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Billionaire Developer of the Grove Got Massive Property Reductions from LA County Assessor

Developer Rick Caruso

 

 

Rick Caruso, potential candidate for Mayor of Los Angeles received special treatment and substantial property tax reductions for The Grove, then donated thousands to embattled assessor’s political efforts.

 

 

By Randy Economy and Brian Hews

Embattled Los Angeles County Assessor John Noguez and his office assisted Los Angeles billionaire real estate mogul and potential mayoral candidate Rick Caruso with preferential treatment that resulted in massive property devaluations at one of the most profitable shopping and entertainment centers in the United States, Los Cerritos Community Newspaper has learned exclusively.

Caruso and his wife Tina donated thousands to two political campaign committees controlled by Noguez including the “Noguez for Assessor Committee 2010” and another to the “John Noguez for Assessor 2010 Attorney’s Fees Fund” in late 2010.

Caruso is one of the most powerful political figures in Los Angeles County and is currently strategizing to become an official candidate for Mayor of LA in the 2013 election.

Los Cerritos Community Newspaper obtained thousands of emails between Noguez and several property tax agents who are now under investigation in what law enforcement officials classify as the largest “political pay to play scheme” in the history of Los Angeles County.

LCCN has been investigating the activities of Noguez and several of his top senior staff members for the past year and has published more than 50 articles documenting massive “pay to play” schemes directed under the approval of Noguez. Since LCCN first began their investigation one lower level appraiser inside the Assessor’s office has been arrested on 60 counts of felony bribery and money laundering counts.

On Thursday, LCCN published several key emails and documents that show how entrenched property tax agents Dale Beckwith and Michael J. Schaaf (who also donated to Noguez’ campaign) were able to flex their political influence on behalf of Caruso that directly resulted in having several Grove parcels, with a 2012 value of $165 million, devalued.

The first case asked for a “Base Value Reduction” on all Grove properties. According to sources in the Assessor’s office, a BVR does not have to go through the appeals process, the properties can be revalued using what is called an “Assessor’s Correction”. One parcel, valued at $13,770,000, was reduced using this correction to $9,050,000, a 34.27% reduction.

Applying that percentage to all other properties would generate a $49 million refund. At a 1.25% tax rate the refund would amount to $612,000 per year.
A Base Value Reduction appeal allows the owner to go back in years and assume the new value. If Caruso owned the property for eight years he would realize a $4,896,000 refund. The rule also allows the carry forward of the reduced amount.

Caruso owns some of the most exclusive real estate in the United States. In Los Angeles County he owns the Encino Marketplace, the Americana at Brand in Glendale, the Grove, and Burton Place Retail Center in Los Angeles. Caruso is also planning to construct a new $500 million luxury resort and casino in Las Vegas, according to several media reports.

EMAIL TRAIL LINKS CARUSO REPS TO NOGUEZ-

Emails obtained between Beckwith and Schaaf and members of the Assessor’s office, including Noguez, show a carefully thought out plan for the tax reductions at the Grove going back to 2009. Caruso gave authorization to both Beckwith and Schaaf to represent him on official business regarding his properties before the Assessor’s office, LCCN sources confirmed.

Noguez along with two of his past top appraisers Andrew Stephens and Mark McNeill from the Major Properties was specifically assigned to work with Beckwith and Schaaf on at least 10 different properties owned and controlled by Caruso.

Stephens and McNeill have been placed on “full paid leave” after at least 300 law enforcement officials raided 12 locations in two different states several months ago.

During a three-day period in September of 2009, Beckwith, Mc Neill, Stephens, Schaaf and Noguez communicated back in forth in a series of emails to set the plan for Caruso’s devaluations.

On Thursday, Los Cerritos Community Newspaper Publisher Brian Hews released several key emails and documents that illustrate how Noguez, Beckwith, Schaaf and others interacted in a “very blatant manner,” Hews said.

In one email conversation on September 3, 2009 Noguez notes: “Below are some of the active appeals that Michael (Schaaf) has for the Grove. Dale (Beckwith), are there any other numbers that you might have as the big reduction is really on your parcel? If so, please send them to Mr. (Mark) McNeill asap so we can get this scheduled (to be placed on the Property Appeals Assessment Board Agenda).”

In another email from McNeill to both Schaaf and Noguez on that same morning of September 3, 2009, he writes: “Good morning all! That should work! Send me the apps guys.”
During that same morning Noguez messaged Mc Neill and Beckwith asking how the item was going to be placed before the Property Appeals Assessment Board and on what specific time and date in order to get approval on the reduction for the parcel: “Could we get you to see if Sylvia would let us do September 8, 2009 at 10:30 am? I could have the clerical work in Wednesday and be ready for the Sunday, September 13, 2009 update. This might mean we could get a corrected tax bill in time for the 1st installment for the taxpayers.”

Calls to Caruso, Schaff, and Beckwith were not returned. Beckwith has hung up the phone on Los Cerritos Community Newspaper in the past when asked about his involvement with Noguez and Caruso.

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27 Responses to Billionaire Developer of the Grove Got Massive Property Reductions from LA County Assessor

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  6. Chewy Reply

    October 2, 2012 at 5:45 pm

    Yes it’s called life after public service, yes once retired he’ ll be enjoying a 6 figure pension and will be hired to make more in privet sector. let’s pass more taxes so morons like him can laugh at us all the way to the bank.
    Like former 5 times mayor of city of Maywood that gave such a sweet deal to trash contractor that after he LOST the election in 2007 he got himself a dream job high pay full benefit and now new 2012 BMW , and who is STOCK with high trash bill? yes people living and doing business in that city. Of course he was working for another contractor while serving as mayor of Maywood, yes the company name ,DPR.

  7. Mark Reply

    October 1, 2012 at 9:21 pm

    Nice work Randy! Keep it up! Nice how the City/Caruso have come up with a cover plan. He has so much money he’ll buy someone to take his place in jail. He’ll, if I did what he did, the SWAT team would be here extracting me from my home and tossing me in jaill, and throwing away the key. Will justice prevail? Hope so.

    • Sergio Reply

      October 23, 2012 at 1:19 am

      All this talk about Caruso ,his father was in prison for almost the same thing
      ( like father like son )

  8. Angry lady Reply

    September 30, 2012 at 10:10 am

    I have been reviewing your outstanding efforts to uncover and expose corruption in public offices.

    I have an ongoing problem with the LA County Assessor’s Department/staff. I am 85 years of age, disabled, with open angle Glaucoma (severe case) and have a very limited income. It is very difficult to get anyone’s attention and meaningful assistance here, although Supervisor Antonovich/staff (Ms. Leida Erickson) have been helping me significantly, especially since I have been right and the Assessor has been wrong. Never the less, I am still forced to untimely waits, complex, invalid answers and more from the Assessor’s Department. Supervisor Antonovich and his Assistant (Ms. Erickson), have in a manner of speaking been “life savers”, but they do have time and availability limitations and the Assessor is another elected official and is not directly subject to the Board of Supervisors’ authority. All this effort, on my part, is extremely burdensome, both physically and mentally, plus, in reality, this should not be happening via a public agency and an elected official/Assessor!

    These problems with the Assessor have extended over approximately 5 years and during this period I have amassed significant/detail evidence that I believe shows the Assessors here (Mr. Auerbach & Mr. Quon – now retired and Mr. Noguez – now forced to step down due to an ongoing investigation for corruption), with Mr. Kreimann now as current acting Assessor are at fault! I do not believe any of these officials have been ethical and/or competent and in their use of their contrived procedures/practice and they tend to and/or deliberately try to confuse, arbitrarily rejecting my evidence and efforts to receive fair treatment or valid answers to my legitimate concerns/questions. I often wonder, based on their incompetent Department replies, whether they even take adequate time to read, in detail, my correspondence and verify it’s accuracy. They seem to have an approach that says, the Assessor/Assessor’s Department is always right and you are wrong no matter what!

    This failure to provide a competent and ethical public service and one that assures and allows equity and relief/adjustments for the Taxpayer/Property Owner does need immediate action! I and others need the assistance of those who can expose and influence rapid and needed changes. If this is happening to me, I’m sure there are thousands of other who are also subject to this treatment!

    The arrogance here is appalling and the incompetency along with this, makes it almost impossible for me to seek and acquire legitimate, financial and timely relief even based on valid evidence. Even the Appeals Board system, which I believe is tainted, and based on my experiences, I believe some Board members are obviously incompetent and are extremely biased on behalf of the Assessor’s Department. My direct experience with the Board, at Hearings, also indicates some of these Board Members do not understand their job, the Real Estate Market or factors that critically affect assessments, thusly property owners are not receiving justice or fair and binding judgments on all parties!

    In summary,I believe the Assessors/Assessor’s Department have been corrupt in their practices/procedures, assessments. The system is broken and in need of an impartial in-depth audit and a close examination by appropriate law enforcement agencies. I understand Mr. Cooley, LA District Attorney is conducting an investigation in this respect. I have, but only recently, found out about this and have forwarded him some late pertinent information (last two weeks), but so far I have not received any replies.

    I could use some meaningful assistance from the Media, those in the State Legislature and others/officials who are ethical, possess leadership strengths and who favor reform in this area of property taxes/assessments and effective public service!

    I am planning to deliver a package of valid and supporting evidence to selected people in the Media, State Legislature, et al and will be arranging to deliver this via a friend in the next 3 weeks.
    I hope you can assist me and supply some names and addresses of key members of the State Legislature, law enforcement officials and any others you believe are willing to look at and expose these problems and unacceptable public services and with a desire expedite reform/actions to correct these wrongs.

    At the moment, I am still engaged in this struggle with the Assessor on several issues and am not getting, what I believe is unbiased and timely help by the Assessor’s Department. As I mentioned, the financial burden, the excessive time/assessments and effort for me is horrendous!

    I simply cannot afford an Attorney, much less the time this would take including the long extended court dates, fees, etc., that this action mandates!

    Thank you for your patience and review,

  9. Mary J. Los Angeles Reply

    September 29, 2012 at 12:00 am

    David Sommers, why are you defending Caruso? Aren’t the tax payers of Los Angeles County paying for your salary,retirement pension and fancy perks? Are you moon lighting for Rick?
    You have a hell of lot of nerve and a hell of a lot explaining to do.
    The media needs to wake up and add you to their focus list.
    The beat goes on, WHAT A LEECH!!!

  10. Nast Reply

    September 28, 2012 at 6:17 pm

    Hey Sommers, lap dog for Caruso on the taxpayers dime- Caruso gave thousands of dollars of dollars to Noggoze. FACT. DA is gonna find out what he got for it, and caruso is not gonna be able to run for mayor. That is what you should have clarified, not defend him . everybody knows these 1%s get special favors. LCCN is exposing their stench while you try to obfuscate and engage in sophisticated circumlocution.

  11. Brian Parker Reply

    September 28, 2012 at 3:22 pm

    Five years ago Caruso tried to build a huge mall on the waterfront of the small SF Bay area town of Albany. Plan was to put it right on the waterfront and divide our local state park in half. He has an aura of invicibility but up here after two years of his failed PR blitz he was forced to withdraw his proposal and head back to LA. He’s had some success and is used to getting his way. He had Hahn’s former deputy mayor in charge of PR up here for 2 years and got no where. Hopefully he will get his just deserts in this case. Power corrupts and absolute power absolutely corrupts.

  12. David Sommers Reply

    September 28, 2012 at 3:17 pm

    A review of County records indicates that the information presented in your article is not accurate due to several erroneous conclusions based on nonexistent evidence. None of the records provided by the Office of the Assessor over the last week substantiate a connection between Rick Caruso and “massive property reductions.”
    Here are some of our specific concerns with errors in your reporting:
    “On Thursday, LCCN published several key emails and documents that show how entrenched property tax agents Dale Beckwith and Michael J. Schaaf (who also donated to Noguez’ campaign) were able to flex their political influence on behalf of Caruso that directly resulted in having several Grove parcels, with a 2012 value of $165 million, devalued.”
    - Publically-available County records indicate that Mr Beckwith and Mr. Schaff were not operating on behalf of Mr. Caruso. These records show that Beckwith and Schaff were advocating on behalf of Nordstrom Incorporated, not Caruso or his company.
    “The first case asked for a “Base Value Reduction” on all Grove properties. According to sources in the Assessor’s office, a BVR does not have to go through the appeals process, the properties can be revalued using what is called an “Assessor’s Correction”. One parcel, valued at $13,770,000, was reduced using this correction to $9,050,000, a 34.27% reduction.”
    - The parcel you are talking about, which received a reduction, is the Nordstrom building in the Grove. Publically-available County records indicate that Caruso was not connected to this request for a reduction. Caruso holds the master lease for the ground on which the buildings in the Grove sit. There is a sublease in place for the building sitting on that ground, the Nordstrom building. Both the master lease and sublease were recorded with the County on August 8, 2000. Nordstrom’s sublease is for a total of 100 years, and the County considers anyone holding a sublease longer than 35 years to be the “owner” in terms of who pays the property tax bill for a parcel. So after August 8, 2000, Nordstrom would have been the recipient of any value reductions for this parcel, not Caruso.
    “Applying that percentage to all other properties would generate a $49 million refund. At a 1.25% tax rate the refund would amount to $612,000 per year. A Base Value Reduction appeal allows the owner to go back in years and assume the new value. If Caruso owned the property for eight years he would realize a $4,896,000 refund. The rule also allows the carry forward of the reduced amount.”
    - You are applying a non-existent formula to parcels that never received a reduction. The $49 million refund statement is pure fiction. No such refund ever occurred. The $4,896,000 refund is also speculation. A review of County records indicates that no refund was ever requested by Caruso, and no refund was ever issued by the County. Again, the County records indicate that Caruso does not have any economic interest in tax refunds related to the parcel you are writing about.
    EMAIL TRAIL LINKS CARUSO REPS TO NOGUEZ
    “Emails obtained between Beckwith and Schaaf and members of the Assessor’s office, including Noguez, show a carefully thought out plan for the tax reductions at the Grove going back to 2009. Caruso gave authorization to both Beckwith and Schaaf to represent him on official business regarding his properties before the Assessor’s office, LCCN sources confirmed.”
    - This is inaccurate. The emails you are mentioning do not connect Caruso to Noguez. County records indicate that Nordstom gave authorization, not Caruso. The Application for Changed Assessment, filed with the County on November 29, 2007, show Beckwith was representing Nordstrom, and not Caruso or his company.
    “During a three-day period in September of 2009, Beckwith, Mc Neill, Stephens, Schaaf and Noguez communicated back in forth in a series of emails to set the plan for Caruso’s devaluations.”
    - Again, this is not related to Caruso. After August 8,2000, Caruso was not the owner who would have been connected to any devaluation of this parcel.

    ~~~~~~~~~~~~~~~~~~~~~~
    David A. Sommers
    Acting Director of Public Affairs
    Chief Executive Office
    County of Los Angeles

    [email protected]
    Cell: (213) 453-6446
    Direct: (213) 974-1363

    • Brian Hews, Publisher Reply

      September 28, 2012 at 5:12 pm

      Mr. Sommers, Los Cerritos Community Newspaper stands by our coverage, at this time.

      Brian Hews
      Publisher
      Los Cerritos Community Newspaper

    • ConcernedCitizen Reply

      September 28, 2012 at 5:28 pm

      Mr. Sommers,

      I have a few questions..

      1. Why are you, a Los Angeles County official, responding on behalf of Rick Caruso?

      2. If the one property wasn’t directly owned by Caruso, what about the other 11 parcels mentioned in the emails?

      3. Why do the emails specifically say, “the Grove”

      Your response would be greatly appreciated/

      • LazyJournalism Reply

        November 20, 2012 at 6:26 pm

        1. Why are you, a Los Angeles County official, responding on behalf of Rick Caruso?

        I don’t have a problem with an LA county official providing valuable context to a libelous claim against a prominent private citizen, particularly when it inappropriately implicates the assessor’s office.

        2. If the one property wasn’t directly owned by Caruso, what about the other 11 parcels mentioned in the emails?

        It isn’t a crime to ask for a reduction. Remember we recently had a housing crash. Property values declined drastically in value, and the property owner has every right to ask the assessor to update the present value of the property. The article focused on a single property at the Grove owned by Nordstrom, not Caruso, and then ERRONEOUSLY extrapolated that reduction. This demonstrates not only a fundamental failure to understand real estate, but an unflinching commitment to misinformation. Shameful.

        3. Why do the emails specifically say, “the Grove”
        The Nordstrom property is located at the Grove. Or couldn’t you read?

        • OMG Reply

          November 24, 2012 at 4:09 pm

          Hey LJ did you have a problem when they conspired to discredit LCCN? when they called Shokirian and Sard Verbinnen, when they called KNX KNBC sent tweets out to local blogs?

          Do you think an ordinary guy would get that type of defense?

          What a joke you are LJ, go back to sweeping the streets at the Grove or Americana…..

  13. Chuck U Farly Reply

    September 28, 2012 at 12:17 pm

    Caruso,
    your big shot lawyers might be able to keep you outta jail, but forget being mayor-you’re toast now, big boy. It’s gonna be a media feeding frenzy.
    The public will be treated to seeing you run from cameras like a dog with his tail between his legs, like Nogood Noguez, helicopters over your house. Maybe your home will be raided!
    And, the public will insist you pay your back taxes and make a proper contribution to society, instead of your “pet” charities. Maybe your parasite tax agents Beckwiff and Shaft will cut a deal and put the finger on you, too.
    Like the Nast comment- you have rendered yourself UNFIT for public service.

  14. Mary J. Los Angeles Reply

    September 28, 2012 at 11:22 am

    Hey Caruso,
    Shame on you! Forget the Mayor thing. The voters are not going to elect another crook, you are history.

  15. jackofalltrades Reply

    September 28, 2012 at 8:54 am

    Well the County of Los Angeles is facing major cutbacks. How could we just set back let these bums continue to do what they did and still get a paycheck?

    Were is the DA!!!!!!!!!!!!!!!

  16. Scott Zwartz Reply

    September 28, 2012 at 8:23 am

    LA City Hall runs on corruption and apparently so does the county which may explain why the Stooge Cooley never sees any wrongdoing.

    The LA City Councilmembers have all sold their votes in return for other councilmembers’ votes. Voting selling is a crime. The Brown Act requires all decisions to be reached through public deliberation. When the voting machine is set to vote YES even when the councilmember is relieving him/herself in the restroom is not based on public deliberation.

    The votes not seldom if ever based on the consideration of the Motion before them as they votes have all been bought long before any motion reaches the council chamber. The agreement is obvious — I will always vote for what you want to do in your district and you will always votes for what I want to do in my district.

    Nonetheless, Stooge Cooley never sees this constant criminal activity — nor any other of the 1,000 criminal activities taking place daily.

  17. Thomas Tweed Nast Reply

    September 27, 2012 at 6:35 pm

    Santos you are in so over your head, real deputies actually pity you-

  18. Thomas Tweed Nast Reply

    September 27, 2012 at 6:32 pm

    Santos- are you listening??? the BOS chose you, after VERY careful, thoughtful, consideration, and a lengthy review of many qualified candidates because you are such an effective manager.
    Quit wasting time organizing an Assessor’s softball team, Assessor’s motto, Assessor’s mission statement etc, etc, ad infinitum. No one cares about your management book.
    Get off the pot, compadre. FIRE worthless cronies Loogy reyes, Jeff Prang, Boyfriend Maraz, corrupt protector of Schenter, -Reinke. these folks are pond scum sucking of the taxpayers.
    If you have any guts you will immediately reverse all Noogoozes Caruso reductions, and submit a press release. But you won’t , will you, cause you’re the BOS boy!!!!!!!!!!!

    • Neil Goldberg Reply

      September 27, 2012 at 9:05 pm

      Satos is too busy to be organizing solfball games or department logos. He is spending all of his time studying for the appraiser licensing exam!!!!

  19. Thomas Tweed Nast Reply

    September 27, 2012 at 6:13 pm

    You better think twice about running for mayor, Big Rick, thanks to LCCN, everyone knows what a filthy, crooked, corrupt slime ball you are. You are not fit to be mayor.

    • LazyJournalism Reply

      November 20, 2012 at 6:33 pm

      Nast, the filth that you spread out of sheer ignorance is appalling. Not sure which mayoral candidate you happen to be a shill for, or which member of your family works for the LCCN, but you’re just flat out wrong.

      This article is an utter canard. There is no proof of any wrongdoing, and seeking a property reduction is in no way criminal. What IS criminal is printing erroneous allegations while demonstrating reckless disregard for the truth. We call this libel.

      I’m afraid I have to rain on your hate-spewing parade of jealousy. I don’t care that Mr. Caruso is a 1%er. Show me demonstrable proof of his wrongdoing, and I’m happy to make up my mind. The only entity coming out of this story looking evil and despicable is the LCCN and the pathetic hangers on desperately searching out ammunition to sustain their jealous hatred of decent citizens.

      You should all be ashamed of yourselves. Take a deep breath and educate yourselves. It’s clear that there’s scant understanding to be found here.

      • OMG Reply

        November 24, 2012 at 4:00 pm

        Hey LJ: Wondering what you are doing here after one month since the story broke. Why are you the only one on the site defending Caruso? Possibly a Caruso minion? Who uses the word canard? I dont see how you can call these guys lazy they busted Noguez, whom your boy Caruso had ties with. Then they busted LA County who was caught calling Galit Shokiran (Caruso VP) and the guy from Sard Verbionnen who also worked for Caruso. The LA Times followed up and proved there were large deductions on the Nordstrom property, so why dont you get your head our of Rick ass and grow your own brain!

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