L.A.’s Ultimate Power Broker

For most of this century, Los Angeles has been a city of two elites -- one predominately WASPish, the other predominately Jewish. Although they occasionally collaborated on projects such as the MusicCenter, the two worlds remained largely separate and indifferent to each other, living in a ruling-class version of institutional apartheid.
December 11, 1997

Eli Broad (left) is the primary moving force behind thefinancing of the downtown Disney Concert Hall designed by architectFrank Gehry, lining up corporations to drop megabucks into theproject..

For most of this century, Los Angeles has been a city of twoelites — one predominately WASPish, the other predominately Jewish.Although they occasionally collaborated on projects such as the MusicCenter, the two worlds remained largely separate and indifferent toeach other, living in a ruling-class version of institutionalapartheid.

But to Eli Broad, a native of New York and a University ofMichigan product who came here 35 years ago, neither Los Angeles northe Jewish community can any longer afford such a division. TheSunAmerica president and CEO thinks it is great that Jews arebuilding new schools, museums and other institutions, but he wonderswhat they’ll be worth if the city around them collapses intolong-term decay.

“There are many people who have gotten wealthy, who are Jewish,but don’t think of themselves as part of anything else,” Broad says.”Some members of the community just seem to want to stick bythemselves. For some, it’s fashionable to be negative about thecity.”

But Eli Broad is anything but negative about Los Angeles. Althoughclearly a member of the Westside elite, Broad has emerged as perhapsthe first Jew in this century to stand as the city’s leading businessvoice. As the primary moving force behind the financing of thedowntown Disney Concert Hall, he has been, along with Mayor RichardRiordan, the key player who’s helping persuade many largecorporations — including Times Mirror, Arco, Ralphs/Food for Less,Wells Fargo and, most recently, the Walt Disney Company — to dropmegabucks into the project.

“Eli Broad is a huge leader who does more than any organization,”says one longtime aide to Riordan, who counts Broad among hispersonal friends and advisers. “Without him, the Disney Hall wouldnever be anything but a parking lot.”

In many ways, it might have been tempting for Broad and others inthe heavily Jewish Westside business community to allow downtowncontinue to go to the dogs. Broadly speaking, Jews fared far betterthan the WASPs in the last recession. As Cal State Northridgedemographers James Allen and Eugene Turner point out in theirrecently published study, “The Ethnic Quilt,” Jews are vastlyoverrepresented in the entertainment and business service fields,which were relatively unscathed in the early 1990s and have thrivedever since. In contrast, the aerospace industry, which was wallopedduring the recession and is now only holding its own, boasts,according to Allen and Turner’s research, a notableoverrepresentation of white Protestants.

The same pattern can be seen in the economic geography where theJewish-dominated Westside has also vastly outperformed the old WASPstrongholds downtown. With entertainment leading the economicrecovery, the Westside now boasts a third more office space thandowntown. The prestige business addresses in Los Angeles — measuredboth by rental rates and fashionability — are predominately inBeverly Hills, along Ventura Boulevard, Century City, West LosAngeles and Santa Monica while the big empty blocks remain in andaround downtown. Today, according to the Los Angeles BusinessJournal, three of Los Angeles’ zip codes with the highestconcentrations of households with more than $500,000 in assets are inBrentwood, Pacific Palisades and Beverly Hills, which are also amongthe most Jewish.

Yet this success, Broad notes, also has brought with it perils.Many affluent Jews who work in these glitzy areas don’t even considerthemselves Angelenos; they see themselves as citizens of theWestside. And with the growth of these centers and emergence of anincreasingly well-developed Jewish education system, there is ampleincentive to turn our back on downtown, the increasingly ThirdWorld-minded City Council and the bumbling Los Angeles Unified SchoolDistrict bureaucracy, and instead simply further feather our ownnest.

But such disdain would also be a repudiation of our own rich andcomplex history here in Los Angeles, a history that too few Jews areeven aware of. Although its future will be as an increasinglyLatino-Asian-dominated metropolis, Los Angeles has, perhaps more thanany city in the nation, been largely shaped by Jewish influence.

In the rough and heady pioneer days of Los Angeles, Jews were atthe city’s commercial epicenter. The Hellman family virtuallyinvented banking in Los Angeles, at one time controlling both theFarmers and Merchants Bank and Wells Fargo in San Francisco. Anotherlandsman, Karspare Cohn, founded the Union Bank, which, for decades,stood as the city’s premier middle-market bank.

Jews also operated at the highest levels of the political andsocial leadership. Members of the Jewish Newmark clan served duringthe 19th century variously as city attorney, city councilman andcounty supervisor.

“Anti-Semitism was virtually unknown in 19th-century California,even in the most exclusive circles,” says Kevin Starr, California’spremier historian. “The Bohemian Club in San Francisco and theCalifornia Club in Los Angeles each had prominent Jews among theirfounding memberships.”

It was only early in this century, Starr notes, with the massiveinflux of largely Midwestern WASPs to the city, that the bacillus ofelite anti-Semitism common in older cities began to infect LosAngeles. Soon, even prominent Jewish families found themselvesmarginalized and barred from the leading clubs and bestneighborhoods. The treatment of the more ethnically distinctivenewcomers from Eastern Europe — including the founders of the movieindustry — was, if anything, even more dismissive. Having nurturedLos Angeles in its pioneer days and created its most glamorousindustry, Jews remained politically marginalized; not a single memberof the community sat on the City Council for more than a half centurybefore the election of Rosalind Weiner in 1953.

As late as the 1970s, says Broad, Jews still did not rank highinside the city’s corporate power structure (with the notableexception of MCA’s Lew Wasserman), even if they dominated the garmentas well as the entertainment industry and controlled much of the mostvaluable Westside real estate.

“When I got there, the giants were the Ahmansons, Mark Taper, EdCarter, Asa Call, and you had the energy companies — ThortonBradshaw at Arco, Unocal. It was all downtown, WASPy and they sat onall the boards,” says Broad.

Yet Broad does not harbor any resentments for these largelyAnglo-Saxon entrepreneurs, largely because their “pioneering spirit”not only built great companies but created much of the basicinfrastructure of our city — the freeway system, the ports, theairport and the County Museum. The problem, as he sees it, is that,by the 1980s, many of these pioneers were retired or dead. Many oftheir scions removed themselves from civic involvement, preferringoften to relocate to the less ethnically diverse and contentiousValhallas of rural Northern California or the Pacific Northwest.

In addition, many of the companies they started were eventuallyabsorbed by other entities or taken over by placeless professionalmanagers, for whom Los Angeles was nothing more than an anonymoussubdivision by the Pacific. The disappearance of onetime downtownpowerhouses such as Security Pacific Bank, First Interstate and theBroadway Department Stores — precisely the corporations that mighthave funded such an enterprise — further weakened the elite.

“Those banks were the glue of this community,” says DennisStanfill, the former president of 20th Century Fox and one of the fewHollywood figures close to the old downtown establishment. “When youlost all those firms — and I have seen it over the last 32 years –you suddenly found there were no leaders. They were gone.”

For art collector Broad, who once bought a Roy Lichtensteinpainting for $2.5 million on his American Express card, the failureof the old elite to raise money for the downtown Disney Concert Hall– much beyond
the $50 million endowment provided by Walt Disney’swidow, Lillian — epitomized this growing “void” in the powerstructure. As Los Angeles’ economy stumbled badly in the early 1990s,the outlook for this new cultural icon grew bleaker as more and morebusiness fled downtown for the Westside, Orange County, the SanFernando Valley or out of the region completely.

To a large extent, Broad’s own career casts him an unlikely saviorfor downtown. As co-founder of Kaufman and Broad, the area’s largesthome builder, he helped construct the sprawling suburbs that hasteneddowntown’s decline. More recently, he has built his CenturyCity-based financial service company, SunAmerica, into a major power– in the 1990s, its market value has risen from $184 million to morethan $8 billion — and a linchpin of the resurgent Westside economy.

Yet, as an Angeleno, Broad believes that the city must have somesort of unifying core. Downtown may never regain its status as theregion’s leading commercial center — both the Westside and arguablyeven Irvine seem destined to surpass it — but it does remain thehistoric hub, the common touchstone for the city. “No great city inthe world exists without a symbolic center,” Broad says. “It’s likethe Eiffel Tower or the Sydney Opera House.”

To Broad, the Disney Concert Hall could become that signaturepiece for Los Angeles. “The success in building the hall is thedefining point for Los Angeles’ new leadership; it’s a newbeginning,” he says. “It’s a sign that the city is culturally cominginto its own.”

But it’s more than that. Disney Concert Hall — along with suchother ambitious building projects throughout the city, from theSkirball Cultural Center and the Getty Center in West Los Angeles tothe new sports arena and cathedral downtown — reflects a metropolisthat not only is recovering from the traumas of the recent past butis beginning to map out a new future that is quintessentially LosAngeles in its brashness and ambition.

But this time, Jews such as Eli Broad will not be merelyspectators, outsiders or incidental beneficiaries, but will be amongthe leaders and architects, just as they were when this city waslittle more than an obscure pueblo on the outer fringes of theAmerican continent.

Joel Kotkin, a senior fellow at the Pepperdine Institute forPublic Policy, is currently researching a report on the futureleadership in Southern California, in conjunction with the La JollaInstitute.

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