Billionaire Caruso Looks to Spur California's Comeback From Wildfires 

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2:15Bloomberg Audio Studios. Podcasts, radio, news. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. We are in the heart of Hollywood, live at Bloomberg Screen Time. We're speaking to the moguls, celebrities, entrepreneurs, the leaders defining the next phase of pop culture. One of those leaders joins us now, Rick Caruso. He's the billionaire real estate developer, the former candidate for mayor of L.A. He's the founder and executive chairman of Caruso. It's one of the largest privately held real estate companies in the U.S. He's a philanthropist. He's going to be here on stage a little bit later for a conversation with our LA Bureau Chief John Gittleson.

2:54He joins us now ahead of that conversation. Rick, welcome back to Bloomberg Business Week. It's been a bit since we last spoke to you. We've got to start with what LA Mayor Bass said last night here. She spoke with Sarah McGregor, Managing Editor, National Desk at Bloomberg. Here she is last night at screen time. Rick Caruso, who you defeated in 2022 in the mayor's race and has been one of your most vocal critics around the fires, He released a statement today after the arrest saying it shows the disaster was preventable and, in his words, calling it a failure of government on an epic level, starting with Mayor Bass.

3:28He'll be with us on this stage tomorrow. How do you respond to that? Well, the way he characterized me sounded like Trump. But I just was saddened by it, honestly, because I think that that response was beneath him. And we actually was in my office a couple of weeks ago. We're working on something. We're working on a couple of things together. But I think that he is sad and bitter. And and I think that it is really sad to exploit. You guys laughing about that? I feel like it's exploiting tragedy. It's exploiting grief.

4:08Well, there you have it. That was L.A. Mayor Karen Bass last night here at Bloomberg Screen Time. Rick Caruso joins us now. Now, Rick, your turn to respond to criticism of your criticism from the L.A. mayor. What do you make of it? Listen, I said what I think so many people around Los Angeles, throughout L.A. and this whole region feel, especially after reading the after action report. I don't know if any of you have read it, but it's very clear that this fire was preventable. And it's very clear that they didn't have a plan to do anything about it because she had a plan. And she would have responded in that question by saying, this is the plan I had.

4:49And, you know, we did our best to implement it. But, you know, going forward, we've got to solve these problems because when you read that after action report, glaring failures, systematic failures of our system, our city are outlined in there. And there are solutions to all of them. and, you know, the focus has got to be making sure this kind of thing doesn't happen again. But I'm not going to dwell on the fact that the city failed because, boy, it's in black and white now and very clear.

5:28Rick Caruso:Well, Rick, just to follow that, Mayor Bass said that you guys were together just recently working together on things. So I'm just curious, you know, conversations sometimes are things we in public versus things we hear behind the scenes. I mean, one of the things we got from Mayor Bass is talking about members of the Trump administration that certainly LA, California in general have clashed with, but that she talks to them on a regular basis, people she knew from her time, certainly in DC. So I'm just curious, what are the conversations or what can you share with us about maybe the constructive conversations you're having with Mayor Bass behind the scenes about what happened, what could be done better going forward.

6:07Yeah, well, here's something that's really important that she said. In the next question, she said politics is performative. And, you know, they would go out, beat each other up, and then go have dinner, something like that, that she talked about. I don't think politics is performative. I think what we learned from this fire is that leadership matters, that these positions, when you're the head of a city, the head of a state, in any kind of very important elected office, you actually impact lives. And it's not about putting on a show. It's actually about making a difference in people's lives every day.

6:47So I was really stunned by her statement. And listen, I have met with her. my job through Steadfast, we are working very hard with the city, with the county, with the state to get people back in their homes quickly and safely, get these neighborhoods rebuilt. And so we have a number of initiatives that we have delivered to the city to help them do their job better and quicker. And I have met with her. And I will work with anybody to help rebuild Altadena, Malibu, and the Palisades and do that with great honesty, great dedication, because that is the mission right now, is to get people's lives rebuilt that have been shattered.

7:33But it's not performative. It's real. And it's also real in my criticism, because that criticism is factually true. And I think what we need to be doing is spending a lot of time, like I just said, going through that after action report, asking some really tough questions. How could this have happened? And what are the solutions? So it never happens again, whether it's a fire or an earthquake or a flood or whatever may be. It clearly points out that there wasn't a plan and the system failed and a community burnt down and 11 people died. let's not forget about that so you know are there tens and tens of thousands of people who are sad and angry there sure are and yesterday after that announcement came out it re-triggered a lot of emotions and a lot of people and i stand with them i understand it because of the losses that we incurred that my daughter lost her house my son lost his house and um that emotion is a true raw emotion.

8:40It's important to recognize and it's frankly important to sympathize and be compassionate about because people are really hurting. I'm fortunate we have a number of options, but the far majority of the people that lost their homes or lost their jobs, they don't have options and they need help and help quickly. And that's what we're doing at Steadfast is making a real difference in people's lives. And I'm proud of that. Well, Rick, last time you were on with us, it was just over a month ago. You said you were still deciding whether or not you were going to run for mayor or for governor. Have you made up your mind yet?

9:17No, but I'm working hard at it. I've been spending a lot of time going across the state. I was in San Francisco last night at a great dinner with a bunch of tech executives and entrepreneurs. And I was in Bakersfield and I've been all over the place. So I'm doing what I want to do, meaning I'm on this tour of the state and the city. I'm meeting people. I'm listening to people. I'm understanding what the issues are, developing policies where we can make a big difference, whether it's the city or the state. And at the right time, I'll make my decision and I'll announce it. And you guys will be one of the first to know.

9:59Thank you.

10:00Rick Caruso:We are talking with Rick Caruso, founder and executive chair of Caruso. Wait, having said that, you know, I'm not going to let this go completely. You said you're in San Francisco talking to tech executives. You're in Bakersfield. You're all over the place. You're in L.A. right now. That sounds to me like a broader scope. So are you leaning maybe towards being governor versus mayor? I'm just, you know, I'm just curious. Are you leaning a little bit? That is a great follow up. I love you. but I am keeping both options very open. I have two different teams. I have two different teams that are working on both and both are really important positions.

10:38And I want to do my best to end up in a position where I could do the greatest good to make a difference in people's lives. And that, that is my motivation. It's not a career move for me. It's really to give back, like I've done before working with three different mayors. And, you know, your your L.A. lead guy, John, who just wrote the article about me, you know, there was a great statement in there that three mayors turned to me to help with critical problems that needed to be fixed at the time. And and I was honored to be able to do that. So to me, that's what public service is all about, is having the trust of people and really making a difference in people's lives.

11:18and I'll let you know where I end up when I make a decision.

11:25Well, John Gittleson is going to be speaking with you on stage here at Screen Time just a little later. If you have not yet seen that story in Bloomberg Business, we check it out at Bloomberg.com and on the Bloomberg Terminal as well. I want to talk a little bit about Hollywood and what you think the fix is here. As we know, the film industry has been under tremendous pressure. COVID, the fires, technological disruption. What is the right fix? we've got to be competitive with atlanta we've got to be competitive with new jersey we've got to save the film industry you know people that are below the line are just getting destroyed you know the florists the drivers all of the people that support the entertainment industry there's an arrogance i think in our leadership that the entertainment industry was born here it's going to stay here.

12:12That's just not dealing with reality. And this is where I think leadership and executive skills really matter. Identify a problem and solve it. If we're the fourth largest economy as a state in the world, let's act like it. And let's give the resources to keep the entertainment industry in California and in Los Angeles. And we've got to be competitive and not allow and force people, quite frankly, to go to London. Like I said, donor New Jersey. I mean, the mayor of New Jersey, you know, Phil did a hell of a job getting Netflix, gave him a lot of money to build a studio there. And that's a sucking sound of jobs coming out of California.

12:55So I would reverse that course immediately so that we're competitive and keep people in our state.

13:06Rick Caruso:20 seconds, very quickly. Do you think a tariff on movies made outside the United States makes sense? And forgive me, really quickly. No, no. Let's just be competitive and let's not be punitive. And if we can't win the industry by being competitive, shame on us. I think we can. All right, Rick, you know where to find us when you're ready to announce.

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