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The Battle for L.A.

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The Battle for L.A.

Can Rick Caruso convince enough voters that their troubled city can recapture its role as an incubator of the American dream? June 6, 2022
California
Politics and law

Central Avenue, the historic heart of South Los Angeles, has seen better days. Once the home to leading black institutions, like the famous Dunbar Hotel, where jazz and other musical greats stayed, it was also an industrial powerhouse that promised decent work for those fleeing the Jim Crow South. But today many, if not most, of its factories are closed; many icons of the old black business community have disappeared, too. The area, site of two of the most devastating riots in American history, is now poorer in relation to the rest of the city than before those upheavals.

Yet amid a malaise that afflicts much of the city, entrepreneurial energy remains evident. Central Avenue’s sidewalks crowd with the brightly colored booths of street vendors, selling a broad range of food, clothes, and other products—more like Mexico City or Mumbai than the South L.A. of the past. Some new apartments are rising to replace the decrepit ones, and the street-level liveliness seems more Washington Heights than car-centric Los Angeles. Despite its troubles, Central Avenue does not exhibit the deathly sense of abandonment of places like the South Side of Chicago or other inner-city communities, where the spirit of enterprise has all but disappeared.

“We still have potential,” insists 63-year-old Rick Caruso, a billionaire running what once seemed a quixotic campaign for mayor. On June 7, Caruso will be a candidate in the city’s open mayoral primary, facing off against, among others, the race’s early frontrunner, long-time congresswoman Karen Bass. (The top two finishers will meet in a run-off general election in November if no candidate wins a majority of the vote.) Without any press, but for me, Caruso spent a recent morning at the Beehive, a new Southside business incubator located amid the detritus of the city’s industrial past. The youthful activity of the startups seemed to energize him. “I want to get on the phone and get investors to come back here—but they won’t if they see instability, the homeless camps, and the crime. That has to change.”

Though he has discarded his designer suit, Caruso cannot help but appear natty with his coiffed hair and monogrammed white shirt. The grandson of Italian immigrants, and son of an entrepreneur who founded Dollar Rent a Car, he started his real estate business here in 1987 and made a fortune worth more than $4 billion by developing shopping complexes, most notably the Grove, adjacent to the iconic Farmer’s Market. A key Caruso theme is restoring the promise that made L.A. the premier urban growth center of the last century, during which the city’s population grew from barely 100,000 in 1900 to nearly 4 million. Now, Los Angeles’s population is in decline and its appeal has faded. The city peaked at a population of 3,983,000 in 2019, and fell 134,000 to 3,849,000 by 2021, with a 41,000 loss in the last year.

The Wall Street Journal has described Caruso as a “liberal,” but that’s a stretch. A longtime Republican now conveniently turned Democrat, Caruso is best seen as a pro-business moderate Republican trying to downplay his membership, for example, in the Ronald Reagan Foundation. Yet unlike most GOP candidates here, he also has lots of money. He has spent over $24 million of his own money to reach out to Angelenos. His campaign boasts of his skills in dealing with L.A.’s fractious communities, whether in his business ventures or as a member of the Water and Power board, president of the Police Commission, or chair of the USC trustees. His money and message are clearly making headway. Despite the now strongly progressive tilt of the L.A. electorate, Caruso has managed to rise from single digits in February to parity, and perhaps even a lead, over Bass.

Like many prominent California Democrats, Bass comes from the far Left and even traveled to Fidel Castro’s Cuba in the Venceremos brigade. In 2016, on occasion of the dictator’s death, she issued a praise-filled obituary to “El Comandante.” Her Castroite credentials may not have helped her when she was briefly considered for Joe Biden’s black female vice president slot, which went to Kamala Harris. More recently, Bass has distanced herself from her past praise of Castro and from policies such as defunding the police. But she remains a fixture of the progressive machine that dominates the politics of both California and Los Angeles over a two-decade-long career in both Sacramento and Washington.

Bass can count on sympathetic coverage from the still-influential Los Angeles Times, which endorsed her and has attacked Caruso for, among other things, lacking a “climate plan.” The paper also bizarrely claims that the Los Angeles police union’s attacks on Bass’s record will help her at the polls—amid a major crime wave. National coverage from magazines like Vanity Fair paint Bass as something close to perfect, while Caruso plays the usual right-wing role of appealing, supposedly, to voters’ “anger.”

As other progressives pulled out of the race, they predictably backed Bass, and their combined support could put her over the top in the likely November run-off. Hollywood, too, has weighed in largely in her favor, seeing her as an ideological fellow traveler—even as more celebrities enlist private security firms, with crime emerging in the wealthiest enclaves. DreamWorks’s Jeffrey Katzenberg has given $850,000 to an independent committee backing Bass and has attacked Caruso for once being a Republican.

Even with his money, Caruso should not have a chance under normal circumstances. After all, the now termed-out progressive mayor, Eric Garcetti, was reelected four years ago virtually without opposition. Democrats in Los Angeles outnumber Republicans better than four to one—double the two-to-one ratio that held when the city elected its last pro-business mayor, Republican Richard Riordan, whose victory was primed by the devastating 1992 riot that left much of L.A., particularly the south side, a physical and psychological ruin.

Nothing so horrible as the 1992 riots has occurred, but Caruso and his handlers sense widespread dissatisfaction with the status quo. According to a 2021 USC survey, 10 percent of Los Angelenos plan to move out this year. Younger Angelenos, according to one UCLA survey, are more dissatisfied with living conditions in the city. Caruso’s internal polling shows that two out of every three residents believe that the city is in decline. “It’s not just whites or the rich who are unhappy,” Caruso notes. “I hear the same things in Watts as in West Los Angeles.”

This sentiment is palpable throughout the city and is reflected in migration losses among the young and immigrants, the city’s traditional lifeblood. Over the past 20 years, a region long associated with youthful enthusiasm has lost 750,000 people under 30—the biggest decline in youth among all large U.S. counties—while its elderly population surged by 500,000. Even the immigrants are leaving, and between the 2010 and 2020 Censuses, the number of foreign-born residents dropped, too.

“We are becoming more dystopian,” notes attorney John Heath, a native of south Los Angeles. “We can’t house people affordably and only build luxury, and there’s no place for a middle class.” In his community, as in others, he notes, “if you want to improve your life, you consider Dallas or Charlotte.”

Caruso’s big issues are crime, corruption, and homelessness. After seeing crime fall for years, the city last year experienced 397 murders, up 11.8 percent from the 355 the previous year, and a 53.9 percent increase from the 258 in the pre-pandemic year of 2019. Smash and grab thefts—most infamously, the rampant theft of goods from the L.A. railyards—have become commonplace. All this has been made worse by lenient District Attorney George Gascón, himself a target of a possible recall.

A record of corruption among public officials hasn’t helped, either, with multiple arrests of city councilmembers and commissioners. Among the fallen: former councilman José Huizar, who has been indicted for corruption; former vice mayor Raymond Chan; former councilman Mitchell Englander; Councilman Mark Ridley Thomas; and several top officials at the Department of Water and Power. Though he has not been tied to the corruption, Garcetti’s personal reputation has been tarnished and his alleged tolerance of sexual harassment of a top aide has all but ended his bid to be named ambassador to India—a somewhat ironic post to seek, given that country’s extensive homelessness problem.

Policy missteps have hampered the city’s efforts to curb homelessness. Despite massive expenditures on “solving” homelessness, the city’s streets teem with more than 60,000 homeless residents, including 2,000 along Venice Beach, and they are spread throughout the city, even in largely middle-class areas. Caruso, among other things, plans to end the right to camp that has come to symbolize L.A.’s descent toward a Third World dystopia.

Indeed, in virtually every area, notes Maria Pavlou Kalban, a prominent activist in still largely middle-income San Fernando Valley, grassroots voters feel alienated from the city. “People are frustrated and feel they can’t trust anyone. The city does not do outreach to the neighborhoods—they have no interest in us.” Kalban and other community activists feel that the city government has proved clearly dysfunctional, this year borrowing to expand services even with a record surplus, largely courtesy of Washington’s Covid aid. This could clearly put the city at risk of a recession as the state’s surplus fades due to a weak stock market.

The key question remains whether enough non-progressive voters exist to push Caruso over the top. Much of the remaining middle class, as leftist writer Harold Meyerson observed years ago, is made up of teachers and other public employees. These, with the exception of the police and some construction unions, provide the bulwark of Bass’s support and can mobilize a get-out-the-vote machine that should not be underestimated.

But Bass also faces demographic challenges, including diminishing support among black voters—according to one measure, she lost 26 points among black Angelenos between April and May. And her black South L.A. power base is shrinking, too. African-Americans started coming to Los Angeles en masse in the 1920s and 1930s, with their numbers increasing during World War II. Lured by good jobs in the burgeoning aircraft, automobile, and construction industries, blacks may have faced some discrimination, but far less than they did elsewhere.

Today’s Los Angeles is hardly a magnet for African-Americans. Since 2000, notes demographer Wendell Cox, the black population has dropped by 80,000, shrinking from 11 to 8 percent of the population. South Los Angeles is now majority Latino. Citywide, Hispanics are now close to 50 percent and Asians over 12 percent. These two demographics, Caruso advisors believe, will be crucial to the November outcome.

But economics, not race, may prove the biggest challenge. Once referred to as an “entrepreneurial dynamo” by urban historian Fred Siegel, Los Angeles, despite its remaining grassroots enterprise, has lagged in virtually every area of job creation. Even Hollywood, notes research from Chapman University’s Marshall Toplansky, has seen its market share stagnate and perhaps erode.

Los Angeles was once a national leader in manufacturing, but since 2005 it has lost over 27 percent of such blue-collar jobs, the highest percentage of any major region. In Business and Professional services, the largest high-wage sector, Los Angeles lags behind not only other parts of California but also cities like Houston, Nashville, Phoenix, and Denver. The entrepreneurial dynamo may still exist at street level, but in terms of new jobs, particularly better-paying ones, L.A. has become the sick man of the West Coast.

Aware of this drift, grassroots business groups have become Caruso’s strongest backers. The Los Angeles County Business Federation (BizFed), with 410,000 (dues-paying) companies across the region, has backed Caruso. BizFed’s most recent polls, encompassing almost 1,000 mostly C-suite executives, show a business community that feels ignored, and even scorned, by the city. Many see Caruso as their savior. “People and businesses will have a true sense of being needed, welcomed and supported,” notes Tracy Hernandez, the group’s CEO.

Like Richard Riordan, who has endorsed him, and successful reform mayors like New York’s Rudy Giuliani and Michael Bloomberg, or Houston’s Bob Lanier, Caruso understands intuitively that investors have many choices—and a dysfunctional, dangerous, and rundown city has little appeal. The city’s economic recovery cannot be limited to street vendors or fancy Westside restaurants. A Los Angeles where almost half of the workforce is low-skilled must provide a path to upward mobility.

The potential remains to rebuild L.A.’s once-diverse economy, which, along with sunshine and the beach, once attracted millions here. Opportunities in fields like space, military equipment, medical technology, digital media, fashion, and product design are ideal for the city’s population and industrial legacy. Los Angeles also retains its strong academic base and a reservoir of skills. The city still has time to rebound, but only with a change of leadership. If he makes it to the runoff, Caruso’s challenge in the months ahead may be to convince Angelenos that their troubled but still-great city—from the fancy hillside neighborhoods to South L.A.—can restore its role as incubator of dreams.

Editor’s note: An earlier version of this article mistakenly identified former city councilman Mitchell Englander as Harvey Englander. We regret the error.

Photos by Jason Armond / Los Angeles Times via Getty Images (left) / Genaro Molina / Los Angeles Times via Getty Images (right)

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