The sky really is falling, Chicken Little! Our north-of-Mulholland and slightly-south-of-Paradise community is being tested mightily with a trio of trials. Two of the three are strictly local, while the third is running rampant around the globe. The crash of Metro 111 in Chatsworth, the disastrous fires in the Porter Ranch and Lake View Terrace areas, and the international economic meltdown combined, they are enough to give the staunchest Valley heart a measure of misery. The ever-larger TV screens that sit in our living rooms, with the every-blemish-revealing clarity of high definition, only enhance the horror of twisted metal and the mountains of flame and innocent-looking-but-deadly showers of embers occurring but a few miles from our homes. It was less than two months ago, on September 12, that a Metrolink commuter train hurtled down the tracks and plowed into a Union Pacific freight locomotive, killing 25 people and injuring 135. It was the nation’s worst train accident since 1993. From all preliminary reports, the head-on accordioning of the two trains was the result of the passenger train’s engineer texting instead of engineering. Will it serve as a wake-up call for all those people who still misuse their cell phones while operating vehicles? Don’t bet on it. And almost exactly one month to the day after those two trains collided in a mechanical kiss of death, the northern end of the Valley exploded in flame. Our annual fall recipe of Santa Ana winds, end-of-summer heat, and low humidity once again whipped up an unwanted desert of destruction. We heard not the Snap! Crackle! and Pop! of Rice Krispies, but of dry chaparral and brush exploding into fiery flame. Displaced residents, terrified horses, property in peril we’ve seen them all before and no doubt will again. And yet, amidst the heat and hell of both disasters, our emergency responders police, fire and paramedics did their jobs, not just well, but consummately well. The third of the Terrible Trio we have had to endure is the national and international financial meltdown. The eyes glaze over, the brain atrophies, and the hands go clammy when trying to understand the complexities that caused the precipitous decline of the stock market. Look at the empty storefronts along the Valley’s commercial streets, notice how non-profits are scrambling more than ever to overcome shortfalls in contributions, listen to the sounds of your investments hitting the floor with a sickening thud. And the struggles Mr. Everybusinessman faces are exacerbated by the unconscionable severance packages and buyout bonuses departing failed corporate executives take away, not the least being this column’s favorite whipping boy, the former honcho at Countrywide Financial, as well as the likes of Merrill Lynch’s Chairman and CEO Stanley O’Neal and Citigroup’s head Charles Prince. Our collective angst is only exacerbated by the seemingly-never-ending Presidential race, with its tinges of racism and sexism, and overt negativism. Depressed yet? Well, don’t bet against the resilience of the Valley’s businesses and residents. After the Northridge Earthquake and many other fires and traumas, we picked ourselves up, dusted ourselves off, and started all over again. The film from which that song came was a Fred Astaire-Ginger Rogers bit of fluff from 1936, Swing Time. That was the height of the Depression, a time in which Americans faced rougher times than we now, or will, face. These Dorothy Fields lyrics are worth thinking about, 72 years on: Now nothing’s impossible I’ve found, for when my chin is on the ground, I pick myself up, dust myself off, and start all over again. Don’t lose your confidence if you slip, be grateful for a pleasant trip, And pick yourself up, dust yourself off, start over again. Work like a soul inspired until the battle of the day is won. You may be sick and tired, but you be a man, my son. Will you remember the famous men who have to fall to rise again, So take a deep breath, pick yourself up, start all over again. The Metro trains are running again, the vegetation turned to ash in the fires will regenerate itself, and destroyed property will be rebuilt. Even now, we can hope that the Economic Alliance, UCC, the Valley’s Chambers, VEDC, and other organizations, are working, individually and in tandem, to help rebuild the economy in our little corner of the world. We still have the word’s greatest weather, a diverse business base, and a hard-working and well-trained workforce. All we have to do is pick ourselves up, dust ourselves off, and start all over again. All we have to fear is fear itself. President Franklin D. Roosevelt Martin Cooper is President of Cooper Communications, Inc. He is President of the Los Angeles Quality and Productivity Commission, Founding President of The Executives, and Vice Chairman-Marketing of the Boys & Girls Club of the West Valley. He is a Past Chairman of VICA, Past President of the Public Relations Society of America-Los Angeles Chapter, and Past President of the Encino Chamber of Commerce. He can be reached at [email protected]

By THOM SENZEE Contributing Reporter A couple of California’s top business banks are working to let companies know they have money to lend; are still lending money; and are actively seeking borrowers. Both Union Bank of California (UBOC), based in San Francisco, and City National Bank, headquartered in Los Angeles, have put the word out that they are still lending to businesses of all sizes. Both claim their lending practices have been so rock-solid that they have changed almost nothing even as some other banks scramble to survive. Wells Fargo, while not mounting a formal effort to make consumers and businesses know they are still making loans, said it is still in the business of offering loan products. “While we don’t have a formal campaign to get the word out, from our bankers to our executives, we are certainly saying that we are open for business and actively making loans,” said a spokesperson for San Francisco-based Wells Fargo. That statement, while encouraging to anyone who might have thought large institutions were unwilling or unable to make loans these days, is tacit compared to press releases from UBOC and City National. “Union Bank is in a great position to help small businesses,” read a press release from Union Bank. “Our net income and loan volume are growing, our credit status is strong, and we have capital to lend.” City National, true to its conservative tradition, was more demure in its call for borrowers and customers. The bank simply reminded the public of its reputation of stability and prudence, as well as its absence from the subprime fiasco. Meanwhile, Washington Mutual, which is now a unit of JPMorgan Chase, recently announced that it is still in the loan business, despite the latest upheaval in its own fortunes. As the Business Journal reported in the Oct. 13 issue, a WaMu official said we “still have money to lend,” at a recent conference.

It’s a buyer’s market on the retail scene as stores focus on promotions, service and inventory to fatten up scrawny sales. Unsettled by shaky consumer confidence and foundering economy, retailers need a strong holiday season to regain solid footing. For the full story visit www.venturacountystar.com/news/2008/oct/26/dreaming-of-a-green-christmas/

Sales of new cars have been on the decline both statewide and nationally for years now. The good news is that some dealerships and auto shops are reaping benefits from this downward trend, namely steady or increased sales in the used car sector and more demand in the service sector. “What we’re hearing is that used car sales are improving and that’s probably logical. Most may be relatively inexpensive when compared with a brand new car. Folks who are trying to make tough economic choices can afford 2005 vehicles, whereas they might not be able to afford a 2008 vehicle,” said Brian Maas, director of government affairs for the California New Car Dealers Association. At this point much of CNCDA’s information about the jump in used car sales is anecdotal with the organization expected to release an official report on the numbers in upcoming weeks. For now, though, representatives of area dealerships support CNCDA’s preliminary findings. Even in the midst of the financial crisis, used cars have been a major draw at area dealerships. “Our pre-owned business is very strong,” said Tim Smith, president of Bob Smith BMW in Calabasas. “Prices on used cars are going to be pretty attractive.” Smith attributes the strong sales at his dealership in part to the charm of the Mini Cooper, which is selling particularly well at the dealership. Maas, however, said that savvy auto dealers of all kinds are weathering the economic storm by increasing their stock of used cars. Doing so allows them to meet the needs of cash strapped customers. “For consumers in a financial situation that is tight, used cars might be more cost effective than new cars,” Maas said. “Those are all things that are probably happening across the state.” When gas prices began to hike up last year, Bert Boeckmann, president and owner of Galpin Motors in North Hills, could rely on sales of used cars as new car sales faltered. “Used car sales have been stronger than new cars during this particular period,” Boeckmann said. Sales of the cars have remained relatively steady during the rockiest economic year in recent memory. Galpin sells new and used Fords, Jaguars, Lincolns and Saturns, to name a few. Boeckmann admits that when the Dow Jones recently plummeted to a record low, used cars sales began to dip on par with new car sales. Fortunately, the dealership can also count on the service department to stay afloat. Because car buyers have been holding on to their cars for lengthy periods of time, Galpin’s service department is on a continued growth spurt, Boeckmann said. The dealership has been particularly aggressive in trying to attract business to its service department, offering promotions in which customers who buy three tires from Galpin get the fourth for free. They’ve also found a clever way to keep competitors at bay. If another auto shop provides a service for a lower cost, “we’ll match their price,” Boeckmann said. Business at the service department at Ladin Auto Group in Thousand Oaks is also booming. There, eight bays were recently added to the service division. Although plans to expand the department were in place before the economic downturn swept the news, General Manager Gary Faga said that the expansion was necessary. He noted that some warranty policies mandate that customers provide regular maintenance for their vehicles, so the service department is never short on clientele. For non-dealers, the car maintenance business may not be as promising. At Gary’s Automotive in Northridge, business has been down between 30 and 35 percent. “Actually, what’s going on is people are only spending money on what they need to spend money on,” co-owner Kevin Stone said. In other words, people will shell out money to do maintenance on a car if the vehicle becomes inoperable, but, barring that, they will refrain from servicing their vehicles. To attract customers, Gary’s Automotive is sending postcards to customers that feature car maintenance incentives such as a Triple A car care value package worth $120 that Gary’s is offering for $35. “But we’ve only gotten two responses from that particular program,” Stone said. “Historically, a program like that brings in 40 people in a month.” To date, the Triple A incentive program has been in place for two months. While Stone is concerned about the drop in business, he believes that time will run out for car owners who are neglecting vehicle maintenance. Soon, the daily wear and tear on their vehicles will leave them no choice but to visit an auto shop. “Eventually, they’re going to pay in the long run,” he said.

Local and state business organizations are generally in agreement about which propositions on the Nov. 4 ballot they support and which they oppose. The Valley Industry & Commerce Association, the United Chambers of Commerce and the California Business Roundtable voted for the most part to oppose bond measures that would increase the state’s indebtedness. Measure J for the Los Angeles Community College District was one of the exceptions, with both VICA and United Chambers voting to support the measure. (Since it’s a local measure, the CBR did not address it.) “One of the reasons the Board made that decision was that, first, the Community Colleges have been a great partner for business in the Valley,” said VICA Chair Greg Lippe, “and two, that there are no added taxes associated with the bond measure.” The organization also decided at its Sept. 25 meeting to reconsider an earlier position taken on Proposition 1A, the $9.95 billion high-speed rail bond measure, which none of the other groups took a position on. Originally, VICA’s government affairs committee recommended that the organization oppose the measure. The entire board then voted on Aug. 28 to accept that recommendation. “How it got back into consideration, I don’t know,” said Jan Sobel, co-chair of the government affairs committee, “because I was not at the second board meeting (on Sept. 25).” She said that the government affairs committee opposed the $9.95 billion bond measure for the same reasons that most of the bond measures were opposed by all groups: with California’s debt increasing daily: 1) it’s not the right time to add more indebtedness; and 2) “We believed there are other bond measures that were of greater good to more people,” said Sobel. When asked about how the reconsideration came about, committee chair Sandy Goldman said, “I don’t think government affairs ever took a position on it. I think it went right to the board.” VICA Chair Greg Lippe said that Goldman came to him after she learned of the vote by the entire board at their Aug. 28 meeting, and asked for reconsideration. Goldman, who represents the California High Speed Rail Commission as a public affairs consultant, said she was not in attendance at either the committee meeting nor at the general board meeting when the group initially voted to oppose. “What happened was, one of our members approached us after the committee meeting who was unable to be there at the committee, Sandy Goldman, and said it didn’t get its day in court,” said Lippe. “Because she wasn’t there and the meetings were held during a time of vacation for a lot of people, she felt it deserved a vetting.” As chair, Lippe said his position is to let any member who is unhappy with any committee decision bring it to the board for further discussion. He said he was aware she had an interest in the proposition and added that it was his recollection that she recused herself from voting on the matter. Further, he said, the vote at the Sept. 25 meeting to change their position was 24 to 4, with one abstention. That put it five votes ahead of the two-thirds majority required for passage. There was no one at the meeting to specifically speak against the proposition, said Lippe, partly because time was short and also because the negative side had been adequately addressed in the government affairs committee’s position paper. “We felt the negative side had been adequately presented,” he explained, “but that the positive side hadn’t been.” One of the key elements that swayed the board to change its position, said Lippe, was learning that the funding would come equally from three sources: 1/3 from the federal government, 1/3 from the state and 1/3 from private enterprise. Another, he added, “Was that not one dime could be spent until the commitment was there from all three parties.” Proposition 8 VICA was the only one of the three organizations to take a position on Proposition 8, which would ban same-sex marriage. That was surprising, given that the measure doesn’t, on the face of it, seem to have much to do with business. The group voted to oppose the measure. “It was an interesting discussion,” said Stuart Waldman, executive director of VICA, “and it really only focused on whether it was a business issue or not.” He went on to say that one VICA member with more than 500 employees made a case that companies extending health and other benefits to domestic partners incur significant expenses in dealing with additional reporting and accounting requirements. “The regulations and the paperwork are so onerous to provide those benefits,” said Waldman, “that they had to hire an additional human resources person, and I think that really hit home to all the business owners.” Other business-related factors that caused the organization to take the position to oppose Prop. 8 included the increased tourism dollars that could accrue, and the benefits it could have in corporate recruiting. “If you think about all the places that a company can go to get high quality employees, we need to do everything we can to keep business in California,” said Waldman.

Magic Mountain President Jay Thomas told members of the Santa Clarita business community that efforts to clean up the park and make it a more family-friendly place have paid off in the past year. “We’re back,” Thomas told a meeting of the Valley Industrial Association on Tuesday. He said the park has also re-established its ties to the community by becoming actively involved in supporting organizations such as the Boys and Girls Club. The park, which Thomas said briefly entertained a purchase bid but is no longer for sale, had struggled with a declining reputation and was known for roaming gangs and other activities that kept many families away. But upon Thomas’ assuming his position in 2007, a reorganization of the way the park is run was undertaken and strict rules were posted. Thomas said now smoking, line-cutting, bathing suits and profanity are forbidden at the park. “I have no problem with my wife and son being there,” Thomas said. He added that 300 separate business units were set up throughout the park to give employees more accountability about the way the park is run. Thomas said that each of these units is responsible for their particular area of the park and for “making a difference” in some way for each guest during their visit to the park. Thomas said that because of the changes employee morale is up (this year 14,000 people applied for 2,500 positions), there is better park conduct, guest satisfaction scores are up and applications for season passes are up 14 percent. Jason Schaff

Of the more than 1,200 businesses that call the City of San Fernando home, the top two industries by far are service providers and retail trade, followed closely by finance, insurance and real estate, and manufacturing. The top 10 companies, by sales volume in 2007, had revenues of more than $16 million combined. The largest, PureTek Corporation, has a 170,000-square-foot state-of-the-art manufacturing and packaging facility that produces pharmaceutical and nutritional delivery systems, as well as personal care liquids, lotions, creams and oils. They reported having 400 employees at their San Fernando plant. Another top 10 employer and sales producer is Future Graphics LLC which has about 180 employees in their San Fernando headquarters facility and 240 companywide. “The majority of our business is the resale of the raw materials required to recycle and remanufacture toner printer cartridges,” said Luke Goldberg, senior vice president. About 40 percent of Future Graphics business is international. That’s a big shift from just six years ago when 90 percent of the company’s revenues were generated by U.S. sales. The company moved its corporate headquarters to San Fernando about five years ago from Canoga Park. Sales have been good since the move with 2008 sales so far at about $130 million. “For us it trended way up in 2007 from 2006,” said Goldberg, “and it’s up, but not as big of a percentage, in 2008. Our business is still growing.” Another of the top companies in 2007 has seen a significant drop in its business over the past year. Santana Formal Wear, listed on the city’s rolls as Premier Accessories Manufacturing, has been in business for 30 years. The woman-owned business makes formalwear accessories such as cummerbunds and bowties. “We’ve been in San Fernando for 11 or 12 years,” said Dee Tennant, “We came from Chatsworth.” Originally the move was made because the taxes were lower. But Dee says one of the major reasons they’re happy in San Fernando is that the city is very responsive to their needs. “The fire and police departments are on top of everything all the time,” she said. “Even when there’s a little tiny bit of graffiti in our front yard here, they come in and just clean it up instantly when there’s any trash left it seems like there’s this one little spot here where people like to dump sofas and stuff the City comes and picks those up right away, too. It’s an excellent city to be in business in.” A couple of years ago, Tennant had well over 100 employees, but now they’re down to fewer than 30. “Business is off,” said Tennant. “It’s a byproduct of a myriad of things.” That includes a major shift in the formalwear business from mom-and-pop stores to large chains. According to Tennant, cost has replaced value as the driver and so cheap overseas imports have taken much of their business away. They’ve adjusted somewhat by increasing another sector of their business that supplies formalwear-type uniforms to casinos in Las Vegas and to places like Disneyland. “It’s tough doing business in California,” said Tennant. “Workman’s comp is very difficult.” Downsizing plan The company is planning to downsize, subleasing about half of their 17,000-square-foot building on Jesse Street. A walk down the outdoor San Fernando Mall suggests that those mom-and-pop formalwear shops are still thriving in the city. In a three-block span there are at least 20 storefronts that have a focus on bride and quinceanera gowns, special event videographers and photographers and party supplies. Isaac Algaze, president of Suburbia Bridal, has been in business in the city for 20 years. He says his is the oldest of the bridal shops on the Mall, all of which have been hit hard by the weak economy. “Right now it’s hard,” Algaze said. “People don’t have money, so we have to reduce our prices and give incentives and spend more money on advertising.” He figures that business is down about 15 percent over the past couple of months. Algaze said said he he felt the city was supportive of small business owners. “They help with events,” he said, “They had one about two weeks ago, the Menudo Festival. It brought a lot of people out.” Some in town don’t agree with that. “I wish that we could have better communication with the city and also a clear understanding of our agreement,” said Juana Cuiriz, CEO of the San Fernando Mall Association. The SFMA is a non-profit entity under agreement with the city to promote the mostly local businesses in a Business Improvement District that has about 255 businesses, said Cuiriz. They are funded by a fee assessed on business license holders each year Cuiriz has been its director for the past three years and brought in an outside group to audit the association and develop a plan going into the future. “We are now forming a new committee which is a downtown community benefit district,” said Cuiriz. “That is going to focus property owners, business owners and residents and we are all going to work together in planning perhaps a new BID or a PBID (property business improvement district). She said that while she knew the city has planned a series of study sessions to review the results of various consultants that have been retained to help in planning, she does not feel enough is being done to reach out to the mall merchants and involve them . City Administrator Jose Pulido said he just doesn’t have the budget to do an extensive community outreach program, and that his core staff of seven or eight are constantly prioritizing what areas need their focus. The city, Pulido added, recently secured a $99,000 grant from Congressman Howard Berman for reinvestment in the downtown area. The El Paraiso Furniture Store on the mall has a “for lease” sign that states “moved to larger location.” But according to Daum Commercial broker Lynn Larocque, they’ve actually gone out of business. “We’ve got plenty of interest in the property,” said Larocque, but the 10,000-square-foot space is too big for most of the local mom-and-pop stores that call. “So I’m doing my marketing right now to your larger national companies, but the national companies are all sitting tight,” she said. A veteran of the real estate business, Larocque said past experience suggests once the presidential election is over, things may pick up.

Everything from hikes in fuel prices to the mortgage crisis have been blamed for the ongoing decline in car sales, but one Valley auto dealer has a different take on what’s contributing to the problem. According to Gary Faga, head of Ladin Auto Group in Thousand Oaks, the perception that financing is unavailable for would-be car buyers has discouraged consumers from patronizing dealerships. They think, “I can’t get financed,” Faga said. “It’s very frustrating.” That’s because the opposite is true, he asserted. “Right now all the media blasting says that it’s impossible to get loans. That doesn’t seem to be the case There’s no shortage of cash but a shortage of people. The amount of customer flow has been shortchanged because of the media telling people they can’t do anything right now.” Faga acknowledged that financiers are more stringent in structuring deals but insists that financing is available for consumers of all stripes, bad credit and all. Just recently, Ladin sold a car to a customer with a FICA store below 500, he said. While the customer was required to make a higher down payment, she ultimately was able to purchase the vehicle. Ford Motor Credit Co., Hyundai Motor Finance, BMW Finance and Mini Cooper Finance have all been highlighted by area dealers for making financing readily available to customers. Because Ford has long had prudent credit standards in place, according to spokeswoman Meredith Libbey, Ford Motor Credit hasn’t needed to change its lending guidelines. “We never got caught up in the sub-prime mortgage mess,” Libbey explained. “We’ve had prudent credit standards for years. Our portfolio is performing the way we’d expect to. We have never gotten into the high risk segment. Only about 4 percent of our portfolio is considered high risk. I’ve read about some other organizations that had a lot of sub-prime lending. We’ve had prudent standards, and we haven’t changed that.” As a result, Libbey said that the company hasn’t changed its guidelines for approving financing for car buyers. If Ford Motor Credit Co. approved a car buyer for a loan in the past few years, the buyer would still be eligible for a loan today, barring any major changes in the buyer’s financial history. “Our credit criteria hasn’t changed,” Libbey said. “We should be able to work with them. We have heard about some other organizations who have changed their credit standards.” GMAC Financial Services is one such company. On Oct. 13, it announced that it would require car buyers to have credit scores of 700 and above. Moreover, the company is limiting contracts with higher advance rates and longer terms. “We had to, as a result of the current capital and credit market environment , make some adjustments to pricing and underwriting in the auto finance business,” GMAC spokeswoman Gina Proia said. “This is a result of the reduced access to funds and the increased cost of funds currently.” In other words, because it costs more for finance companies to borrow funds in the market, they’ve had to make pricing adjustments to the financing they offer customers. In light of the news about the changes GMAC is making, California auto dealers have expressed concerns that they will go out of business. Reportedly just 40 percent of California consumers meet GMAC’s new criteria. Asked whether or not GMAC’s new guidelines will threaten the livelihoods of auto dealers, Proia said, “Obviously these are challenging times, and these are decisions that were not taken lightly in order for us to manage our business. During this significant market disruption, we’ve had to take some difficult steps.” The good news is that once the credit markets stabilize GMAC might consider making its consumer criteria less lenient. Consumers using Ford Motor Credit to purchase a car will have factors other than their credit scores taken into consideration. According to Libbey, the particulars of the vehicle purchase are considered as well as debt-to-income ratio, a statistical analysis of the customer’s ability to make payments and dozens of additional variables. “Our only business is putting people behind the wheel,” she said. “We are hearing that foot traffic in the stores is not as great as we’d like it to be. With what’s going on with the economy, some people are holding back who might be terrific (for financing). If they came in, we’d probably fall all over ourselves.” Chris Sweeney, the general sales manager at Vista Ford in Woodland Hills, attested to how available Ford Motor Credit has made financing to customers. “I don’t feel that Ford has made it any more difficult,” he said. “They’re lending money and approving pretty much on the same guidelines that they had before… Other banks outside of Ford Motor Credit have tightened up, but Ford Motor Credit is still a viable option, and we use them 80 percent of the time.” Despite widespread reports indicating that obtaining financing for new vehicles is hard to come by in a period of economic decline, Sweeney said that Vista Ford, like Ladin Auto Group, is being patronized by customers with a broad swathe of financial backgrounds. “We still have people coming in with marginal credit attempting to buy,” Sweeney said. “Some people qualify for car loans, and some don’t, as it was before.”

ApolloMed Hospitalists has signed a hospitalist service agreement with Pacific IPA of El Monte to provide inpatient care at San Gabriel Valley Medical Center. The Glendale-based company is an affiliated medical group of Apollo Medical Holdings. ApolloMed also provides hospitalist services to Pacific IPA and Allied Physicians of California, the largest independent physician associations in the San Gabriel Valley.

On the heels of suspension of dividend payments and the replacement of the company’s CFO at the beginning of October, Chicago-based REIT General Growth Properties Inc. has shaken up management and announced intentions to market certain Las Vegas properties. All of these efforts are designed to help the company survive billions of dollars in maturing debt coming due at a time when credit markets are frozen, according to an Oct. 22 CPN report. About $1.2 billion in debt will mature in November with another $1.3 billion following in December, according to the company’s second quarter financial report. All told, GGP’s debt totals about $27 billion. For the full story visit www.commercialpropertynews.com/cpn/content_display/finance/reits/e3ia48763163f8b981b83a33474be5dcaa0