With all the industry hype and fanfare about the Dow Jones Industrial Average breaking the 12,000 ceiling last month, it begs the question: Is this just the extra push the moribund IPO market needs to revive itself? The short answer: depends on who you ask. “The underwriters are going to try to push them out now,” predicted James DeStefano, an analyst with Renaissance Capital’s IPOhome.com in Greenwich, Conn. DeStefano reasoned that since the end of the year often sees an uptick in initial public offerings, or the first sale of a company’s common shares to investors, the new Dow number could bode well. “I think we’re going to see more activity,” he said. That could be good news for Simi Valley-based voice and data communication services provider InterMetro Communications Inc., which filed its IPO in mid-May and as recently as late September said it planned to start trading on the American Stock Exchange last month. <!– –> As of Nov. 1, however, the company remained off the market. (Companies cannot speak publicly about IPOs and calls to InterMetro were not returned.) Now would seem like a good time for InterMetro to go public given the glimmering Dow, but DeStefano said the company is hampered by its size just 38 employees and lack of track record in a crowded field of other big name voice-over-Internet providers “Regardless of how the market is doing, I still think it faces some headwinds,” he said. “It’s a very risky company.” DeStefano said successful IPOs tend to come from reputable names poised to grow. “With the strength of the market, especially the Dow, you’re seeing people more interested in putting money behind the developed companies, the fundamental that have growth potential. That’s why Douglas Emmett did well.” Santa Monica real estate investment trust Douglas Emmett has turned into a Wall Street darling since it launched its $1.39 billion in shares last month, the largest initial public offering of a U.S. real estate investment trust on record. The offering price had been placed in the $19 to $20 per share range, but was increased to $21 a share. The company also increased its offering by 20 percent to 66 million shares to meet demand. DeStefano said Douglas Emmett prospered because it is well known, with almost 50 properties and 11.6 million square feet across the country and 12 in the Valley, namely Studio Plaza in Burbank, the Warner Center Towers office complex and the Sherman Oaks Galleria. “If you want to be in the market, they’re the main player,” he said. Still, that size may also make Douglas Emmett the exception to the DeStefano’s theory that now is the time for IPOs to jump in. Charles Rothstein, senior managing director for the Michigan-based global private equity and investment-banking firm Beringea, said despite any record-setting Dow returns, private equity funds remain a better and less regulated alternative to companies looking for funding than going public. “In spite of a soaring Dow, there are other viable financing options which should keep IPO activity muted,” he said. “The sky-high (Dow Jones Industrial Average) is a barometer of market conditions and sentiment, but IPOs are still very difficult to complete.” Dan Genter, president and CEO of the Los Angeles money management firm RNC Genter Capital Management, also questions whether the 12,000 mark will lure more IPOs out of the wings, agreeing with Rothstein that “you’re much better off to sell out to a private equity firm.” That doesn’t mean the Dow’s rise isn’t good news, Genter said. “The best thing about the Dow reaching 12,000 is there’s a lot more buzz about it,” he said. “Success breeds success.” In fact, he thinks the record is just one step in a long series of improvements that will increase IPOs. Until all the stars align, though, Genter says don’t hold your breath. “Now that you have a stable interest market, now you’re in the first place where you’re going to see price-earnings expand,” he said. “Then you will see people start moving back into the public.” Van Nuys Feels Motown Woes The repercussions of Detroit’s ailing auto industry are being credited with dragging down third returns for the Van Nuys wheel maker and auto parts supplier Superior Industries International Inc. The company reported that Ford Motor Co. and General Motors Corp. once some of its biggest clients have scaled back orders on aluminum wheels, causing sales to slip from $178.3 million a year ago to $174.3 million. The losses forced Superior to sell its suspension components operations, close a factory in Tennessee and restructure operations in Van Nuys and Arkansas during the quarter, the company said. In a statement, company president and CEO Steven Borick zeroed in on Ford, GM and DamlerChrysler AG as the culprits. “Superior’s restructuring continues an effort made increasingly urgent by the recent production cuts announced by the Big 3 automakers,” he said. K-Swiss U.S. Sales Down The Westlake Village shoemaker K-Swiss Inc. reported slightly poorer third-quarter profits, which it credited to a softening of domestic orders. Earnings dropped to $21 million $0.59 per diluted share compared to $21.1 million during the same 2005 period. Revenue also fell from $136.7 million last year to $133.1 million. That was partly because of stateside sales, which decreased by 21 percent to $81.7 million, the company reported. International revenue, on the other hand, boomed with a 55 percent increase to $51.4 million. Chairman Steve Nichols in a statement said the disparity between the two sides is “consistent with our previous forecasts,” although he admitted the decline in domestic sales was bigger than anticipated. “We were able to supplement the strength in revenues and backlog in Europe and Asia with better-than-expected margins and at-once orders of our Classic product,” he said. Staff Reporter Chris Coates can be reached at (818) 316-3124 or at [email protected]
Cherokee to Represent Hot Kiss, Linea Pelle
Cherokee Inc. client Hot Kiss has struck an exclusive multiyear distribution deal with the major South Korean retailer, marketer and wholesaler YKI Inc. Los Angeles-based Hot Kiss designs, manufactures and markets junior sportswear, denim, dresses, footwear and accessories. The decade-old company’s collection is sold in more than 4,000 specialty and department stores. While the South Korean agreement includes distribution of most of the brand’s categories, detailed terms were not disclosed. It was also announced that Van Nuys-based Cherokee has taken steps to acquire licensing for international leather goods maker Linea by Linea Pelle. The distribution deal would bring the Linea Pelle brand of artisan, handcrafted leather products to markets in the U.S. and abroad.
New Bar President Wants Clearer Role for Group
A push that began a few years back to raise the profile of the San Fernando Valley Bar Association has yielded a newly energized group with some 2,000 members. Now, as Patricia L. McCabe takes the reigns as the bar association’s president for the 2006 2007 term, she is hoping to make sure that those members find what they are looking for in the organization, and even some things they may not know they want. Q: What are your goals for the coming year? A: The last two years we made a big push at community outreach and trying to get the bar well known in the community and that’s good. But we have 2,000 members. Do those members really know the programs we offer? And do those 2,000 members really know the benefits we offer? I want to make sure they do. My goal is to make sure my membership feels at the end of the year they know why they’re a member and they see the benefit and they’re glad. This all started in July when I was writing a check to another organization. And every year when I write the check I always say, why am I a member? I get my disability insurance from them, and that’s the only thing I get. I want my members to get more than one thing. I think the time has come for us to analyze our programs and take a look at where we are and where technology is and where our members are and really offer our members the best programs they can receive. Q: What are some of the programs you would like to institute? A: We have members that want to have networking and I plan on bringing back networking opportunities. We’re revamping MCLE (mandatory continuing legal education). There are all these providers you can go through. There are specialty bars, county bars, women lawyers, plaintiff bar, Chinese-American lawyers there’s every possible bar association. Members are members of my bar because they either feel they’re getting benefits or they feel an affinity or they feel an association with this bar, and I want to make sure that’s respected. And I’m hoping by giving back to members benefits and programming and other services that will give us the opportunity to reach the people who aren’t members. There are so many lawyers in the Valley who aren’t members and I don’t know why. Q: What prompted you to become an attorney? A: My undergraduate degree is in microbiology, and I have a master’s in clinical psychology. Before I became a lawyer I was a clinical psychologist. I thought I’d be a doctor, but organic chemistry got in the way. I had a patient who had very serious problems with his health insurance company, and it made me realize I would have a greater ability to change these sorts of things if I were a lawyer. Q: How did you come to your acting career? A: It was trial by fire at the law firm I joined after school. The day I was sworn in, they had me doing trial work. One of the attorneys I had met told me to take acting class because it would help in the courtroom. So I did. And my acting coach said, ‘you’re really good. You can do this for a living.’ Well this is L.A. So I actually got an agent for commercial work, and I actually booked commercials. We arranged them to film in late afternoon. I also had a small, non-speaking role on “It’s Garry Shandling’s Show.” I did it for four years, and then when I opened my own office, I had to stop. Q: What keeps you in the practice of disability litigation? A: I sue the government. If Congress rewrote the act tomorrow, I would have no problem saying they changed the law, this is how it is. But as it stands, there are promises made and these people qualify and for whatever reason they’re denied and that’s unjust. I do it to keep that system of balance in place. I have friends in the same practice because they came from a legal aid background. They always worked for the poor, and that wasn’t necessarily me. For me it’s keeping the balance of justice. The law says if you do everything the way it’s supposed to be done, we will do this, and they don’t do it. So that’s wrong. Q: Who is your most admired person? A: I had a client who was a single mom. This mom had been living in a camper shell with her two daughters, no hot water, no heat for almost three years. And she’d been getting them to school clean every day, making sure they did their homework and feeding them. She wasn’t asking for handouts. She had been an office administrator for a law firm and then she got multiple sclerosis. I look at somebody like that and I don’t think I could do that. I don’t think I could live in a camper shell without hot water for three years. After we won she said, ‘do you think we can have hot water?’ That’s why I do what I do. Q: What do you consider your greatest accomplishment? A: I’m a work in progress. I don’t know yet. SPOTLIGHT Patricia L. McCabe Title: President, San Fernando Valley Bar Association Firm: Law offices of Patricia L. McCabe, Van Nuys Practice: Disability Litigation Born: Sept. 20, 1961 Personal: Single, no children. Education: San Diego State University, B.S. micro-biology and B.A. in history; Master’s degree from SDSU in clinical psychology; J.D. from Franklin Pierce Law Center.
Entrepreneurs Learn To Implement Ideas
Mari Prentice found out a few weeks ago about the Dream and Discover 2006 Entrepreneurs Conference at College of the Canyons and immediately saw an opportunity. Her Los Angeles start-up, hungrypotato.com an online store that sells merchandise and souvenirs from restaurants across the country is just getting off the ground and Prentice thought the conference could be a chance to learn a few tricks of the trade from those in the know. Lucky for her, that’s exactly what she got. “It’s been so great,” said Prentice, during a brief intermission during the jam-packed conference at the college’s Performing Arts Center. “I’m so inspired.” Prentice was among about 250 small business owners and aspirant entrepreneurs who turned out Oct. 31 for the half-day event, which included four seminars on small business practices, growth strategies and tackling the myriad other challenges of starting a business from the ground up. The headliners were Jeff and Rich Sloan, a pair of Michigan brothers who became multimillionaires through a unorthodox business path that included, in order: buying, fixing up and selling dilapidated houses; breeding Arabian horses; manufacturing a car and boat battery device; founding a consumer products import company; creating a $60 million venture capital firm; and starting the small business assistance website startupnation.com, which led to a book deal and a syndicated radio show in 75 markets. The success, all without either having a business degree, was all possible because they were willing to take calculated risks and invest wisely, Jeff Sloan said. He noted that such success is even more doable today, given the advances in technology, the Internet and business techniques. “This is the golden age of entrepreneurship,” Jeff Sloan said. As proof, the brothers presented eight steps to creating a thriving business, from the benefits of using smart loans to hiring and working with public relations firms to the importance of establishing connections with those that can help a company grow. “Find those key players to help you get your business done,” Rich Sloan said. An often-overlooked principal, the brothers said, is to focus on the main mission of the business, even if that means outsourcing non-vital functions like payroll or shipping. “Keep your mind clear,” Jeff Sloan said. “Let the minutiae be taken care of by other people outside the business.” And watch your burn rate early on, he said. “It is so fundamentally critical managing that precious resource,” Jeff Sloan said. “Protect it very, very carefully.” The event also included Lina Ramos of the La Jolla consulting firm Emerging Growth Enterprise LLC, motivational speaker Bodine Balasco and Mitch McMullen, who co-founded the Santa Clarita-based Newhall Coffee Micro Roasting Co. in 1996. McMullen, using a mix of folksy and passionate language, walked the audience through the growth of the company from a single coffee shop on Lyons Avenue in Newhall to a major player on the organic coffee circuit, with distribution to Ralphs, Stater Bros., Wal-Mart and Sam’s Club outlets and catering agreements with Walt Disney Co., DreamWorks Animation SKG Inc., Warner Bros., Getty Center, the ski resort Mammoth Mountain and scores of others. McMullen credited the swift growth to a deceptively simple business strategy: “You’ve got to make a better mousetrap. Better coffee is our mousetrap.” It’s also been fueled by McMullen’s push to find business lost by larger competitors. Piece by piece, he’s been able to secure accounts once held by big name suppliers, chiefly Starbucks Coffee Co. “Remember David and Goliath?” he said. “Your small size can really help; the big guys can’t serve them like you can.” Dena Maloney, dean of the economic development department at College of the Canyons and an event organizer, said relaying such pragmatic advice to those that can use it is the ultimate goal of the conference something not always available to small business owners on shoestring budgets. “The excitement in the room is amazing,” Maloney said. “Just amazing.” So amazing that plans are already in the works for a second conference next year. “Based on the response, there seems to be such a need for this,” Maloney said. That’s welcome news for fledgling small business owners like Prentice, who said she took the success stories of the Sloan brothers and McMullen to heart. “I wish there were more of these,” she said.
Local Businesses Turn Out For Valley Community Clinic
This regular feature focuses on philanthropic activities by Valley-area companies and businesspeople. Valley Community Clinic in North Hollywood held its third annual fundraising gala to benefit its nationally-recognized youth/teen program. Among the Valley-based businesses that sponsored the event were Anheuser-Busch, Aetna, Blue Cross of California, Garcia Research Associates, Kaiser-Permanente, OPI Products, Lakeside Healthcare, Mike’s Roofing Services, momready.com and NBC Universal. The event dubbed “Laughter is the Best Medicine/Visionary Awards” included dinner, comedy, music and an awards program honoring individuals and businesses that have shown their support for the facility and its programs. Among the honorees were Emmy award-winning actor and social activist Edward James Olmos and Maria Reza, former LAUSD superintendent, student health and human services. Also honored was long-time clinic corporate sponsor, Carlos Garcia of Garcia Research Associates. Garcia’s Burbank-based company was recognized for its continuing philanthropic support of community health care in the Valley. Focusing on ethnic market research, Garcia Research Associates is especially sensitive to multi-cultural issues. Garcia and his associates actively seek to promote the economic, educational and social advancement of Latinos and other under-served communities. The benefit was held at the Globe Theatre in Universal City and was attended by approximately 300 guests. Greg Proops, Wendy Liebman and Schuyler Fisk shared the stage providing the entertainment for the evening’s celebration. Valley Community Clinic, a charitable, non-profit organization serves thousands of Valley families who work hard but find it difficult to afford high cost doctor visits. For more than three decades, the clinic has provided free and low-cost services, caring for more than 50,000 patients in 2005. Its teen program provides health and pregnancy prevention education and last year served more than 2,800 Valley teenagers. Hospital Fundraiser The Oakmont Country Club in Glendale was the site of the recently held benefit hosted by the Women’s Council of Verdugo Hills Hospital Foundation. The annual fundraiser’s intention this year was to raise money for the hospital’s new digital record and image tracking system called ACCESS. The system allows for the viewing of X-rays online, decreasing processing time thus alleviating patients’ anxiety awaiting results. Among the greater Valley sponsors were Rusnak Automotive Group of Thousand Oaks; La Canada Flintridge Outlook; Thomas & Hurevitz of Glendale; and Wells Fargo. “We’d like to thank those people who have shown their support for the event,” said Betty Hurn, chair of the women’s council. The women’s council’s goal is to raise another $125,000 toward the $1.8 million price tag of the digital system. This will be added to the $104,450 the group has already donated. During its 33 years of operation, the council has raised more than $2.5 million for Glendale’s Verdugo Hills Hospital. It has funded a variety of projects including an upgrade of the gastroenterology department and the expansion of the emergency department. “Their tireless commitment and fundraising efforts set an example for all of us,” said President and CEO Leonard LaBella. Boeing Grant The Lancaster Museum/Art Gallery has received a $9,000 donation from the Boeing Company helping to bring culture and art to local schools. Boeing’s plant 42 located in Palmdale, continues its support of the Antelope Valley with this latest grant. The Partners in Education grant will enable educators to request free visits from the museum/art gallery’s education specialists. Since not all schools are able to sponsor field trips, due to budget constraints, a “mini-museum” can now be brought to the classroom. The one-hour presentations in the educational trunk will include topics such as pioneers, miners and Native American history of the Antelope Valley. “These programs will enhance a school’s curriculum in a fun and educational manner,” said Jessica Derrick, education specialist at the Lancaster Museum/Art Gallery. Childrens’ Charity Westlake Village’s IO Design, in conjunction with the American Heart Association (AHA), sponsored a recent event to raise funds to fight childhood obesity. The two-day celebration included silent and live auctions with local health professionals on hand to discuss the importance of a heart-healthy lifestyle. IO Design will donate proceeds to AHA’s youth market initiatives focusing on the obesity issue facing children in the Valley, as well as nationwide. Church Donation St. Elizabeth Catholic Church in Van Nuys was the recipient of a $5,000 donation from Wells Fargo Bank as part of financial education day held on October 27. The celebration was attended by more than 500 local residents who received professional financial advice from Wells Fargo employees. Among the bank’s staff who offered advice and assisted at the event were Sandra Contreras, Granada Hills branch lead teller; Erika Anaya, Pacoima personal banker; Albert Lopez, Granada Hills store manager; Robert Ortiz, Panorama City assistant store manager; Steven Contreraz, Panorama City store manager and Brian Bravo, Panorama City business banking specialist. The contribution will be used toward security enhancement. Westfield Kick-Off Westfield Topanga kicks off the holiday season with its annual charity event on Nov. 10 through Nov. 17. Shoppers who make a five-dollar donation to participating non-profits receive a “Week of Wonders” wristband providing discounts to more than 100 of the retailers at the mall. All of the proceeds benefit 35 non-profits including Canoga Park High School, L.A. Family Housing, West Valley Food Pantry and San Fernando Male Chorus. –Barbara Sheppard
Study: Retail Sales Weaken During October
October was a lackluster month for same-store sales growth, which dropped 3.3 percent for about 60 retailers reporting results last week, according to a report of shopping trends by the Ohio trade ground Retail Forward. Sales were down from last month’s 4.3 percent sales-weighted composite reported and 4.4 percent composite reported in October 2005. The decreases were mainly centered on apparel and accessory stores, discount department stores and dollar stores. Department stores and drug stores reported growth. The findings shore up a separate Retail Forward study that found that 55 percent of holiday shoppers don’t plan to increase how much they spend this year compared to the last holiday season. Shoppers expect to spend an average of $664 on holiday gifts, the study found. The research group also forecasts a modest 5.5 percent growth in total sales for key holiday retail stores from now until December, a decrease from 7.2 percent last year. Frank Badillo, vice president and senior economist for Retail Forward, predicted the retail market would likely remain strong through the holiday season. “A letup should be expected given the lingering impact of a weaker housing market and elevated gasoline prices,” he said in a statement. “But this doesn’t necessarily suggest a big letdown for the holidays.” Chris Coates.
Medical Record
Heidi Lennartz took an atypical path to becoming a hospital executive. The Glendale native worked as a social worker in Queens, N.Y., helped AIDS patients in L.A. and managed cases for USC University Hospital. Since August, she’s been helming Mission Community Hospital, one of the few truly independent hospitals in the region and a key caregiver for the area’s mentally ill population. It’s also a hospital on the move: the 143-bed facility in Panorama City added a new patient care tower three years ago and plans are in the works to expand the Roscoe Boulevard campus further and boost community services at its satellite operation in the city of San Fernando. With a little over two months under her belt as a hospital CEO, Lennartz sat down with the Business Journal and talked about the tests she’s faced so far, where Mission Community will stand in the future and the challenges that lie ahead. Question: Tell me about how you came to this position. Answer: My background is in mental health. I’m a licensed clinical social worker. I’ve been here over 11 years, (most recently) as director of psychiatric services. I oversaw the inpatient and outpatient continuum of care for both campuses. Then I transitioned into a number of roles, the last being associate administrator working with the CEOs. Before that, I worked at Midway Hospital, now known as Olympia Medical Center (near Hancock Park). I spent time in New York City working in the hospital system in Queens. I went to USC and obtained my master’s in social work with a community organizing (and) public administration emphasis. It was always what I wanted to do. That was my passion. Q: To be a hospital administrator? A: Yes. I’ve had experience in private practice. But then I worked at Midway Hospital in their AIDS unit and fell in love with working in hospitals. It’s such an exciting place to work. You have incredible, professional relationships between physicians and nurses and all the ancillary services that you come in contact with. It’s so stimulating professionally. Q: What’s unique about running a hospital in the Valley? A: I think the Valley serves a different type of client population. I think the Valley has the bulk of the middle working class the struggling working class, the uninsured working class. Here, the San Fernando Valley healthcare system is comprised of two or three major health systems; we’re the last of the independent, stand-alone, nonprofit hospitals. Q: What are some of the challenges of being independent? A: One is maintaining all of the regulatory, all of the support services and all the nursing support services of all the larger hospitals. Economies of scale. It’s a major challenge to support that in comparison to a large national health care system supporting that. Q: So why would a patient come here versus a larger hospital? A: Since we built a new hospital, we offer a beautiful new facility. We’re small so we have personalized operations, personalized service. It’s so easy and quick to talk with the director of a program and have something changed, fixed or modified. Q: So the smaller size is good for doctors and staff as well? A: Exactly. Doctors love the ability to walk in here or page me and share with me whatever frustrations they’re having, whatever they’re pleased with. Q: But isn’t it hard to be seen among all the other, larger hospitals? A: I feel we haven’t achieved the level of visibility we should. We’ve been here and affiliated with the San Fernando Valley for almost a century. This campus has had different names in the ’80s it was Panorama Community Hospital I think that has confused the public. I think we need to brand the new hospital Mission Community Hospital and take our niche market to the public. Q: The most recent hospital expansion was completed in 2003. What’s next? A: Our old building with the old emergency room is a three-story building. We’ve just recently secured an agreement with a private enterprise to renovate that building towards a healthcare service, which within 12 months will be a major benefit. At some point in the future, we’ll go into more detail. After that, it’s really focusing on cohesion between the north tower and the south tower and continuing our community benefit program at the (San Fernando Community Campus for Health & Education) in the city of San Fernando. We lease that campus from the city and have a great partnership with the city council. We also receive a number of grants that support health education initiatives. Q: It seems like a lot of issues to keep tabs on. Is there something about your personality that helps you with that? A: The ability to multi-task; the ability to stay positive and energetic and see the possibilities even in an ominous challenge that might be facing you any given week; constant curiosity and a real passion for helping people and wanting to make a difference. All those whether you’re in the Peace Corps. or working in a hospital that desire to make a difference. You have to have a yearning for that.
Valley Firms May Profit from Network Strategy
With nearly 15 production companies putting out unscripted programming, a stretch of Ventura Boulevard from Studio City to Woodland Hills can appropriately be dubbed Reality Row. The recent news out of the NBC-Universal Television Group the network would favor reality and game show programming in the 8 p.m. timeslot may have ears pricking up in anticipation that the move opens the door to get more of their shows on the air. “It’s good for our community because there are quite a few talented reality producers in the (San Fernando) Valley,” said Rasha Drachkovitch, president and executive producer with 44 Blue Productions, Inc. in Studio City. “We all know each other and compete against each other but support each other.” Anything that gives more opportunity to get shows on a network is good for everyone, added Gary Benz, president of GRB Entertainment in Sherman Oaks. “My sympathies are to the writers of scripted shows and the actors and all the other people who have been in that business traditionally because it may mean less work with the major networks for them,” Benz said. The hand opening that door for more reality programming belongs to Jeff Zucker, the chief executive officer of the NBC Universal Television Group. In an interview published Oct. 19 in the Wall Street Journal, Zucker said the network would stop scheduling scripted comedies and dramas in the 8 p.m. to 9 p.m. hour because the advertiser interest wasn’t there. Viewers, however, may see little change in this season’s schedule at the Peacock network and more likely will see the change in the 8 p.m. slot next fall. NBC is not the first network to try this strategy. ABC Television programs unscripted programming for three out of five weeknights in early primetime. While scripted programming is not something that a major network wants to totally discount, going the route NBC is makes sense at a time of cutting costs, said Robb Weller, an executive producer with Weller-Grossman Productions based in North Hollywood. Local opportunities The decision to look at only unscripted programming does open up new opportunities for independent producers and his firm already has a meeting set with NBC to pitch a show, Weller said. However, the independents can’t be fooled into thinking that strategy will always be in place. “If a good sitcom or drama comes along by a producer they have great faith in they’ll put it back in,” Weller said. Economics seems to be a main motivator in NBC’s decision. In the Wall Street Journal interview, Zucker pointed out that game show “Deal or No Deal” costs $1.1 million an episode, while sports drama “Friday Night Lights” costs $2.6 million an episode. “It’s so expensive to do pilots and have the A-list writers on hold for the studios to do that work,” Benz said. “You couple that with the success reality shows have had it’s strictly an economic reality they have to deal with.” The network may also be using the move as a way to test the marketplace with cost effective programming to see how it does without really taking a huge amount of risk, said Drachkovitch. The strategy also tells Drachkovitch that reality programming isn’t on its way out and still has a lot of life remaining. “It is still a powerful formula,” Drachkovitch said. His 44 Blue Productions is currently shopping a pilot titled “The Assignment” about life in the Los Angeles County Sheriff’s Department. Benz’s company, meanwhile, has started the fourth seasons of its shows “Intervention” and “Untold Stores of the ER” and recently launched a new show for Spike TV. The appeal of realty programming is because they are relatable to the audience and tend to be more outlandish, Benz said. “It’s a great alternative to the traditional dramas and comedies,” Benz said. Offerings last year from GRB Entertainment were filmed in New York, Denver, Atlanta, and San Francisco but this year the company is keeping many of its productions in the Valley, Benz said. Filming increase It’s the local reality show production that helps push the amount of overall on location television production up in Los Angeles County, according to statistics compiled by Film LA Inc., the not for profit agency assisting with the permitting process. The agency reported last month that television production jumped in the third quarter by 15.5 percent over the third quarter of 2005. Leading the way was reality programming, with a 41 percent share of all television programming shooting on location. The on location production creates jobs and is good for the area but the typical reality show does not have the same economic impact because there is less cast and crew, said Film LA President Steve McDonald said.
Tuesday in the Valley
The Sherman Oaks Chamber of Commerce holds its program committee meeting. 11:45 a.m. PF Chang’s in the Galleria 15303 Ventura Blvd., Sherman Oaks (818) 906-1951 shermanoakschamber.org
Taste Test
The mixture of sugar, lime and mint in the expensive Italian made bottles is not simply a mix to make a mojito, the classic Cuban cocktail gaining popularity among trendsetters. Michael Hensel, the German-born president and chief executive officer of Mojito Empire Inc., described the Burbank company’s product as a solution to inconsistency in the taste of the drink and the length of time it takes to make. Swanky nightclubs don’t normally serve mojitos but Hensel is changing that with Mojito Island, a mix that spares a bartender time of muddling, or crushing with the back of a spoon, the mint leaves and sugar needed to give the drink its sweet and minty taste. “For every mojito the bar owners are selling they are making a dollar profit more than a rum or coke or gin and tonic,” Hensel said. “Mojitos are upscale and people are paying more.” The bar and restaurant owners is only one segment the mix serves. For bartenders, it is a time saver for a drink that from scratch can take several minutes to make. For consumers, they get a consistent drink every time. For liquor distributors, they can sell more rum. Mojito Island is available at a limited number of restaurants and bars in the Los Angeles area and at one retailer in both lime and blackberry flavors. Hensel has expansion plans for the coming year that will see his product in partying hotspots like Las Vegas and Miami. Popular Mexican restaurant Casa Vega in Sherman Oaks has been using the mix for about six months and now has customers asking for it by name, said owner Ray Vega. “It comes out the same way every time and it always comes out fresh,” Vega said. “Here we make it either with tequila or with rum. Some of our customers like tequila with it to give it a different flavor.” Outside of places such as Koi, the Roosevelt Hotel and the Standard using Mojito Island at their bars, Hensel gets his mix before the Hollywood crowd at film premieres, events for the Oscars and Emmy awards, and private parties, such as one that took place recently at the home of rocker Eddie Van Halen. Not bad for a company that has been around for just over a year and which Hensel foresees racking up revenues in the millions in the next year to year and a half. If sugar, mint, club soda, lime juice and rum are the ingredients of a good mojito, perseverance and good timing are the ingredients for the success of Mojito Empire. Hensel spent six years developing a method to give a six-month shelf life to his mix, what he called the most important aspect of the product. Peter Burra, of John and Pete’s Fine Wines and Spirits in Los Angeles, called Mojito Island the freshest mix he’s ever tasted and the most authentic compared to making a mojito from scratch. Burra special orders the mix and has it delivered the next morning to maintain its freshness. He will stock Mojito Island once it becomes available in mass quantities. Longer shelf life He likes that the mix has an extended shelf life not found in competitors, Burra said. “What’s wrong with other mixes is that there is too much sugar and too much preservative in them,” Burra said. “That’s why they taste funny.” Mojito Island reaches the market at a time of high commercial and media exposure of the drink. In “Die Another Day,” Pierce Brosnan’s James Bond downs a mojito. The remake of “The Pink Panther” and this summer’s “Miami Vice,” include mentions of the drink. On television, the mojito has made appearances on “Lost,” “Nip/Tuck,” and “Family Guy.” A mojito-flavored ice cream even landed among the five finalists in the “Do Us a Flavor” contest sponsored by Ben and Jerry’s. “It’s a tropical drink and people love it during the summer,” said liquor retailer Burra. “It gives the taste of an island or traveling,” Vega said of the drink. And lest one thinks this is a repeat of how the cosmopolitan became a “chick” drink due to its popularity from “Sex and the City,” the mojito has a more masculine pedigree as Ernest Hemingway pounded them back at Le Bodeguita bar in Havana. A framed copy of Life magazine with a bearded “Papa” on the cover hangs in Hensel’s office. While Mojito Island is a non-alcoholic mix, Hensel markets the product as one would alcohol, which is why he jumps at the chance to serve drinks at celebrity-attended events. The branding of the mix as a premium product even extends to the size and shape of the Italian-made bottle so that it’s reflective of the liquid inside. Expansion plans The mojito mix is just the start for the company, as Hensel plans to expand into other drink mixes and flavors. “When you go into a liquor store and you see a bottle on a shelf, that’s all good,” Hensel said. “But if you see four bottles in different flavors and variations it attracts the eye.” Hensel was introduced to the mojito nearly 20 years ago while working as a bartender in Hamburg, Germany. He came to the United States in 1996 and found work in a bartending school in San Diego. Prior to launching Mojito Empire in 2005, he worked for a spirits company. Eighteen shareholders contributed to the $400,000 in capital Mojito Empire started with. When picking the shareholders, Hensel said he went with people who could provide connections and resources along with money. The immediate future for the company is to raise an additional $2 million to get Mojito Empire to the next level and get onto the market a new mojito-based product with a broader appeal. Hensel understands that as the company grows a firm hand on its operations is needed, which is why he will bring on a chief operating officer. Hensel’s role will continue as the drive behind the company, the guy with the passion and the ideas. “I feel eventually I will need someone to run the operations because that is not what I want to do,” Hensel said. With more money and growth, a change in the business plan is expected that includes licensing the Mojito Island recipe to overseas manufacturers. The ultimate goal is to then sell the company to a larger conglomerate, Hensel said. Until then, Hensel enjoys the life that puts him in close proximity with A-list celebrities at upscale and exclusive events. And he has the mixture of sugar, lime and mint to thank for it. In the world of mixed drinks, the margarita has tequila, the martini has vodka, and the mojito has rum. “We are the rum companies’ best friend,” Hensel said.