
Ideology did not save the Palisades. Competency would’ve. Have. Running this city is running a business for the benefit of the residents. You’ve gotta make good business decisions. It was predictable, Bill. What’s predictable is preventable.
Speaker: 2
00:23
Rick Caruso now has a golden road in the governor’s race if he wants it.
Speaker: 1
00:28
What’s happened to LA over the last decade is just tragic. It’s sad to watch.
Speaker: 3
00:34
Ladies and gentlemen, please welcome Rick Caruso.
Speaker: 1
00:48
This is fantastic.
Speaker: 3
00:48
Great to see you, brother. Thank you for coming.
Speaker: 1
00:51
Thank you very much. Alright. Make my rounds. Thank you.
Speaker: 2
00:55
Good to see you.
Speaker: 1
00:56
Good seeing you. Hello, everybody.
Speaker: 3
00:59
Alright. Rick, we’re nine months out from the tragic fires.
Speaker: 2
01:06
So much has happened. So much has
Speaker: 3
01:08
happened. Karen Bass, so incompetent, such a discraziad. Discraziad. Discraziad.
Speaker: 1
01:18
Ai my Italian brother in here.
Speaker: 3
01:21
But when you when you look at it in all seriousness, you know, you had some properties there. And you’ve always been an innovator. Everybody knows the grove. I speak so much time there with my beautiful daughter, Lotus, and and my my beautiful wife, Jade. Just what a gift you’ve given so many times over to this amazing city.
Speaker: 3
01:40
And then you watch this horrible incompetence, and yet you innovated and you had this incredible ai that when the fires were coming, you would get water in trucks and bring it to the Pacific Palisades and then you found this unique group of innovators called firefighters
Speaker: 1
02:00
and you
Speaker: 3
02:00
also brought some of them. What did you see in this incredible moment of clarity that when the fires were coming, that Karen Bass didn’t sai.
Speaker: 1
02:11
Well, first thing I did is I stayed in town, which I I I think You
Speaker: 3
02:19
wouldn’t abandon the city.
Speaker: 1
02:20
I think when you sana be a leader, you should probably be present. But,
Speaker: 3
02:24
Good start.
Speaker: 1
02:25
That’s a good rule. Listen, we learned a lot when we were building our resort up in Montecito in Miramar. We had fires there that were threatening the construction site. We were just under construction. And a very smart ai, still do on the team, name is Banyan, and he’s the one that sai, we can bring in private firefighters, we can bring in our own water trucks, we can bring in retardant.
Speaker: 1
02:50
And listen, here’s another rule that’s really important when you’re in the commercial side of the business. You want the firefighters that are working for the city or the county, first and foremost to protect the homes. And we know that they should be doing that, so we sana have resources to protect our building sai the resources aren’t taken away from the residential areas.
Speaker: 1
03:14
That’s just, I think, being a good citizen. So fast forward to Palisades, we know we’re in a fire zone. We built it with all non combustible materials. We designed it sai there was no open vents that an ember can get into. About 90% of the homes in the Palisades and Altadena burned from the inside out.
Speaker: 1
03:35
So these wind warnings came and I’m sure you all saw them to the point that I didn’t even believe that they could be true. Catastrophic, life threatening winds. And our team rallied. We had our firefighters, our water, our retardant stationed there two days before the ai, and we were ready to go.
Speaker: 1
03:59
And I’m really proud of my team because they not only saved the village, but we saved the whole block, of properties. And we were actually on the seventh loaning equipment to LA ai department who was running short of equipment, ai failed to work.
Speaker: 2
04:21
Rick, it’s been eight months, I guess, since these fires.
Speaker: 1
04:24
Yep.
Speaker: 2
04:25
How much of it is being rebuilt now?
Speaker: 1
04:28
Not enough. I was out there last ai. It’s slower than it should be.
Speaker: 2
04:33
And what is slowing it down?
Speaker: 1
04:35
Slowing it down is an enormous amount of red tape. I mean, the previous speak is talking about red tape in the state of California. We have red tape in the city of Los Angeles and the county that’s ridiculous. But let me just give you an example. Since COVID, we have still not, we being the city, have still not called back workers to city hall. So plan checkers in LA City are working from home.
Speaker: 1
04:59
You just lost 7,000 homes. You would think the first thing the mayor would do is say, you 10 plan checkers are now out in the Palisades in a construction trailer where the people need you. They’re still working out of a home.
Speaker: 3
05:15
Why did the people Why?
Speaker: 4
05:16
I I wanna know why. Yeah. Why? That makes me angry.
Speaker: 1
05:19
You’ll have to call +1 800 Bass. I don’t know the answer.
Speaker: 4
05:23
What’s what’s your I’ve I’ve tried to call that number a number of times. What is what is your sense of the incentives there? What is driving that? Is it a union thing? Is it, you’re gonna get unelected because this voting block wants to work from home? What is the incentive there? Is no sense.
Speaker: 1
05:40
Ai I think this is what it is. I I think there’s a level of incompetence that’s combined with literally a stagnation and there’s no urgency to do anything. So there’s no decision making and all of us have been in situations in business or whatnot where you meet somebody that is just not well equipped.
Speaker: 1
06:02
And so what happens when you’re not well equipped to make decisions in either easy situations or complex situations, you sort of freeze up.
Speaker: 4
06:11
So the kids run the class?
Speaker: 1
06:13
Yeah. I’ll throw out
Speaker: 5
06:13
a theory and get your reaction to it, which is California is a one party state and Karen Bass doesn’t really need to serve the people because historically we haven’t really had competitive elections. What’s important is that she satisfies this political machine that keeps her in office. She wasn’t a particularly distinguished candidate or anything like that.
Speaker: 5
06:31
She’d just been around the block for a long time. Yeah. And, frankly, we have the best candidate to ever challenge Karen Bass, which was you, a successful businessman. Unbelievable.
Speaker: 1
06:43
And and the proof of that is that I love this crowd, by the
Speaker: 3
06:48
way. This crowd is intelligent.
Speaker: 1
06:49
Yeah. Yes, they are. Yeah.
Speaker: 5
06:50
And the and the proof of that was was in the ai because I think it’s pretty obvious that the palace days wouldn’t have burned to the ground if you had been the mayor because you would have made sure that there’s water
Speaker: 1
06:59
in the fire hydrants. David, what’s amazing to me is and we’re waiting for this action, after action report, which is incredible. We don’t even have it yet. But I am I was convinced nine months ago, I’m more convinced today, that fire was completely preventable. And if you think I’m wrong and it wasn’t completely preventable, the damage could have been significantly mitigated. The fire department was never pre deployed.
Speaker: 1
07:24
Where the fire started is the same exact place that there was a fire seven days before. I think what we’re gonna see is the fire department did not put that original fire out. It smoldered and reignited. When it reignited, the winds were not here yet. The smoke was going straight up. We had the largest reservoir not filled with water.
Speaker: 1
07:48
I mean, I got the call at night the family was together, your daughter’s home is burning down, and the firefighters, their hoses have stopped. There is no more water in the fire hydrants. And I said, how can that be? Arya the second largest city in the country. Impossible.
Speaker: 1
08:05
But listen, I think all of it is fixable. So I’m an optimist. And with the right kind of leadership, and I’m not saying it’s me, I’m just saying in general, in this state, in this city, in this country, with the right kind of leadership that is competent, eager, and willing to make decisions because they sana do what’s best for the people they serve and not worrying about getting reelected, great things can happen.
Speaker: 1
08:34
And that’s my hope for the
Speaker: 4
08:35
Why is this happening around the nation? When you look at Portland, Seattle, Chicago, New York, these cities around this country were seeing similar kind of systems of decay and degradation.
Speaker: 5
08:48
That’s why.
Speaker: 4
08:49
But is it no. But did you say? No. He said they’re blue. But I I I wanna like, is that is that really what’s going on or is there a social thing that’s going on or a societal thing that’s going on that’s causing people to say let’s let these cities kind of decay, let’s stop doing our jobs, let’s keep kind of ballooning the budgets but not delivering any results.
Speaker: 4
09:08
What is it that’s going on?
Speaker: 1
09:09
I have a little bit different take. I have a different take that I think there’s been a a sense of apathy. I think people have not gotten engaged. Not enough people vote and get involved, and we don’t hold our elected officials accountable. People now that run for office believe they have an office for ai, and I think that’s very dangerous. That was never the intent of our founding fathers.
Speaker: 1
09:30
It was to serve and then go back to your private life.
Speaker: 4
09:33
That’s right.
Speaker: 1
09:34
And and now what we have is people just they cycle through it and what we need to do is get more people active. I don’t care what your political persuasion is, get out and vote. But what we have seen particularly are extremes that are very motivated to vote, and they’re moving these, elected officials that are ideologues into positions, and this ai, which may be well intended, has not had good results.
Speaker: 3
10:04
Have the people of Los Angeles seen enough, do you think, to have the common sense to put competent leadership in? I ai so. Enough?
Speaker: 1
10:13
We’re gonna find out in about a year.
Speaker: 5
10:15
What do the politicians mean when I mean, I think I’ve heard Karen Bass say this. I think I’ve heard, Gavin Newsom say this, that they see that what happened to the Palisades is an opportunity to reimagine. What are they imagining there? And how is that different than just letting people rebuild their homes?
Speaker: 1
10:34
I I I can’t I can’t speak for that. I mean, there’s a possibility.
Speaker: 5
10:36
Turning large parts of the Palisades into low income housing or something like that. Is there I mean, should people be worried about this?
Speaker: 1
10:43
I don’t think so. I I think there’s probably fringe people who would like to see zoning changes. I don’t believe that there should be zoning changes on the backs of people who have lost their homes and their businesses. If you sana do that, you wanna have that discussion, do it in an orderly fashion, but do everything you can to get people back into their communities, back into their homes.
Speaker: 1
11:04
And I this city and government has gotta have this culture that we’ve got your back. We’re here for you and we don’t have that. And you’re not gonna get people to reinvest in their own homes and their own community unless they think the city’s gonna be there with them.
Speaker: 2
11:21
How, how much of the ineptitude of Los Angeles is derived from the ineptitude of the state of California?
Speaker: 1
11:29
Well, I think it’s part and parcel, you know, to be sana. But I also believe
Speaker: 2
11:34
that Sai is Gavin Newsom helpful? Has he done stuff to help? Like, when you when all the people in LA who are still, you know, dispossessed and out of a home called him, is he able to apply pressure to the city of California or is it just city of LA rather? Or is it just chaos?
Speaker: 1
11:50
I don’t think it’s chaos. I think actually Gavin has done some good things. Waiving CEQA, waiving the Coastal Commission. Those are really smart things that he’s done. I’d like to see him do more.
Speaker: 2
12:00
Well, for sure. What would you want him to do?
Speaker: 1
12:03
What he could do is he could demand changes very quickly, and if not, he could exert independent California authority to make changes. The these communities, Altadena and Malibu and Palisades, they need completely new infrastructure. They need all the power lines underground. They need new water systems.
Speaker: 1
12:24
All of that has to be done. He’s got the power to really make that happen. And frankly we’ve got to figure out a way to get the federal government to help financially. And I think name calling, probably is not a good way to build a relationship to get billions of dollars into the state of California.
Speaker: 1
12:42
So I’d like to see that stop.
Speaker: 3
12:44
Where can you be more effective as mayor or governor of California?
Speaker: 1
12:49
I think they’re very different, but I think either one of them. I really do.
Speaker: 2
12:55
Oh, okay.
Speaker: 1
12:55
I think I think either one. Well, I mean But I think they have different they obviously have different authorities and different powers, but I think either one can be very effective.
Speaker: 5
13:03
You’d be great you’d be great in either one and, it’d be great to see. You really
Speaker: 2
13:07
would be great in either one.
Speaker: 1
13:09
Thank you. And I appreciate it.
Speaker: 5
13:10
It’d be great to get an outsider, someone, you know, into politics. The thing I worry about is in California, you’ve got ballot harvesting is legal, and checking someone’s voter ID is illegal, and I just wonder if the combination of those two things makes it impossible for someone outside the political machine to get elected.
Speaker: 5
13:31
What do what do you think?
Speaker: 1
13:33
Well, you know, it may, David, but I may I may give that a try. Ai we’ll see we’ll see if it works. Rigging. Rigging. Way it wanted to last time.
Speaker: 4
13:42
Let me add
Speaker: 2
13:42
let me add hold on.
Speaker: 3
13:43
I got I ai to follow-up on this one. You’re I know the people who have been having some of these conversations with you. There’s one camp that’s pushing you to governor and the other camp is pushing you to mayor. How do you make that decision? When are you sana make that decision?
Speaker: 3
13:56
We’ve got eight minutes and fifty three seconds left here. Can we get it done now?
Speaker: 1
14:00
Can I get it done in eight minutes?
Speaker: 4
14:03
Alright. Let’s start. Mayor Clapp. Governor. Who wants him to go for meh? And now governor. Governor.
Speaker: 1
14:10
Wow. Woah. Woah.
Speaker: 3
14:13
You I just sana let you know right now, you have the full support of the all in platform for whichever one you choose.
Speaker: 1
14:20
I appreciate shah very much.
Speaker: 3
14:22
You and I have developed a bit of a friendship. We talk on text sana I every time I go to one of your facilities and we talk about the detail, the detail that you have at the Grove Pacific Palisades, this incredible Montecito property that I got to stay at recently, That attention to detail
Speaker: 2
14:43
is what we need. He wants a great room. This is not what he wants a great room. This is not the address to him.
Speaker: 5
14:50
I will
Speaker: 4
14:51
rest his I will
Speaker: 1
14:53
rest his
Speaker: 3
14:53
talk about where did that where did this attention to detail, the understanding of customers and consumers in your private sector life, where did it come from?
Speaker: 1
15:06
I love what I do. And if if you go to the root of what we do as a company, and you ask anybody in the company, what is your business? Everybody in our company is gonna say to bring joy and enrich people’s lives. It sounds corny. But if you do that, it gives you a platform in business that gives you permission to do things that your competitors are not allowing themselves to do.
Speaker: 1
15:31
It gives you permission to build a place called The Grove, which you and I talk about, and you get to run a trolley through the middle of it.
Speaker: 2
15:39
Is it really that simple? Like you’re building a business and you’re ai, I’m just going to enrich the lives of my customers and make them happy and your competitors literally don’t do that? Are they
Speaker: 1
15:49
Ai competitor’s building an indoor mall with no trees or light and an an escalator and
Speaker: 2
15:55
So you’re just shaking your head ai, how is this how is this even possible?
Speaker: 1
15:58
Well, don’t you wanna be in a place that feels good, makes you happy? You see trees, you have water, you have flowers, there’s nice music. Nobody’s nobody’s Feels like the perfect platform for
Speaker: 2
16:09
a city or or
Speaker: 3
16:10
a stadium.
Speaker: 1
16:11
Sai that’s where that platform gives you this incredible power and authority to go do things. I mean, you look at the Rosewood Miramar resort. We have a full train running through it. Everybody stayed away from that property. And when I announced we’re gonna build a five star hotel, everybody said, you’re crazy.
Speaker: 1
16:29
You got a train running through it. We made the train an amenity. Right. We built a bar next to it with a bell that gets rung when the train comes by. It’s ai. And people celebrate it.
Speaker: 2
16:39
Yeah.
Speaker: 1
16:40
So that’s enriching lives. I I just love watching people enjoy their life and that’s what fuels my public service and it’s what I really enjoyed when I worked for three mayors, when I worked for Tom Bradley and Dick Reardon and Jim Hahn. You can actually make changes in public service that makes people’s lives better. How great is that?
Speaker: 4
17:04
That’s great. People don’t know this widely, but tomorrow is the hundred and seventy fifth anniversary of the state of California. Governor Newsom, it’s a great state and There isn’t. It’s an amazing place. Governor Newsom is giving his state of the state tomorrow morning. If you were in that seat, what would you say at the state of the state tomorrow? What’s your read on the state of the state of California?
Speaker: 1
17:27
I think the state of California should lead the nation in everything that we do. I think the state of California should have the best housing. It should have the best school system, the lowest crime rate. We should not have homeless living on the streets. We should have opportunities for people to grow a business, raise their family, feel good about life, be enriched.
Speaker: 1
17:47
And, we should be in the top of every category that you sana measure quality of life. If you say we’re the fourth largest economy in
Speaker: 2
17:59
the
Speaker: 1
17:59
world, which our elected officials say very often, then act like it and the people of California should be benefiting from being the fourth largest economy in the world.
Speaker: 3
18:11
How would you deal with homeless? You got these encampments. We’re driving around here Downtown LA. Yeah. It had such a renaissance for a short period of time. It feels like it’s devolved again.
Speaker: 1
18:21
It has.
Speaker: 3
18:21
And it just seems to me that there just should be zero tolerance for camping on the street. Meh, here we are again with encampments everywhere. What would be your approach?
Speaker: 1
18:33
Well, my approach was simple when I ran is you can’t allow encampments on the street, but you’ve got to give people who are on the streets an opportunity to have a productive life. So give them the services they need, build the housing that they need. We are spending in the city of Los Angeles $900,000 per person that they’re moving from the streets. $900,000. Per year?
Speaker: 1
19:02
Or
Speaker: 2
19:03
Yeah. Oh ai god.
Speaker: 1
19:05
There’s billions and billions of dollars wasted. Redirect that to organizations that have incredible track records of being successful in Los Angeles, of housing people, giving them the services for mental health and drug addiction. And the first thing you do is you do not allow the sale of drugs on the street. Right now we do. I meh, this that’s a crime. It’s illegal.
Speaker: 1
19:26
Don’t allow it.
Speaker: 4
19:27
It is a crime.
Speaker: 3
19:28
Yeah. I mean, if you look at fentanyl, it is just a different category of drug. We’ve seen the president who you don’t agree with everything on, but he’s taking a pretty hard ai stance to the point at which he’s activating the military. Pretty controversial. What’s your take on that?
Speaker: 1
19:44
I think we should actually have secure borders and shut down the drugs. 100%. Absolutely.
Speaker: 3
19:51
So in full agreement with the president.
Speaker: 1
19:53
Yeah. I I don’t know how you can say Ai wanna have a livable society, a quality of life, allow people to build a business, raise a family, and then at the same ai, you allow drug dealing to go on the streets. You just can’t do it. We have an area out here called the Sepulveda Basin. I got a call from ram resident yesterday, encampments in Sepulveda Basin.
Speaker: 1
20:18
And what they have done now, the homeless, he’s telling me, is they’ve made these booby traps and connected homemade bombs to them.
Speaker: 2
20:27
Oh ai god.
Speaker: 1
20:28
So when the police of the fire department try to go in there, this one firefighter was severely injured, lost an ear because it hit a tripwire. And he had called the meh, the mayor said well it’s very complicated to try to figure out how to get in there to clean it up. It’s not complicated.
Speaker: 1
20:44
You go in there and clean it up. Period. Full stop. Period. Full stop. We just got to do that.
Speaker: 3
20:50
So one of the complications here is the Democrats don’t seem to sana clean up these cities. The president has checkmated them by saying, if you don’t clean it up, I’ll clean it up. Seems like a midterm driven approach. What’s your take on the national guard being sent into these cities?
Speaker: 3
21:10
Because if Karen Bass won’t clean it up, if JB Pritzker won’t clean it up, is there an argument for the president to send the national guard in? It seems like overreach in one way, but we’re sitting here talking about absolute incompetence and a refusal to deal with this issue.
Speaker: 3
21:26
The people who are affected by it are like, meh, send the national guard in if that’s what it takes. What’s your take?
Speaker: 1
21:32
Well ai take on it is sending in the National Guard in Washington DC is a very different situation than sending the National Guard into LA or Chicago, because Washington DC is a federal territory. So that’s different. What I think should be done is we should hold our elected officials accountable to have a police department that’s fully engaged and given the authority to enforce the laws.
Speaker: 1
21:56
And we’re not doing that.
Speaker: 3
21:58
You’re not backing they’re not backing up the cops.
Speaker: 1
22:02
They’re not backing up the cops. The cops are not allowed to clean up the streets. The cops are not allowed to hold people accountable for selling drug on the streets. There’s a whole bunch of protocols in the city of Los Angeles that do not allow the cops to do their job. The any kind of federal interference, I think, should be the very, very last resort. So I don’t support that. I don’t support it.
Speaker: 1
22:24
But I do support a fully engaged leadership system that require that the laws be enforced and give police the opportunity and not only that, demand that they enforce the law.
Speaker: 3
22:39
Ladies and gentlemen, the next governor and or mayor of California, Los Angeles,
Speaker: 4
22:46
Rick Russo. Thank you, Rick Russo.
Speaker: 2
22:48
That was fantastic. That
Speaker: 1
22:48
was great. Thank you very much.
Speaker: 3
22:50
That was great. Thank you, Daniel. Thank you, Chris. Ai got you. We’ll go back. Appreciate you, brother.