Your article gives a rounded picture of a man who might well be the new Lorenzo de Medici of Glendale, California.

His power and influence over Glendale will be unstoppable as we have four out of five council seats up for grabs and he is funding three of them.

I write regularly to the Glendale News-Press A regional paper of the Los Angeles times, but have found the paper timid in its reporting of Rick Caruso. We have a new managing editor – Danette Goulet, but she has been with the paper only a couple of weeks and has yet put her arms around the community issues we face.

I have written frequently to the community commentary column and submitted another yesterday. But, I believe that the concern that I and others have, should be presented to a wider audience. I’d like your opinion on my essay and how I would need to structure it to merit a more prominent place on you OP-ED pages.

The Community Commentary Follows

The new Medici vs. Capitalism
Or Denouncing General Growth is Anti-Americana
Community Commentary: Herbert Molano January 15, 2005

Time and again we read on these pages how some supporters of the Americana commercial development denounce General Growth, owners of the Galleria, as anti-competitive for using the courts to prevent the project from moving forward.

What the town center development is not, is an example of laissez-faire capitalism. The process that makes the Americana possible is a corruption of the very philosophy that we advocate as a free society and for which we have fought many wars.

Caruso’s naming of his development project is an affront to the name “America”. It is as conceptually removed by distance as it is by philosophy. It is a project conceptualized of an Italian/European motif made possible by the use of dual coercions: The taking of private property by the threat of government action (Eminent domain), and the taking of taxpayer’s money for a commercial venture.

The unfairness of this process goes deeper. The money that supports the bonds of tens of millions of dollars the city borrowed has come primarily from the very same owners whose property lie within the redevelopment area. In simple language, General Growth and the surrounding business paid the tax that the city used to force the sale of their property or to subsidize their competitor next door.

Put it in personal terms. If you, as a result of your own determination, frugality and entrepreneurship established a store and developed a sustainable business, you would not consider it free competition if the city helped pay the rent of your competitor next door.

That practice is acceptable to our Council. It’s what transpired with Litchfield Toys when the city subsidized Zany-Brainy. It is what happened with Crown Books when the city subsidized Border Books. Both of those long-term Glendale businesses partially owe their demise to the financial assistance the city gave their competitors. There is not a single fiscal Republican on the dais, let alone a true capitalist who feels, in his bones, what the concept of free competition really means.

Free competition means you take your lumps or your business goes under if you fail to satisfy your customers. But, it also means you bring prosperity to your family and your community if you succeed in providing a product or service that customers want. You succeed without a government hand out and without their interfering on your behalf.

Caruso’s deal with the city is none of that. Not only is his project subsidized by a third of its value, but also, his agreement with the city’s redevelopment agency practically guarantees him a profit. It is understandable if nearly fifty percent of Glendale residents have a different impression. The Public Relations and advertising effort by Caruso Holdings was exceptionally expansive, expensive and pervasive.

Let’s recognize what this argument is not. It is not a condemnation of Caruso, nor of his development concept. The design, style and overall visual impact of the town center are stylish and inviting. Caruso and his team has given us a vision of what proper planning and design can do for a stodgy and historically unimaginative city planning. To me, Caruso is the virtual embodiment of the Medici family of Florence, Italy in both the vision to enhance the architecture of a city and in his mastery of political influence.
If redevelopment is willing to give away tens of millions of land value, he would be foolish not go after it. And foolish, he would never be.

As a city, we created an agency run by people unaccustomed to bare knuckle negotiations and who swoon at the sight of potential campaign support. We have been foolish enough to elect councilmen who never ran a business, never had to meet a payroll, never lived the uncertainty of risk nor suffered the financial hardships of a wrong business decision. Worse still, we elected two of them who lived their adult lives under the security blanket of a government payroll check. We forgot that they would eventually be out of the public eye, behind closed doors, confronting a master negotiator – Caruso.

Free competition really means laissez-faire capitalism, free of the intrusion by government; its value was beautifully expressed by Ayn Rand years ago: “…the moral justification for capitalism lies in fact that it is the only system consonant with man’s rational nature, that it protects man’s survival qua man, and that its ruling principle is: justice.”

General Growth purchased the Galleria, the brick citadel of bland architecture, two years ago in an arms-length negotiated agreement. But, they, much more so than Caruso Affiliated Holdings, are the embodiment of American competitive values. For that alone, they should demand justice.

Herbert Molano
818-974-6374

Herbert Molano
818-974-6374