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Rick Caruso (center)

Paul Wellman

Rick Caruso (center)


Rick Caruso Takes Over Paseo Nuevo

Mall Magnate Will Manage Leases and Overall Operations


Saturday, June 29, 2013
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Santa Barbara city officials have confirmed that Rick Caruso, the billionaire mall developer from Los Angeles and owner of Montecito’s much-bedraggled Miramar Hotel, has taken over management of the downtown Paseo Nuevo shopping mall.

While Caruso took control of the day-to-day leasing and management of the property about three weeks ago, the mall property remains “owned” by J.P. Morgan Chase, which holds a 50 year-lease with the City of Santa Barbara. What difference, if any, Caruso’s management will make in tenant selection and the personality of the downtown mall remains to be seen, but Caruso has specialized in aggressively programming his retail centers, like the Americana at Brand, as premier destination spots, mixing family-friendly outdoor enticements with high-end retailers.

Caruso took over management of the mall from the Macerich real estate investment company, which owns 57 regional malls throughout the United States. Macerich also owns and operates the La Cumbre Plaza mall on outer State Street. Typically, Macerich only manages properties it owns, so the Paseo Nuevo was an anomaly. City officials say Macerich did a good job with the mall, and were responsive to city concerns.

When the company installed a highly phallic decorative poll in the mall’s public common space, it was greeted with considerable public comment. In response, the company capped the column with a crown, making it, in the words of one high-ranking city official “less fallacky.” Macerich continues to own and operate the La Cumbre center, which has struggled to establish or maintain much of a thriving identity during the recent recession.

While City Hall has no financial investment in La Cumbre — unlike Paseo Nuevo — city officials have made no secret that they’d love to see Target move there. For that to happen, however, Sears would have to move out and it has about 15 years left on its lease. And any effort to move Target into La Cumbre would no doubt inflame relations between the City of Santa Barbara and the City of Goleta, which is currently hoping to see a Target open up at the intersection of Los Carneros Road and Hollister Avenue.

Adding yet another wrinkle to the Caruso transaction is Paseo Nuevo’s genesis as a creature of the city’s Redevelopment Agency (RDA). Like redevelopment agencies throughout the entire state, the city’s agency was forcibly put out of business two years ago by a combination of legislative action coupled with adverse court rulings. That has left the fate of the downtown mall — like all properties owned by the RDA — somewhat up for grabs.

Many agency properties have been sold off at forced auctions so that the proceeds could be split by all the government agencies that might otherwise have enjoyed in their escalation of property tax values and revenues. Those government agencies have formed a special committee, and initially that committee was interested in forcing a sale of Paseo Nuevo on the theory that the property was worth millions. But it turns out that City Hall received only nominal rent for the mall, deriving most of the value from increased sales taxes and the generalized boost in retail traffic the mall creates. City officials are confident — at least for the time being — that the mall property won’t be sold off anytime soon, though the theoretical possibility does exist.

While Caruso enjoys considerable cachet throughout the state and the world of mall management, in Santa Barbara County his profile remains decidedly mixed. There’s considerable resentment that he has yet to rebuild the Miramar Hotel, which he purchased from Ty Warner some time ago, and even more that he’s sought to secure a major break on his property taxes as a pre-condition for pursuing his development rights.

Comments

Independent Discussion Guidelines

"While Caruso enjoys considerable cache throughout ..."

I believe the word you're looking for is cachet.

Carpreader (anonymous profile)
June 29, 2013 at 10:05 a.m. (Suggest removal)

ROFL.

banjo (anonymous profile)
June 29, 2013 at 10:20 a.m. (Suggest removal)

I hope Caruso will take a close look at those awful kiosks and the overly aggressive sales people working them. I often walk around Paseo Nuevo rather than through it because I'm sick of being accosted by sales people every 15 feet. I don't want a free sample and I certainly don't want them to touch me.

Ryansbca (anonymous profile)
June 29, 2013 at 10:23 a.m. (Suggest removal)

Caruso has a cache of properties, that is for sure. My response to this takeover is ..uh, oh. But little in Paseo Nuevo interests me anyway. Dumb it up or dumb it down - just make sure you preserve and grow city tax revenues.

The city needs cash cows to make up for the public resources they have taken out of sales or property tax generation, or permanently degraded street retail after letting street vagrants scare away shoppers for much of downtown retail.

Paseo Nuevo as a private entity will have far more control keeping away the street bums, than State Street itself.

foofighter (anonymous profile)
June 29, 2013 at 10:23 a.m. (Suggest removal)

Can he make it more boring?

Ken_Volok (anonymous profile)
June 29, 2013 at 10:26 a.m. (Suggest removal)

Maybe Caruso can get Arnold Schwarzenegger's barber and colorist a salon in Paseo Nuevo, so Caruso can improve on his own rug, as much as The Arnold did.

foofighter (anonymous profile)
June 29, 2013 at 10:37 a.m. (Suggest removal)

If Caruso makes our decidedly uninteresting downtown open air mall more like The Grove it can only be a plus for the city.

emptynewsroom (anonymous profile)
June 29, 2013 at 12:19 p.m. (Suggest removal)

The Grove is way faux Disney, El Paseo Nuevo already looks like Pirates of the Caribbean.

Ken_Volok (anonymous profile)
June 29, 2013 at 3:31 p.m. (Suggest removal)

Maybe he can move the Miramar into the heart of Paseo Nuevo.

Byrd (anonymous profile)
June 29, 2013 at 4:05 p.m. (Suggest removal)

If we all boycott every business in there until he moves forward with the Miramar, will that work (to get the Miramar going again)? Color me skeptical, and mad about the continuing Miramar stall jobs and special deals.

Becky (anonymous profile)
June 29, 2013 at 4:55 p.m. (Suggest removal)

Third Street Mall is more scary/annoying than enticing. Don't know if he has any connection with that in Santa Monica, but would not want to go that direction either. Storefront retail has dramatically changed with internet shopping now becoming such a dominant alternative.

Turning malls into entertainment centers instead ... well, whatever. Boring shopping works. Don't mess with it. Shopping is shopping; not an alternative life style like Alma de Pueblo is preaching too.

foofighter (anonymous profile)
June 29, 2013 at 4:59 p.m. (Suggest removal)

And now the "phallicky" fountain has an angel on top of it!!

sharpen123 (anonymous profile)
June 29, 2013 at 5:02 p.m. (Suggest removal)

This is great news for the LA/OC County crowd who have moved here and want Santa Barbara to eventually become just like what they left behind.

pointssouth (anonymous profile)
June 29, 2013 at 7:40 p.m. (Suggest removal)

Lets all move to Bakersfield!

Byrd (anonymous profile)
June 30, 2013 at 6:50 a.m. (Suggest removal)

The Miramar situation was created by the objectionista of Montecito and their short-sighted supporters. If ya wanna blame someone famous, blame Julia Louis-Dreyfus.

JohnLocke (anonymous profile)
June 30, 2013 at 8:39 a.m. (Suggest removal)

I was under the impression Sears owns the property the store is located on and that Macy's owns its property as well. They are not actually part of La Cumbre Mall management.

terryutterback (anonymous profile)
June 30, 2013 at 9:51 a.m. (Suggest removal)

There is no one La Cumbre Plaza - you are right, there are multiple ownership and tenancy agreements.

foofighter (anonymous profile)
June 30, 2013 at 10:47 a.m. (Suggest removal)

Three cheers for Julia Louis-Dreyfus, and she does it all under her own name too- imagine that.

Ken_Volok (anonymous profile)
June 30, 2013 at 10:59 a.m. (Suggest removal)

Rick Caruso is the new Bill Levy.

easternpacific (anonymous profile)
June 30, 2013 at 10:19 p.m. (Suggest removal)

Paseo Nuevo. Hmmmm. I've heard of that. Don't go there. It's no different than 100 other malls around the US. There's no SB there at all. Bland corporationism rules.

SezMe (anonymous profile)
July 1, 2013 at 2:32 a.m. (Suggest removal)

Indy editors, what questions were asked in the "highly phallic decorative poll"?

John_Adams (anonymous profile)
July 1, 2013 at 8:38 a.m. (Suggest removal)

Yeah, Ken, and she rarely is here, so what happens here hardly affects her. Reminds me of the consultant/seagull analogy - flies over your picnic, fouls (fowls?) it, and moves on. But in any case, her objections were EXTREMELY self-interested since she owns a house near the Miramar. But like many of the Montecito objectionista, she is a part-timer here with too much time on her hands, fouling the nest for the rest of us.

JohnLocke (anonymous profile)
July 1, 2013 at 8:51 a.m. (Suggest removal)

Ryansbca I can't agree with you more! Those sales people, all working on commission, with their overpriced, Chinese made merchandise at the kiosks, are way too pushy.

They will not take a head shaking, "No," a polite, "No." or any other means that I'm not at all interested in their pitch. They all need to go!

If I want ticky tack items I can go to K Mart or buy online for far less including free shipping.

Give 'em all the boot!

Barron (anonymous profile)
July 1, 2013 at 9:24 a.m. (Suggest removal)

Good idea, Becky! Except that if you had actually read the article, you'd realize Caruso is merely the property manager and not the owner. Any boycott (ridiculously suggested or otherwise) would only harm the City of Santa Barbara that has tenuous ownership of the property.

As for Third Street, Caruso has no involvement. The Grove, Americana, The Lakes in Thousand Oaks, The Promenade, The Commons in Calabasas - those are Caruso properties. And not one doing poorly.

sbdude (anonymous profile)
July 1, 2013 at 9:38 a.m. (Suggest removal)

I really hope that Caruso will take out the annoying Sales People at the kiosks. They make it terrible to walk to through the mall, constantly asking you if you want a sample, and harassing you as you walk by. I avoid that area as much as possible due to them. Nobody ever buys from them, and if they do, the stuff they sell is a scam. Why would Santa Barbara have those people in the middle of a nice mall. Very strange, and when out of town people come to visit, that's the first complaint they tell me. Please get rid of them.

danielw (anonymous profile)
July 2, 2013 at 6:56 a.m. (Suggest removal)

Running the gauntlet of street vagrants to get to the mall and then forced to run the gauntlet of aggressive and annoying kiosk touts has made the entire downtown Paseo Nuevo experience too unpleasant to even bother with.

foofighter (anonymous profile)
July 2, 2013 at 9:59 a.m. (Suggest removal)

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