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Airport Businesses Worry Over Future

By
Zane Hill
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Penny Adelson, owner of Vista Aviation and of a flight school at Whiteman Airport in Pacoima. (Photo by David Sprague)

For Penny Alderson, Whiteman Airport in Pacoima has been the lifeblood for three businesses she co-owns and operates that have been around for decades: an avionics installation firm, a flight school and a hangar-leasing company.

Together, these businesses employ more than 15 people and pull in tens of millions of dollars a year in revenue.

But in recent years, that lifeblood has come under increasing threat as pressure has steadily mounted to close the nearly 80-year-old Whiteman Airport, one of the last general aviation airfields to remain in the San Fernando Valley.

“If the airport were to close, it would be the end of the road for my businesses,” Alderson says.

Pacoima Beautiful, a neighborhood activist and environmental group, has been leading the charge to shut down the county-owned airport, citing pollution and noise concerns, as well as a string of plane crashes a few years back. The group’s drive has gained increasing support from local elected officials and others – to the point that this past spring the County Board of Supervisors voted to commission a report from county staff exploring non-airport options for the parcel.

What’s more, earlier this summer, County Supervisor Lindsey Horvath, whose district includes Whiteman Airport, announced that the county would no longer apply for – or accept – federal funds to maintain or upgrade the airport. Such funds usually come with strings attached, including a binding obligation to keep the airport open for 20 years.

As of now, no official action has been taken to close the airport, which sits on 184 acres of land in the Pacoima neighborhood. And even if such a decision is ultimately taken, closure would take years – perhaps more than a decade.

General aviation airports shutting down

Yet, Alderson and owners of more than two dozen other businesses that rely on the airport have reason to be concerned. They look around and see that since 2000, scores of general aviation airports have shut down across the nation, including at least eight in California, according to a 2017 report from the California Department of Transportation.

More recently, in response to similar pressures, Santa Monica, after reaching an agreement in 2017 with the Federal Aviation Administration, is proceeding with the closure of its municipal airport, now slated for December 2028.

“The level of concern about the airport closure is very high,” Alderson says.

Not only do other general aviation airport closures signal that Whiteman Airport could close, but they also put more pressure on the remaining airports, according to Jim Miller, a former administrator of Whiteman Airport who now heads a U.S. Air Force Civil Air Patrol cadet squadron that uses the airfield.

“Santa Monica (Airport) is closing in five years and some of those aircraft are going to come over to Whiteman,” Miller says. “They can’t even get into Van Nuys at the moment.”

With such a tight market for general aviation aircraft space, Miller wonders what will happen to the 600 aircraft that now tie down at Whiteman should the airport close.

“Even if you could get into an airport, the rents for tie-downs are almost certain to skyrocket,” Miller says.

Alderson says she has a similar concern about her businesses, especially the flight school and the avionics installation company, which is called Vista Aviation.

“Each airfield has one or two preferred vendors for installation of avionics equipment,” Alderson says. “And all the other airports around here already have their preferred vendors. So, the question becomes where would we move to?”

Alderson isn’t the only concerned business owner.

Art Cueva owns Able Air Corp., a general aviation aircraft maintenance company founded in 1975 that he says is the oldest business still at Whiteman.

Cueva says that if a decision is made to shut down Whiteman, he wants to know whether the county would help him try to relocate his business.

“Right now, there are no openings for additional aircraft maintenance companies at other general aviation airports in the area – at least as far as I’ve checked,” he says.

Art Cueva owns Able Air Corp., a general aviation aircraft maintenance company at Whiteman Airport in Pacoima. (Photo by David Sprague)

Nonprofits worried, too

Concern about the impact of the potential closure of Whiteman has also spread to the nonprofit sector, including Miller and his Civil Air Patrol squadron. The Civil Air Patrol’s services include search and rescue operations, education programs for the public on aviation issues and leadership skill development programs for teenagers.

“If the airport were to close, we would then have to start looking for another location to meet and use as a training center,” Miller says.

Just as with their commercial business counterparts, getting space at other airports would likely prove difficult, since most other general aviation airports have their own squadrons.

Miller says the other general aviation airports in the region – in Camarillo, Lancaster and in the San Gabriel Valley – are too far away to consider as new locations for the squadron, especially given commute times.

Trying to prevent the airport’s closure

Pacoima Beautiful, the group leading the effort to close Whiteman Airport, declined to comment on the impact that closing the airport would have on these businesses and nonprofits.

The group does have a web page dedicated to its campaign to shut down the airport. On that web page, the group notes that there have been three crashes involving planes flying into or out of Whiteman Airport since 2020 and that two of those crashes resulted in fatalities.

There’s also an environmental justice component to Pacoima Beautiful’s campaign as the group notes that the noise and pollution stemming from the airport primarily impacts the adjacent low-income and minority community.

Pacoima Beautiful has also held numerous neighborhood rallies to put pressure on local elected officials to shut down the airport.

On the pollution front, there may be some progress. Ever since the airport opened in 1946, aircraft have been using leaded fuel. But since June 1, unleaded fuel has been available at Whiteman, part of a broader effort for all five county-owned airports to switch to unleaded fuel.

A plane takes off at Whiteman Airport in Pacoima. (Photo by David Sprague)

Meanwhile, Alderson and the other businesses at Whiteman are trying to get the word out about the economic benefits of keeping Whiteman Airport open. And they have enlisted the help of advocacy organizations like the Valley Industry and Commerce Association.

VICA sought to gather support from the broader San Fernando Valley business community to show up at the county Board of Supervisors meeting in April when the motion to study alternate uses for the property was being considered.

“This will have a devastating financial fallout on existing property contracts, dire impacts on airport businesses, ripple effects on the broader airport system’s finances, and the unsettling appraisal of the land’s fair market value,” VICA said in its plea to the Valley’s business community to show support for the airport at the meeting.

Despite VICA’s efforts, the Board of Supervisors went ahead and approved the motion to study alternatives to airport use.

Once that study is in, the next move will be up to the supervisors.

While Alderson is concerned about the fate of her businesses, she also notes the larger stakes if Whiteman Airport were to join the list of general aviation airport closures.

“If all the general aviation airports close, there would be a tremendous impact on the infrastructure of the country,” she says. “General aviation training centers are the main pipeline for training of commercial air pilots and even future military pilots.”

Minimal Co. Bets on A Simpler Cell Phone

By
Zane Hill
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Founders Armen Youssefian and Andre Youkhna started The Minimal Co. last year. (Photo by Rich Schmitt)

Andre Youkhna had a problem.

After spending hours doomscrolling through social media posts, photos and videos, Youkhna often had trouble falling asleep until 4:30 in the morning. He tried using a feature phone, the classic flip phone used before the smartphone came into existence. While the constant social media scrolling stopped, there were still some limitations – namely, not being able to access bank accounts, email clients quickly, unlock a Tesla (which uses a smartphone as a key) or use two-step verification for certain accounts.

In 2023, Youkhna cofounded The Minimal Co. in Glendale with his cousin, Armen Youssefian, to address this problem. The pair aimed to make a phone that kept up with the hyperconnected life of everyday Americans without enabling them to feed their worst vices.

“I kind of had to have a happy medium between having a really dumb phone and a very smart phone,” Youkhna says.

How it works

The Minimal Phone – the company’s version of “a happy medium” – looks like something between a Blackberry and a Kindle. The phone is compatible with service providers like AT&T, Verizon and T-Mobile, runs on a standard 4000mAh battery and operates on full Android, which means users can download any app from the Play Store. The phone also comes with a camera.

The Minimal Phone’s key differentiator from standard smartphones is its e-ink display. E-ink displays, which are popular on e-readers, reduce eye strain and conserve more battery than standard digital screens. The downside is its low refresh rate – watching videos on e-ink chunks up each frame, diminishes video quality and washes out color with its black-and-white display. While you can access TikTok and Instagram, Youkhna and Youssefian say, you wouldn’t necessarily want to.

“We’re trying to get away from people using their phone for media consumption and just wasting a lot of time,” Youssefian says.

The phone also features a QWERTY keyboard, which makes up for delays in the e-ink display. Instead of typing on the screen itself and waiting for each letter to render, users can use the physical keyboard.

The rise of the feature phone

Feature phones, also called “dumbphones” (“I don’t like to use that word, but that’s what they call it,” Youkhna says,) are making a comeback. The Light Phone, a New York-based startup, raised $12.45 million in a handful of crowdfunding and seed funding rounds between 2015 and 2023. Its e-ink display phone costs $499.

There’s also Brick, a physical device that locks programmed apps and needs to be tapped to unlock them. (The idea is to keep your Brick in a physical location separate from where you need to focus.)

“There’s a lot of people in this segment where they want a dumbphone, but a dumbphone is very limiting,” Youssefian says.

Utah-based Troomi uses the “dumbphone” model for children by allowing parents to block any apps or content from children’s phones while still allowing them to access maps and communication features. Texas-based Techless has a dumbphone that costs $399 and comes with subscription tiers, which allows users to access certain apps based on their specific needs.

“I could imagine feature phones becoming more profitable if there is a way to generate recurring revenue from the hardware, like a smaller-scale version of the installment payment plans Apple introduced to the market years ago,” says Jared Brenner, counsel to tech firms at Sherman Oaks-based Stubbs, Alderton and Markiles LLP. “However, venture capital funds generally rely on outsized returns and mass adoption of software, and their needs seem incongruous with the concept of a dumbphone.”

The investment problem

Despite all the companies popping up to create some version of a feature phone, venture funding in the space has been sparse. A sizable number of investments in feature phones are taking place on crowdfunding platforms. The Minimal Co. raised $719,000 from over 1,000 backers on Indiegogo.

“It is about scalability and the recurrence of revenue,” Brenner says. “The average smartphone user is an exponentially more profitable customer for a venture-backed software business because it’s almost impossible to generate advertising impressions or collect usable behavioral data from a feature phone.”

The demand for a feature phone in the U.S. is pretty small. Outside of the U.S., tech giants like Google are capitalizing on the growth of feature phones in developing areas – according to Counterpoint Research, consumers in India remain steadfast in their faithfulness to feature phones compared to smartphones. A 2023 data report from Counterpoint Research found feature phones to represent only 2% of the handset devices market in the U.S.

In 2023, Andre Youkhna cofounded The Minimal Co. in Glendale with his cousin, Armen Youssefian, to address the problem of smartphones being too much of a distraction. (Photo by Rich Schmitt)

“Although there will not be a significant spike for feature phones in the market, there are consistent needs that create the steady demand for feature phones in a smartphone-dominated market,” the report concludes.

The Minimal Co. founders have been contacted by several high-profile celebrity investors – including UFC fighter Michael Chandler, “Peaky Blinders” actor Paul Anderson and Comedy Central comedian Ronny Chieng – but aren’t looking for additional capital.

“We don’t have a lack of funds to complete the project as we speak,” Youssefian says. “We have a lot of preorders. So we’re just banking on having a great product and great reviews.”

The Minimal Phone costs anywhere from $399 to $499. (For comparison, the iPhone 15 retails at $799 on Apple’s website.) The company is developing its engineering sample and expects to ship orders in October.

Arcutis Wants to Be A Go-To Treatment

By
Zane Hill
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LEADER Frank Watanabe is the chief executive of Westlake Village-based Arcutis Biotherapeutics.

Frank Watanabe and his team at Westlake Village-based Arcutis Biotherapeutics Inc. are on a mission: to have the company’s main drug product become the leading non-steroidal alternative to treat a wide range of skin diseases and conditions.

For decades, the go-to treatment for these skin conditions has been steroid-based drugs, powerful inflammation fighters that also come with a range of powerful and harmful side effects if used for long periods of time. These include often intense skin irritation and weight gain.

“Our goal is to replace topical steroids, which are the bedrock today for the treatment of inflammatory skin diseases,” Watanabe says. “But steroids have problems, especially when used for longer terms. Also, they are not safe for sensitive parts of the body.”

Over the last couple of years, Arcutis has methodically moved to accomplish this mission by securing a series of approvals from the U.S. Food and Drug Administration for various applications of its non-steroidal drug, technically called roflumilast but marketed under the name Zoryve.

The first FDA approval, in July 2022, was for a high-concentration cream version of Zoryve to treat plaque psoriasis in people at least 12 years of age. Plaque psoriasis is the most common form of psoriasis, a skin disease that affects at least 9 million Americans. (Eventually, the FDA approved the use of the drug for anyone at least 6 years of age.)

Then, late last year, Arcutis received FDA approval for a topical foam version of Zoryve to treat seborrheic dermatitis, a chronic recurrent inflammatory skin disease that affects more than 10 million people in the United States. The approval covered the use of the Zoryve foam for anyone at least 9 years of age.

Most recently, in July, the FDA approved the use of Zoryve for the treatment of mild to moderate atopic dermatitis in adult and pediatric patients at least 6 years of age. Atopic dermatitis is the most common form of eczema, affecting nearly 10 million children and more than 16 million adults in the United States.

Watanabe says Arcutis is planning to seek two more FDA approvals of Zoryve: filing with the agency this year for an expanded range of applications for the foam version (now approved for seborrheic dermatitis) and then by late this year or early next year filing for a low-strength concentration of the cream for children under the age of 6.

“We’ve completed the clinical studies for all of these indications,” Watanabe says.

Competing against steroid treatments from pharma giants

Yet even if Arcutis secures these additional FDA approvals, it still faces substantial challenges in securing enough market penetration.

Right now, according to Seamus Fernandez, an analyst with Guggenheim Securities in New York, more than 80% of the products sold to treat skin conditions contain steroids. And this has been the case for decades.

“Steroidal products work pretty well, pretty quickly and they are cheap,” Fernandez says. “That makes them the general go-to products – sort of the Honda Civic for dermatologic treatments.”

Fernandez says that there have been attempts in past decades to bring to market non-steroidal alternatives, but few have been able to gain and maintain traction.

It doesn’t help matters for companies like Arcutis that big pharma companies dominate the skin condition treatment market, such as North Chicago-based AbbVie Inc., which posted 2023 revenue of $54 billion, and Basel, Switzerland-based Sandoz, which had nearly $10 billion in revenue last year. By comparison, Arcutis had about $60 million in revenue last year.

Also, Thousand Oaks-based Amgen Inc., (2023 revenue of $28 billion) has a non-steroidal drug sold in pill form under the marketing name Otezla that is used to treat symptoms caused by inflammatory autoimmune conditions such as plaque psoriasis. But, unlike Zoryve, Otezla is also used to treat non-skin conditions such as arthritis.

“It’s been pretty hard to break this market open,” Fernandez says.

Also not helping is the reluctance of insurers to cover non-steroidal treatments for skin conditions, though Fernandez says that has begun to change in the last two to three years.

“There’s still no Medicare coverage, but we are beginning to see some state Medicaid programs embrace non-steroidal alternatives,” he says.

Arcutis’ best hope, he says, is the growing realization among dermatologists and other doctors that products containing steroids have potentially damaging side effects, especially if the products are used for long periods of time to treat chronic conditions like psoriasis.

Watanabe concurs and says Arcutis is exploring entering into partnerships to educate both consumers and physicians about the advantages of non-steroidal treatments like Zoryve. The first of these partnerships was announced in late July with Kowa Pharmaceuticals America, a unit of Nagoya, Japan-based Kowa Co.

Share price has skyrocketed since year’s start

Investors have glommed onto Arcutis, particularly since the last two FDA approvals have come through.

From a 2023 year-end close at $3.23 a share, the stock zoomed up to $11 a share by mid-March before falling back to the $8 range. It has traded in that $7.50 to $11 range ever since. The share price closed at $8.49 on Aug. 16, up more than 160% since the beginning of the year.

Valley Office Assets See Positive Signs

By
Zane Hill
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Skyline: The Warner Center in Woodland Hills. (Photo by David Sprague)

As employers figure out their in-office versus remote work schedules, and as the general demand for office space has dwindled, some companies are being lured to Los Angeles’ quiet upstairs neighbor – the Valley.

Despite overall office market struggles, the San Fernando Valley, Tri-Cities and Ventura submarkets are all faring quite well – outperforming the overall Los Angeles County vacancy rate of 24% – according to CBRE, which recently released its second quarter Greater Los Angeles office figures.

Ventura County, for example, had one of the lowest vacancy rates in the area, ending the quarter at 17.2%.

“Downtown Los Angeles is historically known to have generally a higher vacancy,” Natalie Bazarevitsch, a senior vice president at CBRE Group Inc. specializing in office properties, says. “And the suburbs, which are smaller markets, can absorb and also have a diversity of tenant base.”

According to the survey, vacancies have swelled in the downtown and central business district submarkets while the suburbs have performed slightly better given the more relaxed adoption of hybrid work.

And not only does the Valley have one of the lowest vacancy rates as a whole, but it also has one of the lowest class A asking rates.

This has resulted in a number of companies fleeing to the suburbs whereas landlords in the urban core continue to grapple with oversupply.

Mutually beneficial

With many employers still wanting to maintain an office presence, some are rethinking their physical footprint, assuming convenience plays a big role in enticing employees to come back into the office.

“The voice of the employee has been pretty strong, as evidenced by the work from home or hybrid models that we’ve experienced, but we are starting to see that pendulum shift a little bit with power being a little more firmly held by the employer,” Bazarevitsch says.

From an employer’s standpoint, suburban office markets typically offer lower lease rates, greater access to labor, more easily accessible office buildings, as well as that usually feature a greater parking ratio.

For companies that have their downtown offices sitting half empty, reevaluating their location may be most economical.

But the suburbanization happening in the office sector can be very beneficial to employees too – oftentimes cutting commutes and making the in-office experience more tangible for those considering the pros versus cons.

“It’s actually a meritorious relationship between employer and employee,” Bazarevitsch says. “Right now, a lot of the employees actually are grateful to be moving out of some of the more dense, urban locations where, if they have to pay for their own parking, it’s very expensive or off-site so they have to walk a lot and (it poses) a safety issue. Homelessness has remained a constant. There’s a lot of mutual benefit in this move for the employer and the employee.”

Woodland Hills is the largest office submarket in the Valley, featuring an 18.2% overall vacancy rate. Valencia and Encino follow with 28.1% and 18.9% vacancy rates respectively. Panorama City is the smallest office submarket, boasting only a 1.7% overall vacancy rate, according to CBRE data.

Buzzworthy: Santa Clarita Project Wraps

By
Zane Hill
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An industrial park in Santa Clarita.

Trammell Crow Co. and Clarion Partners have wrapped construction on the 1.7 million-square-foot Center at Needham Ranch in Santa Clarita.

The property is an 11-building industrial park which has been under construction since 2017. It has been fully leased since last year; tenants include DrinkPAK, LA North Studios, Illumination Dynamics and US AutoForce.

The project was built in partnership with the City of Santa Clarita. Oltmans Construction Co., which has an office in Thousand Oaks, served as the general contractor for the project. HPA Inc. was its architect and Alliance Land Planning & Engineering was its civil engineer.

“The Center at Needham Ranch has been an incredible project to be a part of and our local TCC team has valued our partnership with the City of Santa Clarita, which has been an avid supporter of the development since we broke ground seven years ago,” Philip Tsui, senior vice president for TCC, said in a statement.

“Needham Ranch has filled the demand for modern, Class A logistics space in the Santa Clarita Valley, and more specifically in the L.A. North industrial submarket, which continues to see demand from industrial users because of the area’s deep and talented labor pool and the overall quality of life in the Valley. We are excited to officially close this chapter and look forward to the next development opportunity in this market,” he added.

— Hannah Welk

New CEO For Latigo

Thousand Oaks-based Latigo Biotherapeutics Inc. has named veteran pharmaceutical industry executive Nima Farzan as its new chief executive.

Farzan replaces interim chief executive Desmond Padhi, who is also an operating partner of major funder Westlake Village BioPartners. Padhi is returning full time to the private equity firm.

Latigo was originally founded in 2020 as a biotech firm focused on developing non-opioid pain medicines. It emerged from stealth mode in February with an announcement of $135 million in funding, led by Westlake Village BioPartners.

CEO: Nima Farzan

Farzan brings more than two decades of leadership experience in the biopharmaceutical industry, including most recently as chief executive of Kinnate Biopharma of San Francisco. He led Kinnate’s through an IPO that raised $270 million and then through its sale to Emeryville-based biotech firm Xoma Corp. in April for $120 million. Prior to his stint at Kinnate, Farzan served as chief executive of Redwood City-based vaccine company PaxVax. Before that, he held executive posts at Basel, Switzerland-based pharma giant Novartis.

“(Farzan’s) extensive industry leadership and clinical development experience will propel us toward our goal of becoming a world leader in discovering and developing non-opioid pain medicines,” Nancy Stagliano, Latigo’s board chair, said in a statement.

Farzan said he welcomes this next challenge.

“With our cutting-edge approach to pain management, I am confident in our ability to drive significant advancements in the field and enhance patient care where new, safer options are needed,” he said.

— Howard Fine

Pizzeria Expands in the Valley

A new pizzeria opened in Burbank in August.

Slice House by Tony Gemignani, owned and operated by franchiser Vinny Margott, is located at 108 E. Palm Ave.

The restaurant has New York, Sicilian, Grandma and Detroit-style pizzas, as well as other dishes. Its drink menu includes local craft beers and premium wines in addition to a selection of sodas.

Margott also owns Slice House locations in Simi Valley and Thousand Oaks.

“It’s an honor to further expand our footprint in Southern California, especially in the vibrant city of Burbank, and I look forward to welcoming the local community through the doors to experience our artisan pizzas, fresh pastas, and other Italian staples,” Gemignani said in a statement.

“We are confident Slice House Burbank will become a staple for the community,” Margott added in a statement.

Rendering: Slice House is a franchised pizzeria.

Originally opened in San Francisco’s Italian neighborhood of North Beach in 2010, Slice House has since expanded to include 13 restaurants, all in California and Nevada, with Slice House in Burbank as its 14th location. It is developing other locations in the Valley region as well.

— Mark R. Madler

Neutraderm Makes $21 Million Buy

Neutraderm Inc., a medical-grade skin care manufacturer, purchased 20680 Nordhoff St. in Chatsworth for $21 million.

Neutraderm has occupied a space next to the property 15 years ago. The company will combine the two, as well as one other nearby structure, to create a large complex. The 115,000-square-foot complex will be the company’s West Coast flagship location.

“In our industry, you need to be tapped into both the West and East Coast, and there’s no better centralized location on the West Coast other than Los Angeles, particularly the San Fernando Valley area,” Samuel Raoof, chief executive of Neutraderm, said in a statement. “The West Coast has a long track record of leading innovation, technology and ingredient development for our industry. We have rapid growth plans for our business, which includes a larger presence on the East Coast, but they start here.”

Sold: 20680 Nordhoff St.

The site will incorporate new technology to support sustainability initatives and optimize workflow, the company said.

Lee & Associates – L.A. North/Ventura Principals Erica Balin and Scott Caswell represented the buyer in the sale. Nordhoff XC was the seller.

“We are seeing a major influx of companies seeking innovative manufacturing spaces as they expand in Southern California,” Balin said in a statement. “This submarket is not only attracting new companies; those that are already here are seeking creative ways to expand their footprint and plant their flag firmly in the San Fernando Valley for the long term. This is a strategic real estate play for the company and will set the stage for their continued strategic operational efficiency.”

“Expanding their footprint in Los Angeles without having to relocate their operations was a win for our team, and we’re confident that this new complex will be a game-changer for their future growth plans,” Caswell added.

— Hannah Welk

Gray Duffy Expands Its Offices

Business litigation firm Gray Duffy LLP this summer expanded upon its growth spurt from last year.

The Woodland Hills-based firm took out additional space on its floor – to the tune of 2,000 square feet – as it added three new window offices, an additional conference room, numerous internal workstations and a wellness room. The firm knocked out the dividing wall to achieve a contiguous space.

Gray Duffy – which formed in 1990 – entered this space about 18 months ago, moving into the 19th floor at 21700 Oxnard St. in the Warner Center. It had previously been based in Encino but had outgrown the space as it built out an attorney headcount of about 16 attorneys. (The firm also maintains an office in Redwood City.)

The expansion brings Gray Duffy to about 10,400 square feet of space. It is approaching two years on a five-and-a-half-year lease at the location.

Offices: Gray Duffy is growing.

At the time of the move, firm managing partner Mike Eisenbaum noted Gray Duffy was in growth mode on account of a surge in workload from existing clients. The firm this summer added associate Jonathan Semerjian to its litigation team, which combined with the three others hired last year points to a 25% growth in that timeframe. This would place it within the Los Angeles Business Journal’s Top 25 Valley law firms based on attorney headcount.

With a focus on civil, construction and business litigation, Gray Duffy has amassed a wide variety of corporate clients – such as a major insurance providers – as well as public sector entities such as the Los Angeles County Metropolitan Transportation Authority, or L.A. Metro. The firm also handles automotive, employment, health care and personal injury matters.

The American Bar Association recently recognized Gray Duffy’s work in its appointment of partner Timothy Thornton and associate Katie Camerlengo to the organization’s Tort Trial and Insurance Practice Section for the 2024-25 year. This panel serves as the bar association’s conduit to examine and discuss emerging issues and technologies in tort, trial and insurance law.
— Zane Hill

My Biggest Mistake: Tim Gaspar

By
Zane Hill
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Tim Gaspar

Tim Gaspar is the founder and chief executive of Gaspar Insurance Services. Gaspar is a lifelong entrepreneur – he started his first business in high school and went on to run a number of businesses while attending California State University, Northridge.

Today, his company is one of the largest independent insurance firms in the San Fernando Valley and Gaspar sits on the board of various organizations. But things haven’t always been smooth sailing. Here Gaspar discusses a few missteps from his career.

Adventures With Pepsi

I’ve been an entrepreneur my whole life, even before I knew what that word meant. As a kid I used to read the business section in the newspaper with my dad, Entrepreneur magazine, etc. I remember telling my dad the statistic that most entrepreneurs went bankrupt twice on average during their lifetime (not sure if that was actually true or not).

In elementary school I sold candy and toys to classmates, I built a haunted house business in junior high and a party rental business in high school. When I was 19, I started a business manufacturing hide-a-safes that looked like Pepsi bottles. The Pepsi bottle business did well until the nice attorneys at the real Pepsi found out and they were not fans of my little invention and subsequent business. Pepsi seized my company and sued me into oblivion, and I filed personal bankruptcy at 19. Upon hearing the bankruptcy news my dad said, “Good news, you only have to do this one more time.”

Trust But Verify

During my time building Gaspar Insurance I did about half a dozen acquisitions of smaller insurance agencies. I was feeling pretty confident in my ability to size up an opportunity and make a deal when I was approached by the daughter of an insurance agency owner that had just passed away.

During my due diligence I noticed some of the insurance carrier agreements were missing pages or entire contracts. The daughter said she didn’t know where the missing pieces were and some of the files were just a bit of a mess. I foolishly concluded that the contracts were probably “fine” and moved forward with the purchase.

Only after buying the agency did I learn the agency “owner” didn’t actually “own” anything, all the policies were actually owned by another firm. I went back to the daughter who I made the deal with and she was in the wind, I had been swindled. A little bit more due diligence on my part would have kept me from starring in my very own episode of American Greed.

Lessons Learned 

People say success is a lousy teacher and they are absolutely right. It’s these mistakes and ones I will keep much closer to my chest that create the best lessons.

5 Things To Know: Armida Ornelas

By
Zane Hill
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Armida Ornelas. (Photo by David Sprague)

Armida Ornelas is the president of Los Angeles Mission College in Sylmar. During the course of her career, she has held a number of roles with the Los Angeles Community College District. She earned her master’s degree in public policy studies from the University of Chicago and her doctorate from the UCLA School of Education.

1: She is the daughter of immigrants. Ornelas’ parents came to the U.S. from Mexico in the 1960s. Ornelas says being the daughter of immigrant parents is “one of the things I’m most proud of.” She adds that her parents came to the U.S. to make a “better life for themselves and their children.”

2: She wants to create opportunities for marginalized communities. Ornelas says being the daughter of immigrants is what brought her to her current job which she says is “more of a calling rather than simply a career.” She adds that she is “very intentional about creating opportunities for others, particularly others that have similar backgrounds.” She says things like the time of day of classes and the languages programs are promoted in all play into this.

3: Ornelas is a big fan of Chicano art. She says The Cheech Marin Center for Chicano Art & Culture in Riverside is one of her favorite places to visit and enjoys art that “speaks to social movements in particular.” Despite her love for art, she is not an artist herself. “I have no artistic abilities,” she jokes.

4: She has two grandkids. When Ornelas is not working, she enjoys spending time with her two grandkids. “We like going to a lot of cultural events,” she says. She routinely takes them to museums and to farmers’ markets.

5: Ornelas is an avid hiker. When not working or going to a
museum, she likes to hike. She brings her kids and grandkids on hikes with her sometimes as well and says that hiking helps her “stay balanced and centered.”

Northrop Builds New Flight Wings

By
Zane Hill
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Flight: The Model 437 Vanguard flying over the Antelope Valley.

Northrop Grumman Corp. late last month debuted wings for the Model 437 Vanguard technology demonstrator aircraft built by its subsidiary Scaled Composites.

Northrop, at its Palmdale facility, incorporated its digital ecosystem and advanced manufacturing capabilities to develop, analyze and build the wings for the Vanguard aircraft in advance of the plane’s first flight on Aug. 29 from the Mojave Air and Space Port. Scaled Composites is based in Mojave.

Known as the Digital Pathfinder program, the project demonstrated how the company’s fully digital engineering ecosystem reduces engineering rework, accelerates schedules and reduces costs, offering advantages to customers on future aircraft programs.

Scaled Composites leveraged extensive experience in rapid design, fabrication and test of experimental aircraft to develop the Model 437 Vanguard, while Northrop defined, developed, built and verified the removable wing assemblies using advanced digital tools and manufacturing processes as part of its Digital Pathfinder program, the release said.

Colin Miller, vice president of engineering at Northrop Grumman Aeronautics Systems, said the company continues to refine its digital tools and capabilities to improve them for future efforts.

“This project demonstrates how high-fidelity models within our digital ecosystem serve as a single source of truth to streamline testing and certification on future aircraft, significantly saving cost and time for our customer,” Miller said in a statement.

Brian Maisler, the test pilot, said that the first fight of the Vanguard was in a good jet with a great team.

“This is the best part of my job,” Maisler said in a statement. “Thanks to everyone and their two years of hard work culminating in making this an uneventful and fun day.”

The Model 437 began as a conceptual design, based on the Model 401, exploring a multi-mission low-cost attritable – or expendable – aircraft, according to the Scaled release.

The Vanguard is a crewed variant of the original concept powered by a single Pratt & Whitney 535 engine with approximately 3,400 pounds of thrust. The aircraft has a wingspan of 41 feet and is 41 feet long with a gross takeoff weight of 10,000 pounds, the release added.

After completion of envelope expansion, the Vanguard will have a range of approximately 3,000 nautical miles and an endurance of 6 hours. The aircraft can carry up to 2,000 pounds of payload in multiple locations including an internal weapons bay sized to accommodate two AIM-120 advanced medium-range air-to-air missiles, the release said.

New Firm Helps Brands With Video

By
Zane Hill
-

As more tech companies like Meta and YouTube capitalize on the short vertical video format popularized by TikTok and Santa Monica-based Snap Inc., marketing firms are looking to create brand impact in a sea of black box algorithms and bite-sized content.

Moments Media, a Calabasas-based consulting agency for mobile video, launched earlier this month to take on mobile video. The company is led by Askia Underwood, a longtime digital marketing consultant in Los Angeles, and has acquired a roster of clients like Airbnb Inc., the Microsoft Corp., the National Basketball Association and the National Football League.

“In the age of the infinite scroll, mobile video isn’t just content: it’s currency,” Underwood, the founder of Moments Media, said in a statement. “As attention architects, we help brands mint moments that stop thumbs, capture hearts, and convert attention into revenue.”

Moments Media relies heavily on data to inform strategy. If it’s the brains, the heart is its partner, SAVG Studio. SAVG Studio, a creative production studio that has partnered with companies like Samsung, Adobe and Panasonic, uses a suite of tools to create visual content.

“In a multi-screen world, brand content needs to be adaptable,” Luke Neumann, the chief executive of SAVG Studio, said in a statement. “Building mobile-first video experiences that are interoperable across platforms, prioritizes a consistent and engaging viewer experience.”

Global advertising spend dedicated to mobile is expected to reach $402 billion in 2024, according to Data.ai, and consumers spent $171 billion last year via their phones, primarily driven by social media companies and the creator space.

L.A. in particular has become a hub for mobile spending – there are around 20 social commerce companies in L.A., more than any other city in the U.S., per Pitchbook. Via social commerce, brands can take advantage of snap-second judgments made by viewers on social media and turn them into dollars by allowing viewers to purchase products directly on the platform instead of routing them to a website.

L.A. County Unemployment Rate Rose Again to 5.6% in August

By
Zane Hill
-

L.A. County’s unemployment rate rose again to 5.6% in August from 5.5% in July, its highest level in nearly two-and-a-half years. The uptick came despite modest growth of nearly 14,000 payroll jobs for the month.

Those are the key takeaways from the monthly unemployment and payroll jobs data release on Sept. 20 from the state Employment Development Department for Los Angeles County.

The rise in the unemployment rate was due in part to more people entering the labor force looking for work in August, which led to an increase of 19,000 in the size of the labor force compared to July.

In August of last year, the unemployment rate stood at 5.1%.

The county’s unemployment rate was above the statewide average for August of 5.3% and well above the national average of 4.2%.

The Employment Development Department also released a breakout of August unemployment rates by city, though unlike the countywide average, these are not adjusted for seasonal factors. The rates for the two largest cities in the county – Los Angeles and Long Beach – were identical at 6.8%.

Among cities with labor forces exceeding 10,000, Lomita had the lowest seasonally unadjusted unemployment rate of 2.8% in August, while Calabasas had the highest rate at 9.5% – nearly one out of every 10 residents in the labor force.

Among cities in the San Fernando, Santa Clarita, Antelope and Conejo valleys with labor forces exceeding 10,000, the city of San Fernando had the lowest seasonally-unadjusted unemployment rate in August of 5.1%, followed by Santa Clarita (6.2%) and then Glendale (6.5%).

At the high end in the quad-valley area, after Calabasas and its 9.5% unemployment rate in August, next were Palmdale (9.0%) and Lancaster (8.9%). Burbank’s rate came in at 8.1%.

Turning to employer payrolls, August’s increase of 13,700 jobs represented a modest rebound from the steep drop of 31,000 jobs in July and brough the total payroll job tally in the county to 4,572,900.

The biggest increase came in K-12 public education, which added 23,000 jobs; several local school districts – including Los Angeles Unified – began their new academic year in August.

To account for this expected seasonal increase, the state also released a seasonally adjusted payroll jobs figure for August that showed a slight drop of 1,000 jobs compared to July.

Returning to the unadjusted figures, the only other industry registering a significant increase in payroll jobs in August was health care/social assistance, up 6,800 jobs.

On the downside, the motion picture/sound recording industry posted the largest drop of 4,300 payroll jobs in August as that industry is continuing to contract from its peak television era of a few years back. Professional/business services was the only other industry to post a significant drop of 1,400 jobs.

For the 12 months ending in August, employers in the county added on net 78,000 jobs for a year-over-year increase of 1.7%. Nearly half of that gain came from the health care/social assistance sector, which added 37,700 jobs over that 12-month stretch. Other gainers included local government K-12 education (up 17,500 jobs) and accommodation/food services (up 11,600 jobs).

The professional/business services sector saw the largest drop for the 12 months ending in August, shedding on net 8,700 jobs. Most of those came in the administrative/support services subsector, which posted a drop of 6,500 jobs.

Not far behind was the manufacturing sector, which on net shed about 4,000 jobs during the 12 months ending in August. The total of 314,000 employed in manufacturing in August was down by exactly 500,000 jobs from the total recorded in August 1990, representing a drop of more than 60%.

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