Caruso Sings His Tune in Vegas

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Business Journal showcases L.A. professionals who are sold on retail property development.

DEVELOPER

Rick Caruso, 52

Founder, Chief Executive

Caruso Affiliated, Los Angeles

Rick Caruso’s distinctive shopping malls attract admiration – and envy – from fellow real estate pros as they reel in shoppers from just about every corner on earth.

But until now, the Beverly Hills native has located his upscale retail and entertainment complexes close to home, stretching from just Thousand Oaks to Glendale.

But Caruso, a Rat Pack fan who likes to stream Sinatra songs at his signature Grove complex in the Fairfax District, is finally taking his show on the road – and the destination couldn’t be more appropriate.

It’s Vegas, baby.

Caesars Entertainment Corp. earlier this month tapped his Caruso Affiliated to develop a $550 million retail and entertainment district in the middle of the Strip, across Las Vegas Boulevard from Caesars Palace.

The project, dubbed Linq, will stretch Caruso’s development comfort zone in more than just a geographical way. For the first time Caruso will be only advising, though he could eventually operate the complex for Caesars.

“It’s a completely different business model for us in that we’ll be advisers, not partners,” Caruso said. “I’m not necessarily interested in advising every potential developer who comes to us. What interested me was the quality of the company Caesars is and the vision for the project they had in mind.”

Caruso typically prefers to have soup-to-nuts control over his projects, much like Walt Disney Co., the vertically integrated Burbank entertainment conglomerate that Caruso greatly admires.

In one of the few instances where the 52-year-old developer tried something different – co-developing a 51-acre outdoor mall next to the Santa Anita Park race track – Caruso had to walk away when track owner Magna Entertainment Corp. declared bankruptcy. He’s still in litigation over his expenditures with former partner, Magna founder and Canadian billionaire Frank Stronach.

“I just didn’t have control of that project and it got to the point where I had had enough,” Caruso said. “Everything Frank did impacted me, and I couldn’t separate our project from Frank’s problems.”

Caruso doesn’t walk away from challenging projects easily, and in most cases that perseverance has paid off. After years of placating government officials and environmental and neighborhood groups in Santa Barbara, Caruso is poised to finally move ahead with plans to redevelop the historic Miramar Hotel as soon as financing is sewed up.

“The banks are very leery about ground-up development of hotels right now and these stock market crashes aren’t helping,” he said. “In retail, I’ve got leases and there’s more predicable income. With hotels, you’re renting something on a 24-hour basis, so the financing model is different. But I’m optimistic that we’re going to get through it.”

But even as Caruso departs from his traditional model, the developer isn’t turning his back on his Los Angeles roots. Ground broke a few months ago at his latest project, a mixed-use development at 8500 Burton Way, just a short walk from his first shopping center, Burton Place, which opened in 1992.

The luxury complex will include 88 apartments, with ground floor retail that includes a Trader Joe’s market.

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