Business
Video: Google C.E.O. Comments On Landmark Monopoly Ruling
“Sundar Pichai is here, everybody, the C.E.O., of course, of Alphabet and Google. How much of your time, and I promise we’d get to it, is spent these days on thinking about this legal case that you are the center of with the U.S. government saying you’re a monopoly and we are going to break you up? They have talked about effectively trying to do a whole bunch of things, spinning off Chrome, figuring out how to deal with Android, preventing you from paying folks like Apple to make Google the default search engine on the phone.” “Look, I spend the vast majority of my time on innovation and product innovation we need to do as a company. But at our scale as a company, it’s a big part of my job to engage with regulators and viewed it as an important part of my role to do that. From a legal standpoint, look, these are complex cases. They are in the thick of it. We have very, very capable teams which work through it. I have, I spend time, but it’s not an extraordinary amount of time or something like that, yeah.” “But what do you think your chances are, if you will? I mean, do you say to you, I don’t know how much you want to speculate, but there’s a big question mark about if any of these things were to come to pass, what it would do to the business?” “Look, I mean, I would say this even through the ruling, the judge commented on that we are clearly the highest quality search engine product out there. And we have gotten to that position by innovating ahead of everyone else.”
Business
On a Crenshaw Boulevard corner, old gives way to new, but it stays in the family
The corner lot on Crenshaw Boulevard and 54th Street looks like any other construction site. Inside the chain-link fence encircling the property, an excavator last week was moving a pile of rubble — the last remains of an old building that had been demolished to make room for something new.
But the mundane scene belied an unusual story in Los Angeles real estate: Instead of selling it, a Black family with deep roots in South L.A. chose to hold on to a property they’ve owned for decades and develop it themselves into a $24-million apartment and retail building.
They’ll mark their progress with a formal groundbreaking ceremony Thursday, a rare instance of a local, minority property owner participating in the redevelopment of their neighborhood, which had long been overlooked by conventional developers. In keeping a seat at the table, they are bucking the norms for how development in L.A. typically is done, in which owners sell to outside developers looking to capitalize on the rising fortunes of once-neglected historic neighborhoods.
But even with a train stop for Metro’s new light rail K line nearby, funding for the project was hard to come by. It took years of effort before siblings Jamial Clark and Bridgette Reed, who inherited the property from their parents, could start turning their mother’s former hair salon and wig shop property into a six-story building with 48 apartments and perhaps a small grocery store in the first-floor retail space.
The grind, they said, has been worth it. Their parents, Henry and Lucretia Clark, scraped together money in 1995 to buy the building and the siblings didn’t want to let go of it. Perhaps, they said, they will provide a road map to others who own properties in evolving neighborhoods near the many new transit lines being built and planned by Metro.
“There are a lot of Black-owned properties up and down Crenshaw,” Reed said. “We just want to encourage other families to do the same thing and not sell out to these developers who are coming in and actually pricing us out of our own communities.”
Key to getting their project underway was teaming with developer Kacy Keys, who has spent nearly three decades building commercial projects including apartments, offices and stores. She heads Praxis Development Group, which will have an equity stake in the project, which is named Clark on 54th.
“We were responsible for playing the developer role,” Keys said of her company, such as getting city construction approvals, overseeing the design, hiring contractors and finding financing. The Clarks “agreed to contribute their land into a joint venture with us.”
Both Praxis and the Clarks had to put up cash for the last few years to make sure the project didn’t falter, which was worrying, Jamial Clark said.
“I invested over $100,000 of my money just to keep things going,” he said, “and to keep bills paid and the mortgage paid,” but he and his sister didn’t want to let go of the property their parents toiled over and where they spent many hours of their young lives.
“Selling was never going to be an option, even though we got to a point where we had to think about it” as rising interest rates and inflation drove the potential cost of the project so high it looked out of reach, Clark said.
The pair attended nearby 54th Street Elementary School and after classes they walked to their mother’s salon, where they pitched in answering the phone.
“It was like our second home,” Clark said, a place with a nurturing vibe that encouraged customers to linger and chat.
“Mom was old-school press-and-curl,” he said, referring to a popular hairstyle in the 1990s. “My mom was taking out those weaves and regrowing their hair.”
The salon had a private area where women with thinning hair could get scalp treatments that included massages from their late beautician sister Carla Taylor and oils formulated by their mother.
“It was almost like a counseling session,” he said. “The ladies would stay after they got their hair done and order lunch.”
On Saturdays their mom played such “old” music as the Temptations, Al Green and the Whispers, he said. “The ladies would just love to come and sit.”
Her tenants in the building included the wig shop with a celebrity clientele, a shoe repair shop, a frame shop and a social services provider, all of which relocated in the neighborhood, he said.
Some neighbors were apprehensive about the plan to knock down a building infused with emotions and memories for so many, but Clark saw an opportunity to be part of potential economic changes coming to the area. In West Adams, another historically black community, development of new apartments, restaurants and shops was already taking place on Adams Boulevard.
“I was like, ‘Wow, Crenshaw should be comparable to that, at least.’”
In the 1920s and 1930s, Central Avenue was the center of L.A.’s black community. Later, the center shifted to the Crenshaw Corridor, particularly between Adams and Slauson Avenue, said real estate developer Philip Hart, who is familiar with the plans for Clark at 54th but not involved in the project.
Lately, the multibillion-dollar public investments in Metro’s Crenshaw line and the Expo line that intersects it “have had a ripple effect in terms of the communities they serve becoming desirable,” Hart said.
That economic shift puts pressure on local residents, he said. “Can they continue to pay their rent or their property taxes? The question of gentrification and displacement has become a very important question in the Crenshaw District over the past 10 years or so.”
If redevelopment doesn’t bring with it affordable housing and good-paying jobs, residents will be priced out of their neighborhoods and join a long-running exodus to Palmdale, Lancaster and the Inland Empire, where the cost of living is cheaper, he said.
The Crenshaw community, Hart said, “should retain its historic African American cultural cachet.”
Keys and the Clarks hope their project will play a small part in keeping the neighborhood intact. The building will include 10 units considered “deeply affordable” because they are reserved for tenants earning 50% of the median income in the area when they become available in late 2026.
The apartments will be bigger than average, including two- and three-bedroom units to accommodate families, said Keys, who is working on the project with her partner Charles Wise.
One of the biggest challenges to getting the project underway was finding financing. A building that size typically would be funded with a loan or two, but Keys had to assemble a complicated package from seven entities including philanthropic nonprofits after approaching about 100 financing sources.
“Even though I’ve built over a billion dollars’ worth of projects over the course of my career, this was my first time as a small woman-led business that I was raising money on my own,” Keys said. “It was incredibly challenging.”
Praxis put up more than $200,000 of its own funds and worked without compensation to prove that partnering with legacy landowners to create new housing can work, she said.
Among the financiers was MSquared, a women-owned real estate development and investment firm that will retain an equity share, as will New York investment and development firm Six Peak Capital.
The need to securing financing from multiple sources dragged out the process, but the effort was worth it, Hart said.
“What they’ve done was challenging, but they’ve done it and they’re having a groundbreaking,” he said. “That’s a good thing.”
Business
Video: Bezos Is ‘Very Optimistic’ About a Second Trump Term
new video loaded: Bezos Is ‘Very Optimistic’ About a Second Trump Term
transcript
transcript
Bezos Is ‘Very Optimistic’ About a Second Trump Term
During an interview at the DealBook Summit on Wednesday, Jeff Bezos, the Amazon and Blue Origin founder, said President-elect Donald J. Trump was calmer and more confident now.
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“Jeffrey Bezos, everybody.” [audience clapping] “If we’re talking about Trump, I think it’s very interesting. I’m actually very optimistic this time around that we’re going to see — I’m very hopeful about this. He seems to have a lot of energy around reducing regulation. And my point of view, if I can help him do that, I’m going to help him.” “What about the idea that he thinks that the press is the enemy?” “Well, I think he — I’m going to try to talk him out of that idea. I don’t think the press is the enemy. And I don’t think — he’s also — you’ve probably grown in the last eight years. He has, too. This is not the case: The press is not the enemy.” “I hope you’re right.” “I hope I’m right, too.” “Have you talked —” ”Let’s go persuade him of this —” “Have you talked to him about it?” “You and I should go. Let’s go talk to him.” “If we could try —” “I really don’t — I think that this is absolutely — I don’t think he’s going to see it the same way. But maybe I’ll be wrong.” “Was that always your thought, by the way?” “What I’ve seen so far is that he is calmer than he was the first time and more confident, more settled.”
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Business
Elon Musk's multibillion-dollar pay package is rejected for a second time. What to know
A Delaware judge rejected Tesla Chief Executive Elon Musk’s multibillion-dollar pay package for a second time, writing in her opinion this week that the company’s approval process for the package was “deeply flawed.”
Tesla shareholders approved the compensation plan in 2018, which was once valued at $56 billion but fluctuates dramatically with Tesla’s stock price. Chancellor Kathaleen McCormick first rejected the plan earlier this year on the grounds that Musk had unfair influence over shareholders and that negotiations over his pay plan were not legitimate.
McCormick rejected the plan again this week, citing similar reasons, although attorneys for Musk have argued that the outsized compensation plan is justified because it’s directly tied to Tesla’s valuation, which currently sits at more than $1 trillion.
A dominant player in the electric vehicle market, Tesla has faced setbacks this year amid increased competition and safety concerns surrounding its Full Self-Driving mode. The company slashed more than 10% of its global workforce in April, citing a need to cut costs.
Musk was tapped last month to lead President-elect Donald Trump’s new Department of Government Efficiency, a role that could bolster his influence and Tesla’s standing.
How did we get here?
Tesla shareholder Richard Tornetta filed a lawsuit against Musk and the company in 2018 after the majority of shareholders approved a 10-year performance-based pay package for Musk.
Tornetta alleged that Musk misled investors who approved the plan and exercised inappropriate influence over negotiations. Musk denied the allegations at trial, saying he did not control the terms of the pay package or attend meetings where it was discussed.
McCormick sided with Tornetta in January and blocked the plan. After the ruling, Tesla shareholders voted again to approve the pay package, with more than 70% in favor, but it was not enough to change McCormick’s mind.
Why did the judge rule twice?
After McCormick’s first ruling, Musk’s attorneys argued that the shareholders’ overwhelming support of his compensation plan should override the court’s decision. Tesla shareholders voted twice to approve the plan, but McCormick maintained that they were not acting independently.
“There were undoubtedly a range of healthy amounts that the board could have decided to pay Musk,” McCormick wrote in her second opinion. Instead, the board “capitulated to Musk’s terms and then failed to prove that those terms were entirely fair,” she said.
McCormick said that it was not standard for a judge to change a ruling based on the vote of shareholders. There was “no procedural ground” to reverse the decision, she wrote.
How does Musk’s pay compare?
If approved, Musk’s compensation plan would be the largest in U.S. history for a public company executive, according to CNBC. The pay plan includes a series of 12 milestones and would award Musk additional Tesla shares as the company grows.
In order for Musk to reach each milestone, Tesla’s market capitalization must increase in $50-billion increments. For Musk to fully vest in the award, the company’s market cap must reach $650 billion, the company said.
Musk’s attorneys argue that the pay plan is a reflection of what the executive is worth, but McCormick disagrees. In her second ruling, the judge also awarded the plaintiffs $345 million in legal fees, although plaintiff attorneys had asked for a whopping $5.6 billion.
Who’s right?
Corporate governance expert Charles Elson said the Delaware court’s ruling was sound and in line with the law because Musk had violated conflict of interest regulations. Tesla also created improper new evidence after McCormick’s first decision by calling for a second shareholder vote, he said.
“The judge found that the board was not independent of Musk and there was no negotiation between him and the board that produced this package, which makes it suspect,” Elson said. “The standard rules have to apply.”
What will Musk do now?
Musk criticized McCormick’s ruling on X, the social media platform he owns, writing that “shareholders should control company votes, not judges.”
Tesla also posted on X that the court’s decision was wrong and the company plans to appeal. The appeal would be filed with the Delaware Supreme Court.
“This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners,” the company wrote.
Attorneys for Tornetta and the other shareholders who oppose Musk’s pay plan said they would defend the court’s ruling if the decision is appealed.
The Associated Press contributed to this report.
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