As Pacific Palisades moves from disaster response into economic recovery, developer Rick Caruso says rebuilding will require more than reconstructing homes and reopening storefronts. It will require cities to compete for investment, give small businesses a viable path back and embrace public-private partnerships that can move recovery forward.
He believes those lessons extend well beyond the Palisades, particularly as cities across Los Angeles look for ways to create the conditions necessary for businesses, residents and investment to return. The conversation has particular relevance for neighboring Santa Monica as it works to revitalize its own commercial districts.
“Every city’s got to be welcoming for business — we need to cut the red tape,” Caruso said.
Then came the warning.
“Businesses will close,” he said. “They’ll also move.”
Much of the attention surrounding Pacific Palisades has understandably focused on rebuilding homes. But physical reconstruction is only one part of economic recovery.
Businesses have to return. Restaurants need customers. Residents need reasons to spend time in their neighborhoods again. Developers and entrepreneurs need enough confidence to invest before a recovery is complete.
The question now is not simply how quickly a community can rebuild, but whether it can use that moment to create a stronger economy for what comes next.
Caruso’s approach to Palisades Village offers one model: help local businesses that might otherwise be unable to return, recruit new operators willing to invest before the recovery is complete, create places that bring people and foot traffic back, and use rebuilding as an opportunity to improve rather than simply replicate what existed before.
His mandate to his team after the fire was clear.
“Our mission now is to come back better than it was the day before the fire,” Caruso said. “Better than it was the day we opened.”
That philosophy shaped not only how Palisades Village was rebuilt, but who Caruso wanted to be part of its comeback.
One of his first calls was to longtime Palisades retailer Elyse Walker, whose store was lost in the fire. Caruso recalled asking her to partner with him to “bring back the city.”
Walker had a narrower description: “It’s bringing back the Palisades.”
Caruso saw something larger.
“No, it’s bigger than that,” he recalled telling her. “The way the Palisades comes back will be a real great message for the whole city that we can be resilient and come back.”
Walker ultimately became an advocate for the rebuilding effort, helping recruit other retailers to return and invest.
Caruso’s team also structured deals for independent businesses that he said might not otherwise have had the financial ability to reopen, creating rent structures intended to give them a viable path back. The strategy wasn’t limited to restoring what had been there before.
Brian Toll, co-founder and co-president of The h.wood Group, said that before the fire, Palisades Village probably would not have been the obvious next location for the hospitality company. After seeing the devastation, the calculation changed.
“I feel like it’s our duty to kind of help bring some excitement and life back to that part of town,” Toll said.
The result is Alphabet Bar & Grill, h.wood’s new Palisades Village restaurant with James Beard Award-winning chef Timothy Hollingsworth. For Toll, investing before the neighborhood’s recovery is complete is also a statement of confidence in where the Palisades is headed.
“We need to start getting back to what the Palisades will be,” he said.
Together, those decisions illustrate the economic cycle Caruso is trying to create: give established local businesses a path back, bring in new investment, create reasons for people to return, restore foot traffic and allow each piece of the recovery to reinforce the next.
But developers and business owners can only do so much, Caruso said. Cities have an equally important role in creating the conditions for that investment to happen.
“Every city’s got to be welcoming for business,” Caruso said. “We’ve got to cut red tape.”
His prescription centers on fundamentals: support small businesses, address public safety and homelessness, keep streets clean and create an environment where residents, visitors and businesses feel welcome. Cities, he argues, cannot assume investment will stay put.
That message is particularly relevant to Santa Monica as it works to revitalize its commercial districts and attract new investment. The lesson emerging from the Palisades is bigger than rebuilding one shopping district: Recovery requires businesses willing to bet on a community’s future and cities willing to create the conditions that make that bet worthwhile.