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DTS Inc. sold its digital cinema business in a deal worth $3.3 million, the company announced. That sale to Beaufort California, Inc., plus the sale in April of its digital images business, allows Agoura Hills-based DTS to focus on its consumer products business. DTS audio systems are used in home theatre, car audio, PC and game console products. The company’s first quarter revenues were helped by growth in the high definition optical media markets, primarily related to game consoles and stand-alone players. For the quarter ending March 31, DTS reported a net income of $1.3 million, or $0.07 per diluted share, on revenues of $15.2 million. For the same period in 2007, the company reported a net loss of $765,000, or $0.04 per diluted share, on revenues of $12.6 million. Shares in DTS closed down at $28.50.

Approximately six months ago (November 2007) Los Angeles voters were being asked to approve a new telecommunications tax known as Proposition “S.” At that time we were told that Los Angeles was facing a deficit approaching $150 million for the fiscal year 2007-2008 and, that if voters didn’t approve Proposition “S” the looming deficit would increase by $270 million to a total in excess of $400 million. The voters, concerned about the potential loss of emergency services, listened to the proponents of the Proposition and voted to pass the measure. On April 24, 2008, the Los Angeles Daily News reported that Los Angeles is now facing a deficit of $406 million for the fiscal year 2008-2009, an amount that is similar to the amount of deficit we were told would occur for fiscal 2007-2008 if we didn’t pass Proposition “S.” What happened? Does this mean that if Proposition “S” didn’t pass in November we would now be facing a deficit for fiscal 2008-2009 of almost $700,000, or more than 55% greater than that of fiscal 2007-2008? Another question that arises is: Do we actually have a revenue problem? Or, is it really a spending problem? Are further cuts possible? For example, while researching material for my previous column opposing Proposition “S,” I found that one of the potential cuts included in a memo from the office of the City Administrative Officer (in the event that the Proposition failed) was to reduce the elected officials’ budgets by approximately $24 million (representing 20% of their total budgets). I don’t know how many elected officials these budgets cover but if 20% equals $24 million, the total budgets for these officials amount to $120 million. On its face, this looks like a very large amount. Currently the Mayor and City Council are considering the implementation of numerous fees and taxes to eliminate a deficit amount that seems questionable. Perhaps before adding fees that might include: setting regular street-sweeping schedules on streets that do not have currently established sweeping plans in an effort to raise $20 million per year from parking fines; increasing the city sales tax by up to 1 percent to raise an estimated $400 million per year; increasing parking-meter fees and expanding hours when people need to pay to park (potentially confusing people, who are accustomed to paying for lesser time periods, into receiving fines) to potentially raise $16 million per year; adding a $125 “user fee” on traffic violations to generate $30 million; etc., I think that it would be appropriate for an independent party to verify the amount of the deficit. Look for alternatives If the independent verification idea doesn’t gain traction we should at least consider alternatives before raising fees and taxes that will be sure to exacerbate the existing problem of businesses leaving Los Angeles in favor of surrounding cities such as Burbank or San Fernando to escape the current high costs of doing business in L.A. Recently, the Valley Industry & Commerce Association (VICA) presented a list to city officials of 50 ways to raise revenues and cut expenses to balance the budget without adding additional fees or taxes. Here is a partial list of those ideas: collect a significant portion of the $500 million in uncollected debt currently owed to the City; lease surplus City property (instead of selling) to create long-term revenue streams; mandate that City departments explore opportunities for public-private partnerships to capture greater revenue for services provided; increase revenues through advertising placement on City real estate and at City parks and provide opportunities for sponsorship of City facilities; sell DWP services and non-emergency services of the Los Angeles Police and Fire Departments to jurisdictions outside the City of Los Angeles; establish liability training programs for most City agencies to reduce the cost of litigation and settlement fees the City pays out annually; reduce the City’s worker compensation costs through the same preventative training programs that other employers have successfully implemented; etc. I believe that the current deficit situation provides a great opportunity for City officials to work together with business groups to accomplish a major goal for the common good. It is clear that there are many ways to solve the problem without jumping to raise fees and/or taxes and that people who have spent time in the trenches with their own business challenges are a solid source for information and ideas. Gregory N. Lippe, CPA, is Managing Partner of the Woodland Hills-based CPA Firm of Lippe, Hellie, Hoffer & Allison, LLP, Chairman of the Valley Industry and Commerce Association (VICA) and a Director of First Commerce Bank.

In a Spanish-style building in Palmdale where lawyers and judges once argued over the finer points of law today calls home to classrooms in which the discussions turn to the finer points of engineering or office management skills. For going on five years the AERO Institute has pursued a three-fold purpose of workforce training; educational programs for the public; and development of new intellectual property through its nanotechnology lab in a former courthouse on the civic plaza. The institute is a consortium between the city of Palmdale, major universities and the aerospace industry to give additional education to the workforce in the Antelope Valley and spur interest in aviation and aerospace careers in students in elementary through high schools. While the courses offered at the institute are not limited to aerospace employees, the presence of Lockheed Martin, Northrop Grumman and Boeing in the city is a draw for universities to have their programs available. “The schools are enticed by the companies we have here,” said Lorna Williams, director of operations for the institute. Embry Riddle Aeronautical University, Cal Poly Pomona, USC Viterbi School of Engineering, and the engineering school at Purdue University are among the schools partnering with the institute. New this year are programs from DeVry University in associate, bachelor and post-graduate degrees; and an MBA from the Graziadio School of Business Management at Pepperdine University. The MBA broadens the course offerings at the institute so that it is not so centered on engineering and technical courses, Williams said. Underserved area With the Antelope Valley lacking a four-year university it was underserved when it came to graduate school level work, said Ernesto Morales, director of corporate relations at Graziadio. Morales spent a year building relationships with city officials in Palmdale and Lancaster; at the area chambers of commerce and the Greater Antelope Valley Economic Alliance that eventually opened doors at the aerospace companies. “An MBA would be the perfect augmentation to their technical expertise and help develop them as leaders in the community and at their own companies,” Morales said. The first class drew its 18 students from the U.S. Air Force, Palmdale city employees, Lockheed and Northrop Grumman. The current program takes place two nights a week at the institute in Palmdale. Plans to begin a second MBA program in January would split the two nights between Palmdale and Lancaster. For younger students, the institute gives classrooms and technical assistance for NASA to support its educational programs in schools and through informal programs such as robotics competitions and camps. One room at the institute is a television studio for broadcasts over a digital learning network that allows for real-time interaction between a NASA instructor and students. Another contains hands-on exhibits, a mock-up of a jet cockpit that children can sit in, and a tire from one of the space shuttle orbiters. Yvonne Kellogg, the NASA Manager at the institute, called the facility the gateway between the agency and the community. Kellogg also cited the absence of a four-year school in the Antelope Valley and said the NASA programs help bridge the gap for high school students who want to continue their education and for Antelope Valley College students who want to transfer to a university. “What we would like to see is our own young people have the opportunity to attain a technical education here,” Kellogg said. NASA involvement Apart from its educational and workforce training missions, the institute also showed its worth in NASA’s decision to sign a 20-year lease for hangar space at Plant 42 for five environmental and space science aircraft that had been based at the Dryden Flight Research Center on Edwards Air Force Base. Working with state and local governments and Los Angeles World Airports was new to Dryden and the institute made the process easier. Among the planes based at Plant 42 is a modified passenger jet carrying a complex German-built telescope for studying the universe. When the plane begins flying missions in 2009, visiting scientists will have experiments on board. “When you have people coming all over the world who have never been here before the Aero Institute can find them temporary housing and make their visit much more comfortable,” Kellogg said.

The industrial sector remains just about the only bright spot in the Valley’s real estate picture for the first quarter of 2008, according to a recently-released Colliers International Market Report. That’s not to say it’s all good news. Sales and leasing activity for the period was 31 percent lower than the last quarter of 2007, even though, or perhaps because, the total vacancy rate is holding steady at a very tight 3.3 percent. “The vacancy we have lived with in past few years, sub-4 percent, has been more problem than good,” said Colliers’ John DeGrinis. “It really has hampered growth because there is so little space available.” What few sales there were showed a price increase, up 15.4 percent in the first quarter of 2008 versus the same period in 2007. Owners who may be thinking of selling are taking their time in evaluating what DeGrinis termed “very aggressive” offers. “The average industrial building owner, whether they are an investor or what have you, is still is coming to grips with the fact their building is not worth what it was six months ago,” he said. From 2005 to 2007, there was a dramatic value appreciation, upwards of 40 percent in some areas. “People seem to forget that their building is still worth a lot more now than it was just four years ago.” Office Market Tarnished The first quarter was the third in a row of negative net absorption for the office market, according to Colliers, with West Ventura County seeing the greatest surge with nearly a quarter of its office space sitting vacant. They are trailed by the Santa Clarita and West San Fernando valleys where vacancy rates have climbed to 16.9 percent and 11.6 percent, respectively. I asked Mike Catalano, senior vice president of Studley whether we were looking at a period that might rival the early 90s. “It’s hard to say that the market is similar to that market at all,” he said, explaining that the hits taken by the lending industry have had a “dramatic impact” on the region. In the 90s, a sort of perfect storm hit the Valley: huge numbers of aerospace jobs left the area all at once; there was the savings and loan debacle; plus we had riots, fires and even an earthquake thrown in for good measure. According to Catalano, even the lending industry space contraction will likely not be widespread, confining itself pretty much to the West Valley and Orange County. He also reminded us that real estate data lags by up to six months, with deals signed six months ago not being reported until now. “Typically the first sign is we see concessions rising without rental rates dropping and that is happening in all markets,” said Catalano. “In a market trending downward, landlords are sort of the last ones to acknowledge the trend by lowering (rental) rates.” So while vacancy rates are expected to increase modestly throughout the year across the Valley, Catalano said, we may soon see rental rates decline, hopefully bringing much-needed equilibrium to the market once again. The Colliers International report numbers encompass the West Ventura County and the Santa Clarita and San Fernando valley markets. Industrial Building Sold Parker Industrial Properties sold its 50,620-square-foot industrial building located at 20630 Nordhoff St. in Chatsworth for $6.8 million to an unnamed buyer who will occupy the R & D; building as an owner/user. Tim Foutz of NAI Capital’s Encino office represented the seller and the buyer was represented by Jesse Laikin of Lee & Associates-South Bay. Retail & Apartments Encino-based Investment Real Estate Associates represented the buyer of The Agoura Village Shopping Center in a transaction valued at $7.7 million. The 19,380-square-foot building at 29020 Agoura Road in Agoura Hills was built in 1991. IREA brokers handling the deal were Collin Plume, Rory Hamilton and Warren Berzack while Margie Jones of 222 Commercial Group represented the seller, Agoura Village Center, LLC. IREA also was involved in the sale of an 80-unit apartment complex in San Bernardino for $9 million. Bo Drake and William Everitt of IREA represented the buyer, JLO Properties, LLC. The seller, Clyde Street Properties, LLC was represented by Alex Mogharebi of Marcus & Millichap. Multi-Family Sale A 100 percent occupied, 19-unit apartment building in Canoga Park sold for $2.85 million, with Paul A. Kenworthy, managing director of the Charles Dunn investment services group in West Los Angeles representing the buyer, Saswata Sen and the seller, Khougaz Trust. The building at 7037 Alabama Avenue is 17,324 square feet and the apartments are not rent controlled.. The building totals 17,324 square feet and is 100 percent occupied. Litigators Expand Lease The law firm Loewenthal, Hillshafer & Rosen LLP is expanding its Sherman Oaks office, adding 1,100 square feet to its existing 8,447 square feet and renewing its lease for a six-year term. The transaction is valued at approximately $1.75 million, according to Lee & Associates Principal Thomas N. Specker (LA North/Ventura) represented the tenant while the landlord at 15260 Ventura Blvd., Douglas Emmett Management, was represented in-house by Carol DeFore. Expanding New Vision New Vision Power Property LLC, a manufacturer of fashion eyewear, spent $2.5 million on their purchase of a 21,904-square-foot industrial building in Sun Valley. The seller, AJJ Funding Corp., was represented by AJJ Funding in the transaction by Jack Schlaifer, senior vice president at Lee & Associates-LA North/Ventura, Inc. The buyer of the single tenant building constructed in 1987 was represented by Thomas Chang at America Realty. The Ventura County office of CB Richard Ellis has facilitated the relocation of Whaling West Packaging Corporation from their existing space in Newbury Park to a larger facility in Thousand Oaks, recently vacated by Amgen. The packaging and crating company signed a multi-year lease for 50,000 square feet of industrial space at 800 North Mitchell Rd. CBRE Vice President Bob Boyer represented both the tenant and the landlord, TO Industrial Corporation, in negotiations. Staff Reporter Linda Coburn can be reached at (818) 316-3123 or at [email protected].

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Ontic Engineering and Manufacturing Inc. received a licensing agreement to make and maintain navigation and targeting systems for fighter aircraft. By granting Chatsworth-based Ontic the license for the Low Altitude Navigation and Target Infra Red for Night system primarily used on the F-15 and F-16 aircraft, Hamilton Sundstrand Power Systems can focus on current and future programs. Ontic specializes in supporting older products. “Licensing assures customers of ongoing support for the duration of their requirements,” said Jonathan Shiebler, Director of Business Development for Ontic. Hamilton Sundstrand is a subsidiary of United Technologies Corp.

For decades, this has been the week for network television to strut its stuff. But not everyone is in the mood to party this year. Typically, the major broadcast networks — Fox, ABC, CBS and NBC — have spent about $5 million each to whip up excitement among advertisers for their new fall schedules. They would fly hundreds of stars and executives to New York for extravagant presentations at tony Manhattan venues, followed by lavish parties. The five networks, including the upstart CW, rounded up $9.3 billion in prime-time commercial sales in the weeks after last year’s “upfront” presentations. For the full story visit http://www.latimes.com/business/la-fi-upfront12-2008may12,0,4934699.story

They flew faster, higher and farther than any group of men in history. They did it in aircraft with the prefix of X, F, and D; aircraft born of the Cold War and later adapted to the peaceful purpose of space exploration. Some aged gracefully, living to see not one but two or three generations of pilots succeed them, while others succumbed to early death in fireballs on the desert floor. Today their names and their flying machines are memorialized throughout the Antelope Valley at museums, on a walk of honors, plaques, in airparks, on street signs, schools, and sculptures. Now officials from the Antelope Valley muster support from throughout California for the biggest tribute yet to its aerospace and aviation heritage bringing back a Space Shuttle orbiter for permanent display in a specially built, climate-controlled museum. The Smithsonian Institution in the nation’s capital makes the final decision on the placement of the orbiters, scheduled for retirement in 2010. The Antelope Valley, however, calls itself the home of the shuttle. The spacecraft was assembled and tested there. Edwards Air Force Base north of Lancaster becomes the alternative landing site in case of bad weather in Florida. Being located outside the Los Angeles area gives a future museum access to millions of visitors. “We have all the elements in place to make it an easy decision,” Palmdale Mayor Jim Ledford said. An expensive decision as well, one that the cities in the Valley cannot do alone. Congressman Howard P. “Buck” McKeon` will work with the state’s congressional delegation to sign a letter of support to bring an orbiter back to the Valley. In Sacramento, the governor and state legislators are being enlisted to do the same. The Palmdale City Council got the ball rolling in April by approving an application to obtain shuttle artifacts remaining at Plant 42, the super-sized hangar where all six shuttles were built. Military aircraft are on display at the city-owned Joe Davies Heritage Airpark, an outdoor museum open to the public three days a week. The collection includes aircraft on loan, donated to or purchased by the city that were designed, built or modified at Plant 42. The long-term goal is filling the 26 acres with about 40 aircraft. For a space vehicle with the importance of the shuttle, more needs to be done. “The space shuttle is a different endeavor,” Ledford said. “You are telling the story with a museum; a story that needs to be told in perpetuity.” History abounds The isolation of the Mojave Desert and weather allowing for year round flying brought the U.S. military to the high desert following World War II. It was at Muroc Field (later re-named Edwards Air Force Base) where jet fighters and rocket aircraft were tested; where in 1947 the X-1 broke the sound barrier; and where the fighter jocks longed to go, the top of “the zuggernaut” as described by Tom Wolfe in “The Right Stuff.” To Wolfe, no one possessed the elements of that “stuff” more than Chuck Yeager, an Army Air Force pilot who that October day in 1947 went faster than any man alive and whose West Virginia drawl was adopted by pilots worldwide. That young Yeager, with the X-1 dubbed “Glamorous Glennis” (named for Yeager’s wife) in the background, stares out today from a mural in downtown Lancaster. It is one of four commissioned by the Lancaster Old Town Site to spiff up what had been the main commercial center of the city, and to recognize the importance of aviation pioneers. (The other murals are of James “Jimmy” Doolittle, of Doolittle’s Raid fame; William “Pete” Knight, an X-15 test pilot; and Joe Engle, a test pilot and shuttle astronaut.) Yeager was also among the original inductees into the Aerospace Walk of Honor along Lancaster Boulevard. Anchored by Boeing Plaza with its Phantom II high on a pedestal the Walk of Honor annually inducts test pilots associated with Edwards and the Valley. When the latest batch is added in August, 95 names will be found on plaques along the Boulevard and at the plaza. “Over time test flight has changed especially with computers,” said Laurie Butts, special events manager for the Lancaster Park, Recreation and Arts Department. “(The Walk of Honor) aims to recognize those pioneers who risked their lives in the development of that technology.” Pride in heritage Lancaster’s Walk of Honor and Palmdale’s airpark are among the more visible examples of how the Antelope Valley takes pride in its aviation heritage. Between the two cities finding other examples becomes a treasure hunt of sorts. Two main roadways have been designated Challenger Way and Columbia Way for the two shuttles destroyed during their missions. A Douglas D-558-II Skyrocket is mounted on a pole outside Antelope Valley College, while a McDonnell-Douglas Hornet stakes its position outside Clear Channel Stadium, home of the minor league Lancaster JetHawks. A middle school has been named for NASA test pilot Joe Walker, who died during a flight test.; and a high school is named after Pete Knight. Even the Desert Inn, one of the small, independent motels along Sierra Highway, has a sculpture in its parking lot and an inscription on a brick wall stating, “The Desert Inn Salutes Aerospace.” At Edwards itself visitors can arrange a visit to the Air Force Flight Test Center Museum with its collection of 80 historic aircraft representing the various test projects throughout the decades. The museum also operates Blackbird Airpark adjacent to Davies Airpark in Palmdale where aircraft from the famed Lockheed “Skunk Works” including a stealth fighter and reconnaissance drones are on display. Any story emerging from years of test flight can be touched upon by the aircraft at the museum, said its curator Fred Johnsen. As with pilots, Edwards is considered a mecca for aviation enthusiasts who come from around the world to visit. Some end up sharing anecdotes about the aircraft because of their intense interest, Johnsen said. The attraction is the glamour surrounding pilots, especially those piloting experimental aircraft designed to go higher and faster than any other. “There are layers of adulation that is accorded test pilots,” Johnsen said. AT A GLANCE Joe Davies Heritage Airpark 2001 E. Avenue P Hours: 11 a.m. 4 p.m., Friday – Sunday For information on guided tours call (661) 267-5300 Blackbird Airpark Adjacent to Davies Airpark Hours: 11 a.m. 4 p.m., Friday – Sunday Aerospace Walk of Honor Boeing Plaza Sierra Highway and Lancaster Boulevard Air Force Flight Test Center Museum Edwards Air Force Base For information on free tours conducted on the first and third Friday of the month call (661) 277-3517

On a weekday morning or afternoon, downtown Lancaster can be a quiet place. Few people are about, with the most activity taking place at the Bank of America ATMs, the post office or county library. Plans are afoot to change that, to make the area in and around Lancaster Boulevard from Sierra Highway to 10th Street West into an urban center where residents can live and socialize. All it takes is a commitment from the city, support from the residents and risk-taking on the part of investors to put in the foundation. “There is no reason why downtown Lancaster cannot remake itself into a destination locale and build on things we have already done that are unique,” said Brian Ludicke, planning director for the City of Lancaster. In the works for three years, a preliminary draft of the Downtown Specific Plan and environmental impact report will soon be released to the public. The city’s planning commission may give a recommendation as early as July followed by approval by the city council. In its initial study RBF Consulting divided the 140-acre downtown area into seven distinct districts identified by their primary use commerce, transit, small offices, public parkways, the arts, and residential. With a projected build-out of 2030, the downtown would encompass nearly a million square feet each in retail and service space, and office and public space; and 3,500 residential units. With the urban center approach Lancaster joins other cities in California and throughout the nation to revitalize areas that had been abandoned by merchants and residents alike. New projects of a similar stripe are taking shape in Hollywood and North Hollywood mixed use development combining retail with multi-family housing situated near public transportation. Lancaster’s plan incorporates the close proximity of the MetroLink station at Sierra Highway, the eastern border of the planning area. “This will be the first time there is a project where you can live, work and play so to speak within the same walkable vicinity,” said Joshua Mann, the director of the Antelope Valley Board Of Trade and president of Lancaster Old Town Site, a group of downtown business and property owners. Past efforts The city, property owners and business people never turned their backs on downtown. The Old Town Site group, for instance, funded decorative signs and lights along Lancaster Boulevard, and commissioned four murals of aviation and aerospace pioneers. For its part, the city in the 1980s chose Fern Avenue for its new city hall over a location closer to the Antelope Valley (14) Freeway. In 1988, the city-owned performing arts center was built on the Boulevard, becoming the primary entertainment venue for the city. In the following decade, the city convinced Los Angeles County to build a sheriff’s station and regional library in the downtown area, increasing the number of civic buildings. Mixed in are primarily small businesses lawyers and doctors, a few restaurants, a coffee shop, several banks, a costume store and women’s boutique. All that remains of a chain retailer is the Woolworth’s spelled out on the tile at the corner of Date and Lancaster Boulevard. The single story building that had been a grocery store and later a furniture store stands empty, its slogan “Your Money’s Worth More at Aven’s” chipped and fading on the facade. (A new Aven’s store is nearby at 10th Street West and the Boulevard.) For all its ambitions, the downtown plan does not intend to resurrect the area as a retail hub. Instead it must position itself to draw in people looking to socialize and be entertained and create a synergy between the businesses, Ludicke said. An example is the Lemon Leaf, a restaurant that attracts crowds evenings when there is an event at the performing arts center, Ludicke said. Key to the redevelopment plan is developer Scott Ehrlich who has already built senior housing downtown and will soon complete the renovation of the Essex Hotel into more. Ehrlich and InSite Development, based in Encino, started construction on an artists’ lofts project, and will convert the former furniture store into a restaurant and lounge. “If he can make those both go, I don’t think we will have problems selling downtown to other developers,” Mann said. Major property owner The perception others have of Ehrlich is of a risk-taker but he considers himself conservative in business ventures. “I am a doer. I always cover myself with a lot of different ways,” Ehrlich said. “If something doesn’t work out I have alternatives.” InSite has had a presence in the Antelope Valley for more than a decade and now owns about 10 percent of its apartment buildings. In downtown Lancaster, Ehrlich and InSite have millions of dollars invested in senior housing, lofts, retail and office space. Architectural firm Prantis Solares Studios designed many of the structures. When completed, the conversion of the Essex Hotel carries a cost of $30 million. The artists loft project and the restaurant project are a combined $12 million. The proposed 40-unit Arbor on Date project is $7.5 million and Sagebrush of Downtown is $6 million. With an established record in the city, InSite was approached to be part of the redevelopment. Having tired of battling bureaucracies elsewhere, Ehrlich said he likes being where he is appreciated. “You set the vision and goal and the people who make it happen are in private enterprise,” said Vice Mayor Ron Smith said. Old Town Pasadena, Third Street Promenade in Santa Monica, and Honolulu Street in Montrose get cited as examples of what the new downtown can be. Ehrlich, however, takes his inspiration from developer Rick Caruso, whose latest retail and residential project the Americana at Brand recently opened in Glendale. In the Americana, The Grove and other projects developed by Caruso throughout the Valley and the West Side, he has created places where people wanted to gather and socialize, Ehrlich said. Lancaster and the Antelope Valley as a whole are ready for the downtown’s makeover to become something similar. “I have way more than a $40 million bet on it,” Ehrlich said.