The San Fernando Valley’s own Jaycees (Junior Chamber Chapter) were recognized with three awards from this month’s statewide Jaycee convention. The accolades for “Top Impact Project”, “Top Chapter for Percentage of Growth” and “Top President”, came even before the San Fernando Valley Jaycees celebrated its one-year anniversary. The Valley Jaycees recent award winning “Impact Project”, encouraged community members to interact with dozens of San Fernando Valley-based non-profits. The project succeeded in increasing awareness of community related issues and presented local volunteer opportunities. “We knew if we chartered a Jaycees chapter for the Valley, it would make a big impact and it has,” said Chapter President John Bwarie. –Ryan C. DeSales

The economic climate in the San Fernando Valley remains robust, despite falling housing prices, a shrinking skilled-labor pool and low industrial vacancy rates, according to economists who spoke at the 2007 San Fernando Valley Economic Summit at the Universal Sheraton May 17. Job and retail growth in the San Fernando Valley will stay strong, with new jobs expecting to grow by 1.5 percent in the region, according to Dan Blake, director of the Economic Research Center at California State University, Northridge. The university and the Economic Alliance of the San Fernando Valley co-hosted the summit. “It’s good news mostly across the board,” said Blake. “For home prices, relief is here. For renters, relief isn’t there yet. They’re still feeling the heat.” According to Blake, there were 693,000 wage and salary jobs in the Valley in 2005. Currently, there are 30,000 more jobs than there are residents to fill them. The new jobs are mostly being filled by people commuting to the Valley from other areas. “The Valley is no longer a bedroom community,” Blake said. Wage and salary growth in the private sector is expected to increase 3 percent to 4 percent a year, and retail sales are expected to grow 1.7 percent, according to Blake. The information industry, which includes the entertainment sector, will grow by about 4 percent each year through 2009. Manufacturing, which was hit the worst by an economic downturn earlier this decade, is expected to drop 0.9 percent this year and continue its downward spiral through 2009. Construction is expected to drop 4.5 percent this year. Despite 7,500 fewer births in the area each year, the number of Valley residents is continuing to grow due to a high influx of immigrants. Those trends are expected to continue, Blake said. But there aren’t enough homes to house the expanding population, with a shortage of 15,000 homes each year, he said. “Housing prices have started to matter in terms of in-migration,” Blake said. The economist predicts jobs growth in the Valley to decrease slightly to 1.4 percent in 2008, with 10,000 jobs being created each year. “This is a Valley of small businesses,” he said, with 90 percent of businesses having less than 25 employees. According to a survey that polled key industries in the Valley, 23 percent have considered moving out of the San Fernando Valley because they “see no advantage to staying here,” Blake said, adding that bureaucracy and high housing prices are affecting businesses. According to the economist, the lack of industrial space will also have an impact on employment. In the Valley, office vacancies are at 6.8 percent vs. 13 percent nationally. Jonathan A. Weiss, senior investment associate with Marcus & Millichap Real Estate Investment Services, echoed Blake’s positive economic forecast. Although many people are claiming the United States is in the grip of a recession, the economy is still fairly strong, Weiss said, with 1.8 million new jobs having been created in the U.S. Retail property demand in Los Angeles County will continue to be the strongest in the nation, especially in the San Fernando Valley, Weiss said.

Industry veteran James E. Brown has been appointed senior managing director for the L.A. North region of CB Richard Ellis. Brown, whose appointment is effective on June 1, will oversee the company’s brokerage services in the San Fernando, Conejo, Santa Clarita, San Gabriel and Antelope valleys and a staff of about 100. He will also handle new business development, client relations and property and facility management. Brown spent the better part of his 35-year career with Newhall Land where, for the past 11 years, he oversaw the development of Valencia Gateway as vice president of real estate development. Before his retirement from Newhall last week, he saw development at the Gateway increase from 9.8 million square feet to 23.3 million square feet and Newhall Land, perhaps the oldest development company in California, sold to LNR Property Group for $1 billion. In his new post, Brown is returning to his roots in real estate brokerage. He began his career with Grubb & Ellis in San Diego in the late 1970s. The brokerage business has undoubtedly changed somewhat since those days, and perhaps more so at CB, which has recently acquired several companies, expanding its services into the bargain. In 2003, CB acquired Insignia Financial Group, and last year it acquired Trammell Crow Company. With the exception of its El Segundo office, which has become a retail hub office, the Trammell Crow offices were earlier integrated into CB’s facilities in the greater L.A. region. Brown said he is hoping to help the CB brokers to better leverage the resources that those acquisitions have added to the company. “I’m looking to define the markets that are out there and the opportunities for CB Richard Ellis, and how I can help connect the dots of the services that we provide,” Brown said. “I understand brokerage, but I want to understand the whole platform from facilities management to corporate services and asset and property management and bring that into the brokerage.” Laing Closes on Mosaic After several delays John Laing Homes Urban has finally closed on the Sherman Oaks property along Ventura Boulevard and Moorpark Street. Laing, which is believed to have paid about $18 million for the property, according to brokers who were not involved in the deal, is planning to build 88 condominiums and about 16,500 square feet of retail space on the site, located at 14121 Ventura Blvd. The development will be called Mosaic. The property was first earmarked for redevelopment in 2002, when PCS Development began working to construct a rental apartment complex. By the time the property was finally entitled, PCS feared that the apartment market was softening and it struck a deal with Laing about two years ago. Laing received approval for its project, far smaller than the originally entitled development, about a year ago, but had to continue to battle some community opponents who appealed the decision. Gregory S. Harris, president of The Harris Group of Marcus & Millichap, represented the buyer and seller in the transaction. The Whole Enchilada Hot tortillas anyone? Gruma, the parent company for Mission brand tortillas and the world’s largest flour and corn tortilla company, is about to open its first San Fernando Valley manufacturing facility at The Plant in Panorama City. “There’s a big enough market in the Valley and they didn’t want to be delivering from Rancho Cucamonga,” said Greg Geraci, a broker with CB Richard Ellis, who, with CB’s David Harding, Walt Chenoweth and Frank Geraci, represented Gruma in the deal. Gruma actually had identified several markets the company thought would be suitable for a new tortilla manufacturing plant location, so the CB team was under pressure to identify a Valley site early. “If they found a facility in another target area, they would put this one on hold,” Geraci said. A solution came from an unlikely source, a decorative accessories company that had recently inked a deal to acquire a 200,000 square foot facility in The Plant’s recently completed addition in Panorama City. Zodax had intended to expand its operations into half of the building and lease out the other half, but Gruma made Zodax a deal to lease the entire facility that it couldn’t refuse. “Our intention was to occupy half the building, which we did, and lease the balance,” said Philip Cohanim, president of Zodax. “Then Gruma appeared, and since they were a credit tenant and required the entire building on a long-term lease, it was an opportunity we did not want to lose.” The Gruma deal, brokered by David Hoffberg and Jerry Scullin of Delphi Business Properties Inc., is a 10-year lease valued at $16 million. Hoffberg and Scullin are now representing Zodax in its search to replace the space. Senior reporter Shelly Garcia can be reached at (818) 316-3123 or by e-mail at [email protected] .

There seems to be some confusion. As you can see from our coverage in this issue of the annual Valley Economic Forecast put out by Cal State Northridge and the accompanying Economic Summit recently (starting on page 1) there are two things going on the economic forecast is generally good but much of the buzz at the summit was full of negativity by panelists and audience members. The forecast: The economic climate in the San Fernando Valley remains robust despite falling housing prices and a shrinking skilled-labor pool. Job and retail growth in the San Fernando Valley will be positive, with new jobs expecting to grow by 1.5 percent in the region. Not a lot, but decent. The best news is that the Valley is officially no longer a bedroom community. It’s a job center. There are 30,000 more jobs than there are residents to fill them. So we’ve got loads of commuters coming in. But feedback from panelists, keynote speakers and others didn’t correspond with all this. The high cost of doing business here, is still a huge problem. There are also not enough trained employees and there’s mounting bureaucracy in the city of L.A. This bureaucracy just doesn’t seem to get better. I’ve talked a lot about it in this column. Representatives of various industries encouraged businesspeople to write their legislators about their increased frustration. Even keynote speaker Nolan Bushnell, the founder of Atari and Chuck E. Cheese and the burgeoning uWink chain of trendy restaurants that started in the Valley, criticized the local business climate. He said that doing business in the San Fernando Valley is a mixed bag, with the negatives far outweighing the positives. Confused? This will add to the confusion even more. Included in the CSUN Valley economic forecast are the results of a survey of Valley businesses conducted by Davis Research. This survey found that in the past year these companies have encountered pretty heavy competition and increased costs. Employee compensation is also higher but so are sales. The most interesting results of the survey, however, are these: Despite all the criticism of doing business here, 77.1% of businesspeople surveyed said they wouldn’t consider moving out of the Valley in the next two years. The survey results also showed that 31.8% (the highest percent results) felt that there are no advantages to moving from the Valley. And here’s the crux of it all. The survey results show that 51.2% of respondents say that location is the main reason for staying in the Valley. You just can’t beat it. Access to ports, huge markets in Asia all that. You can’t get that in Idaho or Tennessee. Business Journal Editor Jason Schaff can be reached at (818) 316-3125 or at [email protected] .

With the population in the heavily growing Santa Clarita Valley expected to increase by 100 percent in 20 years, many business leaders in the community fear that local highways will not be able to absorb that growth. Santa Clarita business advocate Connie Worden-Roberts is known locally as the area’s “road warrior” for her efforts in improving Santa Clarita’s highway accessibility. As such, she started her own business, the Transportation Management Association, to help with those efforts and to employ local residents. She also serves on various Santa Clarita transportation committees to help get better infrastructure installed to serve businesses and residents. In her role as co-chairwoman of the SCV Transportation Alliance, Worden-Roberts has advocated for the building of a $245 million, six-lane cross-valley connector, which will travel from State Route 14 over to State Route 126. The building of the connector is complete except for construction of a $30 million bridge that will being at Golden Valley Road, cross over the top of Soledad Canyon Road and end on the Newhall portion of the road. The connector will be complete by early 2009. The connector, Worden-Roberts said, will ease traffic flow for people traveling from the neighboring Antelope Valley and the eastern portion of the SCV to the industrial centers west of Interstate 5. To that end, Worden-Roberts also advocates for improvements to the I-5. The number of trucks using that highway monthly has doubled from 500,000 to 1 million. The interstate, she said, needs additional truck and carpool lanes on both sides of the highway. Those improvements are vital to accommodate the fast-growing Valley, which is adding a new industrial center located off Hasley Canyon Road that is expected to bring an additional 80,000 jobs to the area. It is approximately 15 percent complete and will take 15-20 years to reach full capacity. A future 21,000-home development in Newhall Ranch, which will start development next year, is expected to bring 60,000 new residents to the Valley. Worden-Roberts sat down with the Business Journal to talk about the area’s growing pains and the state of business in the Santa Clarita Valley. Q: How will the new industrial center on Hasley Canyon Road help retain jobs in the area? A: A little more than 50 percent of the Santa Clarita Valley work force, still goes south to the Los Angeles area for employment. It’s a huge issue to us. I would so much rather see them stay up here, which is why I’m happy about the development of the new industrial center. It could provide up to 80,000 jobs. So if more people could stay up here, if (area developer) Newhall/Lennar could find Fortune 500 companies that pay a good salary, we can keep our people up here instead of seeing them go south every day and that would improve their quality of life. They could spend more time with their families. The cross-valley connector will help ease traffic. Q: Does the area’s lack of roads play a part in the fact that more than half of the workforce goes south to work or does it just make it harder for them to leave? A: I think it makes it harder for them to leave. We have pretty good infrastructure. We have adequate parks. We have very good police and sheriff service. I think we’re the safest city in California. Our schools are good. The shopping is good and getting better. The (Valencia) Town Center is looking to expand with 60 new stores and I think four or five new restaurants. They have adequate space in the land area and they’ve centered themselves in such a way that they take advantage of our main thoroughfares so they’re in the center of the roadways that run through our Valley. As we grow, we’ll attract more people to shop local. Currently, there’s a lot of leakage people who would rather have more opportunities to go to a greater number of shops and go over the hill to shop. We must balance housing and jobs. I see it as being formidable but doable. Q: A lot of people are under the impression that the industrial centers in Santa Clarita are at capacity. Is this correct? A: That’s incorrect. The new industrial center on Hasley Canyon Road is already getting a lot of good corporations that are located up there. There are a number of good firms that have relocated up there or located up there initially. Q: What kind of businesses is the center attracting so far? A: Companies like Ultraviolet Devices, Inc.: they manufacture ultraviolet devices, but they have markets all over the world. And there are other companies there where their market area is indeed worldwide. So it will attract other high-tech industries primarily. There can be some manufacturers too. It would be clean manufacturing. It couldn’t be with big smoke stacks or something like that. They could bring in product and turn it into something. Q: What companies are there now? A: Pharmavite, Del West Engineering, Remo Drums, Chocolates a la Carte. There are some office buildings too. The continuous development of this area means you’ll have a good workforce. We’ll have more high-tech, more high-paying jobs so the opportunity to make a livable wage will grow exponentially. Q: What kinds of problems are those businesses going to be looking at? Will infrastructure problems be one of their biggest challenges? A: I think the location won’t be a problem at all. A company that manufactures products that need to be shipped by truck will be very concerned about the availability of lanes and capability of delivery time. If they get stuck on the I-5 or if it takes them eight hours to deliver something that should only take them two hours, certainly that will be a practical matter. The other thing about it is you have to be concerned about employees. If you have one of those companies that is moving from, say, Kansas to here and you brought a few of your employees with you, there is the issue of salaries how much you pay will determine the quality or availability of employees for you. They may have difficulty getting people to move here. And maybe when the folks come out here and look at the home prices in Valencia, they may say it’s too much money. Not long ago, just before the market dropped some, the average price in the Valencia area, in fact the whole Santa Clarita Valley, was $600,000. Now it’s less than that. But that might still be sticker-shock to someone from the Midwest. Q: What is the role of the Valencia Transportation Center in helping businesses? A: Although I chair the transportation committee for both the chamber of commerce and the industrial center, my business is called Transportation Management Association. My business is a separate entity from VIA and the chamber of commerce. It’s a 501(c)(3) corporation. I’ve always been kind of a business entrepreneur. I have a couple of board members who assist me. The reason I formed TMA is to find local jobs for people who would otherwise go over the hill. My tenants are all people who, if they weren’t here, would otherwise be in the San Fernando Valley. As we grow, they grow. K-9 has three offices with 40 employees. A business with women engineers who deal with road issues has five offices here. The Gateway Coalition petitions for roads. Someone just left but for a good reason. Their company is expanding and they outgrew their space. Q: How did you get the road warrior title? A: I think it’s because everywhere I go to speak, I’m speaking about roads we need, roads we need to improve, roads that hopefully we will see built to accommodate growth here in the Valley. Q: How is the business climate now in the SCV? A: I think it’s very positive right now. I think there’s a little fear of it becoming a little bit worse. But right now it’s very positive. SNAPSHOT – Connie Worden-Roberts Titles: President of the Santa Clarita Valley Chamber of Commerce, 2002; President of the Valencia Industrial Center, 1999; Four-time Santa Clarita Valley Woman of the Year award recipient; President of the Transportation Management Center; Member of the VIA and SCV Chamber of Commerce board of directors; Former board member of the Hart Union High School District and former director of the Boys and Girls Club of the Santa Clarita Valley; Director, SCV Congress of Republicans; Chairwoman of the Santa Clarita Valley Chamber of Commerce’s Transportation Committee; Fifth District Supervisor Michael D. Antonovich’s appointee to the North County Transportation Coalition; and co-chairwoman of the SCV Transportation Alliance. Born: Minnesota Little-Known Fact: Worden-Roberts is a relative of former Lancaster Mayor Frank Roberts by marriage. Personal: Son, Leon, and grandson, Jake, 7 Favorite Saying: “I get depressed when I don’t have a lot to do.”

With the web becoming the fastest growing distributor of videos in the world, an Agoura Hills company is helping viewers make sense of it all. ClipBlast! provides a free search engine for navigating the online world to find videos of interest to viewers and ways of managing their favorite and preferred content. With more personal computers hooked up to quicker broadband service, they are being used more and more as a video monitor or television, said ClipBlast! CEO Gary Baker. “We are a culture that is focused on entertainment or emotional moving images through the visual medium,” Baker said. The privately-held company was launched in late 2003, an instance of good timing as two years later would see the debut of YouTube and the start of a revolution when it comes to videos online. User created content and professionally-produced videos, television shows and short films now inundate the web. ClipBlast sees spikes in visitors when big news events occur the recent Griffith Park wildfires and the shootings at Virginia Tech for example or whenever a celebrity does something newsworthy. At the ClipBlast! site, users find a real time ticker on its main page showing what videos are being added at that moment. They can also personalize the page by stating preferences in categories, content providers and search phrases and can be notified when a new clip has been added that meets their criteria. “They can go back and watch a clip from a week ago if they want to,” Baker said. “This is really an on-demand system.” As a private company, ClipBlast! has no shortage of available funding. But before going after any additional financing, the company execs need to know in what direction they are going, Baker said. There have been opportunities for buyouts but heading in that direction was not of any interest. “We see building this out as key to driving good quality value,” Baker said. A World of Films The 2nd Annual Cross Cultural Film Festival Los Angeles takes place June 5 at the Whitefire Theater, 13500 Ventura Blvd., in Sherman Oaks. Screenings will include dramas and documentaries from Canada, South Africa, Hong Kong and the United States. The festival was founded by Robin Saban, who also organizes the International Student Film Festival Hollywood that takes place in November. For more information call (818) 203-4179 or visit www.crossculturalfilmfestival.org. Filmmaker Assistance Online media company Withoutabox, Inc. signed a representation agreement to expand its activities and presence in the United Kingdom and Europe. Andy Whittaker will serve as the film liaison for Studio City-based Withoutabox with the European filmmaking community. Withoutabox offers online tools and services for independent filmmakers, including its popular submission system for 2,000 film festivals worldwide. Whittaker has served as managing director of Dogwoof Pictures and in 2005 simultaneously released a feature film to theaters, DVD and the Internet. “Europe has a wealth of talented independent filmmakers that have been using Withoutabox for years,” Whittaker said. “It is my mission to build upon this by bringing what Withoutabox has successfully done in the United States to the many European festivals and filmmakers.” The agreement with Whittaker is the second strategic partnership with Europe taken by Withoutabox this year. The company recently entered into an exclusive partnership with the Short Film Corner, a division of the Cannes Film Festival, whereby Withoutabox oversaw the Fourth Annual Short Film Corner’s entire title registration process for this year’s event, including solicitation, management and promotion of films. CW Wraps First Season The CW Network completed its inaugural season ahead of both UPN and The WB in target demographics of adults ages 18 to 34 and women ages 18 to 34. The Burbank-based network was launched in September as a replacement for Warner Bros.’s WB Network and UPN, owned by CBS Corp. Returning next season will be the popular “America’s Next Top Model,” “Pussycat Dolls Present,” “Smackdown,” “Beauty and the Geek,” and “One Tree Hill.” Joining the lineup will be new dramas “Gossip Girl” and “Reaper.” Ending it series run this spring was “Gilmore Girls” and cult favorite “Veronica Mars” was not renewed for a fourth season. Pirate’s Booty In the event that one hasn’t tired of reading about “Pirates of the Caribbean: At World’s End” by now, the Disney-owned El Capitan Theatre will display through June 28 set pieces, props and costumes from the third installment of the wildly successful film series. Among the items are ornate props, elaborate costumes worn by the cast, and set pieces of the pirate ships and Shipwreck Island. Warner Bros. News Warner Home Video announced that it is the first studio to surpass sales of 100,000 copies of a high-definition DVD with the Academy Award-winning “The Departed.” “It’s no accident that Warner is the first studio to reach this benchmark. We owe this success to a combination of great content and our decision to support both high definition formats,” said Ron Sanders, president of Warner Home Video. “By releasing titles on HD DVD and Blu-Ray, Warner Home Video not only increases our potential audience reach, but also offers consumers assurance that regardless of the format they choose they can enjoy our movies.” And in other Warner Bros. news, the Hollywood Reporter reported May 24 that Warner Bros. Pictures acquired rights to “Skulduggery Pleasant” by Irish author Derek Landy. The book series is considered to be Warner’s next family-friendly film franchise. Set in present-day Dublin, the comic-horror novel is about Skulduggery Pleasant, a skeleton detective and his young accomplice, Stephanie. Staff Reporter Mark Madler can be reached at (818) 316-3126 or by e-mail at [email protected] .

Add one more business trend to the rising number of products and services attributable to aging baby boomers reverse mortgages. With seniors living longer and home values escalating, a growing number of retirees are opting for reverse mortgages to help them to continue to live in the style to which they’ve become accustomed in their golden years, and as they do, more investment firms are buying reverse mortgage loans and more lenders are offering them. Countrywide Financial Corp. became the latest major mortgage lender to enter the arena when it rolled out its reverse mortgage product, SimpleEquity, nationally earlier this year. But Countrywide is not alone. Financial Freedom Senior Funding Corp., Seattle Mortgage Co., IndyMac Bancorp Inc. and Wells Fargo Home Mortgage among others are all reporting dramatic increases in their reverse mortgage lending. Last month, in a further sign of the increasing attractiveness of the niche, Bank of America Corp. agreed to acquire the reverse mortgage business of Seattle Mortgage Co. At the same time, major financial services companies like Lehman Brothers Holdings Inc., UBS AG and Deutsche Bank AG are all purchasing these loans from lenders for resale to investors, marking a major shift from years past when Fannie Mae was the dominant buyer of these loans. Reverse mortgage programs essentially allow seniors to borrow against the equity in their homes and receive monthly payments from the lender for as long as they remain in their home. If they move or sell their home, borrowers must repay the loan, but many times, the lender is repaid upon the death of the borrower from the proceeds of the house sale. “A major reason people get a reverse mortgage is to get rid of their current mortgage payment,” said Kathy Meyer, director of Pacific Coast Lending’s just opened reverse mortgage division. “If someone has a $150,000 mortgage and they are paying $1,200 a month, if they do a reverse mortgage, we pay off the regular mortgage and they have an extra $1,200 a month. “It’s just like a regular mortgage, the only difference is the loan is paid off when they move, sell or die. There’s no monthly repayment.” The loan can be paid in a lump sum, monthly installments or as a line of credit. Countrywide’s SimpleEquity program goes one step further, eliminating the origination fee and closing costs for borrowers who opt to withdraw the entire loan at closing. Calabasas-based Countrywide is targeting those whose homes are valued at $500,000 and more. “There weren’t a lot of options for people who had higher-value homes,” said D. Steve Boland, managing director, reverse mortgages at Countrywide. “We felt this was a very natural progression to now be the leader in enabling homeowners to stay in their homes and retire comfortably.” Reverse mortgage loans have increased dramatically in recent years. In 2006 reverse mortgage loans insured by the Federal Housing Administration increased 77 percent to 76,351 loans, up from 43,131 in the prior year, according to data from the National Reverse Mortgage Lenders Association. Several factors are fueling the trend, including high home appreciation rates of recent years. Since lenders don’t know what the life of the loan will be, they tend to be extremely conservative in assessing the amount they will lend. In the past, that meant that those with a moderately-priced home might not receive enough cash to make a reverse mortgage worthwhile. But as home values have escalated, so too has the amount available to borrowers. At the same time, the graying of the baby boom generation is creating a much larger market for lenders and many more are jumping into these products. “We’ve looked at the demographic shift that is on the horizon, and seniors are going to grow as a percentage of the population in unprecedented numbers,” said Boland. “It was very important to make sure we had reverse mortgage as part of our offering to meet their needs.” Pacific Coast Lending, which works through CPAs to provide a variety of mortgage lending, began to see increased interest in reverse mortgages as CPAs counseled their clients in areas such as estate planning. As the product selection for reverse mortgages expanded, CPAs are increasingly recommending the option for some of their clients. “The programs have changed a lot in the last six to 12 months,” said Meyer. “Reverse mortgages have really improved and expanded so they really offer flexibility with regard to what people can use products for.” Lenders and brokers note that reverse mortgages can offer a number of different solutions for everything from supplementing monthly income to funding college education for grandchildren and helping with unforeseen medical expenses. “A reverse mortgage is not for everyone, but we think it meets the needs of a number of senior homeowners looking for additional income in retirement,” said Boland.

The city of Santa Clarita was ranked the third safest city in California in 2006 for cities that have a population of 150,000 and more. The rankings were based on crime rates for cities with police departments and contract cities in the state. Although Santa Clarita experienced a 5.7 percent increase in its population last year, part-one crimes, which are the most serious felonies, dropped 4.6 percent compared to the prior year. Violent crimes, however, increased 16.7 percent during the same period, from 336 to 392. Property crimes, which include burglary, robbery, theft and grand auto theft, fell 7.7 percent in 2006. Gail Ortiz, the city’s public information officer, attributed the drop in most crimes to crime prevention efforts and programs, including neighborhood watch programs. Irvine and Glendale were ranked first and second safest cities in California, respectively.

The official economic forecast was largely good but many Valley-area businesspeople speaking at the 2007 San Fernando Valley Economic Summit at the Universal Sheraton on May 17 weren’t all smiles. Lack of space, the high cost of doing business, not enough trained employees and mounting bureaucracy are threatening to push out businesses in the San Fernando Valley to more business-friendly environments, they said. Calling the Valley a poor place to do business, business leaders in industries across the board said their businesses are suffering as a result of the business climate in the region and state. Representatives of the retail, manufacturing and entertainment industries each discussed the various challenges of doing business in the Valley and encouraged business owners and leaders to be proactive and write to legislators to express their mounting frustration. “California is becoming very business unfriendly,” said Nolan Bushnell, founder and chief executive officer of uWink. Bushnell, a Valley entrepreneur, knows something about business. He created the video game system Atari, later started the Chuck E. Cheese restaurants and most recently founded the restaurant and entertainment center uWink located in the Westfield Promenade mall in Woodland Hills. Among the challenges, Bushnell said, is the threat of litigation that keeps innovators from developing new technology. Although the technology is in place to develop an auto-piloted car to help solve the state’s sub-par public transportation system, people are afraid to test the technology because they could be sued if something goes wrong, he said. In addition, the state faces a middle-market labor shortage, which is compounded by its failing education system. Doing business in the San Fernando Valley is a mixed bag, with the negatives far outweighing the positives, Bushnell said. The positive aspects of doing business in the Valley, he said, are that residents have high incomes, the area has a good test market and is close to major markets. The downsides, he said, include high costs, regulation difficulties, an unpredictable environment, the rising cost of workers’ compensation benefits and zoning problems. In addition, the high cost of living is driving out the middle class. “We’ve got problems and we have to fix it,” Bushnell said. To Steve MacDonald, president of Film L.A., a private, non-profit corporation that offers permit coordination and assistance to filmmakers, fixing the problem would entail California offering tax incentives to keep the film industry in the state. More and more film production and state income taxes are being lost to other states that offer such incentives, he said. In 2006, regional gains in the film industry were less than 1 percent, MacDonald said. And further erosion is expected. “It does not look good this year,” he said. Brad Ward, president of the Small Manufacturers Association of California, echoed the sentiment for the manufacturing industry. Cuts in the Star Wars program will result in layoffs in the region, he said. More than 300,000 manufacturing jobs have been lost in the state over the past several years, he said. Despite this, “manufacturers in the San Fernando Valley are doing better than many throughout the state,” he said. The credit for that, he said, is owed to “the tenacity of San Fernando Valley business owners.” The same challenges for manufacturers exist all over the country. Because of the mounting cost of doing business in the area, Ward fears that businesses will “get fed up and leave.” The cost to manufacture products is higher in this country than in Third World countries, causing many businesses to use labor from other nations to manufacture their goods. In addition, the lack of a skilled labor pool has translated to companies having difficulty finding even qualified entry-level workers. The health care crisis is further adding to the problem. “What it looks like is small business is going to have to carry health care on its back,” Ward said. The retail sector is feeling the heat too. According to Clifford Goldstein, senior partner at development company J.H. Snyder, the lack of retail space in the Valley, and skyrocketing rents for the space that does exist, are causing more retailers to build upward instead of horizontally, creating more dual-level structures. The high cost of building surface parking is forcing more customers to use parking structures and paid parking. In addition, a 30 percent spike in the cost of such building materials as steel is also affecting retail growth. “There’s a thin margin of profitability for retailers,” Goldstein said.

The Burbank Gardens Retirement Hotel was sold earlier this month to Newport Beach-based senior housing operator VinCal Senior Housing, LLC, for $12.5 million. The eight-story retirement hotel is undergoing $7 million to $8 million in renovations including turning the eighth floor into a center that will provide care for as many as 25 residents suffering from Alzheimer’s disease and dementia. “It’s going to be a higher-end facility,” said George Stavaris, vice president of Colliers International’s Encino office, which represented the buyer. “The market can certainly sustain that.” According to Eric Davidson, principal with Vintage Senior Housing, which will operate the new hotel through Vintage Senior Management, the facility will have 104 residential units with rooms for about 110 seniors after renovations are complete. The hotel should be open in about a year. The facility, which originally opened in the mid-1980s, was owned by Orlando Clarizio Sr. of Burbank for 20 years before he died. According to Clarizio’s son, Orlando Clarizio Jr., the hotel “was struggling for many years” before it was purchased. “My father didn’t believe in raising the rents,” Clarizio Jr. said. “People were paying 30 to 40 percent below market value.” Although the Clarizio family looked for a local company to purchase the hotel, nobody in the area expressed interest in acquiring it because it was in need of renovations, he said. Subsequently, Clarizio Jr. and Stavaris worked together to sell the property for about two years before VinCal purchased it, according to Stavaris. Escrow on the property closed at the end of April. “At the time, it was the only (company) that accepted the property the way it was,” Clarizio Jr. said. According to Davidson, the purchase is among a growing trend among real estate service companies that take part in off-the-market transactions to purchase property. Due to the lack of space in the region, companies are finding it easier to purchase existing entities and renovate them. “With the market as tight as it is, it’s how business is being done,” Davidson said. “Almost every type of industry has seen this type of off-market transaction to find space.” Another advantage to this off-market transaction, Davidson said, is that the zoning for the property won’t need to be changed. With a large number of baby boomers taking on the responsibility of caring for aging parents, the city of Burbank is in need of expanded Alzheimer’s and dementia care for seniors, Davidson said. One feature of the hotel is a “Recollections Wing,” which will be designed to help prompt residents’ memories. In addition to extra staffing and a monitoring system on doors and windows, the rooms in the wing will be adorned with photos in the hopes of jogging the memories of those suffering with Alzheimer’s. Educational and leisure programs will also be offered. The renovated hotel will have an increased bed capacity, according to Stavaris. Although the facility is licensed for 120 beds, it only had 100 beds previously because the top floor wasn’t being used. According to Davidson, after renovations the approximate monthly rent for studio apartments will be in the low-$3,000 range.