Revenge of "A Good Walk Spoiled"

25:23Please understand, this system is insane. Totally crazy. I mean, just think of all the reasons why someone might deserve a big tax break. I mean, they're sick, they're poor, they have tons of young kids, they've made a big investment in their business. The state of California says no. We think the most deserving group are people whose property hasn't changed hands in 40 years. Okay, now imagine that you're a private golf club. You did that spectacular bit of jujitsu with Bob Hope in 1960, which means that you don't pay real property taxes. Gift from God, number one. Then comes Proposition 13, and you get a second gift from God.

26:04Because Proposition 13 says that those already artificially low property taxes are now frozen forever at 1978 levels, so long as your country club does not change hands. And that last part is crucial. because if you have a change in ownership, then you have to pay real property tax like every other long-suffering California taxpayer who hasn't been in one place since 1978. So the country clubs of Los Angeles all hang by a thread. They continue to exist only so long as the tax system perceives that they have not changed hands. And for years, everyone assumes they haven't changed hands. I mean, Brentwood, L.A.

26:53Country Club, Wilshire, all the major golf clubs were all founded before 1978. But then a neighborhood newspaper called the Los Angeles Garment and Citizen runs an article, January 16, 2010, in which they say, wait a minute, most private country clubs in Los Angeles have what's called equity ownership. They're owned by their members. When you're admitted, you get a share. When you die or quit, someone else takes your share. So over time, if enough members die or quit, isn't that a change in ownership? That question was put to Rick Auerbach, who was then the head of tax assessment for L.A. County.

27:34I think the quote was kind of funny for him. He said something about, let's see, on most issues we have heard at least the question asked before. He said he'd worked in the office 39 years, but this was a new one. So... Auerbach refers the question to the city's lawyers. They put their best and brightest legal minds on it for six months. And on June 2, 2010, the county's tax court issues a solemn four-page ruling. They conclude, no, country clubs haven't changed hands. If you're keeping track, that's the third straight-up gift from God that L.A.'s private country clubs have gotten in the last 50 years.

28:09I was talking to someone who's a member of Bel Air Country Club. And I said, what percentage of the members of Bel Air today were members in 78? And he said, you know, 10%. So why isn't that a change of ownership? Right. I haven't had a chance to dig through this a whole lot since I got it out of the file the other day. But they kind of get into it. They're saying if there's no one event that is more than 50 % of a transfer, then it's not each of those little individual slices are not a change of ownership on their own. Did you find that argument plausible? Well, it's proper change. Yeah, that's...

28:51We are implementers of the law. You don't have opinions. No. Well, there are no opinions. I could swear as I looked across the table at Donnelly and his cohorts that they were twitching like they desperately wanted to say something but had to bite their tongue. You know what it's like? Like, you know that famous paradox, I forgot, with the ship? The question is, if you have a ship and you change, it's like some ancient Greek thing, and you change one board at a time, is, at the end of the day, is the ship different? That's what this is. The thing I can't remember is the ship of Theseus, the famous thought experiment described by the Greek philosopher Plutarch roughly 2 ,000 years ago.

29:34Plutarch says, imagine Theseus is sailing on a ship, and one by one he replaces every one of the original planks that make up that ship with a new plank, until every single piece of the ship is new. The question is, when Theseus reaches shore, is he sailing on the same ship as he was when he left, or a new ship? One view says it's a new ship. This is called the myriological theory of identity. The identity of something is the sum of its component parts. Change the parts, you change the thing. On the other side of the argument is something called spatiotemporal continuity theory, which says that an object can maintain its identity so long as the change is gradual and the form or shape of the object is preserved through the changes of its component materials.

30:24I think you can see where I'm going with this. The city's lawyers take the second view. So long as a country club replaces its rich white guys gradually, and so long as each new rich white guy preserves the form and shape of the rich white guy he is replacing, then the private golf clubs of today must have the same existential status as the private golf courses of 1978. Collections of rich white guys from the standpoint of the L.A. County property tax system possess spatio-temporal continuity. At this point, I realized I was in way over my head. Tax assessors were not going to be enough. I needed an actual philosopher.

31:07So I called Mark Cohen of the University of Washington to get to the bottom of the question of whether large groups of rich white people possess ontological permanence. Here's an argument that favors the spatiotemporal continuity theory, theory. The idea that what makes the ship persist through time as one and the same is that it moves smoothly through space-time. One plank is removed and thrown overboard, and a replacement plank is installed, taken from the cargo the ship has on board. So when it arrives, it doesn't have a single part that is identical to any of the parts it started out with.

31:48And so So there's no point at which you can say, aha, now we have a new ship, a different, a numerically different ship. So that, if you have that sort of argument in mind, you think, okay, the spatio-temporal continuity criterion is the correct one. Forget about requiring that all the parts are the same. But, Cohen is not finished. As a philosopher, his job is to consider all the scenarios raised by the ship of Theseus conundrum. Like the museum counterexample. The museum example goes like this. Suppose the ship is in a museum of ancient ships, and a gang of crooks is trying to steal this ancient ship.

32:28And it realizes it can't just haul it out in one piece. They would easily be spotted. So they come up with a clever scheme. They sneak in every night and steal the ship one board at a time, one plank a day, so the museum doesn't realize what's going on. By the time they're finished, on day number N, they have all N parts of the ship removed. Now they reassemble them and put it on the black market. They're selling Theseus' ancient ship for a pretty price, and they've left a replica behind in the museum. I contend that in this case, when you describe it in this way, it seems as if Theseus' ship has been stolen piecemeal from the museum.

33:14Cohen's point is that there's no simple answer to the ship of Theseus problem. You can go around and around and around. That's why it's a puzzle. But do you see what the lawyers at the L.A. Board of Equalization did? They just waltz into a philosophical conundrum that has bedeviled some of the best minds in the world for 2 ,000 years and declare victory. And say, oh, it's definitely option one, spatio-temporal continuity.

33:43The problem as it stands is irresolvable, and you only come to a conclusion that makes any sense to you if you place it in a context in which there is something sort of extra metaphysical, something pragmatic that helps, that tilts you in one direction or the other. So what's the pragmatic extra metaphysical consideration here? It's that Los Angeles ranks near the bottom of all major metropolitan areas in the United States in terms of public parks. There's Griffith Park, off in the northeastern corner of the city, which only a fraction of the city can even get to. And then there's basically nothing, except these massive golf courses, which are both closed to the general public and subsidized by the general public.

34:32Do you want to know the size of that subsidy? I asked around. A guy I know knows a guy who's a member of the L.A. Country Club. That guy's back-of-the-envelope calculation was that the club's land was worth about$6 billion. But that was a couple years ago. Then I heard from another guy who said that they now think it's worth$9 billion. $9 billion! Under normal circumstances, the property taxes on that much land would come to about$90 million a year. Do you know what L.A. Country Club actually paid? after you add up the Bob Hope exemption and the spatiotemporal continuity ruling? $200 ,000, give or take.

35:12All right, let's do the math together. They should be paying$90 million. In fact, they're only paying$200 ,000 in property taxes. $90 million minus$200 ,000 is$89 ,800 ,000. That's how much the taxpayers of Los Angeles subsidize one of the swankiest country clubs in the world every year. Well, I want to bring up something else that comes to mind here, which is that the spatial temporal argument taken out of philosophical context strikes me as being, can sometimes be really troubling. For example, it's a very, I mean, I think there's something fundamentally intuitive about it. And I don't mean that necessarily in a good way.

36:00That we get the fact that we call the Hudson River the Hudson River, even though the Hudson River is at every second changing. It's like, you know, the water's not the same. Boats go down it. You know, it never looks the same way twice ever, but we continue to call it the Hudson River. But it strikes me that in a political context, this kind of thinking can be used to perpetuate inequality and injustice. For example, what is an aristocracy but a political formulation of the spatial-temporal continuity principle? Right? It is something like that. And it's troubling in precisely that way because they're saying circumstances can change and the holders of the privilege can change.

36:52The father can die and the son can inherit the peerage. But the peerage remains intact. It has this quality that's independent of all that's going around it. And that's... Yes. Where the identity of the object confers, for example, a right or a title. and if it's considered to be held intact and in full by whoever holds it at any one time then basically that removes change altogether from the realm of of what matters as far as as ownership is concerned yes so the 17th great grandson of the peer still has all of the rights and privileges, even though so far removed from the rights and privileges as they attach to the original holder of them.

37:45So there is something that is unfair and anti-egalitarian about the way this principle can get applied.

37:56So the golf clubs of Los Angeles are essentially aristocratic institutions. Exactly.

38:09I think someone needs to tell Brentwood and LA Country Club and all the others that if they want to hold spatio-temporal continuity privileges, they have to give something back. Take down your barbed wire. Your members can play golf on weekdays, but evenings and weekends belong to the ordinary taxpayers of Los Angeles. Let them come and enjoy the greens and fairways that they've been subsidizing for generations. It's worth remembering, by the way, that the most famous golf course in the world, the home of golf, St. Andrews in Scotland, is open to the general public on Sundays. In Toronto, the fanciest golf club is Rosedale Country Club, right in the middle of the city.

38:51But the golf course is only private in the summer. The rest of the time, it's open to anyone who wants to go for a walk, or play frisbee, or go cross-country skiing. Canada and the United Kingdom, I would point out, are governed by a queen. They have an actual aristocracy. But somehow they've figured out a way to have their fancy golf courses be democratic. It's only on the corner of San Vicente and Burlingame that golf remains an instrument of medieval privilege. I mean, when you fly over L.A., the green space that you see is cemeteries and golf courses. And golf courses. You don't see parks.

39:30We don't have a park like, say, San Francisco's Golden Gate Park or New York's... Central Park. Central Park. Dizak and I are standing outside the barbed wire of Brentwood Country Club, peering through a fence. We're trying to spot one of the privileged few permitted a walk in the park on the west side of L.A. I see one guy. I see one. That's unbelievable. It's a Saturday afternoon. Sun is now coming out. Yep. Right now, we're standing on the running track, and there's someone running up right now. There are more people on this narrow dirt track than there are typically on the golf course. Let's see if we can still see any kind of...

40:15I'm still looking for a golfer. I'm not... Oh, I see one. Oh, you see one? Yeah. Oh, that's very exciting. Yeah. Next time, I'm climbing the fence. Maybe we all should.

40:35That episode dropped on June 15th, 2017. Ten years later, almost to the month, one of Audra Nazarian's staffers comes to him and says, you should listen. So he does. When we come back, all hell breaks loose. Apple Vacations, where your story starts. The July Savings Event from Apple Vacations is here. Book by July 23rd and save up to$400 off your flight and hotel package to Mexico, the Caribbean, Central America, Hawaii, or Europe. From all-inclusive escapes to bucket list adventures, Apple Vacations makes it easy to create memories with the people who matter most. Start today at AppleVacations.com or contact your trusted travel advisor.

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42:27Adrien Nazarian, it turns out, had for a long time asked himself the same question I asked myself whenever I went to Los Angeles, which is, how on earth do these massive golf courses on some of the most expensive land in the world afford their property taxes? And after listening to that episode from 2017, he finally had his answer. because, basically, they don't pay property taxes. The six major L.A. country clubs sit on land worth conservatively$15 billion. You know how much they pay in property taxes in a typical year? Less than a million dollars. And thus enlightened, he decided to act and introduce a ballot proposition.

43:15So tell me what does your proposal, Tell me exactly what your proposal says, how you would like to address this problem. The proposal was meant to be a conversation starter to force this issue. So what my team came up with was to look at maybe a$4 proposal per square foot parcel tax, which does not contradict the state's Prop 13 requirement. It's a local city-based parcel tax. And the goal of the$4 per square foot was to make it almost commensurate to what a 1 % property tax valuation for best and highest use would have produced. So back of the envelope calculation, what would a club like LA Country Club be paying every year under your proposal?

44:17It depends. Oh, if it was at$4, I don't even know if they would be able to pay. They would shut down. Yeah, yeah. Let's do the math. The Los Angeles Country Club, the LACC as it's called, the fanciest and most exclusive of all Los Angeles country clubs, occupies roughly 325 acres. That's just over 14 million square feet. A$4 a square foot tax comes to roughly$55 million a year in property taxes. Right now, membership dues for the LACC total somewhere around$20 million a year. Under the Nazarian ballot proposal, they'd have to triple their fees just to pay their property taxes. Now, technically, could all the millionaires and billionaires who belong to the L.A.

45:06Country Club afford that? Sure. But everything we know about very rich people is that they don't like to pay market rates for things they previously got for free. For the well-heeled golfers of Beverly Hills, then, this is existential. In May, Nazarian put his proposal on the ballot for November. Let the voters of Los Angeles decide. Did you have a... You must have done polling. We did do polling because we wanted to not just make assumptions and understand that we actually have something that the public would feel strongly about. And in our initial polling from a reputable pollster, we saw a 64 % approval rating.

45:53So it's pretty strong. Oh, so these guys had a reason to be scared. Again, these are all folks that are part of the fabric of the city. So they understand that something like this would be seen as a populist issue and would garner quite a bit of support. Do you understand that? The country clubs freaked out. Someone, I'm not going to say who, who is a member of the LACC, forwarded me an email sent to him by the club's board of directors. Here's what it said. We want you to know that we are taking this matter very seriously. We are confident that we have the right people with the right experience engaged to address this issue on our collective behalf.

46:40While we won't get into specific details of our approach in a broadly distributed communication, please be assured that we are actively and thoughtfully engaged. In case you're wondering, these are all rich people euphemisms for, we're going to the mattresses on this one. An entire busload of white-shoe lawyers just pulled up downstairs. We've locked the gates. We've stocked up on enough Wagyu beef and 40-year single malt to fortify us until November. But then, the email continues. In the meantime, if you have particular expertise, insight, or relationships that you believe may be relevant to this situation, we encourage you to reach out to our general manager.

47:26Which is rich people euphemism for, we're totally panicking right now. We wish we'd said yes to that membership application 20 years ago. From Donald Trump. So the clubs get together, tell Nazarian they want to negotiate. He puts the ballot measure on hold. But then the second fanciest club in the city, Bel Air Country Club, says, no, we're going to fight. I have to confess that I didn't know there was such a thing as the Society of Golf Historians. But there is. And they weighed in. What the city of Los Angeles seems to overlook is that the preservation of these clubs should be viewed in much the same way we preserve great works of art.

48:10Their importance is no less significant than a Frank Lloyd Wright home or the value of a Picasso painting. The artists behind them are equally important, and their canvas is a living, breathing landscape that requires stewardship, investment, and at times, thoughtful restoration. The tabloids get wind of the story. It makes page six. Twitter blows up. My friend emails me again. They are throwing their nine irons at me, at the LACC. It's chaos. It's rich white guy on rich white guy violence. but play with me for a moment. Last time I was in L.A., I went to the top of... I wanted to see L.A. Country Club from high up.

48:57So I went to the top of the Waldorf, that little restaurant there, and looked down and said, this is an astonishing piece of property. And if they came back to you, I was thinking, what are the little things? Suppose they came back and said, all right, they have two parcels on either side of Wilshire, right? Am I right? Yes. What if they said, okay, we'll give you one of those parcels for a park if you let us keep the other for our country club? Who says no?

49:31Well, I like how you're thinking. And if this is a precursor to how the negotiations go, then that's a good place to be. While you're doing these negotiations, can I make a personal request? Please. the whole i think i explained this in the in the in the podcast the whole thing that got me going on this is i would stay with a friend of mine in brentwood and go running around the brentwood country club on that little narrow rocky gravel path that is between the fence of the brentwood country club and the street and i would always say they have whatever 300 acres and there's no I went on there 300 acres, and I'm being forced to run in this narrow track all I want.

50:16Can they just move their fence? Audrey, could they just move their fence in three feet so that the runners of Brentwood would have a nice path as opposed to running on like a thing of rocks? Can you make it? Just say Malcolm wants you to move your fence in three feet, and we can talk.

50:37And then afterwards, we'll name it the Malcolm Path. So that's where we are, dear listeners. A revolt on the verdant greens of Los Angeles, sparked by yours truly, in combination with a city council member who is now my hero. And next time you're in Los Angeles and happen to drive by any of those fancy golf clubs, LACC, Bel Air, Brentwood, Hillcrest, Lakeside, lower your window, raise your middle finger, honk your horn, and shout out, I stand with Glaubel in this Aryan mother... And if anyone ever tells you the truth cannot be spoken to power, you should answer, actually, that's not true. May I direct you to Season 2, Episode 10 of Revisionist History.

51:38Revisionist History is produced by Nina Bird Lawrence, Lucy Sullivan, and Ben Nadaf-Haffrey. Our editor is Karen Shikurji. Our executive producer is Jacob Smith. Engineering by Nina Bird Lawrence. Special thanks to the newest member of our team, Isaac Scribner. An extra special thanks to the people who worked on the original A Good Walk Spoiled. Mia LaBelle, Julia Barton, Camille Baptista, and Stephanie Daniel. Original music by Luis Guerra. Sound design and mastering by Marcelo de Oliveira. I'm Malcolm Gladwell.

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