Group Ties School and Housing for First Time in Valley By SHELLY GARCIA Senior Reporter To all appearances, the five acres that runs along Canoga Avenue at Cohasset Street in Canoga Park looks like any other construction site. But behind the chain link fencing, something unusual is taking place a development geared specifically for single parent families that will combine affordable housing with an elementary school and a learning center that provides after school activities for the kids and a range of continuing education classes for their parents. The project, Tierra Del Sol, is the work of New Economics for Women, an L.A.-based not-for-profit that, since 1985, has specialized in assisting families using a holistic approach that attacks not only basic survival needs but also provides the skill sets and services they need to climb the economic ladder to success. The roof is just the beginning. Families living in New Economics developments get access to ESL classes, courses in managing finances, saving for home ownership or starting a new business, job preparation workshops and other skill training that has seen them increase their annual gross income by an average of 50 percent within five years of moving into the residence, New Economics boasts. New Economics, which has a $3 million annual budget, has so far provided some 419 apartment units southeast of downtown Los Angeles, but with Tierra Del Sol, the group is building its first project in the San Fernando Valley. It is also the first partnership struck between a not for profit and the Los Angeles Unified School District. The $25.4 million housing development will include 119 apartment units in three structures next door to a 35,141 square foot elementary school that will serve 520 students. The LAUSD will purchase the $15.8 million school and operate it upon completion of construction sometime next summer. As the child of a single parent, Maggie Cervantes (photo, above), a 13-year veteran of New Economics for Women, saw first hand the needs of working moms struggling to earn a living and raise their families. She joined NEW after working as a budget analyst for the city and now uses her administrative expertise to help provide families with alternatives to her own latchkey upbringing. Question: How are New Economics communities designed? Answer: It’s a web of services built around family to help that family become economically self sufficient. So based on that concept and based on the concept that a family really knows what it needs and wants when we design anything, when we build anything, it’s always based on the needs and wants of that community. For this area when we met with different stakeholders in the local area, a big need initially we saw was affordable housing with senior housing and a community center. When we talked to (then) council member Laura Chick she had indicated a real big need in this area was alleviating the overcrowding in schools. So at that point we talked to LAUSD and came up with this partnership that you see coming together now with affordable housing on one piece of the property and a 520 student elementary school that will service the local children. Q: What are some of the programs that are offered to adults? A: We’ll have ESL classes besides the other host of services that NEW provides which is financial literacy. Families need to know how to manage their money and how to go to that next economic level. How to use a financial system in this country, consumer education classes, how to use your credit cards or not use your credit cards, how to save up for home ownership. There’s a lot of fraud in the Latino community especially in the Spanish-speaking community and so we address those issues as well. Q: Did New Economics begin with this holistic approach or is it something that has evolved over time? A: New Economics for Women was started by five Latinas who grew up in poor communities, who went to college and became professionals and now had a middle class standard of living. Back then they were looking at what were the differences that helped them move from where they came from to a middle class family, and a lot of it had to do with family values, with the culture the family created about success and prosperity and really how the mother played such a huge influence on the lives of these women. In combination with Maslow’s Hierarchy of Needs theory, which says your basic survival needs need to be met in order to move onto the next level, the members looked at housing with onsite supportive services to begin to address some of those issues. Q: These projects appear very complex and expensive. How did the Tierra Del Sol project come together for instance? A: New Economics for Women is really a team effort so we have various individuals with different expertise that come together to put a deal like this together. Bea Stotzer, our board president and a founding member, who is a San Fernando Valley resident, was influential in having her contacts with the Dept. of Water & Power who sold us the property. The executive committee worked at negotiating the LAUSD agreement. We had other individuals that helped us put the financing together on the housing side as well as the school site. We conducted focus groups with families and community stakeholders and business owners to ensure that what we were proposing is something they were interested in and to get their input about the school and housing. Leslie Lambert at the Community Redevelopment Agency was instrumental in helping us through that process. Q: Who is financing Tierra Del Sol? A: It’s a complex deal. It’s a combination of public and private financing so our lenders are: US Bank, Los Angeles Housing Department, Community Redevelopment Agency of the City of Los Angeles, California Dept. of Housing and Community Development, the Federal Home Loan Bank of San Francisco and Western Financial Bank. Q: Why is New Economics for Women able to boost the incomes of the families it serves in ways that other programs, such as Section 8 housing cannot? A: The difference is the services and the way that we work with our families. Each of our families has a case manager attached to the building that services those families. That case manager working with that family puts an economic plan together where they have certain milestones they want to reach. So a family may want to save up to buy a house, or it could be to start their own business or maybe they finished school and they now want to be a chef or a nurse or a physician’s assistant. What our staff does is to help put those pieces together and refer them out to other services in the community to help them get to that next level. There’s a level of accountability within our organization, our social contract that each family signs is tied to the lease, so that it’s not a free ride. If you’re interested in living here you have to commit to what you say you will do. Q: What was the most difficult aspect of putting this deal together? A: The school site was a challenge because it’s never been done before in the sense that this is the first time the LAUSD has a partnership with a non profit. Because they were able to jump on our bandwagon so to speak we were able to create a unique site that combines housing and schools. Q: Why haven’t others proposed this kind of partnership do you think? A: It’s not easy to do. We’ve been working on this for the last four years. It took a lot of perseverance and Bea Stotzer and the executive committee worked with LAUSD for a long period of time to work on that mindset. Q: How does the current budget crunch affect you? Are you looking at alternatives to public funding for your projects? A: We’re still struggling with that. Just in terms of the construction costs going up I think that adds another layer of difficulty, so projects are getting more costly and there’s going to be less public money to spread out, so funding will become even more competitive, and its’ going to be more difficult and more expensive to do deals. Q: How did you get involved with New Economics for Women? A: I grew up in a single parent family so I think my childhood experience gave me a passion to help other families and children. When I was growing up there were no support services or any affordable housing that we knew of that could help relieve the burden off my mom’s shoulders of having to work two jobs and raise her kids. So for me this is a perfect job because I help families create a better quality of life for themselves and their children. Maggie Cervantes Title: Executive Director, New Economics for Women Born: Oct. 27, 1958, East L.A. Education: Bachelor of Arts degree in Chicana Studies at Loyola Marymount University; Masters degree in Public Administration from University of California, Riverside Personal: Single, no children Most Admired Person: Mom, Dolores Career Turning Point: Volunteering at Comision Feminil where she learned she could combine her administrative talents with her passion for the community.

First Bank of Beverly Hills Plans Expansion By SHELLY GARCIA Senior Reporter The holding company for First Bank of Beverly Hills has divested its non-banking subsidiary, leaving the company free to focus on building the bank, officials said. Wilshire Financial Services Group Inc., parent company of the Calabasas-based bank, has sold its Wilshire Credit Corp. subsidiary to Merrill Lynch Mortgage Capital Inc. for about $48.8 million. As a result of the sale, Wilshire becomes the holding company for First Bank of Beverly Hills, and Joseph W. Kiley III, president and CEO of FBBH becomes CEO of Wilshire Financial Services. Subject to shareholder approval the company plans to change its name to Beverly Hills Bancorp. The bank, which has to date had only one branch in Beverly Hills, will open a Calabasas location sometime later this year. Kiley said that the company decided to divest its loan servicing subsidiary because the two disparate businesses made telling the company’s story difficult. Before potential investors had to evaluate the combined businesses, and there was no peer group against which the company could be measured. “They said let’s just become a simple bank company,” Kiley said. “I think potential investors were very confused as to what business we were in. This makes us look and walk and talk like a duck.” Now, with the divestiture, FBBH can be compared with other commercial banks of similar size, a measure Kiley believes will hold the bank in good stead. Kiley replaces Stephen P. Glennon, who resigned as CEO of WFSG. He also retains his responsibilities as CFO for the holding company. For the quarter ended March 31, FBBH recorded net interest income increased to $6.5 million, up about $1.7 million from the same period in 2003. Wilshire Financial Group assets totaled $1.2 billion for the same period.

New Law Putting Licensing Fees on Tobacco Sellers By JEFF WEISS Contributing Reporter Phillip Morris USA, the Coalition of Responsible Retailers, Wholesalers, & Distributors, and The California Board of Equalization held meetings recently at the Sheraton Universal in Universal City to inform businesses about California Assembly Bill 71 set to be enacted into law June 30. It will require cigarette manufacturers to pay a one-cent tax on each pack of cigarettes sold. Additionally, it will require retailers to pay a $100 one-time fee to obtain a California state license to sell cigarettes, while wholesalers will be obligated to fork over $1,000 plus in yearly renewal fees. Phillip Morris came out strongly behind the bill and urged retailers and wholesalers to comply, claiming that only by stringent regulation can the industry combat the flourishing contraband cigarette trade. “Phillip Morris believes that we need to control this illegal trade. We lose billions of dollars in sales, the state loses billions in tax revenues, and it adversely impacts legitimate retailers who are seeing their businesses undercut by these counterfeiters,” Jamie Drogin, Phillip Morris’ manager of media affairs, said. “We feel that it will provide protection for legitimate businesses and give lawmakers the power they need to fight the people breaking the law. There is a problem and we need to address it.” The California Board of Equalization believes that the new law will be effective in fighting illegal sales as well as helping fill the states coffers. “We do feel that Assembly Bill 71 will reduce evasion of counterfeiting in California. We are projecting that the state will gain between $58 million and $87 million a year in additional revenues,” said Gil Haas, chief of the Board of Equalization’s investigations division. “The board is going to be conducting 10,000 inspections of retailers checking for counterfeit stamps on the sides of cigarette packages.” While the major corporations and bureaucrats involved claim that this was a major dilemma that needed to be addressed, certain individual retailers are chafing under the burden of having to pay licensing fees. “I am not in favor of Assembly Bill 71. For us, it’s an extra burden because they want us to pay money for the license. I understand that they don’t want people to sell to minors but it hurts small business owners,” Wesley Strekowski, owner of a Shell gas station in Canoga Park said. “It had been working quite fine until now. More licensing is just an extra tax to collect. Nothing has ever changed in terms of my sales. It’s extra taxation.”

Pacoima Chamber Staging a Rebirth By Listening to Firms FROM THE NEWSROOM By Jason Schaff A year ago I didn’t think Pacoima even had a chamber of commerce. They were quiet to say the least. Little did I know that other people even in Pacoima also thought the chamber was pretty much dead. Well, I’m happy to let everybody know that the Pacoima Chamber of Commerce is alive and well and getting stronger everyday. Evidence of this was a great banquet on May 27 where chamber officials showed they’re organized, focused and intent on greatly improving the business climate of their community. At the event, Wells Fargo and Citibank were honored for their work in helping to improve Pacoima an often overlooked section of the Valley and Los Angeles. Both banks have put their money and resources on the line to better serve the area by offering banking services. L.A. City Councilman Alex Padilla was also honored for having a vision for the community, which is his home. Hip Hop Beverage Corp., which has created jobs with its energy drink headquarters in Pacoima, was also recognized. But Pacoima businesses overall should be honored for their vision and their actions that have staged a rebirth of their chamber, which just seven months ago had under 40 members. Now the membership totals more than 100. Chamber officials predict more than 200 members by the end of the year. So what’s the deal? It seems that it’s passion and action on the part of chamber officials and the overall business community in the area and a little bit of creativity. The chamber offers free Web development for members. Chamber officials have learned what many other chamber officials throughout the Valley have learned you’ve got to offer businesses something in return for their yearly chamber dues beyond the “prestige” of belonging to the chamber. Mario Matute, chamber vice president and director of the Valley Family Technology Center in Pacoima, is one of the chamber officials leading the organization’s activist agenda. He also credits the current activist board in helping bring in new members. Matute believes the “personal touch” is the best in Pacoima when chamber officials actively visit businesses to find out what their needs are. That’s true anywhere. The Forecast I hope Dan Blake isn’t too optimistic in his rather rosy predictions for the Valley in the annual Cal State Northridge Economic Forecast conducted by Blake at that school’s Economic Research Center and released on May 25. He’s the economist and I’m not. So I believe him. It all seems good. We’re going to add jobs, although a lot of them will be temporary workers in the next year. I worry about the manufacturing sector, though. That industry is expected to lose 2,300 jobs this year, according to Blake. That’s less than last year but still way too many. Manufacturing, although we may think it’s old school, is the base of any economy. It generally pays well and generally employs people who have some basic skills. It’s unfortunate to lose too much of that. Business Journal Editor Jason Schaff can be reached at [email protected] or at (818) 316-3125.

Valley Companies Riding Auto Customization Craze By SLAV KANDYBA Staff Reporter On a popular new show on MTV hosted by rapper Xzibit called “Pimp My Ride,” a crew of auto mechanics from the West Coast Customs shop transforms an old, raggedy car into a fixed-up, glossy painted marvel to the exuberant celebration of the car’s teenaged owner. These days, aftermarket car accessories such as TVs and shiny car rims are a booming industry. While cars have been fixed up for a while, car customization is entering the mainstream pop culture quickly. For further proof, look no further than L.A. streets, where many cars display their owner’s taste for bling-bling with 20-inch chrome wheels. Capitalizing on the car customization craze a $3 billion industry are several Valley companies, including Galpin Motors, which already sells more Fords than anyone else in the world and has a number of other dealerships, including Volvo and the high-end line Aston Martin. The successful dealership is growing, and a large part of that growth has to do with aftermarket accessories. Beau Boeckmann, the son of Galpin owner Bert Boeckmann, is presiding over the development of Galpin Auto Sports center at the dealership, which is on track to open later this year. The center will enable consumers to get their cars customized on-site. “That demand has been there for a couple of years,” Boeckmann said. Galpin is investing $1.5 million to build the center and plans to have more than $2 million in inventory in the 7,000-square-foot facility. There will be eight service bays to start, but eventually another six, for a total of 14, will be installed. Products offered will include suspensions, lowering kits, wheels and tires, and a myriad of other parts that are becoming more and more popular with various demographics, not just young hipsters or wealthy athletes or Hollywood executives, Boeckmann said. “It’s like an explosion in the last couple of years in the industry itself,” Boeckmann said. “You see (TV) show after (TV) show that’s on today so there’s obviously a large interest in it.” Galpin is joining a pack of companies offering customization to the public, but Pacific Coast Motoring in Woodland Hills is specializing in a more narrow market. Celebrity customers Founded by Eric Rosenthal and Raschid Shah, the company specializes in complete customization for celebrity clientele that costs from $15,000 to $20,000 per car or SUV. They have outfitted the cars of celebrities including former Los Angeles Clippers star Lamar Odom, current player Quentin Richardson and even Cher, according to their official Web site. Business, in fact, has boomed in the last several years, Rosenthal said, to the tune of 75 to 80 percent total revenue increase. He credits the fact that technology is rapidly changing and more devices are installed inside vehicles than before. “We’re doing five to six monitors inside the cars,” Rosenthal said. “We’re booked one month ahead.” On the manufacturing end, aftermarket parts are also in demand. At Chatsworth-based Milodon, vice president of sales and marketing Ken Sink said business has jumped about 20 percent over last year. The company produces aftermarket head studs, main studs, and gear drives primarily oriented for street performance or drag racing market. With about 50 employees, the company sells its parts to wholesalers. Yet another local company on the aftermarket rush is Autotechnica, which is a distributor of parts. The Chatsworth-based distributor of parts such as steering wheels, racing pedals and chrome attachments for trucks and SUV employs 20 and is licensed with Dodge, General Motors and Chrysler and is growing its business. “I would say that annually we’re seeing anywhere from 10 to 20 percent increase,” said Jeffrey Redding, vice president of product development at the company. “We expect at least as much this year.” Broader market Redding said because the market is becoming more diverse, a lot more people are “interested in customizing their vehicles.” “The industry is one where products are constantly changing,” he said. “There’s always something new coming out.” Galpin’s Boeckmann also has seen the aftermarket accessories market become very popular. “A few years ago, having a TV in the car was abnormal,” Boeckmann said. “Now, it is how many TVs do you have?” B & M; Racing and Performance Products in Chatsworth is seeing business rise as well. The company, which manufactures shifters for performance cars, has had steady growth over the past five years, with the fourth quarter of 2003 notably best. The biggest growth at the company has taken place in the OEM supply, as more and more car makers including Ford and Porsche are ordering its parts. The “embrace of tuning and performance craze” meant the company is building shifters for about 100 different car companies, Applegate said. “What happened is things have changed. If you go back 15 years, it was a narrow market,” said Brian Applegate, the president of the 140-employee company that was founded in 1952. “It was an older, muscle car-oriented stuff. (Now) you got virtually every brand entering the performance arena.”

Neighbors Seek Slowdown of Growth in Warner Center By SHELLY GARCIA Senior Reporter The Woodland Hills-Warner Center Neighborhood Council is asking the city to place a cap on residential building in the area, fearful that the balance of homes to working spaces could be tipped beyond what the area’s infrastructure can bear. The neighborhood council’s motion, which also includes demands for a new traffic study and provisions for additional parkland, comes as developers ready plans or begin construction for an additional 2,500 apartment units in the Warner Center area. Those plans will likely be delayed at the least, and could be modified if a new traffic study finds that the development will create additional congestion in the area. “What we have is an infrastructure that is already congested,” said Los Angeles Councilman Dennis Zine, who represents the district. “We’re trying to find new space for schools and the other parts of the infrastructure that haven’t kept pace. What we’re trying to do is make this work for the community and Warner Center.” Zine said he would support a move to update the Warner Center Specific Plan so that additional residential development is curtailed as well as a new traffic study that would consider not just the potential effect of the new projects planned along DeSoto and Canoga avenues, but throughout the Warner Center area. That is not likely to sit well with developers, who have been moving forward based on a Specific Plan that, as it stands, does not require additional entitlements or variances for these projects. It could also mobilize land owners in the area, who have found a welcome market at top dollar for land that is converted to residential use. Indeed, some of the apartment complexes currently planned will be developed on parcels that now house industrial buildings. Back about a decade ago when Warner Center was still a predominantly commercial hub, city officials drew up the Specific Plan with an eye toward creating a full-fledged community with a balance of homes and businesses, schools and roads. The plan was designed to remain in effect until about 20 million square feet of commercial building was completed in the area or the year 2008, whichever came first. More housing units At the same time, an environmental report that accompanied the Specific Plan sought to maintain a balance between commercial and residential building, and it established another criteria for that balance Warner Center could accommodate about 3,000 new housing units to correspond to the targeted 20 million square feet of commercial development. The expectation was that it would take nearly until the end of this decade to reach that balance. It now looks like that day has arrived about four years early. Until recently, all the development activity at Warner Center was focused on commercial properties, and the area now houses about 17 million or 18 million square feet of commercial buildings. But the decline in the commercial real estate market has brought those types of developments to a standstill and moved the pace of residential building up considerably. The area’s neighborhood council and others say residential construction is outpacing the area’s ability to develop an infrastructure to support it. “No matter that the traffic study says it won’t have an impact, we just don’t believe it,” said Joyce Pearson, chair of the Woodland Hills-Warner Center Neighborhood Council. “There’s a certain amount of experience with the city’s traffic studies that lead us to believe maybe they’re not as comprehensive as they should be.” The traffic studies required of the new developments require only that the developers measure the impact of their specific projects without taking into account all the projects under development. Pearson and others point out that the three projects under consideration by the council, at 6301 6331 DeSoto Ave., 6200-6250 DeSoto Ave., and 6200-6250 Canoga Ave. are in addition to a large Warner Ridge project, Bella Vista, which sits just across the street from the two DeSoto projects. “We already know traffic on DeSoto heading to or from the freeway on the afternoon is really bumper to bumper,” Pearson said, “and the concentration of the new projects is all there.” Mall expansion Also at issue is a planned expansion at Westfield Shoppingtown Topanga, which will add hundreds of thousands of square feet to that shopping center and further strain the roads and freeway access. Meanwhile, the development of public transportation is lagging behind, opponents of the new developments say. Construction of the busway has just begun and a planned Dash shuttle service is not yet fully online. But changing the specific plan is easier said than done. “If the council office wants to set new standards, how do they go about doing that?” said Brad Rosenheim, principal of Rosenheim & Associates, which serves as the director of the Warner Center Association. “It is pretty difficult to do that without amending the specific plan. It becomes very complicated.” Amending the specific plan is a time consuming and labor intensive effort, and the plan was just amended several years ago, making the cost of another amendment in so short a period of time hard to justify. Layering additional ordinances onto the plan is like to result in confusion for developers as well as city officials. Meanwhile developers, who have been led to believe that their projects do not require any additional entitlements or variances may find themselves waiting in the wings, unable to proceed with their projects.

Northridge Article Full of Problems I read (Staff Reporter Slav Kandyba’s) your recent article (“Northridge Says It’s Leaving Valley Chamber Alliance,” May 10) with interest, first, and with utter amazement, ultimately, at the utter scope of your misquotes of our interview. First, you attributed to me the comment that “Northridge’s decision was based on money.” That is exactly the opposite of what I said. What I said was that the decision could not have been based on money, since the dues are so minimal only a few hundred dollars per year. Attributing a move like this to a couple of hundred dollars is both insulting to Northridge and to my own intelligence. Neither of us deserves that. You exactly reversed what I said. Your next comment is just plain not understandable, that I “refuted the idea that VICA is competitive.” To make it even more confusing, you quoted me as saying that VICA was competing with chambers. Obviously, VICA is a very competitive and important voice for businesses in the Valley. The UCC and VICA are allies in many legislative and community endeavors and are both strategic partners in the Economic Alliance for the San Fernando Valley. UCC greatly values our relationship with VICA. In many ways, we are walking down the same road to make things better in the Valley. Thus I would never, and did not, say that VICA wasn’t competitive. That’s silly and I know better. Again I was misquoted 180 degrees from factual. You almost quoted me correctly on VICA’s competitive role with chambers, in that I told you that the comment you attributed to Northridge that they had turned away from UCC to other entities for support did not make sense. That is because some of the likely “other entities,” such as VICA, were actively soliciting membership from the same membership base upon which Northridge relied. I explained that UCC does not do that. Our members are the chambers and we would not dream of competing with them in that manner. Finally, you misquoted me about Wayne Adelstein’s suggestions re improvement of UCC. What I told you is that Wayne approached me with several suggestions for improvement when I first took over UCC as its chair. I told you I implemented nearly every one of his suggestions, so I was surprised at his current stance, especially since neither Wayne nor the Northridge Chamber had recently been participating in UCC activities, so they would not be in a position to know whether or not those improvements had indeed been implemented. In fact, Wayne’s ideas’ implementation had occurred. The only missing link was Wayne’s and Northridge’s involvement to see that. Your article grossly misquoted me, made me out to be hostile to VICA, Northridge, Wayne and whoever may be allied with them. None of that is even remotely true. If this was an attempt at character assassination, congratulations, because your misinformation has succeeded. If this was just negligence, the outcome is the same. William F. Powers Jr. Chatsworth

THE BRIEFING Traffic School Takes High-Tech Approach Armen GeoSimonian was in a quandary after he dissolved his business Traders Online. Driving home after the dissolution proceedings, his mind became distracted while mulling over potential business ventures. Inspiration struck at perhaps the least likely time: when he got pulled over by a cop for speeding. The incident provided the genesis for his next enterprise, an online traffic school that would allay the hassles of having to drag oneself into a Traffic School on a Saturday Afternoon to watch Red Asphalt 1-7. GeoSimonian’s new company, Traffic101.Com was one of the first online traffic schools to come into existence when it debuted in 1997. Since then the company has continued to expand and remain profitable even as numerous other online traffic schools have entered the fray. Today, Traffic101.com operates in six states and plans to add four more by the end of 2004. The service costs $24.95 throughout the Valley. “Originally, when we first started getting courts to try the service, it was very difficult. We only had one or two small courts in Modoc County and we hardly had any business. They only chose to allow it because there customers were in such remote areas that it seemed beneficial to their residents. Slowly and slowly more and more courts began to look into the option. In our first year of business, we only serviced California with only a handful of courts but it was always profitable from day one. Over the years, we’ve grown drastically. We are in six different states and we’re talking to four more. We expect revenues to triple once we receive these new states. It’s been an interesting journey. “The biggest conflict has been the courts. They always ask how can you verify who is taking the course over the Internet. Some schools offer the courses online then make their customers come in and take the final exam in a room monitored by a proctor. We chose from Day 1 not to take that route. We started working on a new technology that would allow us to verify the students’ identity over the Internet. The way it works is that we provide the user a free Web camera, and when they get to the final exam they stay at home and plug in the camera. While they take the exam, we use face recognition technology to verify that it is indeed the person taking the course.” Jeff Weiss

Valley May Be Key to Determining L.A.’s Next Mayor Guest Column By Gregory N. Lippe Approximately two years ago Mayor James Hahn launched a massive and costly campaign of fear and alleged deceit and fraud in his successful attempt to crush the secession movements in the San Fernando Valley. The fear tactics included suggestions that the Valley would lack adequate police, fire and other safety personnel in the event of a serious disaster, such as that of 9/11, and that utility costs could increase dramatically. Few Valley television viewers will forget the “Roulette Wheel” ad used to drive fear into the minds of Valley voters. The alleged deceit includes the holding back of information that a significant price increase was already being considered by the DWP. The alleged fraud includes the recent “Pay-to-Play” accusations that have driven stakes through the hearts of a number of the mayor’s relationships. Additionally, there were allegations of inappropriate secession campaign contribution requests. The first of such requests to be reported by the media was a $25,000 campaign contribution made by the now reorganized Entertainment Industry Development Corporation, a quasi-governmental agency originally formed and operated for the purpose of streamlining the film permit process in an attempt to stem the tide of runaway film production. The investigation into this contribution opened a Pandora’s Box, revealing a number of expenditures by the agency considered to be improper. Although the mayor obtained his desired result of avoiding secession, it may belong in the “be careful what you wish for” category. Sometimes those things we fight the hardest to avoid turn out to be the things that are best for us. Valley candidates There are analysts that believe that the outcome of the next mayoral election will be decided by the Valley votes. If this is true, it appears that the mayor is in serious trouble. The methods used in his anti-secession campaign not only crushed the secession movement, but alienated many of the Valley’s residents, business owners and most influential people. Additionally, the mayor has not as yet been able to change the perception that he is unfriendly toward the Valley. Meanwhile, two very credible seasoned politicians, who are residents and friends of the Valley, have declared their candidacy for mayor. The first to declare is Senator Richard Alarcon, a very charismatic legislator with a long history of support among labor. The second to declare is former Speaker of the Assembly, Bob Hertzberg, who has a nickname “Huggy Bear” due to his well-loved habit of placing a bear hug on everyone he sees, and his somewhat Teddy Bear looks and personality. Hertzberg is widely popular among Valley residents and business owners and, through his position in the Assembly, has demonstrated a tremendous ability to work together with all members of the Assembly (Democrat and Republican) to create and pass legislation that benefits both labor and business. Differing reputations While Hertzberg has earned the nickname “Huggy Bear”, reflecting his popularity, Mayor Hahn has been referred to as “Jimmy Yawn” and an “empty suit” for a perceived bland personality and ineffectiveness in achieving the goals of stimulating economic growth and creating a friendly business climate in Los Angeles. Although it is rare for an incumbent with a large war chest to lose an election, popularity is a very important factor. Additionally, Hahn, who received a tremendous legacy of goodwill and admiration created by his father, Kenny Hahn, has not been able to sustain it. Instead he and his administration are being subjected to continuing attacks alleging questionable practices and poor judgment. His most recent attempt to help balance the city’s budget by planning to raid $5 million from a trust fund, established for the purpose of business tax reform, was declared illegal by City Attorney Rocky Delgadillo. In the end, Mayor Hahn’s desperation to keep the Valley from seceding resulted in retaining a large block of voters that could cause him to lose the next election. Perhaps, if the mayor had allowed the Valley to secede, he would have a much better chance of retaining future control of the city. Unfortunately, secession would have taken significant funding away from the remaining city since the Valley’s contribution to revenues significantly exceeds the value of services it receives. The loss of significant revenues coupled with a deflated ego from losing a significant portion of his constituency could have been Hahn’s worst nightmare. Gregory N. Lippe, CPA, is managing partner of the Woodland Hills-based CPA firm of Lever, Lippe, Hellie & Russell LLP (LLHR) and a director of the Valley Industry and Commerce Association (VICA)