LOS ANGELES (CBSLA) — What will recovery from the coronavirus pandemic look like, which type of stores should reopen first and what will happen to millions of workers desperate to work again?
Pat Harvey spoke with prominent Los Angeles developer Rick Caruso, chair of the University of Southern California Board of Directors, who was one of roughly 200 people chosen to work together with the White House to chart the path forward.
Caruso advocates a slow, methodical reopening of the country guided by medical data. His company has hired the head of infectious disease from the Keck School of Medicine at the University of Southern California as a consultant.
PAT HARVEY: First of all, Rick, I’d just like to know how this came about, how you were picked for this committee of, what is it, 200 business people?
RICK CARUSO: Yeah, I believe it is. Well, thank you, Pat. Thanks for having me on. You know, I’m honored to be picked, I’m actually humbled by it. It’s a really amazing group of men and women who are on that group that are helping to advise the White House and, and give some good ideas and information. You know, I think I was picked because I started my own business. I’m an entrepreneur. It started with me and one other person, and we built it up over the last 30 years to some level of prominence. And so I have a unique perspective as somebody who started a business now has a lot of employees and responsibilities to the community, and to my family and my extended family and my company, and talking about how we restart the economy, frankly, with the small businesses, which is really critically important to me, and I think it’s very important to the nation, and certainly Los Angeles, is to let the small entrepreneurs at the right time with the right safety measures in a very methodical way, starting to read open and really lead the opening of this economy in a way that will really support them.
PAT HARVEY: Your primary focus of your business has been retail development. So how do you see recovery after this is over?
RICK CARUSO: Well, there will be a recovery. And we’re going to get through this and we’re seeing a light at the end of the tunnel. And I think we need to be, you know, sort of optimistic about seeing that light. I think retail is going to come back. I’m not worried about brick and mortar retail. I don’t think that people have gotten used to just staying home and ordering online. You know, clearly more people have gotten used to it. But it’s going to be a slow recovery, in my opinion, and there’s going to be winners and there’s going to be some losers. I think the winners are going to be those businesses, those retailers and restauranteurs that realize all of us have changed consumer habits. The way we do our business and the way we live our lives is going to change and how we meet that customer, make them feel safe, make them feel like they’re in an area where they can enjoy being with other people. Some of the retailers that went into this crisis wounded, I think you’re gonna have a tough time getting through it.
PAT HARVEY: I’m going to bring up the big box retailers like your Macy’s, your JC Penney, what do you think about them?
RICK CARUSO: Well, they went into this crisis pretty wounded. And I think they’re gonna have a tough time, you know, many retailers really need to think about how to reinvent their business. And they weren’t meeting the customer where the customer wanted to be met. They have to do that. They have to be relevant. They have to be interesting. They have to create an experience inside their stores. And now more than ever, they’re going to have to convince all of us that, shopping with them, there’s an enrichment to it, right? There’s a payback to it. It’s more than just the product, and it’s more Just the price, because we’re giving them our time also.
PAT HARVEY: Restaurants. You talked about the restaurateurs just briefly here. How do they expect to come out of recovery?
RICK CARUSO: Well, some may not be able to make it. I mean, I’m really worried about any small business, including the restaurants. But let me tell you something that really excites me. The ingenuity of the American people during a crisis is phenomenal, and you see it in the restaurants. So now you have restaurants that not only have pickup and delivery, but now they have meal kits, and you can take your food and then you make it at home and it becomes fun, and there’s a family experience around it. I don’t think that goes away. I don’t think the efficiency of the delivery goes away. So they have learned new avenues of revenue that I think will stay with them. So that’s a good example where the smart business people the smart entrepreneurs are going to get through this and they’re going to thrive. This happened in World War II. Businesses really changed how they did business. And they had to pivot. And then many of the things they pivoted to became their most successful lines of business.
PAT HARVEY: What type of strategy do you see necessary for real estate to recover? Is there government assistance included? Does it need to be?
RICK CARUSO: Well, listen, there’s a lot of government assistance out there, which I think is great. I actually think the federal government has done a good job of having robust programs. Good real estate, again, I think is going to be fine. I mean, all of us are going to be wounded. I count myself as somebody who’s lucky to own some really good real estate, but none of us are coming through unscathed. And so it’s going to be a matter of degrees, but I’m very fortunate. It was obviously very well planned. Everything we have is outdoor, and I think the outdoor environment people are going to really gravitate to shopping and being entertained and being in an outdoor environment, especially in Los Angeles, where we’re blessed with great sunshine and beautiful weather.
PAT HARVEY: Anything with your existing projects during the crisis. I mean, are they open or how has business of your your tenants been impacted?
RICK CARUSO: Well, the tenants have been impacted in a very tough way, so there’s a lot of sacrifice and pain that they’re obviously having. But we kept all of our properties open. You know, we issued a letter to the communities, that our lights are bright that the music is on that the fountains are working. They’re immaculately maintained and clean and safe. And so people can enjoy strolling through them, walking through them, taking their kids for a walk, sitting in the little outdoor spaces. I really don’t like the term social distancing. We really should be having a physical distance with each other. But we are social animals, and so being outdoors and at least waving to people at a distance, I think is a healthy thing. And I think it stimulates positive thinking.
PAT HARVEY: Even though I would say market conditions are weakening, because of time already committed, developers may continue with projects.
RICK CARUSO: Well, we have a bunch of projects that we are working on that we have been working on and we’re going to continue to work on. I mean, I have great faith in the American economy. And I certainly have great faith in Los Angeles. So we are planning on coming through this. And we are still working on our projects. All of our people are working every day. Everybody at Caruso is fully employed, they’re all working from home, but they have full salaries and benefits, and we are working really hard. So I’m very excited actually about moving our projects forward. And we’re going to do that I think other developers will, too, you know, capital is going to be a little bit more constrained. And so we might have to pick and choose the timing of when we start certain projects. I think every developer is going to do that. Because we want to be wise how we’re using our capital right now, especially those of us who are continuing to keep our employees on payroll. But I see a bright future out there for Los Angeles and this region. There’s nothing like it in the world. And so when we get on the other side of this which we will, we’re going to stay very busy and build some new and beautiful projects that hopefully people are very excited about.
PAT HARVEY: When’s your next conversation with the president, Rick?
RICK CARUSO: I think it’s scheduled for next week. We’re actually going to be sending a bunch of data that we have put together. The great thing that’s happening now, I can tell you, there is no competition amongst companies. Everybody that I’ve talked to around the country and around the world for fellow CEOs are all sharing information, because we all are together in this. And make no mistake, we are a nation that’s been called to duty and we are all leaning in and doing the best we can on making sure everybody comes through this together.