A real estate mogul seeks to expand his influence over Los Angeles

The property, called the Miramar, opened in February and is his first hotel. It is vintage Caruso: nostalgic and shiny, and, like his multimillion-dollar developments in Los Angeles, every detail has been obsessed over. It builds on his earlier successes. The Palisades Village, a small-scale shopping center modeled in part on Nantucket, Massachusetts, opened in October. The Grove, a retail enclave that opened in 2002, counts a number of annual visitors on par with Disneyland.

As the chairman of the board of trustees at the University of Southern California, Caruso has also taken on a role of prominence as the university struggles to handle a series of scandals. These are the latest signs that Caruso seems intent on broadening his stamp on the city of Los Angeles, where he is a figure of increasing influence.

At 60, he seems poised to take a greater role in the city’s affairs, at a time when older leaders, like Eli Broad, the octogenarian-billionaire arts patron, are stepping back.

Now eyes are on Caruso — who has said he might run for mayor — and a handful of others to see where they will try to take the city in the next several years. His rise to prominence has been welcomed by his peers, but it has also raised questions for many in Los Angeles about who should take on the mantle of benefactor, power broker and possible political leader for an increasingly diverse city where inequality is visible everywhere.

In addition to Caruso, others in the city seen as filling the gap left by Broad and others of his ilk are Austin Beutner, a philanthropist and superintendent of Los Angeles schools; Magic Johnson, with his investment company and philanthropy work; Casey Wasserman, an entertainment executive who led efforts to bring the Olympics to Los Angeles in 2028; and Antonia Hernandez, who as president of the California Community Foundation funnels a large amount of philanthropy toward immigration and housing programs.

Notably absent are Hollywood moguls, like billionaire David Geffen, who have historically supported the arts but shied away from involvement in broader civic affairs.

“I wish there were more people who took a leadership role in civic activities,” said Caruso, who added that he would be hard pressed to put together a dinner party of civic leaders if he wanted to rally support for a big initiative. “We don’t have that long list of go-to people to get things done that we used to have.”

Part of the reason that widespread civic engagement is difficult in Los Angeles is because the city can feel so fragmented. This was highlighted with the recent killing of rapper Nipsey Hussle, whose death was felt deeply in his black and Latino South Los Angeles neighborhood, even as many in other mostly white sections had barely heard of him.

Mike Feuer, the Los Angeles city attorney who has known Caruso for years, said, “There was historically an echelon of LA leaders with a very deep stake in the future of the city and a passion, a sense of philanthropy, people who were civically engaged.” He added, “Eli is of that generation. But there are very few people like that anymore in Los Angeles.” Caruso, he believes, is one of them.

Caruso’s curated worlds, though, are a world away from the concerns of everyday citizens of Los Angeles, and many dismiss the idea that a multibillionaire developer should take on a bigger leadership role.

His real estate career has not been without controversy. In 2016, he had to walk away from plans for a retail development on a lagoon near the coast in Carlsbad amid opposition from the community. Caruso spent millions to fund a ballot initiative to bypass state environmental planning laws, but a citizen-backed measure opposing the development eventually prevailed.

Were he to pursue a serious run for mayor it would raise numerous conflicts of interest, given City Hall’s role in approving development deals, and he would most likely have to step away from his businesses.

The grandson of Italian immigrants, Caruso grew up in Beverly Hills. His father started Dollar Rent A Car. He worked as a lawyer before getting into real estate by buying property and leasing it to his father’s business. That began his rise as a developer, with periodic forays into public life, with the city’s Department of Water and Power in the 1980s and later as president of the Police Commission. He eventually amassed a fortune of $4 billion, good for No. 504 on Forbes’ billionaires list.

Then last year, he was thrust again into the spotlight as chairman of USC’s board of trustees at a time when the university was thrown into crisis.

After decades in which USC leaders had worked to transform it into a world-class institution, the university, Los Angeles County’s largest private employer, was waylaid by several scandals. It has been at the center of the Justice Department’s investigation into the college admissions scam. And last year, a Los Angeles Times investigation revealed accusations that a former gynecologist at the university had sexually abused students for years. This came on the heels of the medical school dean being ousted after allegations of drug use and prostitution.

Last summer, Caruso became chairman of the board and installed Wanda Austin, a former aerospace executive, as interim president, forcing out C.L. Max Nikias, who still had many loyalists on the board who opposed Caruso’s efforts to install new leadership. Sometimes the drama of the boardroom spilled into public. Edward P. Roski, a trustee who is also a billionaire developer, wrote a letter last year accusing Caruso of admonishing a board member he disagreed with, “first administering a loud, abrasive tongue lashing, then kicking him out of a meeting.”

Marc Benioff, the founder of Salesforce.com and a fellow board member who is close to Caruso, said it “was one of the most politically charged situations I have ever witnessed.”

“These were probably some of the darkest days I have ever seen for USC,” he said.

For Caruso, the politically fraught drama at USC drew parallels to his role in an earlier episode in Los Angeles: as president of the Police Commission in 2002, when the Los Angeles Police Department was reeling from the Rampart corruption scandal. The department, still shaken from the aftermath of the Rodney King beating and the ensuing riots, was led by Bernard Parks, who was an icon in the black community but who many city leaders wanted gone. Caruso pushed Parks out and helped bring in William Bratton to reform the department.

“Rick was the one who had to manage the commission’s vote to oust Parks,” said Connie Rice, a prominent African-American civil rights lawyer. “And I can’t tell you the kind of courage that that took. And my part was, I was their racial shield. They couldn’t remove an icon like that, unless you had the leading civil rights lawyer in the city, who is African American, saying he needs to go.”

The USC drama has attracted a great deal of public scrutiny, some intensely personal. After USC was implicated in the bribery scandal, news emerged that one of the students who was allegedly admitted to the university after her parents paid a bribe was vacationing on Caruso’s yacht with his daughter.

The scrutiny is sure to intensify as Caruso takes a bigger role in the city’s affairs, and there is sure to be renewed talk of a possible run for mayor — something he planned to do in 2012 before opting out, after he had already recorded campaign commercials. It is speculation that Caruso welcomes.

“If there is a chance down the road, I will consider it,” he said.

For all his successes, even those who admire his business acumen question whether he could break through in politics in Los Angeles.

Some of the most important debates underway in the city are about gentrification of minority neighborhoods and the future of urban spaces. Caruso, whose developments tend to be privileged enclaves set apart from the city, has mostly shied away from those debates, although he has supported community policing programs, paid for dozens of scholarships and supported education programs on Skid Row.

“I think one of the biggest weaknesses of this city is we have not figured out how to reinvent and bring up the whole Los Angeles,” he said. “I think it’s devastating to this city.”

Still, Jill Stewart, executive director of the Coalition to Preserve LA, a group that focuses on urban planning and promotes transparency in government, said of Caruso: “His heart isn’t in the zeitgeist of Los Angeles. And the zeitgeist of Los Angeles to me is, it’s a working-class city. It’s a small business city filled with mom and pop places. It’s really not his vision of gigantic things. And I think that will always push back against him.”

The issues at USC, Caruso said, have forced him to think harder about a political future. “I have to be more thoughtful about it,” he said. “It can’t just be about me. It’s got to be about the impact on my wife, the impact on the kids.”

If he has a future in the politics of the city — the next mayoral election is not until 2022 — Caruso, who supported Republican John Kasich for president in 2016 and has also supported Democrats, said if he were to run for office, he would do so as an independent and would focus on development.

California is in the throes of a housing crisis and Caruso believes that to solve it, Los Angeles needs to grow vertically — his next project is a luxury apartment tower — and move away from its past as a city centered on single-family homes. He is a big promoter of aboveground rail and believes the city’s investments in the subway system are misguided.

“I don’t know why we don’t have a rail line that’s going down the middle of the 10 freeway and the 405 that’s connecting the West Side to downtown,” he said. “You have the right of way all the way through it. But what are we going to do? We’re going to spend billions and dig a tunnel and just screw up the whole city.”

For all his attributes, though, Caruso strikes many as from another era — in the mold of Richard Riordan, a wealthy businessman who served as mayor in the 1990s.

“Whether LA, which is clearly a multicultural city, would welcome his candidacy, I don’t know,” said Jane Harman, a former congresswoman from California who is close to Caruso. “It depends on who else is running.”

Some, though, clearly would.

“I’ll campaign for him,” Paltrow said in an interview. “I’ll make the T-shirts.”

This article originally appeared in The New York Times.

A real estate mogul seeks to expand his influence over Los Angeles

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