A $100 Million Mall Reopening Is a Sign of LA’s Uneven Fire Recovery

August 19, 2026 by John Gittelsohn

There’s a flurry of construction in Pacific Palisades, more than a year and a half after a wildfire ravaged the Los Angeles enclave in the most destructive blazes in Southern California history. There’s also a lot of frustration.

At the community’s core, the luxury Palisades Village shopping center reopens Saturday after a $100 million restoration by billionaire developer Rick Caruso, marking a milestone in the area’s recovery. Partially dressed mannequins stand in the A.L.C., Brunello Cucinelli and Elysewalker boutiques. The Erewhon has stocked fresh produce for its signature smoothies. The freezers are chilled at McConnell’s Fine Ice Creams.

“It’s a significant chapter in the journey of rebuilding here,” Caruso said during an interview at his shopping center, where work crews were finishing sidewalks and setting up restaurant chairs. “It’s certainly not the end.”

Signs of revival surround the complex, from construction crews in pickup trucks jamming nearby streets to the roar of power tools as workers erect wood housing frames. But behind the activity is a stark divide: Those with the money to move ahead are doing so, while many residents are still waiting on insurance payouts and government aid. Still others are giving up altogether.

Caruso, who protected Palisades Village during the January 2025 inferno with private firefighters and water tankers, poured his own money into its restoration. Nearby, wealthy homeowners and developers are rebuilding multimillion-dollar houses, and buyers are paying roughly $2 million for some burned-out lots.

For most of the people who lost houses, it’s still a long road ahead — if they’re even returning. Fewer than a third of the owners of destroyed homes have received rebuilding permits in the Palisades, and only 1% of houses have been completed. That lopsided recovery stands to reshape a 100-year-old community once known as “Mayberry by the Sea” for its small-town vibes.

“You’re going to lose some of that flavor in this community, which I think is unfortunate,” Caruso said. “But at the same time, it’s 30,000 acres overlooking the Pacific Ocean, and it’s really great real estate, and it’s going to be probably the best community to live in in the United States because it’s all new.”

Originally developed in the 1920s, Pacific Palisades grew around a grid of streets — dubbed the Alphabet Streets because of their names in alphabetical order — with small lots and modest cottages affordable for middle-class Angelenos, who enjoyed the fresh ocean air in an enclave bounded by the sea, Santa Monica Mountains and the wealthy Brentwood district. Its cozy atmosphere persisted for decades even as the original homes were replaced by McMansions built by newly arrived financiers and Hollywood celebrities such as Tom Hanks, Kate Hudson and Ben Affleck. Before the wildfire, average home prices had soared to $4 million.

Rich Wilken, 79, a third-generation Palisadian who lost his home of 47 years in the blaze, said he grew up surfing with famous but unpretentious neighbors, including actor Bob Denver of Gilligan’s Island and the girl who inspired her father to write . Those times won’t come back with the rebuilding.

“It’s gonna be more people with more money,” said Wilken, an architect. “At the Chipotle, a guy asked me if he could cut in line because his Lamborghini was double parked.”

The Palisades Fire, which investigators say was started by arson, destroyed more than 6,800 structures in the area. It erupted just hours before the Eaton Fire leveled much of Altadena, east of Los Angeles. Together, the blazes killed 31 people and caused more than $40 billion in insured damages.

“People lost their homes, their livelihoods, and in some cases, people they loved,” said Traci Park, the Los Angeles City Council member representing the Palisades. “Now they’re fighting insurance companies, watching their savings disappear and navigating decisions they never imagined having to make. When you’re living through that every day, it’s completely understandable to feel like the rest of the world has moved on. Frankly, a lot of it has.”

Politically, the recovery effort has reverberated all the way to Washington. California Governor Gavin Newsom, an ardent critic of the Trump administration, has said the federal government is failing to deliver relief funds, with more than $15 billion in requests unpaid.

“While California has made progress, wildfire survivors are still waiting on the federal disaster funding President Trump promised 18 months ago,” Newsom’s office said in an emailed statement. “It’s time for the president to do his job.”

The administration has “obligated nearly $2.6 billion” for wildfire assistance and has extended the period for homeowners and renters to seek compensation, said Lauren Bis, a White House spokeswoman. She said Newsom is seeking to pass blame for “his horrible mismanagement” of the fires and recovery efforts.

“Disaster recovery is supposed to be managed by local and state leaders with supplemental assistance provided by the federal government,” Bis said.

The slow recovery has also become a political liability for Mayor Karen Bass as she fights to keep her job in November. Bass, who was on a diplomatic trip to Africa when the fire broke out, faced intense criticism over the city’s response. She has blamed insurers, lenders and the federal government for the slow pace of rebuilding.

“At this point in time, the greatest impediments are insurance companies not paying Palisadians what they’re owed and banks not financing them so they can move forward,” she said in a statement.

But signs of the anger confronting Bass are hard to miss in the Palisades. Visitors entering the neighborhood from Chautauqua Boulevard are greeted by a “They Let Us Burn!” banner posted by a group that blames City Hall for both the fire’s destruction and the slow recovery.

Nithya Raman, a City Council member challenging Bass in a November runoff, has seized on the uneven recovery, accusing the mayor of failing to appoint someone to oversee reconstruction or adequately prepare the city for future disasters. “The immediate aftermath was dysfunctional, and the rebuilding effort has been indefensibly slow,” Raman said in a statement.

Maryam Zar, cofounder of the Palisades Recovery Coalition, said Bass has focused on other LA problems at the expense of the rebuilding efforts.

“The mayor’s been AWOL,” Zar said. “It’s emblematic of lack of leadership and vision that’s played into this recovery.”

In a sign of the dissatisfaction, Spencer Pratt, a Trump-backed ex-reality television star, won almost 60% of the vote in the Pacific Palisades precinct in the June mayoral primary after turning the loss of his home in the fire into a viral campaign against Bass. He ultimately failed to make the top two citywide.

‘Disappointed’ in Neighbors

Beyond homes, the infrastructure needed to support a rebuilt Palisades is far from a reality. A six-year, $78 million plan to improve the water system is just beginning, according to a June presentation by the Los Angeles Department of Water and Power. The Santa Ynez Reservoir, the area’s main source of emergency and drinking water, will be offline until December.

Roads are pitted with potholes from heavy truck traffic and new gas lines. Streetlights haven’t been replaced. No reopening dates have been set for the burned Ralphs and Gelson’s supermarkets, although both companies say they plan a return.

“I’m very disappointed in my commercial neighbors,” Caruso said. “There is very little, if almost nothing, going on as we’re sitting here.”

With so little around, real estate buyers are paying higher prices for lots with views and those closest to Caruso’s Palisades Village, according to Dan Urbach, a real estate agent with Compass. About one lot a day has sold so far this year, at prices averaging about $2 million per site, he said. Lots with rebuilt homes are likely to cost $4 million or more, he said, making the Palisades one of the priciest neighborhoods in California.

“It’s going to be the new shining city on the hill,” he said. “It’s the land value. They’re not making any more of it.”

Many sellers are elderly longtime Palisades residents for whom rebuilding will be too expensive or take too long. Mary Jo Stirling, 86, said about half of the women in her weekly bocce group have decided not to move back. She’s an exception. Her custom-designed three-bedroom, two-bath home is under construction on the site where she had lived since 1986.

Stirling hired Cosmic Buildings, a contractor that uses advanced technology to design and construct houses more quickly and cheaply than traditional custom builders, she said. The house is supposed to be ready to occupy next year. Her insurance covers most of the nearly $1 million construction cost.

Stirling is staying in an apartment in nearby Santa Monica while waiting for her rebuilt home. She plays bocce on Tuesdays at a restored park in the Palisades, going out to lunch with her fellow bowlers afterwards. She’s looking forward to eating again at Palisades Village.

“I can’t wait to go to McConnell’s for ice cream,” she said.

Top photo: An empty pool in a destroyed Pacific Palisades home overlooks new construction. Photographer: Maggie Shannon/Bloomberg.

Popular Today