Dismissing reports that the sale of the largest portfolio of commercial property in Pacific Palisades to developer Rick Caruso has collapsed, Honorary Mayor Jake Steinfeld visited the Palisadian-Post offices on Monday to “set the record straight” about his longtime friend.
In late August, the Post website quoted an insider that the deal had collapsed between Caruso and the 14 trust entities operating as Pacific Palisades Properties, who placed their 2.77 acres of storefronts on north Swarthmore Avenue and on Sunset Boulevard on the market last October via the CBRE Group.
However, the Post was unable to confirm this report because both Caruso and Palisades Propeties are muted by an alleged legal confidentiality agreement.
In June 2011, a lawsuit filed on behalf of Palisades resident and co-owner John Wilson, who is a trustee for his family interests (13 percent) in the portfolio, asked the courts to force the sale of the properties and for an independent property manager to be appointed in the interim.
Conversely, a cross-complaint, filed in September 2011 on behalf of the MacDonald and Joslyn family interests (51.9 percent), requested a partition of the properties, with each owner to receive a portion of the physical property.
In January the same year, the partners, who have been called “dysfunctional landlords” by many merchants on Swarthmore, began meeting with a mediator, retired judge Patricia Collins, who ordered the partners to sell the property (partition by sale). It is unclear if this decision was legally binding as this depends on whether the partners signed a contractual agreement to abide by her decision before entering arbitration.
The remaining stakeholders in the portfolio include the Carey family and other aligned interests (24 percent) and children and grandchildren of Wilson’s deceased brother (10.7 percent). The portfolio includes the entire east side of 1000 Swarthmore Avenue (from Bentons to City National Bank), all of the west side from Monument Street to Intima Lingerie, the open-air parking lot along Monument and three vacant properties on nearby Sunset Boulevard, including the former U.S. Bank and the former Office Supplier.
On Monday, Steinfeld told the Post that he has known Rick Caruso “for about 15 years” and “he is one of the nicest and most philanthropic people that you will ever want to meet.”
Steinfeld said that after hearing from residents concerned about the sale of the property to Caruso, he decided to “pick up the phone to my friend and say ‘I’m the honorary mayor, I have a couple of questions for you.’”
They met on August 19 at Caruso’s The Grove and had what Steinfeld called a “fantastic two-hour meeting,” with Caruso reiterating his plans for the nearly three-acre property. Steinfeld said that Caruso is planning “a Main Street in Nantucket, a place where you can take a walk and a stroll. We are not talking about big box stores here…He’s going to build something that fits into the fabric of what the Palisades is all about—its family, its community.”
“‘Jake, with a guy like me you know what you’re going to get,’” Steinfeld recalled Caruso saying.
Since that August meeting, Steinfeld continued Monday, “I have spoken to him on two separate occasions and he continues to tell me that he loves the Palisades and he wants to make the place even more beautiful than it is today—a Mayberry by the sea.”
Caruso, who lives in Brentwood, is not trying to bring “Rodeo Drive to the Palisades,” Steinfeld said, adding: “I trust that Rick Caruso will do right by everybody in this community.”
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