The Jobs Issue: It’s Better But Some Industries Still Lag By BRAD SMITH Staff Reporter As indicators of economic activity and consumer and CEO confidence slowly rise nationally, Southern California and the San Fernando and surrounding valleys are poised for reasonable gains in employment, forecasters expect. “What you are seeing overall is Los Angeles County’s economy is making the turn,” said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp., which will release its mid-year economic forecast for the five-county southern California region July 15. “We’re seeing good year-to-year job growth, although it is still not as high as we’d like.” According to the California Employment Development Department, unemployment figures in California remained steady at 6.2 percent in May, unchanged from April, although improved from the May 2003 figure of 6.8 percent. That translates to a decrease of 100,000 unemployed since 2003. Kyser said the LAEDC expects to report both gains and losses regionally, with industrial and public sector employment down but encouraging signs in aerospace, technology, and travel and tourism. “Governments are still paring workers, and a lot of manufacturing is under a lot of pressure from imports, but in classic aerospace and high technology companies a lot of government money has come into Los Angeles County and they’re looking for people with specific job skills,” he said. Kyser’s opinion corresponds with the expectations of the San Fernando Valley Economic Research Center at California State University Northridge, which published its latest forecast in May. The CSUN team expects 11,000 jobs to be added by local employers, although that includes both temporary and full-time employment. The local studies mirror national trends, experts said. CEO confidence, for example, rose in May but then dropped slightly in June, according to national surveys. “It’s sort of two steps forward and one step back,” Kyser said. “It is better, but is it easy for anybody that wants a job to find a job? The answer is no, and business is still very concerned.” Still looking At the EDD’s Worksource office in Canoga Park, where jobseekers can get state assistance with unemployment benefits and leads on new jobs, a fair percentage of those using the agencies’ services are experienced professionals. Jim Gross, a Studio City film editor with four decades of experience, was in on a recent weekday for an appointment. Work generally slows down in the summer for editors as the networks go on hiatus, but in the past, Gross has been able to pick up a television movie or film project to tide him over. Not this year. “It is going to get better, because the networks and cable producers have said they are going to produce more original content for the summer, and year-round,” Gross, 62, said. “But Fox only began doing that last year, so it will take awhile before that really has an impact.” Les Krasuski, a civil engineer from Tarzana whose specialty is cellular telephone towers and antenna arrays, was also waiting for an appointment to discuss if he would qualify for state aid to further his education. He was laid off in April, and wants to expand his expertise into seismic retrofit work. “The telecom business has been going down, because we’ve already been built out (in the San Fernando Valley),” Krasuski, 48, said. “The quantity of jobs began going down in 2002 and it hasn’t come up.” Experiences like that are not atypical, but the expectation that technology-related employment will increase in the second half of 2004 is supported by anecdotal evidence. “The last two years were dismal,” said Don Speth, president of Independent Resources Systems, an Agoura Hills-based contingency search firm that specializes in the high technology and biotechnology fields. “But starting the last quarter of last year it started to pick up a little, and in the first and second quarters of this year it was looking much better.” Growth expected Speth said his placements have doubled from the first to second quarter, and that he expects similar growth in the third and fourth quarters of 2004. “There are still a lot of people that are underemployed,” he said. “But as confidence in the marketplace picks up, a lot of employers are going to get a rude awakening because of the way they have treated their employees over the last few years.” Also anecdotally, some large local employers, especially in he health care and biomedical sectors, said they expect to add jobs in the next six months as well. At biotech giant Amgen Inc. in Thousand Oaks, which employs more than 6,300 people and where staffing grew by 27 percent in 2003, significant job growth is expected. “We’re looking at several hundred new jobs this year, not in the thousands like 2003,” spokeswoman Mary Klem said. “Our earnings report comes out July 22, and we are expecting another good year.” At Northridge Hospital Medical Center, with more than 1,600 full time equivalents the third largest in the San Fernando Valley, executives expect to add 50 to 60 new staff.

Firms Brace for Wage Legislation By JEFF WEISS Contributing Reporter California’s business climate could possibly take another turn for the worse if a minimum wage increase bill making its way through the state legislature passes, according to legislators and businesspeople against it. Assembly Bill 2832, authored by Assemblywoman Sally Lieber (D-Mountain View) proposes to raise the state’s minimum wage to $7.25 an hour by January, then to $7.75 an hour by January of 2006. The bill easily passed the Assembly with a 45-30 vote and at presstime was expected to clear the traditionally more liberal state Senate within days. As one might expect, support for the bill has tended to stay closely along party lines, with Democrats favoring its passage and Republicans adamantly opposed. “The University of California at Berkeley released a study two weeks ago saying that people who make less than $8 an hour cost taxpayers $8 billion in additional support services. I think we need to increase the minimum wage to alleviate that tax burden,” state Senator and Los Angeles mayoral candidate Richard Alarcon (D-Van Nuys) maintained. “Obviously, the wages that business pay out would be higher but the idea is that the workers would be more stable and that they would be able to afford their bills and hopefully be more loyal. History has shown that every time the minimum wage is increased it has benefited our economy.” State Senator Tom McClintock (R-Thousand Oaks) took an opposite tack on the bill, claiming that it will further hamper the state’s already shaky business climate. “”I think it’s a bad idea. It will price the minimum wage entry level positions out of the market, removing the first rung of the economic ladder. People will lose their jobs or opportunities for jobs. If raising wages were that easy, why not go to $10 an hour or $20 or $30, the answer is because every time you raise it you cost people at the bottom their jobs,” McClintock said. “The intention of the bill might be compassionate, but it’s the most mean spirited thing you can do to workers trying to land an entry level position. The industry estimate is $2 billion in direct costs.” Trouble with governor McClintock expected the bill to fly through the Senate but have more difficulty once it reached the governor’s desk. “This is the most liberal legislature in the country. Of course it will pass the legislature,” he said. “Fortunately, we have a more sensible governor then we had in the past. I can’t speak for the governor, but I would expect him to veto it.” Indeed, the rhetoric emanating from the governor’s office would seem to point towards a veto. “The governor does not generally comment on pending legislation before it completes the legislative process. At the same, the governor’s commitment to improving the state’s business climate and making it easier for Californians to get and retain jobs is certainly well known,” Vincent Sollitto, a spokesperson for the governor said. California is one of 10 states with a minimum wage higher than the federal minimum of $5.15 an hour. The highest is Washington state, which ties minimum wage increases to inflation at $7.16 an hour. California has steadily increased its minimum wage since 1996, when state voters approved the Living Wage Proposition 210 to establish a $5.75 per hour wage. Since then, the Legislature has raised the minimum twice, leaving it at the $6.75 an hour it currently stands at. Restaurant opposition The California Restaurant Association is one of the opposition leaders to the bill, claiming that the $1 increase will cost the average small business restaurateur upward of $20,000 in new payroll costs the first year and upward of $40,000 the second year, forcing them to scale back shifts or lay off workers. However, not all small businesses feel that they will be adversely affected by the proposed increase. Ben Forat, owner of Studio City Hand Carwash is in favor of the pending legislation. “It’s fine with me. The cost of living is going up and the minimum wage should go up too. At my business, the new people get minimum wage while others get $10 an hour. As long as they lower the cost of worker’s comp, it will balance it out. If you can’t afford to pay employees one dollar extra then you shouldn’t be in business. Having happy employees is crucial to a business’ success. Keeping them happy can only make the business better,” Forat said. Jeff Arnold, chief financial officer for Burbank based Mexican-food chain Poquito Mas, believed that full-service restaurants would be affected more than quick casual restaurants like Poquito Mas. “My gut feeling is that it would put upward pressure on just about everybody in business, even though most of our people make over $7.75, there’s still a big difference between making minimum wage and making 25 cents over. Yet most of our people make significantly more than that. The issue of minimum wage will affect the full service restaurant more. The majority of people making minimum wage are servers,” Arnold said.

Antelope Valley Gets Industrious By SHELLY GARCIA Senior Reporter A huge development boom is underway in the Antelope Valley, with nearly 1 million square feet of industrial property in varying stages of construction in Lancaster alone and thousands more in earlier planning stages in Palmdale. Developers who have never considered the area before, mostly regional and local firms, have acquired land with the intention of building industrial facilities for sale and for lease. Although their enthusiasm is tempered by the fragile history of the area and its building busts, these developers say the dynamics in play in the Antelope Valley now are different enough and sufficiently promising to warrant the investment. “If you look at Southern California, the basin is really getting full, so everything has to go either north or east,” said Greg St. Clair, executive vice president for Larwin Investment Co., which is developing 225,000 square feet of industrial property on 16 acres in Fox Field Business Park, a new industrial complex bordered by Barnes Avenue, 47th Street West and Avenue G in Lancaster, the first industrial venture into the area for the developer. “We’re beginning to see the push now into Lancaster. There’s a great employment base, there’s a lot of positive attitudes toward growth and then there’s enterprise zones that really assist small manufacturing firms.” Some of the development is coming from owner-users like Valencia-based Regent Aerospace, which has contracted for a 75,000-square-foot build-to-suit in Fox Field and Delta Scientific Corp., which just opened a new facility built for the company in Palmdale. But for the first time in decades, developers are also building “on spec” in Antelope Valley, meaning they have no specific tenants ready to occupy their buildings. Among the developments underway in addition to Larwin: >Culver City-based UDC Properties Inc. is constructing four buildings totaling 66,000 square feet on six acres in Lancaster Business Park at Avenue K-8 and 5th Street East and will begin work on another eight acres next year. >Cambridge Development Group LLC in Encino is building 93,000 square feet of industrial properties in Lancaster Business Park. >Frank Visco, a local Antelope Valley developer who recently completed a project for Countrywide Financial Corp., is acquiring 32 acres of land in Fox Field Business Park. >Santa Monica-based McGarrey Development Co. Inc. is working on a 10.4-acre project in Lancaster Business Park with a total of 138,434 square feet planned in two phases. >Kestly Building Company with Lanet/Shaw Architects is developing a 22,500-square-foot industrial condominium complex at Lancaster Business Park. >Robert Brown and Rosalie Clark Brown are developing 42,000 square feet of incubator units in Lancaster Business Park. City development “It’s as hot as I’ve ever seen it,” said Vern Lawson, marketing and economic development manager for the City of Lancaster Redevelopment Agency. Meanwhile, in the neighboring city of Palmdale, plans are underway to develop a 120-acre industrial park the city acquired in hopes of providing a ready supply of properties for companies seeking to relocate. “One thing we’ve had as a disadvantage, when businesses come here they’re moving within three to six months and we’re saying we can’t have anything ready for 12 months,” said Dave Walter, economic development manager for the city of Palmdale. Palmdale acquired the Fairway Business Park about four years ago and has been subdividing the property and putting in the infrastructure since then. Besides Delta Scientific, several smaller end users have contracted for facilities and a few developers have already acquired parcels in the park, located along Avenue O, between 7th Street West and Division Street. Back in the 1980s, Antelope Valley became ground zero for Southern California’s aerospace boom, setting into motion a wave of industrial construction and homebuilding. But by the mid-1990s funding for these companies had dried up and with it the budding economic base of the area. Homes foreclosed, industrial buildings were abandoned and the area stagnated. Some of the developers now building in the area were burned here years ago. “What am I calling it? Project disaster. Don’t you print that,” one said as he lightheartedly recalled the area’s real estate bust in the 1990s. But if developers are now willing to set aside that history it is because the Antelope Valley of today is very different from the aerospace headquarters of the 1980s. Consumer goods distribution and warehousing operations, small manufacturers and service and operations centers have been moving into the area. And the population growth, fueled by an abundance of housing at affordable prices, has also spawned a thriving small business economy of companies that provide everything from pool supplies to accounting services. Supply shortage Those businesses have been growing faster than the supply of buildings in the area. “I was attacking a market I feel is already there,” said Tom McGarrey, who figures he is about five months away from beginning construction on the first of 34 industrial condominium units that will range from about 2,000 square feet to 5,000 square feet each. “There’s already an established market in 3,000 square feet and under. People are paying rent, and I’m hoping they’re going to be attracted by the loans.” Those like McGarrey who are developing units targeted to small businesses, point out that SBA financing at current interest rates coupled with the tax advantages of ownership mean companies can acquire these facilities at a monthly cost that’s less than the cost to rent a facility. Those developing multi-tenant properties that they intend to lease point out that with virtually full occupancy in the area there is also a ready market for rental properties. UDC had leased up all seven of the units in one of its 17,000-square-foot buildings before construction was completed in January. Another property, a 16,000-foot building which will be completed sometime in August, is two-thirds leased. “I felt there was a need in the area for an upscale type of industrial warehouse,” said Ruben Urcis, president of UDC. “Most of the existing buildings were 12 or 15 years old.” While the lower pricing in Antelope Valley plays a part in these decisions on average a new building sells in the $95 a square foot range, compared in to an average of $125 per square foot in the San Fernando Valley most of the developers said that the more compelling reason to build in the area had to do with the scarcity of supply, both land and buildings, in the San Fernando and Santa Clarita valleys, and the increasing migration of the population to the area. While cost was definitely a factor for Regent Aerospace, which will use its Lancaster facility for manufacturing and distribution, officials said a bigger reason was the workforce already commuting from the area. “Thirty five to 40 percent of our workforce is coming from Antelope Valley,” said Reza Soltanian, president of Regent, which employs about 200. “That was one of the main reasons we chose Lancaster.”

International Barricade Maker Expands Close to Home MEDIA & TECHNOLOGY By Slav Kandyba Homeland security equals more business and expansion. At least, that can be applied as an equation at Delta Scientific. The Valencia-based manufacturer of barricades that protect the U.S. Justice Department and some 160 U.S. embassies and consulates has opened a new, 125,000-square-foot facility in Palmdale. Delta Scientific manufactures 30 barricade models, from its most popular DSC501 security gate to its bollards, the brown stubby metal objects that can be seen outside the Department of Justice in Washington, D.C. All of the models have one characteristic in common: they can stop a truck weighing some 15,000 pounds. The new facility will double the manufacturing capacity of Delta Scientific, which has had its hands full with projects given the current state of world affairs and fear of terrorism. “We’ve seen a 300 percent or three-fold increase (in) demand for our products (since the Sept. 11 attacks),” said David Dickinson, Delta Scientific senior vice president. Driving the growth is the need for better security in U.S. and at its allies across the world, and Delta Scientific’s ability to deliver a range of products at a moment’s notice. “When it comes to addressing the vehicle assault aspect of that they only have one company to turn to, and that’s Delta Scientific,” Dickinson said. The company initially transferred 35 employees to the Palmdale facility in April, but it already has grown the workforce there to 90 employees, Dickinson said. There are plans to hire more. The company now has a total of 325 employees worldwide, including offices in Virginia and England, in addition to the headquarters in Valencia. At a time when many companies are choosing to flee California citing high workers comp costs and other conditions unfriendly to business, Delta Scientific’s expansion in Southern California is as surprising as it is positive for the area. The company selected the City of Palmdale over a number of other destinations, including outside of the state, after a careful search that took about five years. “They wanted us and we wanted them,” Dickinson said, adding that proximity to Valencia and cheaper land were key factors for the decision to stay. And while many manufacturers have left for states such as Texas, Delta Scientific is staying in California because it believes the business climate will improve and values its infrastructure, Dickinson said. “We are hopeful for the future of California,” Dickinson said. “We see a turnaround happening here, so we’re willing to stick around.” With its facility on-line, Delta Scientific is going to be able to crank out counter-terrorist barriers for the U.S. Air Force ordered in May. The order was worth $25 million and is believed to be the largest contract for barricades ever. The barricades will secure more than 100 Air Force bases domestically and overseas, Dickinson said. ISP-Phone Company Partnership Agoura Hills-based ISWest, an Internet service provider serving Ventura County, has entered into a partnership with Simi Valley-based ITS-Omnicom to expand its market reach. ITS-Omnicom, which provides phone services to businesses, has the same type of clientele as ISWest in Ventura County and the Central Coast, factors that were attractive to ISWest. “The significance for us is it allows us to market in areas where they have customers,” said Drew Kaplan, ISWest’s vice president. Kaplan said for now ITS-Omnicom will offer high-speed Internet access to its clients, but ISWest will refrain from offering ITS’ phone services to its clients. “We may offer voice down the line,” Kaplan said. The overall strategy for the partnership is to add value to both companies to get a hand up on competition from larger companies such as SBC and Verizon, which have begun offering bundled services, combining both Internet and voice in one package for businesses. “The more services you can offer the more value you add,” Kaplan said. “The more the chance your customer won’t leave you.” Image and Dark Horse Image Entertainment, a Chatsworth-based licensee, producer and distributor of DVDs, has taken signed on with Beverly Hills-based Dark Horse Entertainment. Dark Horse and Image will share ownership of projects released through the newly formed Dark Horse Home Entertainment venture. Dark Horse owns the rights to and publishes comics from which films “Hellboy,” “The Mask” and “Timecop” were spawned. Previously, Image had only been involved in distribution. “This is the first time, it was something that we evolved into,” said Martin W. Greenwald, president and CEO of Image. “This is a natural evolution of a successful distribution company.” NetZero Debuts at RadioShack Westlake-Village based United Online is coming to your nearest RadioShack store. United Online’s multi-year partnership is the second one with a major electronics retailer, said Jon Fetveit, chief strategy officer at United Online. The company already has an agreement in place with Best Buy. “We’re definitely in the mode of expanding distribution channels,” Fetveit said. NuTech Goes International NuTech Digital, a Van Nuys-based DVD distributor that also manages Internet distribution of entertainment content, has recruited a distributor for Europe and the Pacific Rim. Queenstone Financial will manage license agreements in those regions. NuTech Digital had previously distributed and marketed only in the U.S. Staff Reporter Slav Kandyba can be reached at (818) 316-3126

NEWSMAKERS Health Focus Attracts Endowment CFO Michael Januzik has spent most of his professional life as a corporate financial specialist with telecommunications and technology companies in the Bay Area, including more than a decade with SBC Communications Inc., the parent company of Pacific Bell. But Januzik, 47, jumped at the chance at an opportunity presented itself with the Woodland Hills-based California Endowment, a $3.4 billion philanthropy created in 1996 to expand access to health care for underserved communities. “My career has always been at for profit companies and the mantra there is always to maximize shareholder value, but the mission here is to maximize the endowment in order to improve health care in California,” said Januzik, who moved to the Conejo Valley from Illinois as a teenager and graduated from Agoura High School. His appointment as chief financial officer of the endowment was announced June 29. Januzik will earn $225,000 annually at the endowment, where he will lead the organization’s investment, financial, and grants administration staff of about 30. “The hope is we will get some good traction in Los Angeles with children’s’ health issues and services, and we can lever that into other communities across the state,” Januzik said. He comes to the non-profit from Tatum Partners, LLP, a professional CFO services firm based in Los Angeles. Along with working at SBC for 12 years, Januzik also worked as vice president at QuantiLogic Asset Management Company Inc., in San Francisco, where he managed investment portfolios totaling $1.6 billion. He earned his BA in Economics from the University of California Los Angeles and his MBA from the University of Southern California. Januzik lives in Camarillo with his wife Renee and their two children, ages 12 and 9. Brad Smith Biotechnology Joshua Ofman was promoted to the newly created position of vice president, reimbursement and payment policy at Thousand Oaks-based Amgen Inc. Ofman, who joined Amgen in 2003, was senior director of U.S. Medical Affairs and headed up Amgen’s U.S. Health Economics and Outcomes Research Group. In the new position, Ofman will oversee Amgen’s reimbursement and payment strategy to give patients and government better access to Amgen’s products. Education Wilma Worden was named the new director of the Los Angeles Regional Small Business Development Center Lead Center at Cal State Northridge. Worden was formerly president and CEO of Community Career Development, Inc., a non-profit involved in workforce development activities. She also served as vice president of the Valley Economic Development Center for six years. In her new position, Worden will oversee the Lead Center’s operations as well as its four sub-centers and their satellites. In addition, she will manage relationships between the U.S. Small Business Administration and small business service activities in the area. Entertainment NBC Universal, a subsidiary of General Electric, has named new vice presidents at two different San Fernando Valley locations. Marcia Haynes, a General Electric employee since 1979, has been named executive vice president of sourcing for NBC Universal in Universal City. Thomas G. Smith, a veteran of two decades with GE, has been named vice president of West Coast Real Estate and Space Planning for NBC Universal in Burbank. Warner Bros., part of Time Warner, has named a new vice president for the Telepictures Productions department in Burbank. David Benevente, who has worked at Telepictures since 1996, will run the Finance and Administration side of the department. Human Resources Shawn Mohr has been appointed to the newly created position of chief sales officer and president of its medical, financial and allied division for On Assignment Inc. Media Brad Smith, a veteran newspaper editor and reporter, has joined the staff of the San Fernando Valley Business Journal as a reporter. A native Angeleno, Smith has worked for general interest and specialty newspapers in Los Angeles, San Bernardino and Ventura counties and in Sacramento, most recently the Ventura County Star as a reporter and editor. He lives in Granada Hills. Real Estate Bob Weiss has been appointed vice president for Sperry Van Ness in Woodland Hills. Weiss, a 24-year real estate veteran, was most recently with Valley Industrial Properties. Jessica Ramirez was promoted to controller of NewMark Merrill Companies, a Woodland Hills-based operator of retail shopping centers. She was previously the senior property accountant at the company.

WellPoint Pushes Cooperation as It Faces State Foes By BRAD SMITH Staff Reporter Despite heavy criticism from consumer groups and some leading California Democrats, officials with Thousand Oaks-based health care giant WellPoint believe they can successfully negotiate an agreement with state regulators that will allow a planned $16.5 billion merger to go forward. “It is part of our culture to understand the regulatory and political process and to adhere to it; we consider it a core competency and a competitive advantage,” said Ken Ferber, a vice-president at WellPoint, the parent company of Blue Cross of California. “At the end of the day the regulator will regulate.” The merger, approved June 28 by 97 percent of the voting shareholders of WellPoint Health Networks Inc. and Indianapolis-based Anthem Inc. would create one of the largest for-profit health care corporations in the nation, company officials said. Under the terms of the deal, WellPoint stockholders will receive $23.80 in cash and one share of stock in the new company for every share they currently own in WellPoint. WellPoint closed at $108.90 per share June 28, up from $83.93 since October, when the merger was announced. The deal has been approved by federal regulators and officials in 10 states; California Insurance Commissioner John Garamendi and the state Department of Managed Health Care, part of Gov. Arnold Schwarzenegger’s administration, have yet to agree to the deal. The DMHC is set to hold a public hearing on the matter July 9, with a recommendation expected in August, department officials said. Garamendi held a hearing June 25, and negotiations between the companies and his agency’s staff on the requirements, called undertakings, that the new company will be legally obligated to perform after the merger are proceeding. Ferber said the companies expect they can come to an agreement with the California agencies. “We do not believe the commissioner is asking for material changes (in the merger agreement) and the undertakings is part of the deal,” he said. “Our intention is to work with both regulators to get the deal approved, and we have confidence we can do that. We have not heard anything from the regulators over the past eight months that there have to be changes that would threaten the actual (merger) agreement.” The merger is to be financed by $700 million in cash, $2 billion in bonds, a $1 billion line of credit, and $12 billion in stock. The possibility that California premium payers will end up paying off that debt, however, is a concern for Garamendi. “Every business that is now or may be a customer (of Blue Cross) is going to end up paying an extraordinary amount of money to enrich a few stockholders and executives,” the commissioner said. “It’s about $4 billion in cash coming out of the pockets of businesses and individuals across the nation for a financial roll-up that has little or anything to do about health care.” WellPoint, a holding company, received $280 million in profits from Blue Cross of California in 2000; $290 million in 2001, $202 million in 2002, and $300 million in 2003, according to the company. Similarly, Blue Cross Life and Health sent some $63.7 million “upstream” to WellPoint in 2000, $55 million in 2001, $60 million in 2002, and $90 million in 2003. Executive compensation Garamendi is especially critical of estimates that compensation for former WellPoint executives in the wake of the merger could range from $200 million to as much as $600 million in cash and stock options. “In my mind, this is not a financial transaction,” Garamendi said. “This is about consumers in California; this is about health care; and this about the 6.8 million Californians who don’t have health care this is also about a group of 300 executives getting an amount of money equivalent to what it would cost to give 570,000 children (health insurance) for one year.” If approved, the merger would result in Anthem’s Indianapolis-based holding company, which would be re-named WellPoint, Inc., controlling insurers and HMOs that serve some 28 million people in more than a dozen states. The new holding company would own both the Blue Cross of California HMO and Blue Cross Life & Health Insurance Company, which cover some 5.18 million Californians. The HMO and the insurance company employ some 7,000 people in California, including 2,750 in Woodland Hills, 1,800 in Newbury Park, 1,400 in Camarillo, and 500 in Thousand Oaks. Most employees are expected to remain in Southern California, company officials said. “The number of corporate jobs moving to Indiana will be minimal, and the number of corporate losses will be minimal,” Anthem CEO Larry Glasscock said. Employees at the Blue Cross complex in Woodland Hills are concerned, but not panicking about their careers if the merger goes through. “I’ve been here 16 years, and whatever is going to happen will happen,” said one long-time administrative worker, who asked not to be named. “If I lose my job, I lose it, but they say we won’t and the job market seems to be picking up.” Since the deal was announced it has been strongly criticized by opponents, especially over the terms of the severance packages for top executives of WellPoint. Particularly controversial has been the package for current WellPoint CEO Leonard D. Schaeffer, who would be entitled to a cash payout of $47.5 million and some $6 million in stock options, according to the company. Those figures have been blasted by Democratic elected officials, including Garamendi and state Treasurer Phil Angelides, who successfully lobbied for CalPERS, the state pension fund, to vote against the merger. Angelides called the expected severance package for Schaeffer, who will lose his post as WellPoint CEO but become chairman of the board of the new company, as “egregiously unwarranted.” Garamendi wants the equivalent of whatever amount of money is paid out to WellPoint’s executives, based on the company’s reports to the Securities and Exchange Commission, for investment in health care programs to serve low income communities. “They will not have my approval until they deliver to Californians an amount equal to the executive compensation, in cash and stock,” Garamendi said. “Their SEC numbers will show what it is and that’s what the number will be, so it is really up to them, isn’t it?” Broker support Supporters of the merger include some health care providers and Blue Cross-affiliated insurance brokers, some of whom testified at Garamendi’s hearing. “There are justifiable concerns but some of these things are unfair,” said George Geldin, a Westlake Village broker who serves on a health care roundtable group sponsored by WellPoint. “Most of my clients don’t like rate increases and are unhappy about it, but the insurer’s costs have to be passed along through the premiums,” he said. “Business people understand how business is, and WellPoint is just trying to manage their risk pool and make a profit.” Consumers’ groups, which have been critical of Anthem’s record in other states, expect the merger will be approved in California after the companies agree to provide additional investments in health care for the poor. “I think Garamendi is trying to do his job and protect the consumers of California, and is really concerned that the amount of money that is going to go into these executive compensation packages is going to come out of California premiums,” said Laurie Sobel, a Consumers Union attorney who specializes in the health care industry. “This is the last thing the (companies) need to move forward with the merger, so that gives California some more leverage; if they need to pay some money to get it approved maybe they will.” Other health care experts agree the merger will go forward. “I think it is reasonable to invest in the health care of California, and to invest significantly,” said Daniel Zingale, head of the DMHC under Gov. Gray Davis and currently a member of the state Agricultural Labor Relations Board. “With a transaction of this magnitude, (Garamendi’s request) does not strike me as an inordinately large amount.” The DMHC hearing on the merger is scheduled from 10 a.m. to 9 p.m. July 9 at the Secretary of the State’s building, 1500 11th Street, in Sacramento. For additional information, call 916-445-7401.

Second Mixed Use Plan for Ventura Boulevard Gets OK REAL ESTATE By Shelly Garcia A second plan for a mixed-use residential project on Ventura Boulevard has passed a major hurdle. AvalonBay Communities Inc.’s project on the southeast corner of Noeline Avenue and Ventura Boulevard in Encino, was approved by the planning commission after about 18 months spent working with the community and the city to gain support for the idea. The commission’s decision to green light the project was unanimous, said Larry Scott, regional vice president for AvalonBay. “This is a perfect mixed-use location,” said Scott. “You’re walking distance to the grocery store, walking distance to employment. It has all the characteristics of a mixed use, urban infill location.” The project, located on a site that currently houses the Plaza del Sol shopping center, will include 137 one- and two-bedroom units of luxury rental housing and 12,000 feet of ground floor retail as currently designed. It will be called Avalon Encino. The specific design of the units has not yet been determined, but the exterior will be built in an Italian Mediterranean style and the complex will house amenities such as a pool, fitness facility, recreation center, media room and game room. “We really want it to be a resort atmosphere.” Scott said the company has been actively seeking a site for a residential project in the San Fernando Valley for about three years. Avalon Bay will replace a shopping center that has been largely vacant, and was not listed on the market for sale when AvalonBay began discussions for the purchase with the private investors who had owned it for the past four years. Although the project did not require any zoning changes, the approval process was arduous, Scott said. The company held 22 meetings with the community, including two homeowner groups and the area’s neighborhood council and revised the site plan five times from the original concept. Avalon Encino is the second mixed-use residential project to gain approval on Ventura Boulevard. The developers of the first site, also in Encino, currently have their entitled property on the market for sale. But despite the apparent interest in developing apartment units along Ventura Boulevard, Scott said he does not expect the Valley’s most famous street to become a prominent residential address in the same way that other cities like New York or San Francisco have married commercial and residential real estate projects along major corridors. “Smart growth is a Utopian belief,” Scott said, referring to the growing trend to create urban villages along commercial corridors. “I think the opposition will grow stronger as more projects are proposed.” The idea behind “smart growth,” is to place housing in close proximity to jobs and transportation, reducing the number of commuters and encouraging self-contained communities that provide amenities like restaurants and groceries for residents. But such projects in the Valley have often met with strenuous community opposition from homeowners who believe that apartment dwellings are too dense and will create more traffic for the neighborhood than would, say, a shopping center. AvalonBay is currently developing another mixed use project along the mid-Wilshire corridor. Universal Acceptance The Centrum, a 137,000-square-foot office building in Universal City, has been sold for $28 million. Jamison Properties, an L.A. based real estate investment firm with about 60 properties including numerous holdings along the Wilshire Corridor and several properties in Encino, among others, acquired the building, at 3575 Cahuenga Blvd. from EP Investment. The building is about 85 percent occupied, mostly by entertainment companies. Manfred Schaub, a broker with Cushman & Wakefield, represented the seller. Jamison represented itself in the transaction. Van Nuys Sales A Nearon Enterprises unit has divested two San Fernando Valley buildings in the 500,000-square foot master-planned business park in Van Nuys. Nearon Van Nuys Industrial LLC sold a 60,000-square-foot industrial building for $5.8 million. The building, at 7801 Hayvenhurst Ave., was sold to E & S; International Enterprises Corp., a distributor of consumer electronics. The second site, a 34,000-square-foot industrial property in The Commerce Center at Van Nuys Airport, was sold for $3.5 million. The buyer, City Art, is a non-profit art gallery. Mike Tingus and Randy Kobata, brokers with Lee & Associates’ L.A. North division, represented Nearon in both deals. The buyer of the Hayvenhurst Avenue property was represented by Darren Cline and John DeGrinnis of Colliers Seeley. City Art was represented by Plaza Loans. Apartment Outlook Soaring home prices will boost demand for apartments during the second half of the year, according to a just released report from Marcus & Millichap. The report notes that the loss of jobs from the recent recession has not stemmed population growth in the Los Angeles area, and the growing population, coupled with the declining affordability of homes, will drive decreases in the apartment vacancy rates and increases in rental rates. About 16 apartment projects are expected to be completed this year in the San Fernando Valley, adding a total of 755 apartment units to the housing stock in the region. The report noted that there are only three large projects on the drawing board in the Valley for 2004. The balance of projects in the coming year are under 30 units in size. The limited supply of new housing stock is expected to result in a dip in the vacancy rate for apartments in the Valley to an average of 2.8 percent by year end. Vacancies are lowest in Granada Hills, Sherman Oaks and Chatsworth, the report said. Rental rates are expected to grow by 6 percent this year to an average of $1,133 a month in the Valley. Senior reporter Shelly Garcia can be reached at (818) 316-3123.

NEWSMAKERS Jim Sherman Exits West Hills for Los Robles After six years at the helm of West Hills Hospital and Medical Center, President and CEO Jim Sherman has decided to leave the hospital to assume the equivalent post at Los Robles Regional Medical Center in Thousand Oaks. Acknowledging that it was a difficult decision to make, Sherman said he will begin his new position on July 6. “It was not something that I was looking for,” said Sherman, who was named the Business Journal’s “Health Care Leader” last year. “The current CEO at Los Robles is retiring from health care and fortunately both hospitals are in Health Care Association,” Sherman said. “I was tapped on the shoulder and asked if I had an interest. It was an opportunity I couldn’t pass up. It’s a much larger hospital, and it’s a tertiary hospital which means there is more open heart surgery and more oncology. It was something that will allow me to grow my management expertise.” An executive board member of the Valley Economic Alliance, and a board member on the West Valley Boys and Girls Club and the HCA/Las Vegas Patient Accounting Services Center, Sherman had worked at West Hills since April of 1998 serving as CEO and CFO prior to becoming President and CEO. Before joining West Hills, he had served as the executive vice-president of the California Hospital Medical Center in Los Angeles. “I look forward to building a sense of team at Los Robles. I want to get everyone from the volunteer on up to understand the big picture vision, to see what health care in the 21st century will be like,” Sherman said. “The hospital is building a new patient care tower and it will be a great opportunity to work with physicians and the community to meet the needs of a community going forward.” -Jeff Weiss Entertainment The Motion Picture & Television Fund has elected Joseph Fischer chairman of the board of directors. Taking the place of Roger Mayer, Fischer will be crucial in providing guidance in delivering services to the entertainment industry, including day-to-day management of MPTF’s health care, residential, childcare, and community social service functions, the organization said. Previously, Fischer headed the board’s finance committee. Human Resources Shawn Mohr is the new chief sales officer and president of the medical, financial & allied division of On Assignment, Inc. This new position makes Mohr responsible for working with each division to develop the company’s sales approach, and for operating field reporting and sales management. Manufacturing Bill Kirk has been appointed to a new post at Delta Scientific with responsibility for the firm’s special projects. Delta Scientific manufactures counter-terrorist vehicle control systems used in the United States and internationally. The long and extensive experience that Kirk had in the international security industry, including work in Delta’s Rome office and then work in Germany, is vital to his new position in Delta’s Valencia office, the company said. Kirk will be handling the company’s most crucial anti-terrorist applications. Media Tyler Cox has been appointed national program director of News/Talk of Salem Communications, a radio broadcaster focused on religious and family-themed radio programming. With his appointment, effective on July 1, 2004, Cox will serve as a resource for Salem’s senior management, network management, general managers and programmers, and will also oversee programming, talent, and building ratings for the company’s News/Talk stations. In over three decades of working for different communication companies, Cox has served as station manager for KMEO-FM/KESN-FM, operations manager at WWRC-AM in Washington, D.C. and at WBZ-AM in Boston, and as director of news and operations for KRLD-AM and as operations manager at WBAP-AM, both in Dallas. Medical Care Dr. Walter W. Mosher has been selected as one of 100 notable people in the medical device and healthcare industries according to Medical Device & Diagnostic Industry magazine. In 1956 Mosher co-founded Precision Dynamics Corporation, the global leader in the design, production, and distribution of automatic identification wristband systems and healthcare products, and was president and CEO of the company until 2002. Mosher has been honored for his contributions to these industries as well as his additional responsibilities in the medical community. Real Estate Residential real estate agent Marilyn McDonald has joined Troop Real Estate, Inc. in its Westlake Village office. She was previously with Pinnacle Communities. At Troop McDonald will focus on the resale market throughout the Conejo Valley, representing both buyers and sellers. Cindy Pardee has also joined Troop Real Estate in Westlake Village as an agent. Pardee was previously with Re/Max Olson in Westlake Village. Earlier she worked at Coldwell Banker. Technology Nexsan Technologies, Woodland Hills, made two appointments to newly created positions at the storage solutions company. Frank Patterson was hired as vice president of global supply chain, and Steve Freeman was named director of engineering. Patterson was formerly with Cisco Systems where he was most recently senior director of global semiconductor commodity management. Freeman worked at Madge Networks, Ahead Communications. Technology Current member of the Board of Directors Richard Gold has been nominated to become Chairman of the Board of California Amplifier, Inc., to become effective at a meeting on July 30, 2004. Gold has extensive experience in senior management positions in the telecommunications equipment industry, ranging from his position as Chairman, President, and CEO of Genoa Corporation, to being President and CEO of Nova Crystals, Inc., and to his position as Chairman of Radia Communications, Inc. The experience that Gold has in wireless technologies is a huge asset is shaping California Amplifier’s expansion into new markets, and is a strong pull for his new position as Chairman.