Part 126: Rick Caruso vs. Montecito – Scandalous Ex Parte in a Luxury Playground
Published November 5, 2024. Updated November 7, 2024.
Photo of Rick Caruso and Caruso firm staff members during recess at the Santa Barbara County Planning Commission by author (GoPro Hero 11 Black).
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By Zachary Ellison, Independent Journalist
The final vote of the Santa Barbara County Planning Commission on Friday, November 1, was a humbling 4-0. The Commissioners all but explained that they felt there was little choice under California law but to give approval to the controversial expansion of the beachfront Rosewood Miramar Beach resort in Montecito, California. The unincorporated area just outside the Santa Barbara city limits has come to be known as the luxury playground of stars such as Oprah Winfrey and, until recently, Ellen DeGeneres, among others. Perhaps the most crown jewel property in the area belongs to real estate developer and former Los Angeles Mayor candidate, Rick Caruso, known for his highly profitable developments built with a personal family touch. Caruso’s plan to add 2 buildings of mixed-use retail and market-rate apartments plus a separate housing development for employees and affordable housing offerings on top of the resorts parking lots created a stir. Almost as predictably though, the project, in part thanks to an 11th-hour deal with a neighboring church, gets to skirt the California Environmental Quality Act (CEQA).
This is no small part thanks to the equally landmark state Housing Accountability Act, which mandates approval for projects that meet certain requirements. Most controversially to neighbors is the impact of taking away surface parking lots in exchange for subterranean garages and mechanical car stackers combined with valet service. Miramar Beach, prized for its white sand and peaceful waters ideal for swimming, draws a great many people, most especially during the summer, with public parking available adjacent to the resort on South Jameson Lane and Eucalyptus Lane. The California Coastal Act protects such access along with pathways through the resort itself, ostensibly open to the public. Reality though is much different, as the signage welcoming the public was by their own admission from Caruso Senior Vice President of Development Chris Robertson something they’d “be happy to install” if requested to do so. No other community benefits were offered during the nearly 4-hour hearing. In the front row sat Rick Caruso with son Justin Caruso. The elder Caruso didn’t speak while his firm worked to close the deal.
In fact, only one public commenter seemingly questioned the clear lack of public benefits from the development, with a number speaking in favor and others speaking against, with discussion mostly centering on parking. The rector from neighboring All Saints Episcopal Church was there after striking a deal to downsize the proposed mixed-use commercial development from two stories to one in order not to block their view of the Santa Ynez Mountains. Caruso also agreed to help install new stained glass windows in the columbarium, where funerary urns are stored, and to landscape the wall separating the adjoining properties. Less discussed were Caruso’s plans to build almost on top of Oak Creek, which account for the majority of the two dozen native trees that would need to be felled for the development, including most principally 22 western sycamores and 2 coast live oaks. Santa Barbara’s oak tree ordinance doesn’t protect the latter species in coastal areas, despite them of course predominating coastal regions.
In fact, only one representative from the environmental community was present, from Heal the Ocean to object to the obvious. As the representative from the Montecito Independent Fire District noted, the drainage, which passes under the 101 Freeway, which is presently being expanded in the immediate area, has in fact been historically the most flood-prone out of Montecito’s 8 creek beds. Beyond lies the mighty Pacific Ocean, which according to widespread scientific consensus is likely to rise, just not as fast as Caruso Affiliated will be stacking the Benjamins should it in fact get to break ground. Montecito’s principal commercial district, along Coast Village Drive, already features an array of ritzy shopping destinations, leaving numerous residents to question the motivation, with one sardonically calling it “Caruso’s Miramar Mall.”
Caruso’s properties are known for generating industry pace-setting revenues. A recent profile in the Los Angeles Business Journal by Hannah Welk, described how the firm is now formally led by Chief Executive Officer Corinne Verdery, a former NBC Universal executive: “The company also reports 75% higher sales per square foot than the industry average.” Rick Caruso nominally stepped down “amid a run for mayor” and now serves as “founder and executive chair.” Justin Caruso, previously known for his music, now serves as a Manager with the elite real estate firm, according to an apparently newly created LinkedIn profile. After the approval, Verdery and the younger Caruso could be seen alongside the 65-year-old elder Caruso at the highly exclusive Miramar Club on the property overlooking the Pacific Ocean, celebrating. The rumored potential candidate for California Governor sat with his dog Hudson at his feet. Two security personnel quickly stopped me for taking his picture from the public right of way. Rick Caruso had announced the location while exchanging handshakes with the Planning Commissioners, having closed the deal. The project valuation remains unknown.
Who says business can’t be mixed with pleasure? Rick Caruso had looked at me oddly for recording the exchange, but given what had happened with the preceding Montecito Planning Commission, it seemed like an appropriate precaution. Montecito Journals’ Tiana Moloney had titled her story on the debacle, “MPC Recusal: Miramar and the 18 Pages Heard Around the Room.” As Moloney described, the October 18 meeting had “abruptly ended when Commissioner Sandy Stahl recused herself halfway through, causing the commission to lose its required quorum.” Caruso had sought to bypass the body entirely but was directed by the County Planning Commission to engage with it due to the public debate over the project. Developers get a total of 5 government hearings on any given project; Rick Caruso had won approval in 3, two with the County and one with Montecito. Stahl’s recusal came after pointed questioning from Caruso SVP Robertson, who alleged that she had engaged in undisclosed ex parte conversations with attorney Philip Dracht vis-à-vis the 18 pages, which included “6,000 words.”
Were we in Hollywood and not in Montecito, Robertson, a former staffer for Los Angeles City Councilmembers Mitch O’Farrell and Mike Bonin, might have earned an Academy Award for corporate use of a “legal” team. As noted in the report from Santa Barbara Independent journalist Christina McDermott, she declared: “In my 20 years of working in land use, I’ve never seen something like this at this length. It calls into serious question whether or not this commission has pre-judged our project.” Noozhawk’s’ Joshua Molina called it a “Perry Mason-like moment.” According to the Caruso Affiliated’ statement direct from Rick Caruso himself, who attended all hearings, they believe: “Integrity is a core value for me and my company, and it should also be for those who hold positions of public trust.” Ironically, Robertson, during her time at City Council, according to a report sponsored by the AIDs Healthcare Foundation, working from LA City Ethics Commission filings, placed Robertson in closed door meetings relating to three projects. Her time on Council overlaps with the leadership of José Huizar over Los Angeles’s powerful Planning, Land-Use, and Management Committee. Huizar now sits in a federal prison facility for having corrupted projects.
The now controversial AIDs Healthcare Foundation, now subject to scrutiny for having given Kevin de León $100,000 to work as a lobbyist for 6 months before taking his current place on Los Angeles City Council, was questionable itself. The effort that generated the report, the Coalition to Preserve LA backed failed effort, Measure S, that would have limited development judged to be gentrification. One Santa Barbara County Commissioner, Roy Reed, during the break, told me that the LA press must “certainly be better” than the local press, a proposition that I didn’t quite agree with, before I cautioned him that I too didn’t want to have any improper ex parte communications. The line between simply speaking with commissioners, writing to them, and acting improperly has never been so discrete, with beleaguered Montecito County Planning Commissioner Sandy Stahl explaining, “I was unclear about procedures and the specifics of ex-parte communications, and on that basis I am going to recuse myself,” as she reportedly packed up her bag on October 18. This isn’t to say that Montecito alone could have blocked the project, but the process of essentially bargaining that determines the outcome on such projects was given short shrift.
I couldn’t blame the Santa Barbara County Commissioners, chaired by Vincent Martinez, with Vice Chair Laura Bridley absent from the meeting of the normally 5 member panel. After all, they had to comply with California law in granting the exemption from CEQA under the Housing Accountability Act. As one project opponent told me, it’s recent expansion and pro-developer ambiguity had all but rendered the landmark environmental law meaningless absent a lawsuit. Whether that will happen remains to be seen, but some are certainly considering taking the matter to the California Coastal Commission, which grants a contingent land use permit. Moreover, recent attempts such as that of Huntington Beach to block housing projects had failed, with Governor Gavin Newsom, a close friend of Rick Caruso, having failed on October 18, with Newsom declaring: “No more excuses — every city must follow state law and do its part to build more housing.” Few in Montecito seemed to object to the idea of more housing, but rather to the lack of community benefits, including safety measures, and environmental havoc.
To enforce its on-site parking rules, Rosewood Miramar Beach initially contracted 6 security personnel, dressed in dark suits with walkie-talkies, to patrol the public parking lot. The number was down to 3 when I arrived, and when I asked one why they didn’t have any ID on, he simply explained that they “weren’t employees.” Signage directing guests not to use the beach parking seemed almost deliberately undersized, and neighbors have rightly questioned whether the resort is complying with fire guidelines, with one explaining in public comment that she didn’t want to be the “safety police.” Meanwhile, Justin Caruso explained, “We have hundreds and hundreds of supporters throughout Montecito, including those who have signed support letters that I have with me today.” By contrast, two opponents unrolled a scroll with letters of 165 opponents. A legal threat was directed from a supporter toward an opponent in the hallway. Clearly, not all letters are equal. But who really speaks for safety in Montecito? On Caruso’s property, a safety usher ensures that guests aren’t hit by passing Amtrak trains, but on Eucalyptus Lane, a 60-year old woman from Pasadena, CA, was fatally struck in 2015, a sadly common area event.
The aging beach access at the end of the street, which forms the main access to Miramar Beach, now has rocks piled up against it, washed out from Montecito Creek only to return and then be pushed up against the eroding stairs and ramp. Rick Caruso’s luxury playground may be safe for guests, but what about the general public? His development, which features a cafe and multiple stores, will undoubtedly increase foot traffic on Eucalyptus Lane at a tidy profit, but what gets the public to the beach? Above his namesake restaurant flies the flag of the United States and below it his family flag, a measure of audacity grossly ironic considering its meaning. People have died for that flag, but who will die because of Rick Caruso’s shopping center from the increased traffic? I had explained to Caruso’s security guards that in pursuing him to his private club, I simply wanted to test public beach access, and they were proving the point. Exclusivity doesn’t override the public right to the coastline.
Caruso’s traffic estimates, according to opponents, are gross understatements. Nothing about that is unusual in a process that typically favors developers in seeking information versus independent analysis. When you simply aren’t listening though, which is what I observed from Rick Caruso on Friday morning sitting in the front row sipping coffee, and even at one point rubbing his face exhaustedly suggests that Team Caruso viewed this not as an exercise in “smart development,” but rather as development at-all-costs. Planning Commissioner John Parke, in ex parte communication, had brokered the deal with the church, paving the way for final approval. As Noozhawk’s Joshua Molina wrote, “The deal was done, sealed long before Friday morning’s meeting began.” Caruso’s guards had asked me what story I was covering: “Rick Caruso closed the deal; he came back to his club to celebrate.” Opposition in Montecito was hardly organized; for the most part, it seemed that the majority of the public wasn’t aware, but what happens when Caruso Affiliated starts breaking ground and summer comes to town much less winter storms?
Santa Barbara County Supervisor Das Williams, who represents the area and will leave office in January, said in a statement, noting that he was in communication with all sides and parties: “I am impressed by the high percentage of price-controlled Affordable housing for hotel employees; that said, in the event that the project is appealed to the Board of Supervisors, I will weigh all evidence in the record, for and against the project, in accordance with the law and sound planning principles.” A spokesperson for Caruso didn’t immediately respond to questions about beach safety and access, environmental impact, and the project’s economic value. Caruso SVP Chris Robertson didn’t respond to a request for comment about what transpired in the Montecito Planning Commission, nor did Commissioner Sandy Stahl for her comment.
Santa Barbara is outside the Los Angeles media bubble, and indeed, the Rosewood Miramar Beach was the first successful project for Rick Caruso outside of the greater Los Angeles area. Acquired in 2007 by his firm, the vacant resort was demolished in 2013 and reopened in 2019 after a 2018 groundbreaking ceremony. The site as a resort itself dates to 1880 and is currently managed in partnership with Rosewood Hotel and Resorts. In 2019, Caruso told Haute Living journalist Laura Schreffler, after being asked if he compares to Walt Disney, and agreeing: “I’m very passionate about civic responsibility and I’m grateful to the community for allowing me to do more than just build real estate.” Montecito can only hope that he will keep this civic promise. After all, Montecito in 2018 was the scene of a terrible disaster: mudslides following a wildfire that killed 23 people while flooding out the 101 Freeway that neighbors the resort. After 8 months of investigation, the Los Angeles Times concluded that the failure was “government officials did not heed decades-old warnings,” and here we are again, doing the same old disaster avoidance song and dance. Not entertainment?
Link: Miramar Resort’s Housing, Retail Project Wins Approval, Despite Neighbor Concerns
Link: Caruso and All Saints by-the-Sea Episcopal Church reach agreement on proposed expansion
Link: Article IX - Oak Tree Protection and Regeneration
Link: Heal the Ocean
Link: Caruso Leader Has Vision
Link: MPC Recusal: Miramar and the 18 Pages Heard Around the Room
Link: Chaos Hits Montecito Planning Commission Meeting Over Miramar Hotel Project
Link: Did Kevin de León, AIDS Healthcare Foundation have improper relationship?
Link: Santa Barbara Planning County Commission
Link: Woman Killed by Train in Montecito
Link: Caruso Affiliated Breaks Ground on its Resort Property, Rosewood Miramar Beach Montecito
Link: Santa Barbara County knew mudslides were a risk. It did little to stop them
Please support my work with your subscription, or for direct support, use Venmo, CashApp, PayPal, or Zelle using zachary.b.ellison@gmail.com
Zachary Ellison is an Independent Journalist and Whistleblower in the Los Angeles area. Zach was most recently employed by the University of Southern California, Office of the Provost, from October 2015 to August 2022 as an Executive Secretary and Administrative Assistant, supporting the Vice Provost for Academic Operations and the Vice Provost and Senior Advisor to the Provost, among others. Zach holds a Master’s in Public Administration and a Graduate Certificate in Sustainable Policy and Planning from the USC Sol Price School of Public Policy. While a student at USC, he worked for the USC Good Neighbors Campaign, including on their university-wide newsletter. Zach completed his B.A. in History at Reed College in Portland, Oregon, and was a writer, editor, and photographer for the Pasadena High School Chronicle. He was Barack Obama’s one-millionth online campaign contributor in 2008. Zach is a former AmeriCorps intern for Hawaii State Parks and worked for the City of Manhattan Beach Parks and Recreation. He is a trained civil process server and enjoys weekends in the outdoors. Zach is a member of the Los Angeles Press Club.
