The economy of Beverly Hills needs those misbehaving Saudi princes and Porsches

Sept. 28, 2015 7:16 AM PT

In Beverly Hills and surrounding upscale hamlets, the talk at social gatherings this month has centered on indications of wealthy Arab visitors behaving badly.

Earlier this month, a man driving a Qatar sheik’s rare, million-dollar-plus Ferrari LaFerrari raced a Porsche 911 GT3 through a quiet Beverly Hills neighborhood, ignoring stop signs and passing slower vehicles as horrified residents looked on. A member of the country’s ruling family, the sheik first claimed diplomatic immunity, then skipped town — with his costly vehicles.

Then on Wednesday, a Saudi prince was arrested at his rented estate in Beverly Glen and booked on suspicion of having forced a female worker to perform oral sex on him. He was freed on $300,000 bail.

Jimmy Delshad, former mayor of Beverly Hills, says his friends are asking: “Who the hell do they think they are, coming here and behaving like that?”

But Delshad, who emigrated in 1959 from Iran, is also quick to point out that these incidents are anomalies and that the strength of his city’s economy increasingly relies on the largesse of these elite Arab visitors.

They’re certainly spending with abandon — renting lavish beach pads for $100,000 a month and buying furnished penthouse condos along the Wilshire Corridor for their children at UCLA and USC, according to real estate brokers.

“Many Middle Easterners are low profile,” said Jeff Hyland, an agent who works with wealthy clients. “The ones we’re hearing about are the royals who splash the flash and have the Lamborghinis.”

Visitors from the Middle East — particularly Saudi Arabia — have long boosted the bottom lines of luxury boutiques and hotels in Beverly Hills, said Julie Wagner, chief executive of the city’s Conference and Visitors Bureau. In recent years, Beverly Hills has also seen tremendous growth in tourists from the United Arab Emirates, Kuwait and Qatar, who find Arabic-speaking staff members to serve them in upscale shops.

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Emirates and Etihad airlines have direct flights to Los Angeles from Dubai and Abu Dhabi, and Qatar Airways plans to begin service in January.

Middle Easterners, Wagner said, spend the most on Beverly Hills-area hotels among international travelers, and they are second to Chinese visitors in retail spending. Muslim women in head scarves dine in large numbers at the high-end Ivy restaurant and Urth Caffe, two popular people-watching spots.

The Peninsula Beverly Hills on Santa Monica Boulevard is one of many opulent hotels offering amenities such as prayer rugs, arrows pointing toward Mecca and pillowcases monogrammed in Arabic. “We have had repeat guests that have come to visit us year after year,” said Offer Nissenbaum, the hotel’s managing director.

On Saturday afternoon, tourists from the Middle East and around the world strolled up and down Rodeo.

Afnan Alghamdi of Saudi Arabia said Beverly Hills’ “international reputation” is a big draw.

“Many people come here to see the companies,” referring to the high-end clothing designers.

Alghamdi and her family were in town for a vacation before she continues her graduate studies in English up in Fresno. They stopped at the Rolex store and were headed next to Gucci.

“I like the designer,” she said before her voice was drowned out by the sounds of a black and yellow Lamborghini and two red Ferraris racing up the street and screeching to a halt at a red light. The commotion drew a large crowd, with most people trying to take pictures of the luxury vehicles with their iPhones.

Abdul Alaradh and a friend stopped on the iconic street on the second day of their trip from Kuwait. The fashionable men matched dress shirts and loafers with a Louis Vuitton bracelet and belt.

“Nice weather, nice people,” Alaradh said of why he chose to visit Beverly Hills. “I feel happy here.”

Hillary Fogarty, head of business development for Beladora, an online seller of high-end designer and estate jewelry, said she called all of the luxury hotels in Beverly Hills to find a suite for an August show. They were fully booked, she learned, in many cases with Middle Easterners. During the month, Fogarty, whose offices are on Rodeo Drive, noticed groups of women in elegant abayas in the Golden Triangle’s shops and restaurants.

“They’re definitely stimulating the trade,” she said. She works with discriminating clients from Saudi Arabia, Kuwait, Qatar and Dubai. “Our experience is extremely positive in every way,” she said. “They know quality. They have good taste. When they come to see the pieces in person, they often buy them to take them back. That means they have to pay tax. If we ship [from their website], they’re not taxable.”

The visitors’ shopping is not limited to souvenir baubles, either. They buy Bentleys at O’Gara Coach Co., a luxury car dealer, and $30-million estates in the hills. A Middle Eastern client of agent Sally Forster Jones rented a place on the Santa Monica coast for more than $100,000 a month.

“They’ve been very helpful to our economy,” she said.

Some will stay at hotels for the entire summer and then return the next year, their entourages growing with each visit. That can lead to hunts for estates capable of housing multiple generations.

“The market here in L.A. is very strong,” said Sam Real, an agent who serves the luxury market. “It’s a good place for them to place their money. You’re seeing a lot of royal families trying to diversify their portfolios.”

Both police investigations this month offered a window into the wealth.

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On Wednesday, Los Angeles police were called to a gated property in the Beverly Glen area that is itself in a gated community. The 22,000-square-foot property, valued at $37 million, was being rented by Saudi Prince Majed Abdulaziz al Saud, 28.

Al Saud was arrested and booked for allegedly attacking a female worker at the house. Neither he nor his attorney could not be reached for comment.

Neighbor Tennyson Collins said foreign visitors had been renting the compound for months, sometimes posting guards.

“Obviously, neighbors aren’t happy about it, but it is what it is,” Collins said.

Earlier this month, a video went viral showing a Ferrari and a Porsche speeding through narrow streets in Beverly Hills. Police determined that the cars belonged to Sheik Khalid bin Hamad al Thani of Qatar’s ruling family.

Police said Al Thani denied that he was driving either car and that he invoked diplomatic immunity. Detectives later said he did not have such immunity. By then, the sheik had fled the country. The investigation continues.

The case struck such a nerve that the police chief vowed at a news conference that Beverly Hills would apply the law equally regardless of “who you are, who you know or where you are from.”

Those who cater to Arab visitors see the recent headline-grabbing incidents as highly unusual.

“These are aberrations,” said Hyland, the real estate agent. “The people we deal with are quiet, and they really want to fit in to the social fabric of the city.”

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