Los Angeles at a Crossroads: ”A growing chorus of Hollywood executives are talking about leaving the city,“ one entertainment industry insider tells TheWrap
Ryan Kavanaugh, founder and CEO of the video-sharing app Triller, grew up in Los Angeles — Brentwood to be precise. But now he’s ready to pack his bags and move his family and his business headquarters to Florida.
For Kavanaugh, such a major move represents a mix of concerns — including being closer to his parents, who already left Brentwood for a penthouse condo in the Sunshine State in January. In an interview with TheWrap, Kavanaugh said the main reason he’s ready to leave is his increasing disillusionment with L.A.’s rising crime, homelessness and what he considers California’s anti-business policies that are driving him away from the place he has called home for 47 years.
Join WrapPRO for Exclusive Content,
Full Video Access, Premium Events, and More!
“I grew up here, I grew up in Brentwood and I was allowed to be on the streets,” Kavanaugh said. “I would never let my kids walk (alone) in Brentwood… How many times do you have to be out in Los Angeles and see feces in the streets before you just don’t want to be here anymore?” he said.
The shocking murder of Jacqueline Avant, the wife of music mogul Clarence Avant and a pillar of the Los Angeles philanthropic community who was gunned down by an intruder in her Beverly Hills home last month, is contributing to a feeling of insecurity, experts told TheWrap.
“A new tipping point emerged late last year with the murder of philanthropist Jacqueline Avant in her Beverly Hills home,” said Gene Del Vecchio, adjunct professor of marketing at USC’s Marshall School of Business. “It so shocked the protected community that even the liberal Beverly Hills city council voted to recall the liberal Los Angeles district attorney George Gascón. When crime hits home, it becomes personal, and people act by either fighting, as with the Gascón recall, or by leaving.”
Kavanaugh is not the only one among Hollywood’s rich and famous who have recently left the city or are planning to exit greater Los Angeles. The list of recent defectors includes such high-profile players as veteran network TV exec Ted Harbert, most recently chairman of NBC Broadcasting, who fled to Portugal, where he is building a house because, as he told TheWrap in an email, “#americatoocrazy.”
Late last year, Elon Musk moved his home to Texas from California to be closer to Tesla’s new car manufacturing plant. His SpaceX company also has a launch site in the southern tip of Texas. That move has largely been attributed to avoiding California’s massive capital gains tax.
Oracle billionaire Larry Ellison — the father of film producers David (founder of Skydance Media) and Megan (founder of Annapurna Pictures) — moved to Lana’i, Hawaii, full-time in 2020. That may be less of a surprise since he has owned nearly 98% of the island, or some 87,000 acres, since 2012. The elder Ellison has said his goal is to create a “wellness Utopia” on the island, according to Business Insider.
And comedian and UFC podcaster Joe Rogan moved from L.A. to Austin, Texas. during the pandemic — a move he attributed to avoiding crowds. “Most of the time [overpopulation is] not a problem, but I think it’s a real issue, when you look at the number of people that are catching COVID,” he said on his podcast last July.
Research shows that California’s devastating wildfires and floods, some of which seem to be moving further inland from the notoriously climate-challenged Malibu, are additional factors for those who leave.
Kavanaugh, who co-founded and previously served as CEO of Relativity Entertainment, said he doesn’t blame the pandemic for what he sees happening throughout greater Los Angeles. He blames city and state government regulations that he believes have made it more difficult to prosecute criminals, and local leaders who have failed to address the crisis of homelessness. “It’s not the pandemic, it’s policy,” he said.
Still, not everyone is bailing on the Golden State. Producer Jeffrey Katzenberg, who recently has been highly active in trying to address the local homeless problem, told TheWrap, “Every city has its issues and challenges but there is no place I’d rather live than L.A. I’m proud of this city and optimistic about its future.”
Byron Allen, a philanthropist as well as founder, chairman and CEO of Allen Media Group, praised the efforts of prominent entertainment figures including Katzenberg to address homeless issues, but noted that running away from L.A. is no fix since many social problems are now global concerns. “If it starts here in L.A., it’s gonna find you in Atlanta, and Texas, and Florida,” he said.
Irving Azoff, the legendary music manager who has been here for decades, also said he’s staying put. “I’m not leaving!!!” he wrote TheWrap, adding: “Hollywood contingent staying. Some Silicon Valley geeks bailing!”
Hardly a Silicon Valley geek, Kavanaugh said that remote work and shelter-at-home mandates have made it easier for the wealthy to close their eyes to outside problems, and to concentrate on remodels and building up private fortresses instead of moving. However, as going out becomes more routine (or at least, had become so before the Omicron variant scare), Kavanaugh and others say they see affluent homeowners registering shock as they view homelessness and urban blight through car windows or on neighborhood streets.
“They say, ‘Do you see what’s going on out there?’ Well, it’s been there for… years,” Kavanaugh told TheWrap.
But it’s not only Hollywood’s super-rich who are pulling up stakes. Jake Lee, a former special effects technician who was born and raised in West Hollywood, left both the area and his entertainment industry career to move his family to North Dallas in July 2021. He cited street crime, homelessness, restrictive COVID-19 protocols and tax disincentives for business owners (he is now a self-employed inventor).
“The final straw was this school lockdown that my (14-year-old) daughter had to endure for a year and a half through 7th and 8th grade, which was truly devastating,” Lee, a longtime neighborhood activist, told TheWrap. “She was a synchronized swimmer they wouldn’t let her in the swimming pool. It really had a profound effect on her emotional well being.”
He also sought open-school policies because he believes remote learning led to more cyber-bullying among her classmates.
The situation has gotten so bad in parts of Los Angeles, even Gov. Gavin Newsom expressed shock. On Jan. 20, Newsom visited a stretch of railroad tracks near downtown L.A. that were littered with thousands of opened and discarded packages looted from passing trains. After donning gloves and helping clean up the mess, Newsom spoke to reporters about the blight, which has made international headlines.
“What the hell is going on?” he said. “I mean, it looked like a third-world country, these images, the drone images that were on the nightly news, day in and day out, some networks weaponizing them for their own political agenda and others just reporting the damn news.”
Recent surveys do not break down the number of people leaving California by occupation, but the trend is clear: According to a study by the California Policy Lab, since the coronavirus pandemic began, far fewer people have been moving into California from other states and more have been leaving. At the end of September 2021, entrances to California were 38% lower than at the end of March 2020. Exits, following a dip in the first half of 2020, stood 12% higher at the end of September 2021 than at the end of March 2020.
Not surprisingly, the most expensive areas with the highest housing prices, the Bay Area and the L.A. area, experienced the most significant exodus, reported U.S. News (also predictable due to the densely-populated areas representing about 44% of the state’s total population.) Popular destinations include Texas, Nevada, Florida and Tennessee — all states that have no income tax.
Reasons for moves out of L.A., or the entire state, are complex, and include pandemic-fueled new opportunities for remote work. The California Policy Lab study points out that, during the pandemic, college students who moved away from a California campus to their family home or elsewhere out of state due to campus COVID shutdowns were also counted as moves. In addition, the study said that a significant number of those moving out of urban areas are migrating to high-priced cities with their own urban problems, including New York City, Chicago and Seattle, suggesting that they are not necessarily moving to avoid L.A.’s problems but for jobs or other reasons.
Some, including Kavanaugh, believe that population loss will spur more of the same urban problems because the decline has caused California to lose a Congressional seat for the first time.
Kavanaugh and others said urban flight holds a larger significance when it comes to powerful players in the entertainment industry because the notion of “Hollywood” is so anchored in the Southern California geography. It’s a tourist attraction, a place where hopefuls flock with dreams that a chance encounter may lead to stardom.
“If we lose Hollywood, we’re going to end up with a pretty bad economy,” Kavanaugh said.
One formerly California-based entrepreneur turned the exodus from L.A. — and other major urban hubs — into a business. Paul Chabot, who attended USC and loved Southern California’s freewheeling beach culture, now lives in Texas with his wife, Brenda, and their four children, aged 8 to 14. There, the Chabots operate Conservative Move to facilitate moves from blue states to red states. Chabot said with a laugh that the company does not inquire about the politics of the movers but instead uses the company’s name to suggest that moves to more politically conservative states also may offer freedom from crime, congestion and other urban ills.
The moving business dried up during the early days of the pandemic in 2020, when people hunkered down and home buying and selling froze given an uncertain future. However, Chabot said that about six months into the pandemic, “tens of thousands of people have contacted us from major metropolitan areas. But Southern California is our number one market people are moving out of, just because of density of population.”
According to Chabot, those moving include plenty of entertainment industry clients, but they are reluctant to go public with their choice of a red state home base. “Many of our (Hollywood) clients don’t tell their neighbors they are moving until the van shows up,” he said.
Despite fears expressed by Kavanaugh, Chabot and others, some experts believe there’s little chance that losing a few influential entertainment industry homeowners — or smaller entertainment company headquarters — will make a dent in the overall positive image of Los Angeles as the world-renowned entertainment industry hub. One L.A. area real estate developer, who is familiar with major entertainment properties and asked not to be named, said that office and studio expansion is continuing at a rapid rate, and noted that creative businesses are more tied to Southern California than perhaps some others.
“Our stages and studios remain very active in terms of people (returning) — the cast and crew and creative people, they need to be on the studio lot,” he said. “A lot of people, let’s say like the production accounts, back office, people that don’t necessarily need to be there are still (working at home). But writers, for example, who were working remotely have migrated back to offices. They’ve been doing that for the last six months.”
Like some others, Del Vecchio said office life in all sectors has changed forever with increased remote and hybrid work options. However, he noted, “Hollywood will not lose its glamour because of the executive flight. It will continue to be the mecca for dreamers in search of fame, for tourists who come to touch the magic, and for stars and executives alike who desire to mingle among the other Gods of Mount Olympus.”
Chabot is not so sure. “Maybe Hollywood Part II will be right here in Texas,” he said.
Sharon Waxman, Brenda Gazzar and Anita Bennett contributed to this report.
Read Part 2 of Los Angeles at a Crossroads: As Violent Crime in L.A. Rises, Demand for Private Security Among the Wealthy Soars