Rick Caruso on California's Collapse: Broken Leadership, LA Wildfire Failures & the Fix

**Chamath Palihapitiya** (0:00)
For people who don't 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 want to bring your kids.

**Rick Caruso** (0:08)
Ideology did not save the Palisades. Competency would have. Running this city is running a business for the benefit of the residents. You've got to make good business decisions. It was predictable, Bill. What's predictable is preventable.

**SPEAKER_3** (0:23)
Rick Caruso now has a golden road in the governor's race if he wants it.

**Rick Caruso** (0:28)
What's happened to LA over the last decade is just tragic. It's sad to watch.

**SPEAKER_4** (0:34)
Ladies and gentlemen, please welcome Rick Caruso.

**Jason Calacanis** (0:48)
Great to see you, brother. Thank you for coming.

**Rick Caruso** (0:51)
Thank you very much.

**Jason Calacanis** (0:52)
All right.

**Rick Caruso** (0:53)
Make my rounds.

**Jason Calacanis** (0:55)
Thank you.

**Friedrich Hayek** (0:55)
Good to see you.

**Rick Caruso** (0:56)
Good seeing you. Hello, everybody.

**Jason Calacanis** (0:59)
All right. Rick, we're nine months out from the tragic fires.

**Friedrich Hayek** (1:06)
So much has happened.

**Jason Calacanis** (1:07)
So much has happened. Karen Bass, so incompetent, such a disgraziad.

**Rick Caruso** (1:15)
Disgraciad.

**SPEAKER_4** (1:16)
Disgraciad.

**Rick Caruso** (1:19)
My Italian brother in here.

**Jason Calacanis** (1:21)
But 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 spent so much time there with my beautiful daughter, Lotus, and my beautiful wife, Jade, just. What a gift you've given so many times over to this amazing city. And then you watch this horrible incompetence. And yet you innovated and you had this incredible insight 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. And you 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 see?

**Rick Caruso** (2:11)
Well, the first thing I did is I stayed in town, which I think when you abandon the city, I think when you want to be a leader, you should probably be present. But 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 guy, still do on the team, his name is Banyan. And he's the one that said, we can bring in private firefighters, we can bring in our own water trucks, we can bring in retardant. 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 want to have resources to protect our building, so the resources aren't taken away from the residential areas. 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 so 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. 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 station there two days before the fire. And we were ready to go. 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 Fire Department, who was running short of equipment. And we were actually loaning water because we were bringing in our water tanks when the water hydrants failed to work.

**Friedrich Hayek** (4:21)
Rick, it's been eight months, I guess, since these fires. How much of it is being rebuilt now?

**Rick Caruso** (4:28)
Not enough. I was out there last night. It's slower than it should be.

**Friedrich Hayek** (4:33)
And what is slowing it down?

**Rick Caruso** (4:35)
Slowing it down is an enormous amount of red tape. I mean, the previous speaker 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, has still not called back workers to City Hall. So plan checkers in LA city are working from home. 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.