Convention Is Just an Introduction to Eli Broad’s Vision of Downtown

In another life, before Eli Broad became a billionaire insurance man and savior of downtown, before he helped deliver the Democratic National Convention to Los Angeles and loomed over the city’s art and philanthropy like J. Paul Getty’s ghost, he reigned as the King of Sprawl.

From the late 1950s to the late 1980s, Broad built more houses across suburbia than any man in America, changing the face of big cities from California to New Jersey. No builder did more to spread Los Angeles from sea to mountain to desert than Broad. He lured baby boomers to the land of one-hour commutes with four-bedroom ranch houses, wall-to-wall carpet, fully equipped kitchens, two-car garages and an orange tree in every yard--a dream had for $25,990.

These days, the 67-year-old chairman of SunAmerica, a financial giant that sells insurance and mutual funds to baby boomers turned gray, pours his considerable energy and fortune into reviving a downtown eviscerated by decades of suburban growth.

“It’s a paradox. Yes, it’s a paradox,” he said. “But it isn’t penance.”

Even in this land famous for third acts and deathbed conversions, Broad’s life is remarkable for its transformations. He has emerged as arguably the city’s most powerful unelected leader through a series of incarnations, four distinct lives that would seem to add up to a profound contradiction. But to hear Broad describe it, as he guides you on a dizzying back-seat tour of his life--and not coincidentally the life of Los Angeles from midcentury forward--it all seems like an easy evolution.

The boy who attended Socialist camp in the Catskills grows up to be a billionaire five times over and a liberal with no love for unions. The man who made his first fortune on the low art of the stucco tract house becomes one of the nation’s foremost collectors of modern art and a patron of the finest architects. The man whose far-flung subdivisions sucked life out of the core of Los Angeles now devotes his life to turning downtown into a rival of Manhattan. The man who built his first house in Huntington Beach and his last in Moreno Valley--a legacy encompassing hundreds of miles of freeways and shake roofs and strip malls--hosts a convention of Democrats who have declared war on sprawl.

When it comes time to crown Al Gore, a politician who has attempted to turn runaway suburban growth into a national issue, Broad will stand just offstage, in the shadows, cheering. Whether or not the evils of sprawl make it onto the Democratic platform, the builder who practically invented the conceit of naming his subdivisions for the nature they paved over--Green Acres, Pinetree, Quail Run--has already become a convert.

“The landscape here has suffered from poor planning for five decades. It’s everything from billboards to sprawl to a lack of public transportation,” says Broad, a fit and dapper man with shiny gray hair and a tan that, myth has it, comes not from leisure activity but from holding grueling business meetings under the sun.

“We need far better planning, and it’s not going to come from the BIA (Building Industry Assn.). Their members would like to do whatever they want without any restrictions.

“The costs of urban sprawl are very expensive. We’ve got to build closer in, higher densities, and do whatever’s necessary to save the farmland.”

‘This Can Be Our Central Park’

Just days before the big convention, his black sedan rolled slowly through the streets of downtown, the heart of Los Angeles still in the making. “Stop here,” Broad commanded, and his driver glided to a halt on that stretch of Grand Avenue where tycoons become immortals.

He leaped out of the back seat and stood in front of the Museum of Contemporary Art--the museum that bears his name as founding chairman--on the same street where Disney Concert Hall, another piece of his handiwork, is coming to be.

The billionaire then bounded to a spot in the middle of traffic. He moved his hand like a wand from curb to sky. At once, parking garages disappeared and Grand Avenue itself--suddenly closed off to cars--gave way to a vision 3,000 miles to the east.

“This is L.A.’s future,” he said with a missionary’s glare. “This can be our Central Park.”

Broad seems to pop up everywhere these days, whether he’s recruiting a new chief of city schools, leading the charge to land Los Angeles a new football team or raising tens of millions of dollars to bring the Disney Hall project back from the dead. He has become downtown’s biggest cheerleader, finding holes in his crazy schedule to pitch “America’s 21st Century City” to East Coast journalists out to cover the convention.

The chance to sell Los Angeles is the primary reason he worked so hard with Mayor Richard Riordan and power broker Bill Wardlaw to bring the Democrats here. Forget the $100 million or so in projected economic activity, he said. You can’t put a price tag on the newspaper, television and Internet coverage.

“The perception that Los Angeles has on the East Coast lags reality by at least five to 10 years,” he said. “People come here and they’re surprised. Where’s the earthquake damage? Where are all the layoffs in the defense industry? That’s all history. It’s gone. We’re the headquarters of the Pacific trade.

“And look at the great buildings going up. The cathedral, Disney Hall. Look at the size of the Staples Center. It’s bigger than [New York’s] Javits.”

Somewhere between the rugged tycoons of industrial America who grabbed their fortunes from the earth and the sallow billionaires of high-tech, there stands Broad (rhymes with road), a man who never amassed more than enough land to build his next tract and maybe the next one after that.

It was easy once to underestimate him. He was the only child of a house painter and a seamstress barely removed from the Jewish ghettos of Lithuania. He grew up in a six-story walk-up in the Bronx where secrets were spoken in Yiddish and the bad match between his parents was covered up for a time by their shared passion for the Workmen’s Circle, Depression-era leftists devoted to the struggle of labor. In summer, the Broads headed to the Catskills for fresh air and bourgeoisie bashing.

“I remember there were canoes and all that stuff,” Broad said. “It was my country experience.”

The family moved to Michigan and his father ran a Christmas card and ornament shop on his way to opening a five-and-dime. Broad said he left no mark on his high school. He sort of ran track, but if any classmates could recall him, they’d remember a smart-aleck who hung around other smart-alecks. At Michigan State University, he discovered something about himself, a fire that only the most driven could understand. He graduated in three years and passed the state’s CPA exam before age 21.

He was still a kid with jumbo-sized black horn-rimmed glasses, and he failed at his first accounting job because he refused to wear the customary felt hat. “My ears are big and the hat made them look bigger,” he said.

He began looking for office space in Detroit, and Donald Kaufman, 10 years his senior and related to Broad’s wife, Edythe, offered him free rent in return for doing his books. Kaufman was a carpenter who remodeled and built houses, and Broad had saved all his wedding money to buy a few lots. They became partners, Kaufman & Broad, and in 1956 they staked $25,000 on their first tract in the suburbs outside Detroit.

They had the audacity to build two models without the standard basement, offering instead a carport. It was an idea Broad stole from a big home builder in Ohio. “We built a model that I named the Award Winner although it won no awards except for the award I gave it,” he said, smiling. “We listed it for $11,990 and our competitors, who were fat, dumb and happy, were selling their models with basements for $15,000.”

That first weekend, they drove their wives down and watched in wonder. Young couples kept signing on the dotted line until all 16 lots had sold. Now the trick was to build the houses in 45 days--impossible except that Broad had struck a deal on lumber that required payment in 31 to 60 days. This way, he could avoid a costly construction loan.

The houses got built with a few days to spare. Kaufman & Broad, using pretty much the same method, soon became the biggest independent builder of single-family houses in America. First Detroit, then Phoenix (“Live Life Like a Movie Star” became the Arizona ad campaign), then Los Angeles, San Francisco, Chicago, Toronto, New Jersey, France, Belgium and Germany.

Kaufman retired and later died flying an experimental plane. By the time Broad broke ground in 1963 on his first project in Southern California, he had piled up a personal fortune in excess of $4 million and taken the company public.

But the Los Angeles County-Orange County market, with houses selling for $25,000 and up, made him nervous. There was no shortage of big local builders with proven records. So he decided to start very un-L.A.-like: row houses in Huntington Beach at the unheard of price of $8,990 for one bedroom and $16,990 for the four-bedroom model.

An amazing thing happened. The first day alone brought out 12,000 people. In five weeks, all 756 townhouses sold.

“I wasn’t very smart back then. We shouldn’t have sold the houses that quickly. We should have had Phase 1 and Phase 2 and kept raising prices, but we were so proud of the success and we had such big egos.”

Buying Up Land on the Fringe

The game was cheap land on the fringe and Broad played it better than anyone. In 1968, he began luring families out of the city’s core to a rustic planned community near Angeles National Forest. From there he headed to Chino, Corona, Riverside and Cucamonga, at one point offering a mature orange tree with every house in a futile attempt to preserve the rural beauty he and other builders were replacing.

Whether Pepper Tree Farms or the Meadows or Oak Lake or Devonshire Place, his tracts always seemed to find their place near the next new highway, just a “35-minute commute” from the Civic Center.

“I am very proud of the fact that we provided the dream of homeownership to several hundred thousand families and 90% of their net worth is the appreciation in the value of those homes,” he said. “But as far as land planning, there’s no question that it left a lot to be desired.

“You just keep going out until you find land that’s cheap enough, and that’s not right. It shouldn’t be this pattern, but whose fault is it? I don’t feel the home builder created the system. That was the politicians. Maybe we took advantage, but the city, the county--those were the folks asleep at the switch.”

He now concedes that the growth often didn’t pay for itself. The costs of bringing new tracts sewer, water, police and fire service amounted to more than the sales and property tax revenues they brought in. Cities kept growing new suburbs just to cover the losses of the old suburbs--a municipal Ponzi scheme that created overnight communities like Moreno Valley.

“You’d buy a piece of land, present a subdivision map and they’d approve it,” he recalled. “They hadn’t developed the kind of sales tax or industrial base they should have. It wasn’t balanced.”

After surviving a housing bust in the mid-1970s, Broad decided to concentrate his energies on building Sun Life, an old-line insurance company that he bought as a means of diversifying. He began to distance himself from home building and bought up half a dozen more insurance companies. To the service of underwriting death, he added investment vehicles called annuities. SunAmerica, under Broad’s hand, grew a hundredfold.

If he swore off downtown Los Angeles during his years as a home builder, Broad has become a student of its streets and lacunas and missed heartbeats--in what he calls Phase 4 of his life, his career as “venture philanthropist.”

On the drive downtown from his SunAmerica building in Century City, Broad wanted it known that his passion for downtown is no atonement. If the tens of thousands of houses he built in suburban Los Angeles contributed to a flight of private dollars and public investment from the core, that past has little to do with his efforts to now revive downtown.

Beyond his contributions to Disney Hall and MOCA, Broad’s philanthropic portfolio includes the funding of a foundation dedicated to improving urban schools. His two sons, both unmarried and living lives of complete leisure, will probably continue the gift giving, the father said.

“Listen, I’m doing this as a citizen,” he said, betraying the first hint of ruffled feathers. “If I had brewed beer or made clothing instead of building houses, I’d probably have the same interest in the city.

“I don’t want to die the way Getty died and leave all my money to heirs I never met. Look, you stop counting after 1 billion. I am a builder. I’m a maniac when it comes to getting things done. And I don’t like to preside over the status quo and simply write checks.”

As Broad painted his vision for Grand Avenue, a place where people from South-Central, East L.A., the Valley and the Westside would mingle in the name of art and good food and free concerts--a grand pedestrian boulevard that would finally “overfly” New York--it was hard not to get caught up in his enthusiasm. It’s easy to forget for a second all the political ducks that must be aligned and the back-room fights that must be won and the tearing down of places with their own powerful supporters and legacies.

For many of the city’s powerful, the Grand Avenue project means closing off the street to traffic for half a mile and tying together MOCA with some of the great postcards of L.A.’s future--Disney Hall and the Cathedral of Our Lady of the Angels.

Not surprisingly, Broad talked of something bigger and bolder, perhaps a mile stretch that joins the Central Library, MOCA, Disney Hall, the Dorothy Chandler Pavilion, Mark Taper, the Ahmanson, the cathedral and Civic Center Park.

“This is the last chance for downtown Los Angeles to really do something where you can get 150,000 or 200,000 people from all the communities together. Imagine New Year’s Eve. Imagine Grand Avenue closed and we create this esplanade with great elegant steps coming down from the Music Center Plaza and cinemas, restaurants and shops lining both sides.

“Close all the parking entrances and take Civic Center Park, which is now hidden behind all this junk, and join it with the rest. What a footprint.”

The tour was over and Broad directed his driver straight to Century City. The paradox of his past and present, though, still seemed to be hanging in the air. He took one last crack at trying to explain it:

“I’m not comparing myself to Carnegie or Mellon, but I don’t think if you go through history you’ll find that it’s all that unique that wealthy people have conflicts in their lives.”

The car turned onto the Avenue of the Stars and Broad craned his neck to take in the great shadow of his SunAmerica building 38 stories high, his office at the very top. A funny grin appeared from the side of his pleasant face. “My vision,” he said, “has gotten broader.”