{{Short description|American businessman and philanthropist}} {{Infobox person | name = Bruce Karatz | image = | caption = | birth_name = | birth_date = {{Birth date and age|1945|10|10}} | birth_place = Chicago, Illinois, U.S. | occupation = | known_for = Chairman and CEO of KB Home | education = Boston University <small>(B.A.)</small><br>{{nowrap|USC Gould School of Law <small>(J.D)</small>}} | political_party = Democratic | spouse = Janet Dreisen (divorced)<br> Sandra Lee (divorced)<br> Lilly Tartikoff | children = 3, including Matthew Karatz | website = }} '''Bruce E. Karatz'''<ref>{{Cite web|url=https://apps.calbar.ca.gov/attorney/Licensee/Detail/48088|title=Bruce e. Karatz # 48088 - Attorney Licensee Search}}</ref> (born October 10, 1945) is an American businessman and philanthropist. He served as Chairman and CEO of KB Home,<ref name="Los Angeles Business Journal">Berry, Kate (2004-9-6). "Coming home: Bruce Karatz started as in-house counsel, but learned the business and turned what became KB Home into an international market leader (Interview)." Los Angeles Business Journal</ref> and engaged in philanthropic efforts to help rebuild both Los Angeles after the L.A. Riots and New Orleans following Hurricane Katrina.<ref name="Fortune Birger">{{Cite web |title=Man on a Mission - April 3, 2006 |url=https://money.cnn.com/magazines/fortune/fortune_archive/2006/04/03/8372982/index.htm |archive-url=https://web.archive.org/web/20060616191903/http://money.cnn.com/magazines/fortune/fortune_archive/2006/04/03/8372982/index.htm |url-status=dead |archive-date=June 16, 2006 |access-date=2023-07-10 |website=money.cnn.com}}</ref> Karatz was CEO for two decades while KB Home grew revenues from $491 million to $11 billion and annual home deliveries increased from 4,500 homes in 1986 to over 39,000 homes in 2006. In March 2013, Karatz was a recipient of The Malibu Times' 23rd Annual Dolphin Awards.<ref name=TMTM1>{{cite web|last=Magruder|first=Melonie|title=23rd Dolphin Awards honor Malibu's citizens of the year|url=http://www.malibutimes.com/news/article_0812f3e4-862f-11e2-adb0-001a4bcf887a.html|publisher=The Malibu Times|access-date=13 March 2013}}</ref> Karatz operates BK Capital LLC based in Beverly Hills, California.
==Early life== Karatz was born in Chicago, Il and raised in Minneapolis, Minnesota, in a middle class Jewish family.<ref>[https://www.jta.org/2009/03/09/news-opinion/united-states/mini-madoffs-facing-federal-fraud-raps Jewish Telegraph: "‘Mini-Madoffs’ facing federal fraud raps" By Tom Tugend] March 9, 2009</ref> His father owned a movie theater and his mother was a homemaker. He graduated from high school in 1963 and from Boston University in 1967. Karatz received his Juris Doctor degree from the University of Southern California in 1970.
==Career== In 1972, Karatz joined Kaufman & Broad (the company took the KB Home name in 2001) as an associate general counsel.<ref name="Los Angeles Business Journal"/><ref name="Fortune Birger"/>
After spending a short time as an in-house counsel, Karatz moved to the home building side of the business and soon thereafter became head of KB Home’s French division. He made a mark in 1977 when he installed a full-sized model home on the roof of the Au Printemps department store. More than 500,000 people toured the rooftop house. During his time in France, KB Home grew into one of France's largest homebuilders.<ref name="Fortune Birger"/>
In 1981 Karatz rejoined the Los Angeles headquarters of KB Home and in 1986 was named CEO. As CEO, Karatz oversaw the company’s growth into one of the most successful home building companies in the world. Karatz is credited with changing the company’s business model of building homes on speculation and then selling them, in favor of building houses on order. KB Home's new business model allowed middle class home buyers to customize their homes and defined a far more efficient and profitable business model for the industry.<ref name="Fortune Birger"/>
In the early 1990s, when the real estate market in Southern California collapsed, Karatz moved aggressively to expand the company by acquiring other regional home builders such as the San Antonio-based builder Rayco for $105 million in 1996. The success of the new business model led KB Home to acquire additional companies and expand organically into markets across the country to provide customized homes for middle-class families.<ref name="Fortune Birger"/>
As CEO, Karatz built on his Paris marketing achievements. Working with Fox Broadcasting, which was celebrating the tenth anniversary of The Simpsons, KB Home constructed a real-life replica of the Simpsons' home in one of KB Home's Nevada subdivisions, which helped turn Las Vegas into KB Home's top market.<ref name="Krantz USA Today">Krantz, Matt (2004-11-22). "KB chief builds on creativity: CEO of homebuilder steps outside box to get attention." https://www.usatoday.com/educate/college/careers/profile43.htm USA Today</ref>
During his tenure as CEO, KB Home became a Fortune 500 company. Karatz oversaw a 1476% increase in the company’s market capitalization, an 800% increase in the company stock price, a 575% growth in revenue, a 400% rise in dividends, and an increase in the number of employees from less than 500 to over 6,000. In 2006, KB Home was ranked the #1 homebuilder in Fortune Magazine’s 2006 list of America’s Most Admired Companies and was listed by Fortune as one of America’s Most Admired Companies[4] and won the American Business Award as the Best Overall Company.<ref>{{cite web|url=http://www.kaufmanandbroad.com/PressArticle~id~376.aspx |title=KBHome - KB Home Wins American Business Award For Best Overall Company |publisher=Kaufmanandbroad.com |access-date=2010-09-14}}</ref> Karatz in turn became one of the country's highest-paid CEOs during this time.
In 2005, Karatz's last full year as chairman and CEO, KB Home’s profits were $1.29 billion.<ref>{{citation |url=http://www.bizjournals.com/austin/stories/2010/03/22/daily16.html |title=KB Homes net loss falls in Q1 |publisher=Austin Business Journal |date=23 March 2010 |access-date=16 January 2013}}</ref> On November 12, 2006, Karatz retired from KB Home and agreed to pay the company the profits he received based on KB Home’s stock option back-dating procedures.<ref>{{citation |url=http://files.shareholder.com/downloads/KBH/2255816776x0xS950134-06-21229/795266/filing.pdf |title=KB Home Form 8-K |publisher=United States Securities & Exchange Commission |date=13 November 2006 |access-date=13 January 2013 |archive-url=https://web.archive.org/web/20150929050242/http://files.shareholder.com/downloads/KBH/2255816776x0xS950134-06-21229/795266/filing.pdf |archive-date=29 September 2015 |url-status=dead }}</ref>
===Recent career=== In October 2014, Karatz partnered with Guy Nafilyan, the former chairman and CEO of Kaufman & Broad France, to create the Paris-based real estate development company called Nafilyan & Partners.<ref>{{cite web | url = http://www.directgestion.com/sinformer/filactu/29936-immobilier--nafilyan-a-partners-un-nouveau-promoteur- | title = IMMOBILIER : NAFILYAN & PARTNERS, UN NOUVEAU PROMOTEUR | publisher = Direct Gestion | access-date = 8 November 2014 | archive-url = https://web.archive.org/web/20141103031913/http://www.directgestion.com/sinformer/filactu/29936-immobilier--nafilyan-a-partners-un-nouveau-promoteur- | archive-date = 3 November 2014 | url-status = dead }}</ref> Karatz and Nafilyan each own 37.5% of the company and the remaining 25% is owned by two investment groups and two financial institutions.<ref name = logement/> Nafilyan & Partners opened for sale its first development in Villepinte, a suburb of Paris, France on October 11, 2014.<ref>{{cite news | title = L'ancien P-DG de Kaufman & Broad crée sa société | publisher = Le Moniteur | author = Barbara Kiraly | date = 30 October 2014}}</ref><ref>{{cite web | url = http://www.businessimmo.com/contents/49344/guy-nafilyan-et-bruce-karatz-creent-nafilyan-partners | title = Guy Nafilyan et Bruce Karatz créent Nafilyan & Partners | date = 10 October 2014 | publisher = Business Immo | access-date = 8 November 2014}}</ref> As of October 2014, Nafilyan & Partners has 22 projects representing approximately 2,000 residences throughout suburban Paris.<ref name = logement>{{cite news | title = Nafilyan & Partners (N&P) vise 1 500 réservations par an en Ile-de-France et de petites opérations tertiaires | publisher = Du Logement | date = 20 October 2014}}</ref><ref>{{cite news | title = Nafilyan & Partners (N&P) vise 1 500 réservations par an en Ile-de-France et de petites opérations tertiaires | publisher = Le Courier }}</ref> In 2017, Nafilyan & Partners was purchased by Belgian property developer Immobel. The purchase was completed in 2019.<ref>{{cite web |title=Tikehau Capital announces the sale of its stake in Nafilyan & Partners in three stages |url=https://www.privateequitywire.co.uk/2017/12/04/258927/tikehau-capital-announces-sale-its-stake-nafilyan-partners-three-stages |website=Private Equity Wire |access-date=7 August 2023}}</ref>
==Philanthropic activities== After the Los Angeles riots in 1992, Kaufman and Broad spearheaded the effort to rebuild Camp Hollywoodland, a rustic canyon retreat for inner-city children whose main hall, dining room and other structures were gutted by fire.<ref>{{cite web|url=https://www.constructionnews.co.uk/archive/18jun92-usa-kaufman-and-broad-leads-rebuilding-of-camp-hollywoodland-in-california-18-06-1992/ |title=18Jun92 USA: KAUFMAN AND BROAD LEADS REBUhivILDING OF CAMP HOLLYWOODLAND IN CALIFORNIA |publisher=Construction News |date=1992-06-18 |access-date=2020-01-23}}</ref>
In the early 1990s, Karatz co-chaired along with Los Angeles Mayor Richard Riordan the Mayor’s Alliance for a Safer LA, which raised over $16 million to place computers in all LA precincts.<ref>{{citation |url=https://www.latimes.com/archives/la-xpm-2010-apr-02-la-fi-karatz2-2010apr02-story.html |title=Bruce Karatz brings in star character witness: Richard Riordan |author=Pfeifer, Stuart |work=Los Angeles Times |date=2 April 2010 |access-date=13 January 2013}}</ref>
In December 2005, shortly after Hurricane Katrina, Karatz directed that KB Home become the first, and at that time only, national homebuilder to go to New Orleans to support rebuilding efforts in the wake of Hurricane Katrina. KB Home acquired 74 finished lots in downtown New Orleans and bought 3,000 acres in Jefferson Parish. At the time, Karatz said, <blockquote> "We're now seven, eight months into post-Katrina, and we're the only ones that have stepped up. I honestly think that's part of the problem with New Orleans: It's a weak business community. And I personally felt it was important for a company like ours to do something, because if we waited for others, we could be waiting a long time. And if we're successful, it will motivate others." <ref name="Knox USA Today">Knox, Noelle (2006-3-21). "KB Home bets on Stewart, New Orleans." https://www.usatoday.com/money/economy/housing/2006-03-21-kb-home-usat_x.htm USA Today</ref></blockquote> Karatz had to overcome reservations of KB Homes’ Board of Directors. Fortune Magazine wrote at the time, "It’s not often you hear a CEO express goals in humanitarian, not bottom-line, terms, especially when its shareholder money with which he’s do-gooding."<ref name="Fortune Birger"/>
Karatz agreed to make KB Home the builder for an episode of ABC’s Extreme Makeover Home Edition after listening to a pitch from employees. The show featured a family headed by a single mother, Patricia Broadbent, who had been diagnosed with lung cancer and had seven children. Six of the children were adopted, and three of them were born with HIV.<ref name="Extreme Home Makeover">{{cite web|url=http://www.tv.com/extreme-makeover-home-edition-howd-they-do-that/broadbent-family/episode/414202/summary.html |title=Extreme Makeover: Home Edition: How'd They Do That?: Broadbent Family Episode Summary on |publisher=Tv.com |date=2008-03-26 |access-date=2010-09-14}}</ref>
Ms. Broadbent is a longtime children’s advocate, former social worker, and an internationally recognized AIDS activist.<ref name="Extreme Home Makeover"/>
Rather than remodel the family’s home, Karatz decided to raze it and build a {{convert|3200|sqft|m2|adj=on}} home in 48 hours. Hundreds of workers and KB Home demolished the Broadbents’ {{convert|1450|sqft|m2|adj=on}} cinderblock house while Ms. Broadbent and three of her daughters were on vacation. In the closing moments of the episode, Karatz tore up the family’s mortgage, promised to pay off the entire loan on their behalf, and said they’d never have to worry about making those payments again.<ref name="Extreme Home Makeover"/>
In 2007, Karatz founded the Keep Your Home Foundation to support people in California facing foreclosures as a result of the mortgage crisis. Keep Your Home Foundation supports a clearinghouse website to provide information to homeowners facing foreclosure.
From May 2010 to August 2011, Karatz worked as a full-time volunteer with the non-profit, HomeBoy Industries, which provides a second chance to formerly incarcerated gang members by training them to reenter society. Today, Karatz is a member of the Homeboy Industries’ Board of Trustees.<ref>{{citation |url=http://www.phoenixhouse.org/news-and-views/news-and-events/phoenix-houses-of-california-welcome-new-board-members/ |title=Phoenix Houses of California Welcomes New Board Members |publisher=Phoenix House |date=7 August 2012 |access-date=13 January 2013}}</ref><ref name = guidestar>{{cite web | url = http://www.guidestar.org/organizations/20-1342811/bruce-karatz-family-foundation.aspx | title = Nonprofit Report for Bruce Karatz Family Foundation| publisher = Guidestar | access-date = 13 November 2014}}</ref>
'''Karatz other philanthropic/non-profit initiatives have included:''' * Rand Corporation (Board of Trustees 1995-2006 and Vice-Chairman 2004; Chairman, Rand Education Committee 1994-2003) * California Business Roundtable (Chair) * Los Angeles World Affairs Council (Chair) * Council on Foreign Relations * USC Board of Trustees * USC Gould School of Law Board of Councilors (Chair) * Wilshire Boulevard Temple (President) * DARE (Director) * Children’s Institute International (Director) * National Park Foundation (Director) * Co-Chair of the Mayor’s Alliance for Safer L.A. * YMCA of Metropolitan LA (Director) * KCET, Board of Directors * Pitzer College (Trustee) * Coro (Director) * Honeywell (Director) * Kroger (Director) * Edison International (Director) * National Golf Properties (Director) * Avery-Dennison (Director) * The Broad Museum, Los Angeles Board of Trustees<ref>{{cite web |title=Board |url=https://www.thebroad.org/sites/default/files/pressroom/the_broad_collections_board_of_governors.pdf |website=The Broad Los Angeles |access-date=11 September 2023}}</ref>
'''Karatz has been recognized for his philanthropic leadership, including:''' * HomeBoy Community Service Award (2012) * Human Relations Award, American Jewish Committee (2004) * Ellis Island Medal of Honor, National Ethnic Coalition of Organizations (2003) * Crystal Angel Award, Los Angeles Police Foundation (2002) * Distinguished Humanitarian Award, B'nai B'rith (2000) * Chevalier of the Legion of Honor, Presented by the Pres. of France (1999) - automatically rescinded due to conviction of a misdemeanor * Spirit of Life Award, City of Hope National Medical Center (1996) * Jack Webb Award, LA Police Historical Society (1995) * Distinguished Service Award, The Aviva Center (1994) * Humanitarian of the Year Award, National Association of Christians and Jews (1984)
==Political activity== Over the years, Karatz generated attention over his support of Democratic candidates,<ref name="Krantz USA Today"/> including Bill Clinton, Barack Obama, Al Gore, Antonio Villaraigosa, and Dianne Feinstein (according to public campaign finance records.)
==Legal== On September 15, 2008, Karatz settled civil charges brought by the Securities and Exchange Commission ("SEC") arising out of these stock option back-dating procedures.<ref>{{citation |url=https://www.sec.gov/litigation/litreleases/2008/lr20717.htm |title=Litigation Release No. 20717 |publisher=United States Securities & Exchange Commission |date=15 September 2008 |access-date=13 January 2013}}</ref> On November 10, 2010, a federal judge sentenced Karatz to probation for a term of five years.<ref>{{citation |title=U.S.A. v. Karatz, United States District Court, Central District of California, Case No. 2:09-CR-00203-ODW, Docket Entry #467 |date=27 April 2012}}</ref> The federal judge later entered an order providing for the early termination of Karatz’s five-year term of probation effective April 27, 2012.<ref>{{citation |title=U.S.A. v. Karatz, United States District Court, Central District of California, Case No. 2:09-CR-00203-ODW, Docket Entry #452 |date=10 November 2010}}</ref> The sentence of probation was based on a report of the U.S. Probation Office concluding that Karatz’s "conduct does not appear to have resulted in any pecuniary harm" to KB Home or its shareholders and stating as follows: <blockquote>Truly, in the collective 30 plus-year experience of the undersigned Probation Officer and Supervising Probation Officer, this office has never seen such an array of efforts to assist the community . . . These letters [submitted on Mr. Karatz’s behalf] all note the defendant’s support during times of need. Most notably, the letters describe the involvement of the defendant and reflect a participation that involved much more than mere financial donations. This is not a man who simply shared his wealth. He extensively shared his expertise and time as well.<ref>{{citation |title=U.S.A. v. Karatz, United States District Court, Central District of California, Case No. 2:09-cr-00203-ODW, Docket Entry #446 ("Defendant Bruce Karatz's Sentencing Memorandum") |date=5 November 2010 }}</ref></blockquote>
==Family life== Karatz has been married three times. From 1968 to 2001, he was married to Janet Dreisen, an art consultant and board member of various arts and other non-profit institutions in Los Angeles. From 2001 to 2005 he was married to Sandra Lee, a television personality. Lee converted to Judaism.<ref>[https://nymag.com/news/features/sandra-lee-2011-4/index3.html New York Magazine: "The Ravenous and Resourceful Sandra Lee" By Benjamin Wallace] March 27, 2011</ref><ref name=TabletSandraLee>[http://www.tabletmag.com/scroll/64047/the-jewish-martha-stewart The Tablet: "Semi-Homemade, Totally Jewish - Turns out Sandra Lee converted a decade ago" by Allison Hoffman] April 5, 2011</ref> Since 2009, Karatz has been married to Lilly Tartikoff, a leading cancer activist best known for co-founding the annual Revlon Run/Walk events in New York City and Los Angeles and Revlon/UCLA Women's Cancer Research Program, which helped raise more than $80 million for cancer research.
Karatz has three adult children, Elizabeth, Matthew, and Teddy, and 8 grandchildren. Elizabeth is the founder and chief executive officer of La Loop, a privately owned firm that manufactures and sells a line of patented eyeglass products.<ref>{{citation |url=http://www.laloop.com/about-la-loop/ |title=La LOOP |publisher=LaLOOP |access-date=11 January 2013 |url-status=dead |archive-url=https://web.archive.org/web/20121212050516/http://www.laloop.com/about-la-loop/ |archive-date=12 December 2012 }}</ref> Matthew served as Deputy Mayor of the City of Los Angeles and the head of the City’s Office of Economic and Business Policy. He has oversight of all housing-related City departments from the Los Angeles Department of Water and Power asset and real estate management to the City Planning Department.<ref>{{citation |url=http://mayor.lacity.org/PressRoom/LACITYP_015127 |title=Mayor Villaraigosa To Business Community: Together, We Can Create Jobs, Grow Our Economy |publisher=City Of Los Angeles |date=19 July 2011 |access-date=11 January 2013 |url-status=dead |archive-url=https://web.archive.org/web/20120829040921/http://mayor.lacity.org/PressRoom/LACITYP_015127 |archive-date=29 August 2012 }}</ref> Teddy is the managing director of a private equity firm.<ref>{{cite web |title=Theodore Karatz |url=https://platform.reverecre.com/user/theodore.karatz |website=Revere |access-date=11 September 2023}}</ref>
==References== {{Reflist|35em}}
==External links== *[http://www.KeepYourHomeFoundation.com/ Keep Your Home Foundation] Foundation set up by Bruce Karatz to help families facing home foreclosure. *[https://web.archive.org/web/20100205105609/http://www.keepyourhomefoundation.com/about/meet_bruce_karatz Bruce Karatz biography] at Keep Your Home Foundation
{{DEFAULTSORT:Karatz, Bruce}} Category:1945 births Category:Living people Category:American chief executives of Fortune 500 companies Category:American businesspeople in construction Category:Philanthropists from Illinois Category:American political fundraisers Category:American businesspeople in the real estate industry Category:Boston University alumni Category:Businesspeople from Chicago Category:RAND Corporation people Category:USC Gould School of Law alumni Category:21st-century American Jews