Companies are already expressing an interest in hiring workers who will be laid off when a Washington Mutual Inc. call center is closed in the coming months, a top economic official for the San Fernando Valley said. Since Washington Mutual’s announcement in mid-January of the job cuts, Economic Alliance of the San Fernando Valley President and Chief Executive Officer Bruce Ackerman said he has received phone calls from two companies in the San Gabriel Valley and a major insurance company in the San Fernando Valley interested in hiring some of the employees. “They are well trained,” Ackerman said of the call center workers. “They are going to be absorbed as quickly as they will be let go. That’s why we are not hitting the panic button.” Banking giant Washington Mutual is closing its Chatsworth call center resulting in the loss of 1,000 employees. Two weeks after that announcement, Superior Industries International said it would lay off 375 employees at its Van Nuys plant that manufactures automotive parts. But Ackerman and other Valley business and political officials say those layoffs are not indicative of any trend and they are confident of the area’s overall economic health. “It’s not panic time. It’s not even worry time,” Ackerman said. The Jan. 18 announcement by Washington Mutual was not unexpected as there had been talk for six to eight months the call center would be closed, Ackerman said. The banking firm is moving the jobs to San Antonio, Texas and Costa Rica in an attempt to cut costs. The positions will be phased out over the next two months. Seattle-based Washington Mutual is also cutting 64 full-time positions at a call center in South Carolina and transferring the positions to India. Los Angeles City Councilman Dennis Zine said that while it was disappointing that jobs will be lost in the Valley it was not a time to panic. Business layoffs and closures are cyclical in nature with other businesses ready to step in to fill a vacancy, Zine said. “Washington Mutual has been a long-standing representative here but on the other hand you have Wells Fargo bank on a run to open more branches in the Valley,” Zine said. Superior is letting go more than half of its manufacturing positions at the Van Nuys plant. The 125 corporate jobs at that location will not be affected. But like the call center employees, Ackerman said he does not expect the Superior workers to be at a loss to find new jobs. “The technology community will pick up those jobs in a heartbeat,” Ackerman said. The Superior cuts are an example of how companies have to compete on an international basis and not just national, Los Angeles City Councilman Alex Padilla said. “They are competing in a marketplace with Third World countries that don’t pay the wages we pay here and don’t offer the benefits we offer here,” Padilla said. Superior supplies aluminum wheels and other aluminum automotive components to more than a dozen automakers, including Ford and General Motors. Padilla said he has experienced job losses before, specifically in 1996 when bathroom and kitchen fixture manufacturer Price Pfister moved out of Pacoima, resulting in several hundred people being let go. But the city needs to take a proactive stance in attracting new business and retaining those already in the Valley, Padilla said. “We need to work with the business community to target physical plants for expansion or relocation,” Padilla said. “We need to identify niche markets and emerging technologies and leverage those.”

THQ Inc. signed a deal with Polish Developer People Can Fly to publish the company’s forthcoming video game; under the relationship People Can Fly joins THQ’s studio system, which includes 12 internal studios and over 25 independent development teams. People Can Fly’s next game, which is still untitled, will be released across several platforms in the fall of 2007. The Polish developer’s first game, “Painkiller,” was released to critical acclaim on the PC and Xbox platforms.

Plans underway could double the size of the Valencia Town Center, Santa Clarita’s largest shopping center. The owners of the Valencia Town Center, LNR Property and Westfield Group, a shopping center operator with headquarters in Australia, are working with the city of Santa Clarita to develop a proposal for a lifestyle center that would add entertainment and restaurant venues among other things to the 1.2 million-square-foot town center. The Valencia Town Center is anchored by a Robinsons-May (due to be renamed Macy’s as a result of the retailer’s acquisition by Federated Department Stores), and Sears. While the department store arena is shrinking, there are many other retailers and restaurants that are not represented in the region. “We have seen a couple of different designs and they’re trying to incorporate three different philosophies and address all the needs of the city,” said Carrie Rogers, economic development manager for the city of Santa Clarita. Rogers said that, in addition to the retail needs of the growing city, the developers are considering the addition of more office space in the complex. Santa Clarita, which had labored under double-digit vacancies in its office stock for some time, is lately seeing brisk leasing activity, and the city planners expect that more space will be needed. Several plans have already been scrapped as a result of the changing business environment and changes in the retail landscape. “There’s a lot of need and there’s a lot of demand, which has driven them back to the drawing board,” Rogers said.

Amgen Inc. and Sweden-based Biovitrum AB have expanded their alliance in a deal that gives Amgen worldwide rights to develop and commercialize potential diabetes treatments the companies have been developing. Amgen will pay Biovitrum upfront for expanded licensing rights, which it previously held only in North and South America, the European Union, Australia and New Zealand. Under the new agreement, Biovitrum will retain co-promotion rights in the Nordic region and Amgen will handle development and commercialization worldwide. Biovitrum will get royalties if a product is approved and sold and may receive other milestone payments.

Santa Clarita is home to a growing business community, establishing itself as an industrial and high-tech player in the region, leading some business people to say that it’s about time the city had a convention center to attract corporate meetings. Carrie Rogers, marketing and economic development manager for the city, said that the possibility of investing in a convention center will be a serious topic of discussion this year. “It’s something we’re looking into, our vacancy rate is very low, which means our occupancy rate is really high,” said Rogers. “One of our goals for the next year is to have an analysis done by professionals, we don’t believe we have a market saturation yet.” “While we have some meeting rooms, we don’t really have a center capable of handling a large conference,” Rogers said. Currently, the Hyatt Valencia and Santa Clarita Conference Center offers the meeting space in the form of an 8,000 square-foot ballroom and several meeting rooms, but conventions require more space. At a recent meeting in Los Angeles dealing with hotel development, Rogers said, speakers claimed that meeting capacity is extremely important in attracting corporate clients. The question the city is asking itself is “barring expansion at the Hyatt, is there some other complementary use, where another hotel can work with the Hyatt to attract meetings?” Rogers said the call for a conference center has come from a wide spectrum of businesses within the city. “We desperately need (a conference center,)” said Don Fleming, owner of Valencia Acura. “We get 400 people in the Hyatt for dinner and it’s just packed. If we could get a place were we could put 1,000 attendees, it would be great.” Occupancy rates in the Santa Clarita Valley have been consistently stronger than areas like downtown Los Angeles and Santa Monica, and slightly lower than the San Fernando Valley. The growing number of industrial companies setting up shop in Santa Clarita and Six Flags California’s Magic Mountain have combined to attract visitors. Ocean Park Hotels, which operates three mid-sized hotels near the freeway, is building a 112-room La Quinta Inn & Suites and a 144-room Courtyard by Marriott. Both hotels are slated to open later this y ear.

Businesspeople and residents can agree on one thing in the Santa Clarita Valley as more people settle in the area and more buildings go up: City officials need to be careful that the gridlock that plagues much of Los Angeles doesn’t develop there. Since 1990, the population of the City of Santa Clarita has grown by more than 50,000 to over 162,000 residents. The greater Santa Clarita Valley, which includes unincorporated parts of Los Angeles County, is home to over 250,000 people. The city boasts a three percent annual growth rate, the highest of any city with a population over 150,000 in Los Angeles County. City officials estimate that the population could more than double by 2025, ballooning to over 350,000 people. Growth will come in the form of 60,000 homes over the next two decades, and the city now has more than 1.5 million square feet of commercial space either approved or pending approval. Santa Clarita has marketed itself as a business-friendly city with plenty of residential developments for migrating families, but some people are worried that too much growth at once may lead to the congestion that’s driven people out of the San Fernando Valley and the rest of Los Angeles. John Hoskinson, president and CEO of Gruber Systems Inc. in Valencia, said the increase in traffic over the last few years in the Santa Clarita Valley has helped make it hard for the company to expand in the region. “I don’t have anything new to add about traffic, other than it is what it is, and it’s not good,” said Hoskinson. “It makes it hard for us to attract people to come any distance to work here. Employees need to be very close, within a 30 to 40 minute drive, in order to not get burned out.” He said that the freeways are still open enough to make it manageable for some employees from the northern end of the San Fernando Valley to commute to Santa Clarita, but everyone’s commute, particularly those fighting freeway traffic from the Lancaster area, is increasing. Hoskinson has worked for Gruber since the early ’80s, when he lived in Redlands. “I commuted daily, it was horrible, but now it’s not even possible,” he said. Some of Gruber’s non-local employees drive from the northern end of the San Fernando Valley and others come in from Lancaster or Palmdale, and traffic is heavier every year. Even if traffic improves, however, Hoskinson said retaining employees is difficult. “Then you’ve got the housing problem,” he said. “The cost of housing has gotten so bad everywhere that it has affected our ability to attract and retain employees.” Traffic and housing, will likely force the company to expand out-of-state, and Hoskinson said it’s also been difficult to find a large available space in which the company could expand in Santa Clarita. “Our ability to grow is quite limited in California, most of it will probably be in the Texas and Florida markets,” he said. Gruber employs about 165 people in Valencia, its newer offices in Texas and Florida are so far staffed with about 16 people each. Larry Mankin, president and CEO of the Santa Clarita Valley Chamber of Commerce, said growth has completely transformed the area. “Where Magic Mountain Parkway and McBean Parkway are now 10 or 12 years ago was all farm land,” said Mankin. “Now you’ve just plopped tens of thousands of new homes there and a huge amount of new commercial development.” Marlee Lauffer, vice president of marketing and communications for the Newhall Land & Farming Co. which developed the master-planned community of Valencia now part of the City of Santa Clarita, said that traffic worries every prospective resident, even if they’re moving to a master-planned community. “When you ask people, it’s certainly often an issue that comes up, we all know that it’s an issue of interest for everyone,” said Lauffer. “The most critical part of the traffic solution will be the cross-valley connector, which will run from the east to the west corridors.” “Certainly there’s also the I-5 freeway, and we’re working with a coalition of civic and business leaders to make sure that state and federal tax dollars return. There’s a project being studied that includes plans for a dedicated truck lane and an HOV lane,” Lauffer added. Lauffer said that traffic doesn’t have to get worse just because the Valley is growing, however. “(Newhall Land) is focused on doing more to attract employers,” said Lauffer. “We’ve built about 18,000 homes and created about 50,000 jobs, so we think there can be a job/housing balance.” Lauffer said the approximately 1,500 companies in the Valencia Gateway development include companies like Princess Cruises, Southern California Gas and Advanced Bionics that provide high-paying jobs to local residents. The median household income in Santa Clarita as of 2004 was $76,127. In comparison, the median household income for Los Angeles County was $53,239. Still, business leaders are counting on the city to do whatever it can to lessen traffic throughout the valley. The cross-valley connector is an eight-and-a-half mile road connecting the city between the Golden State (I-5) freeway and State Route 14. It will be either six or eight lanes wide depending on the section of roadway. “It’s going to affect the whole system of city roadway, especially roads which run parallel to the cross-valley connector, like Soledad Canyon Road, where it will have a tremendous impact,” said Andrew Yi, city traffic engineer for Santa Clarita. Yi said the section of the road running from the 14 to Soledad Canyon Road already has four open lanes, which will eventually be widened to six lanes. The city is waiting for an additional $17 million and results from environmental reviews before it can complete construction on sections from the Golden State Freeway to Copper Hill Drive and from Bouquet Canyon Road to Soledad Canyon Road. By the time the connector is complete, city officials are hoping that it will help to reduce 5,000 hours of vehicle delays. Each lane on the connector is designed to handle 9,000 vehicles per day, Yi said, meaning capacity on the connector will be anywhere from 45,000 to 60,000 vehicles, depending on the number of lanes. Yi said the city is also aggressive on other traffic mitigation projects, like increasing the capacity of the Bouquet Canyon Bridge and widening Bouquet Junction. “One other thing we do is traffic signal synchronization. All of them are coordinated every three months,” said Yi. “This is one thing that’s more aggressive than any other city in L.A. County, I think.” This week, Yi said, the city council will decide whether to authorize payment to a consultant who would put together a study on improving the road systems for non-motorized users like bicyclists and making transit stops more convenient for residents. “We want there to be less dependency on single-occupancy cars, so we’re looking in both direction to try and improve transportation and make things flow better and reduce the total number of trips,” Yi said.

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Although still many Santa Clarita residents travel to jobs in the San Fernando Valley and other parts of the county each day, the city’s economic development manager says recent survey results show Santa Clarita itself is attracting plenty of high-paying jobs. The city does not have a business license fee, which makes it easy for companies to set up shop, but hard for city officials to keep track of jobs. Carrie Rogers, marketing and economic development manager for the City of Santa Clarita, said survey results show that four clusters have formed: aerospace manufacturing, biomedical companies, computer electronics businesses and entertainment businesses. “We wanted to find out what kind of labor base we have here,” said Rogers. “We don’t want people having to commute on the freeway every day in order to continue to produce a high quality of life. We want to see what we can do to help residents work close to home.” Larry Mankin, president and CEO of the Santa Clarita Valley Chamber of Commerce, said the city has the ingredients that catch executives’ eyes when they are deciding where to move a company. “It’s a safe environment, it’s still pretty easy to get in and out of and we have a high-quality work force,” Mankin said. “We need to keep that up, the valley needs to put a lot of resources into education, public and post-secondary.” Doug Lynch, spokesman for Advanced Bionics, which employs close to 200 people in its Valencia offices, is planning to expand its manufacturing capabilities in the Santa Clarita Valley. It plans to move many of its Sylmar employees to Valencia and will likely hire more new employees as well. Lynch said that the company is forced to recruit many of it engineers from out-of-state and other countries, but it prefers to hire locally for as many positions as it can, like lab technicians. Jim Wolf is training students at College of the Canyons in hopes that they will be able to get jobs at companies like Advanced Bionics. Wolf is director of the school’s biotechnology program, which teaches students the skills they need to work in a scientific setting. “Originally, (students) were getting jobs that weren’t local. Some of them were going to the Ventura area, I have a student working at Amgen and one at Baxter,” said Wolf. “Getting them into the local Santa Clarita economy is a relatively new thing. But you actually have to grow these employees from home because it’s impossible to ask someone to move to the area for an entry-level technician’s salary, that’s not really a reasonable request.” Roger Seaver, president and CEO of Henry Mayo Newhall Memorial Hospital, said the hospital works closely with College of the Canyons’ nursing program and hires many of its graduates. The hospital, the sixth-largest employer in the region which is rapidly expanding to meet the needs of the valley’s growing population, will continue to rely on local community college training programs to find technicians as it upgrades its radiological equipment. “The College of the Canyons is the most dynamic community college in Southern California when it comes to working with local employers, and it’s no different with us, we have a great relationship,” said Seaver.

John Dilts has resigned his position as president of the Keiretsu Forum chapters in Los Angeles, Westlake Village and Santa Barbara. Dilts, who has headed the local forum chapters for the past two years, said he plans to pursue other opportunities. ” I have decided to move on from this role to focus on new ventures of my own,” he said in a press release announcing his decision. Dilts could not be reached at press time. Keiretsu Forum is a network of angel investors who work as a group to review potential investment opportunities but make the investments individually.

The message for middle-market companies at a panel discussion sponsored by Gold Coast Business Forum recently is there is still plenty of money chasing deals and that money is as selective as it’s ever been about picking investment and acquisition targets. The four panel members at the conference, “Outlook 2006: Mergers & Acquisitions and Financing,” told an audience of about 50 participants that venture capitalists are expected to continue the pace of investment that they have shown for the past several years. But a continuing lackluster climate for initial public offerings is limiting the exit opportunities for venture firms, and some are financing later stage rounds than they have in the past. Although the market for initial public offerings is not expected to pick up anytime soon, the panel members noted that some firms are taking replacing the IPO with M & A; deals in order to cash out. “The lack of exit for most VC-backed companies has bolstered the M & A; market,” said John O. Johnson, managing director of The Spartan Group TSG, a boutique investment banking firm based in Glendale. “We’re not just seeing M & A; activity from strategic buyers. We’re also seeing clearly the largest number is among private equity, venture capital funds and hedge funds.” In 2005 there were 56 venture capital backed initial public offerings, down 39.8 percent from 2004. At the same time, merger and acquisition activity remained relatively stable at about 330 transactions. Because investors are finding it more difficult to use initial public offerings to cash out, some are investing in later stage funding rounds, the panelists said. The median age of venture backed companies for the past three years has increased to nearly six years. Prior to 2000, the median age of venture backed companies ranged between three years old and four years old. New investments reached a four-year high in 2005, said Randy Churchill, director of business development at PricewaterhouseCoopers’ Southern California technology practice who also oversees the firm’s MoneyTree Survey, which tracks venture capital investment activity on a quarterly basis. On a national basis, 901 companies received a first round of venture capital investment totaling $5.3 billion last year, compared with 865 companies that received $4.6 billion in 2004. “Over 300 of those companies are later or expansion stage companies,” Churchill said. “VCs are looking for more mature companies to put money into.” But if investors are sticking with companies longer they are not loosening their requirements. Conference panelist Samuel Paisley, the chief administrative officer at ValueClick, a Westlake Village-based online advertising and marketing firm, told the group that his company’s acquisition criterion included not only companies that would add to ValueClick’s revenue stream, but also that the companies acquired had to trade at a discount to ValueClick’s multiple. In one case, for instance, an acquisition that cost ValueClick $122 million in stock, returned $130 million in cash on hand. ValueClick screened “hundreds of companies” in order to affect the 12 acquisitions the company has made in recent years, Paisley said. One emerging trend the panelists noted is the renewed interest in investing in consumer-directed Internet companies. Noting that the Southern California marketplace has presented a number of recent examples, Joseph Marks, managing member of Smart Technology Ventures, said these companies are generating brisk activity. Among the transactions last year, E-Bay acquired Rent.com for $415 million last year; E.W. Scripps paid $525 million to acquire Shopzilla.com, an Internet shopping service based in L.A.; and Viacom’s MTV division paid $160 million to acquire Neopets.com, a children’s entertainment Website. “This is sort of the next generation of the Web with broadband reaching penetration where these companies can all generate larger amounts of cash,” said Marks.