Interview with Rick Caruso

Glendale’s airwaves are booming with heated debate on the pros and cons of building a proposed Town Center in the heart of downtown Glendale. In a special September 14 election–Glendale voters will consider the proposed $264 million retail and residential development project–casting their ballots on three ordinances–known as A-B-C–that concern the project’s planning and zoning and the development agreement between Caruso Affiliated and the city. Although Rick Caruso–the Founder and President of Caruso Affiliated got the go-ahead from the Glendale City Council to build The Americana at Brand (Town Center)–the referendum was forced by opponents led by the Galleria’s owners–General Growth Properties Inc.–the second-largest US shopping mall proprietor.

Both sides say they expect the vote to be close–and have spent close to $1 million to defend their issues. The ensuing battle has not been pretty. Asbarez spoke with Caruso about the issues on the minds of voters.

WHEN YOU BUILD A STRUCTURE SUCH AS THE TOWN CENTER– YOUR INTENT IS TO NATURALLY ATTRACT PEOPLE. HOW CAN YOU TACKLE TRAFFIC THAT IS ALREADY HEAVY IN THE AREA?

There’s no question more cars will be added to the streets. A ton of money will be spent on improving traffic–specifically $14 million to improve traffic flow. Studies show that 14 intersections will get better. Past experience shows that there will be no negative impact on traffic in the area. That was the result achieved at the Grove [Caruso’s 575,000 square foot project adjacent to the Farmers Market in Los Angeles]–all the intersections improved. The area around South Brand has not seen any new developmen’s or investmen’s in a very long time. As a result–there has been no improvemen’s in fixing the streets–including street widening or new signal systems. A number of things can be done to improve the freeways. We are spending $1.5 million of our own money to design changes to exits and entrances. I am confident that everything will operate even more smoothly when completed. Traffic studies conducted show this. The traffic issue is a scare tactic.

BUT PEOPLE ARE CALLING THE INVESTMENT THE CITY IS MAKING IN THIS TOWN CENTER–SIMPLY A BAD ONE.

I disagree strongly with that. The city will get all their money back plus profit. Of the $77 million figure set aside–$65 million is for the acquisition of land that the city bought over 20 years–and the city will retain most of the land; $12 million is for public improvement. The city is expected make $3.5 million in new tax revenues per year from sales and property taxes. Over the next 30 years–an estimated $109 million will be made in taxes–$16 million would go to public schools and private agencies.

HOW WILL THE PROJECT AFFECT EXISTING SMALL BUSINESSES?

I know it will help the small businesses. It happened at the Grove because it brought increased shoppers to the area. Right now–there are 15 acres of empty lot and run down buildings. That hurts the area. It will create more shoppers walking around Brand. With new stores–parking structures–etc.–people will flock to the area. The tax receipts for stores on 3rd street–Beverly Dr.–La Brea–and Fairfax [area surrounding the Grove] show a 65% increase since the Grove was built. There is always a spillover effect. That’s why the city wants to invest this money.

BUT WILL YOU ENCOURAGE THE GROWTH OF LOCAL BUSINESSES?

Absolutely…We not only have programs within our company that reduce rental rates [for small businesses] but we also programs called ‘incubating small businesses.’ For example–we have a jeweler at the Grove–Tracy Allen–who used to sell products door to door. We helped her build a store–rent-free and now she is very successful and pays rent.

WHY DO YOU THINK THE CAMPAIGN AGAINST THE CENTER SO ACTIVE IN THIS COMMUNITY?

General Growth properties–the owners of the Glendale Galleria–don’t want the project built. They don’t want competition–and this isn’t good for the city. They want to maintain a monopoly–at any cost. It has even been said that I don’t like Armenia’s and am trying to drive them away from the city which is absolutely not true–my sister-in-law is Armenian and lives in the area. It’s very unfair and wrong–and we took them to court. Though the court ruled that they lied to the public–and ordered them to stop–they continue.

DID YOU FACE OPPOSITION WHEN DOING THE GROVE?

Yes–but not to this extent. The Beverly Center tried to stop it–but wasn’t as vicious as the company that owns the Glendale Galleria. Malls will try to stop such projects because they don’t want to reduce their rental rates as a result of the emerging competition. That’s what they’re trying to prevent.

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