One Los Angeles Questions Secession Election Plan By JACQUELINE FOX Staff Reporter The panel expected to craft a resolution for a ballot initiative on secession in roughly two weeks is being pressured to delay a vote for mayor and city council of a new Valley city until after a breakup vote either passes or fails at the polls Nov. 5. An up-or-down vote on secession and the election of 14 city council and one mayoral seat are now slated to be held concurrently. But anti-secessionists say that process would be costly and confusing for voters, as well as for candidates who would run the risk of campaigning for seats in a city government that may never be created. Pro-secessionists, however, say voters should and likely would want to know who would be running their new city as they ponder whether to break away from Los Angeles. Jeff Daar, co-chair of One Los Angeles, an anti-secession group, submitted a 15-page document to the Local Agency Formation Commission (LAFCO) April 24 as the panel received final recommendations for a split from its top executive, Larry Calemine. LAFCO is expected to recommend a ballot initiative on secession May 15 based on Calemine’s report. Highlighting details in the One Los Angeles report, Daar said LAFCO could be in violation of government code on the issue of elections. He requested that, if a secession vote is successful, separate elections for new Valley seats be held in March 2003 to coincide with elections for the Los Angeles City Council. “I believe there has been a serious error in that LAFCO hasn’t considered holding separate elections,” Daar told the panel. He said Valley VOTE, the group that initially gathered petition signatures to obtain a study on secession, failed to inform voters at that time that they would ultimately be deciding both issues at once. “There was no proper request for a separate election,” Daar said. “The petition signed by the voters is silent on the issue of elections.” LAFCO has said that, because Valley VOTE requested concurrent elections during negotiating secessions, it has no legal choice but to grant them. Daar, on the other hand, said the original petition signed by voters didn’t include that request, so LAFCO has more discretion than it is admitting to. LAFCO Chairman Henri Pellissier hinted that Daar, making his first and only appearance so far before the panel, and One Los Angeles were simply making an 11th-hour attempt to stall the process already six years in the making. “Maybe the petition was silent, but it’s been known that this is how it’s going to work,” said Pellissier. “All of a sudden you come up with the idea that this isn’t right.” Daar told LAFCO members that voters would be “confused” and “inundated” if the races and the issue of secession are held at the same time. With 14 council seats and the mayor’s slot in the offing, political campaigns would overshadow the historical significance of whether to carve up Los Angeles, he said. “The election would eclipse the issue of secession,” Daar said. And, the One Los Angeles report states, “Not only can we avoid the confusion and distraction on the important decision of whether or not to break up the city, we will have candidates who will run for new offices knowing they are not wasting their time and that of the voters. Candidates can spend the millions of dollars needed to be elected mayor of what would be the sixth largest city in the United States knowing that there is, in fact, such an office to be filled.” Valley VOTE President Jeff Brain disagreed. “We believe the voters have a right to know who’s going to lead them as they determine their view on secession,” Brain said. In addition, Daar suggested concurrent elections carry inherent political red flags for sitting L.A. City Council members who now oppose secession, but may want to campaign for Valley offices if they lose their seats when a new city is formed. LAFCO Member Zev Yaroslavsky indicated the panel has no interest in ruminating over the political ramifications for would-be or incumbent elected officials. “Do you think that’s the concern of this commission?” he asked Daar. In a subtle show of support for Daar, however, LAFCO member and City Councilwoman Cindy Miscikowski, a staunch anti-secessionist, pointed out that, because the language in state guidelines on incorporation uses “shall” in the discussion on elections, there is room for interpretation that merits investigating before May 15. Yaroslavsky agreed saying, “We ought to know what our options are.” Finally, Daar pointed out that, under LAFCO’s terms and conditions, the city of Los Angeles would be partially responsible for the costs of the elections. And with the city facing a potential $250-million budget shortfall and further potential cuts at the state level, he suggested separate elections would be the fiscally responsible thing to do. “Resources would be used unnecessarily if secession fails,” he said.

The Briefing: THE BOSS’ MANAGEMENT STRATEGY As manager of the Van Nuys Airport, Selena Birk faces challenges every day, everything from tenant needs for more space to complaints of neighbors about the noise created by early morning TV and radio helicopters trying to get commuters the latest updates on freeway tie-ups. Some challenges arise even when the idea is to make things better for Valley residents. For the last year and a half, the airport has been pushing a plan for a new commuter bus terminal, for shuttle passengers to and from LAX. Current plans for the $30 million project include an elevated parking garage, an increase in the number of parking spaces for commuters from 2,000 to between 4,000 and 6,000 and a food concession area. Plans have been challenged by residents living nearby concerned the changes would bring more cars, buses and noise into their neighborhoods. The airport has asked its architects to revamp the Flyaways plans to address resident concerns. Officials now hope to have plans finalized, out to bid this fall and construction completed by next year. Birk spoke recently to Business Journal reporter Jacqueline Fox about the project, where it stands and her strategy for keeping it on track. “The design has been a challenge for us from the start. But we have been working with the community and we’ve developed and updated the plan in order to minimize bus and vehicle traffic. “When we first started getting concerns, we decided to hold a public hearing to discuss the project. The total process has probably taken about a year and a half. We are not required to do that, but because the Flyaways has been such an institution in the Valley, and a lot of people want to take advantage of it, many wanted to be a part of the process. “One of the big challenges we are still wrestling with is trying to anticipate what the airlines at LAX, Ontario and Palmdale airports are going to need in the future. We are anticipating a lot of technological changes. We don’t know yet fully what some of those technology changes might be, but they include things like check-in areas, on-site ticket purchases or e-ticketing. The potential is there for changes (to the current plan), but we are trying to anticipate what might be needed and design for as much flexibility in order to meet those needs, whatever they will be. We are doing that as we go along.”

The Valley’s Longest Practicing Attorney By JACQUELINE FOX Staff Reporter The year Aaron P. Moss was admitted to the State Bar, the minimum wage was just over 40 cents an hour, 50 percent of American households still did not have indoor plumbing, the average life expectancy for a woman was 68.2 years, for a man 60.8. Moss turned 85 in January. So much for numbers. Moss, the longest practicing attorney in the San Fernando Valley, passed the bar exam in 1940 and still practices family law out of his Van Nuys office every weekday and most Saturdays, juggling as many as 100 active files at a time. “You have to have a sense of humor, that’s been very important to me,” quipped Moss, who was at one point in his life, he claims, nearly 6 feet 11 inches tall. He still carries himself like a linebacker, albeit a few inches shorter than in his football days, thanks to Father Time. Moss is legally blind and uses a magnifying glass to read legal briefs and prepare documents. Files have names scrawled in black letters six inches high; stand more than a foot away and you’re probably a blur to him. He shows few signs of wrapping up the six-decade career he’s devoted to helping couples traverse the thorny road to divorce or bickering family members divide up estates. It is a career in which there has been plenty of time for public service, particularly in the Valley, where he first set up his practice in 1959. He served as a judge pro tem of the Los Angeles Superior Court, a volunteer mediator in Juvenile Court and a state bar examiner. Moss created a missing child hotline in Orange County and, in the 1970s, helped get a state law passed that stiffened penalties for parents charged with abducting their children during custody disputes. When he saw that the Valley was in need of a family law section specializing in divorce, custody and arbitration support services, he made sure the San Fernando Valley Bar Association got one and that he was its first chairman. “I was president of the San Fernando Valley bar in 1970,” said Bruce Gleason, who ran his own family law practice from 1949 to 2000. “Aaron came to me and said, ‘Bruce, we need a family law section.'” According to Gleason, anyone involved with family or probate law could take a few pointers from a guy like Moss and walk away richer for having done so. “I couldn’t say enough about him,” said Gleason. “He was the best family lawyer I ever knew. He was tenacious, friendly to everyone. He’s one of the most polite people I’ve ever known and he writes the best briefs I’ve ever seen.” To say the rules pertaining to family law, specifically divorce, have changed since the 1940s would be an understatement. Judges in paternity cases once simply put the father and mother together and made a ruling on who the child looked most like. Today, they rely on advanced DNA testing to make those determinations. Women, to obtain divorces, once had to prove unusual cruelty, desertion or alcoholism. But California was the first state to adopt the no-fault divorce laws in the early 1970s, clearing the way for any couple to dissolve their marriage by mutual consent. Community property laws have also changed, making it easier for the courts to split up a couple’s assets. One Valley family law attorney new to the field says she’s sought guidance from Moss repeatedly since establishing her Van Nuys practice two years ago. “Aaron is so bright and has such a strong grasp of the law,” said Marcia Anderson, whose office happens to be next door to his. “I go over and ask him for help. I talk to him about my cases and I can see that he really takes them to heart. He helps me think about things differently and that helps me practice better law.” Some of the biggest changes for Moss have been mechanical. For instance, when he started practicing in the Valley, there were no municipal court branches. Lawyers had to be lucky enough to get a case out of the city of San Fernando or Burbank to avoid trekking into downtown Los Angeles for court appearances. “Decentralization of the courts has been a big part of the changes I’ve witnessed,” said Moss. “If you were an attorney in Los Angeles or the Valley back when I first got started, you could count on seeing your colleagues all in one courthouse most of the time. The Valley didn’t have a branch location. The Van Nuys courthouse was a two-story municipal building. That’s all we had.” Moss’s first assistants transcribed documents onto wax discs. Later they used Dictaphones and took shorthand. Then came the wire tape recorder, the electric typewriter and eventually the personal computer. “Think about the work involved for law clerks and secretaries,” said Moss. “Things used to take much longer.” Family law judges today have court-appointed mediators and child custody evaluators to assist them in setting the terms of a divorce, including alimony, child support and the division of community property. In fact, said Moss, the Valley was one of the first areas to implement paid mediation programs and conciliation courts, clearing the way not only for a new line of employment in the field of family law, but also making life simpler for family lawyers and judges. “These programs used to be all voluntary,” said Moss. “But we put together a system that has really worked to save a lot of time. Our courts used to be extremely overcrowded, so they also helped to unclog the system to some degree.” But some things haven’t changed. Some haven’t improved either like the divorce rate. While the post-World War II baby boom eventually put a shiny face on the institution of marriage, women went to work while their husbands fought overseas and, for many, it was the first real taste of freedom from household drudgery. Divorce rates began to climb, albeit slowly, just as Moss dug into the second decade of his career, then gained momentum as the 1960s drew to a close and what was then called the women’s movement began to take shape. Today, it’s estimated that 50 percent of all marriages will end in divorce, although there has been a slight decline in some states over the last decade, partially due to the fact that couples are waiting until they are older to tie the knot. “One thing that hasn’t changed is human nature,” said Moss. “The battle between the sexes has kept me and my colleagues busy. But there are also battles between people that will never end either. In probate court, believe me, you get all kinds.”

Dudovitz Finds ‘Work for the People’ Is Fine By CARLOS MARTINEZ Staff Reporter At the time it seemed like an omen, said Neal Dudovitz, of the Northridge earthquake that nearly destroyed his Pacoima office in January 1994. In the end, the damage was slight and the office was back in working order within days. But he had a challenge ahead of him. “I couldn’t really worry about it. We had to go out into the community and make sure people that needed help got it,” said Dudovitz, executive director of Neighborhood Legal Services of Los Angeles County. Dudovitz wasn’t just writing court motions or filing briefs on behalf of his mostly immigrant clients. He was out in the streets, doing what he called “work for the people.” “I’d only been there six months when, boom, the quake hit and it changed everything,” he recalled. Neighborhood Legal Services became a focal point for the Valley’s recovery efforts as its staff scrambled to find shelter, food and clothing for many who had lost their homes to the quake. It didn’t matter to Dudovitz that his legal skills were not needed as much as his leadership and expertise in reaching the right people to provide help to residents and businesses. This was right where Dudovitz wanted to be. “Working in the community was something that was probably instilled in me by my parents, and that was part of what people were expected to do back then,” said Dudovitz, who grew up in the middle of President Lyndon B. Johnson’s War on Poverty. “My goal was to go to law school, become a public interest lawyer and work with the community,” he said. Veteran Woodland Hills-based attorney Lyle Greenberg said Dudovitz’ dedication to the community is unique among attorneys. “His focus is clearly not on his personal and financial status,” Dudovitz said. “He sees it as his responsibility to the community to provide legal services to those who can’t afford it.” After graduating from Northeastern University School of Law in Boston in 1973, Dudovitz joined the advocacy group National Senior Citizens Law Center in Michigan. Two years later, Dudovitz headed to Los Angeles to lead that group’s efforts here. He spent 17 years filing briefs and litigating on behalf of senior citizens before he decided it was time for a change. “After spending my time writing briefs and arguing in court, I found a program where you could work in different forms to protect people’s rights,” he said of Neighborhood Legal Services. Upon his arrival, Dudovitz found an office with plenty of work to do, but few resources. With a $2.2 million budget, mostly federal grants, the organization was at the mercy of bureaucrats in Washington, D.C. who could and occasionally did cut funding with little notice. So, Dudovitz began developing new programs with funding from a more diverse range of private-sector and non-profit institutions. Today the organization’s budget is closer to $7.5 million. But the real catalyst was the 1994 Northridge quake, which proved to Dudovitz that the organization could do a lot more than just provide legal aid. In the earthquake’s wake, he founded the Health Consumer Center, helping the disadvantaged obtain health care, and the Self-Help Legal Access Centers, a partnership with Los Angeles Superior Court and the San Fernando Valley Bar Association to assist low-income residents who need legal assistance. Other programs include the Domestic Violence Clinics to provide legal assistance to domestic abuse victims, and more recently, the VIDA program, to help primarily low-income Latinos get health care. “When I started in 1993, there were 10 or 12 lawyers. Now we have 30, but by the end of the year we hope to have 40,” Dudovitz said. Lee Alpert, a partner in the law firm of Alpert & Barr in Encino, said Dudovitz is well suited to lead the organization. “He’s a unique guy because he’s a community activist, a non-profit guy, a businessman and a lawyer all rolled into one,” he said. “He constantly thinks out of the box and always tries to figure out ways to solve problems and always manages to do something positive.” Five years ago he received a call from a resident of Astoria Gardens, a crime-ridden, dilapidated apartment complex in Sylmar. “They were having all kinds of problems getting the landlord to fix things, and it was a terrible situation for those families,” Dudovitz said. Gangs roamed the complex, often breaking into dwellings and terrorizing families and their children, said Pablo Partida, a longtime resident there. Dudovitz and his staff came up with a solution. They helped residents create a non-profit corporation to acquire the complex and turn it into a co-op with tenants sharing ownership. With a volunteer board that manages the rents and finances of the complex, Astoria Gardens was cleaned up, repaired and made secure. “It’s really a great success story,” said Dudovitz, who credited his staff and Astoria Gardens residents for making the project possible. But most projects involve just one family, such as the time Dong Guo and his wife Yu Zhou discovered their month-old daughter Esther needed surgery and had no insurance to cover the costs. The family was unable to get any help from county or state agencies until Neighborhood Legal Services became involved. “Our staff contacted all the appropriate agencies and worked with them to get them assistance,” Dudovitz said. “It took a lot of doing but we got them help.” Other times, the agency must sue public agencies to aid the needy, such as the 2000 case involving Gina Mosley, who was denied help from CalWorks, the state welfare-to-work program. “She needed money to repair her car so she could go to work and it was denied, so we just helped to get the county to do what they’re supposed to do,” Dudovitz said. Last year, Mosley received the $1,700 she requested to fix her car and is now a medical assistant at Los Angeles County/USC Medical Center, he said. “But we mostly try to make changes and improve the quality of life in the community in ways other than through the court system,” he said.

Losing Kmart Is Big Gain for Mall By SHELLY GARCIA Senior Reporter The decision by Kmart Corp. to close its Fallbrook Center store could be a boon for the West Hills shopping complex. Granted Kmart’s departure leaves mall owner General Growth Properties Inc. with 130,000 square feet to fill, after nearly completing an arduous re-positioning and re-tenanting of the center. But the newly available space also gives Fallbrook officials an opportunity to bring in one or more additional retailers with more drawing power than Kmart could provide. “Kmart hasn’t drawn a lot of customers into their stores for quite some time, so the opportunity to upgrade the box is definitely an opportunity,” said Chris Wilson, president of Wilson Commercial Real Estate, who works with General Growth on some of its deals. Kmart, which earlier this year filed for bankruptcy, is closing nearly 300 units in its 1,900-store chain, including the Fallbrook location. The retailer has long been criticized by industry pundits for failing to establish a successful niche in the fiercely competitive discount market dominated by Wal-Mart and Target. The chain’s $37 billion in sales last year pale in comparison to Wal-Mart’s $218 billion volume. While Kmart’s discount strategy fit with the newly developed Fallbrook positioning to create a big box and off-price center brokers and others say there are many other retailers out there who can draw greater numbers of shoppers to the mall. “I think it’s an opportunity for Fallbrook and for the community,” said Ron Wood, a partner with Santa Monica-based Epstein & Associates who brokers deals for retailers including Ross Stores Inc. and Borders Group Inc. “The community didn’t need to have another low-end retailer in that market area.” The one caveat for Fallbrook, however, could be finding those alternative tenants. While retailers are continuing to expand despite the economic slowdown, brokers say the big-box sector has only a limited number of players for each category of merchandise. “The problem in our market today is in every category we’re only two deep,” said Wilson. If, for example, Barnes & Noble and Borders Books & Music already operate in a trading area, a property owner seeking a book seller would be hard pressed to find a tenant. “That said, what can they do with Kmart?” asked Bert Abel, vice president of the retail group at Grubb & Ellis. “They can do anything the market requires. It’s now simply an element of who’s not there.” Officials at Fallbrook Center said they are considering “all the options.” Kmart’s departure will not require any additional reconfiguration at the center, which began remodeling work last year with plans to transform the 50-year-old center into what it calls the largest power center in the West San Fernando Valley. “It really doesn’t have any effect on the remodel other than we need to look for a replacement store,” said Daryl Rheingans, general manager for Fallbrook. General Growth has already spent several years considering a new strategy for Fallbrook, a 1-million-square-foot complex that had become a hodge-podge of big-box and discount stores along with an enclosed mall. A redesign had to take into account neighboring upscale shopping centers within a few miles of Fallbrook and a myriad of smaller centers that had grown up in the surrounding area. Last year, when mall operators inked a deal with Home Depot Inc. for a 150,000-square-foot store and a 15,000-square-foot to 20,000-square-foot garden center, the new direction appeared to gel. General Growth signed Designer Shoe Warehouse, Linens ‘n Things, Laemmle Theatres and HomeTown Buffet, which would join a lineup that already included Mervyn’s, Burlington Coat Factory, Old Navy and Ralphs. “I think they’ve got enough critical mass at that center,” said Greg Whitney, senior associate at CB Richard Ellis. “They’ll attract somebody else to fill that space because they have a nice lineup of tenants.” Rheingans said the demolition of the enclosed mall portion of the 1-million-square-foot property is in the “final stages.” A completion date for the rest of the remodeling has not yet been set, nor has the center determined what the final square footage will be when all the work is complete. “We are currently negotiating leases that are not fulfilled yet, so I don’t have that number for you,” Rheingans said.

Phobics Face Virtual Reality to Overcome Their Fears Therapy: Curing fears of flying, crowds and heights in a psychologist’s office. By CARLOS MARTINEZ Staff Reporter One person who suffers from a fear of heights stands on the balcony of a 10-story building. Nearby, somebody else petrified of crowds gives a speech in front of thousands. Neither, however, are where they appear to be. They are in a doctor’s office undergoing virtual reality therapy, using a high tech helmet and visor to provide all the sounds and images of a tall building, a crowded auditorium or a jet airliner. Gerald Tarlow, a psychologist and director of the Center for Virtual Reality in Calabasas, said a technology developed for military uses is the latest addition to his practice. “The equipment has always been extremely expensive to purchase and the programs available have been very limited until now,” said Tarlow, who along with his partner, Alan Berkowitz, has been offering the virtual reality therapy since January. The new therapy allows the treatment of phobias such as fear of flying, heights, driving and public speaking. Treatments for other phobias are being developed, Berkowitz said. According to Georgia-based Virtually Better Inc., which makes and sells virtual reality devices for psychotherapeutic purposes, Tarlow and Berkowitz operate the only virtual reality psychotherapy center in the Los Angeles area, one of only 25 such clinics in the United States. “They’re in the unique position to be the only game in town when it comes to virtual reality therapy,” said Ken Graap, Virtually Better’s CEO. The technology, originally developed to train fighter pilots and U.S. army tank crews for combat, has been modified into a low-end version that costs between $2,500 and $23,000 to get off the ground, compared to the $2 million to $5 million units the military uses, Graap said. “It doesn’t have to be as realistic for a patient as it is for the military because you’re not training someone to fly a $40 million jet fighter,” he said. In the past, therapists had to rely on essentially two kinds of therapy to treat phobias: systematic desensitization and so-called flooding. In the first, patients were asked to face their fear gradually, such as asking a person afraid of heights to go to a second floor, a third, and so on, Tarlow said. Flooding is when a person is immersed in a phobic situation, such as a person afraid of spiders being asked to handle many of them. The virtual reality device is a helmet and visor on which virtual images are projected to simulate a roomful of people, for those with fear of public speaking, or the inside of a commercial jet, for those with fear of flying. The patient wearing the virtual reality visor, for instance, can move his head to view the entire room or aircraft, much as if he or she were in an actual situation. The technology was developed about five years ago by Emory University scientists in Atlanta, but only in the past two years have psychologists in the civilian world begun to embrace virtual reality therapy. “Now more people can afford to get the equipment,” said Brenda K. Wiederhold, executive director of the Virtual Reality Medical Center in San Diego and one of the pioneers in the field. Last year, Wiederhold said, she had about 300 patients undergo the therapy, compared to just a handful four years ago. Patient counts like Wiederhold’s are what attracted Tarlow and Berkowitz’ interest. So far, virtual reality therapy makes up only about 5 percent of the psychologists’ practice, but Tarlow expects it to grow gradually. “Within two or three years, we could see it be about half the practice, easily,” he said. A 45-minute session costs $200, about the same as a non-virtual reality therapy, and most patients complete between 10 and 12 sessions, Tarlow added. “It takes about half the time that it takes with more traditional psychotherapy,” said Wiederhold. Tarlow said the clinic has about a dozen clients, but he expects the practice to grow within two years to about 20 patients a week, worth about an additional $200,000 in annual revenue. Dina Azarkman, a 45-year-old artist and homemaker from Encino, swears by the virtual reality therapy that, she said, has nearly cured her fear of flying. “I flew all my life. The phobia developed on a long transatlantic flight and I couldn’t fly anymore,” she said. “I actually tried two other therapies and that didn’t work. I felt like a complete failure and it was very humiliating.” Azarkman said the virtual world isn’t as realistic as some of today’s top video games, but it’s real enough to do the trick. Berkowitz said most patients are hesitant at first, but eventually respond to the virtual world. “We can control everything, like, for people with a fear of public speaking, we can make the audience clap or stay quiet or yell and scream,” Tarlow said.

On Assignment Buys Firm, Cuts Earnings Expectations Corporate Focus By MICHAEL HART Staff Reporter When On Assignment Inc. adjusted downward its earnings expectations on March 28 for the first quarter, many might have simply said, “That figures.” After all, it’s no secret that companies have responded to the economic slowdown with layoffs and hiring freezes, dampening business opportunities for temporary staffing companies. On Assignment is expected to announce on April 18 revenues of $44 million to $45 million and earnings of 14 cents to 15 cents a share, compared to revenues of $51.2 million and earnings per share of 21 cents in the first quarter of 2001. It will be the fifth quarter in a row revenues and earnings have fallen for the Calabasas-based niche temporary staffing firm. On Assignment would appear to be in good company: On April 5, the much larger competitor Robert Half International announced it anticipates first-quarter revenues of $465 million to $475 million, a far cry from the $521 million analysts had expected. “There’s not been a lot of good news lately,” said Ronald Rudolph, On Assignment executive vice president and chief financial officer. But analysts and company officials insist there is reason for optimism. Certainly, there is the gradual strengthening of the economy to look forward to. “The temporary staffing business is completely cyclical,” said David Riedel, an analyst with Salomon Smith Barney. “Its raison d’ & #281;tre is to accommodate the business cycle.” Indeed in March, temporary staffing firms throughout the United States added 69,000 positions to a total of 2.4 million, according to Dow Jones. Just as during economic downturns companies cut temporary and contract workers first, in recoveries they are more likely to use those workers while waiting to see if conditions are right to make permanent hires. Also likely to boost On Assignment’s future performance is its recent $150 million purchase of Health Personnel Options Corp., based in Cincinnati. The deal, the largest acquisition in On Assignment’s history, is expected to close by May 1. On Assignment offers clients temporary workers in highly specialized fields like health care financial administration, environmental inspection, lab support and diagnostics. HPO’s specialty is one that many analysts expect to be increasingly “resource-scarce” as time goes on: nurses on temporary assignment. Bill DeVille, founder of HPO and currently its executive vice president of operations, said, “We see the nursing shortage getting worse and worse and, consequently, we expect demand to increase.” Joe Peterson, named On Assignment’s president and CEO last fall, said the HPO acquisition “immediately accomplishes our goal of deriving half of the company’s revenues from health care.” About 30 percent of On Assignment’s 2001 revenues of $195 million came from its health-care staffing business. In 2001, HPO reported revenues of $72.4 million and earnings before interest, tax, depreciation and amortization of $10.1 million. Rudolph said that, on its own, On Assignment “can’t get back up to $195 million this year,” but with HPO, 2002 revenues should be in the range of $245 million to $255 million and earnings per share between 70 cents and 75 cents. On Assignment’s stock hit a 52-week high of $25.26 on Jan. 4. After the company announced Jan. 24 that net income for the fourth quarter of 2001 was down 33 percent from the previous year ($3.7 million on $46.8 million in revenue compared to $5.4 million on $51.8 million in revenue in the last quarter of 2000), the stock price began a drift down to a low of $17.75 the day before the HPO acquisition was announced. On April 11, On Assignment stock traded at $20.05. “I don’t want to be circumspect about this,” Peterson said. “The overall numbers are what the overall numbers are. But this is one of those moments in time when the average snapshots of On Assignment are misleading in terms of performance.” Adam Waldo, an analyst with Lehman Bros., said, “It (the acquisition) looks to be a good use of shareholder capital.” While it is not likely On Assignment will be going on a shopping spree with the $116 million it has in cash reserves, Peterson has said acquisitions are now a part of the company’s growth strategy. “This isn’t necessarily the end of the line, but I wouldn’t expect to see too many large ones right away,” Rudolph said.

Panavision Struggles With $300M Debt Load By CARLOS MARTINEZ Staff Reporter Troubled movie camera-maker Panavision Inc. hopes to sell $200 million in secured notes to pay off a growing debt that has become difficult to manage. The Woodland Hills-based company has struggled to service its nearly $300 million debt amid an economic downturn and a decline in movie production. Most of the TV and film industry relies on Panavision for the rental of its cameras and related equipment. Panavision’s debt troubles are not new. When billionaire investor Ronald O. Perelman purchased an 87-percent interest in the company, he transferred about $340 million in debt to it from his PX Escrow Corp. That outstanding debt, along with other loans and a subsequent decline in revenue and market share, has forced Panavision to make the latest offering, company officials said. The offering is tentatively scheduled for later this month. Panavision currently owes $277.3 million in notes that fall due in 2006. The company had initially said it would issue $250 million in secured notes to pay that debt, but last week reduced the offering amount to $200 million. The company did not give reasons for the change. Panavision spokesman Tony Shaffer By CARLOS MARTINEZ Staff Reporter Troubled movie camera-maker Panavision Inc. hopes to sell $200 million in secured notes to pay off a growing debt that has become difficult to manage. The Woodland Hills-based company has struggled to service its nearly $300 million debt amid an economic downturn and a decline in movie production. Most of the TV and film industry relies on Panavision for the rental of its cameras and related equipment. Panavision’s debt troubles are not new. When billionaire investor Ronald O. Perelman purchased an 87-percent interest in the company, he transferred about $340 million in debt to it from his PX Escrow Corp. That outstanding debt, along with other loans and a subsequent decline in revenue and market share, has forced Panavision to make the latest offering, company officials said. The offering is tentatively scheduled for later this month. Panavision currently owes $277.3 million in notes that fall due in 2006. The company had initially said it would issue $250 million in secured notes to pay that debt, but last week reduced the offering amount to $200 million. The company did not give reasons for the change. Panavision spokesman Tony Shaffer said proceeds from the offering would go toward the debt, with additional funds provided from a new credit agreement the company is seeking. Shaffer would not say how much the company would save in interest payments if the new offering is successful. Last year, Panavision lost $14 million on $190.8 million in revenue, compared to a year earlier when it lost $23 million on $204.6 million in revenue. But perhaps most telling is the fact the company last saw an annual profit in 1997, the year Perelman acquired the firm. As part of an effort to bolster its finances, last month Panavision offered to pay off most of its outstanding debt at 65 cents on the dollar. But that effort backfired when Standard & Poor’s viewed the offer as tantamount to a default and lowered the company’s credit rating from single B to double C. Shortly thereafter, on April 9, the company withdrew the offer without explanation. Bob Berzin, an analyst with Lehman Brothers, said Panavision even with a lower credit rating is on the right track in trying to deal with its massive debt load. “By selling these notes, they can pay off that debt that’s been killing them,” he said, noting that the company’s outlook for its core business of camera manufacturing and rentals is improving with an anticipated ramping up of production in Hollywood. “I’m sure there’ll be takers out there for this offering,” Berzin said, noting that the company should benefit from lower interest rates and improved revenue both of which should attract bond investors. While Berzin said some investors are likely to be attracted by the latest offering, he noted that others may hesitate to get involved in a company so influenced by Perelman’s past financial dealings. “It doesn’t help when you have investors losing faith in the chairman of the company,” said Berzin, referring to Perelman. Perelman has been widely criticized for moves that appear to have benefited himself at the expense of other stockholders. Last year, for instance, Perelman was sued by stockholders of M & F; Worldwide Inc. after he sold 7.3 million shares of Panavision stock to M & F;, a company he controls, for $17.50 per share, or for about $123 million. At the time, Panavision shares were trading at about $4 a share, prompting some angry investors to claim Perelman engineered the sale to salvage a bad investment. Perelman has denied those allegations. Panavision stock closed at check on Friday PVI. In February, M & F; reached an agreement to pay $2.15 per share to those who held M & F; stock prior to the April 23, 2001 deal with Perelman. The total cost of the settlement is about $6 million. Ironically, M & F; has nothing to do with cameras or the film business. It’s a worldwide producer of licorice and licorice flavorings for tobacco products, based in New York City. Panavision’s primary revenue comes from the rental of its sophisticated Panaflex cameras and related accessories. Panavision manufactures, but does not sell its equipment. It also operates a lighting equipment rental unit. Some analysts, like Bob Davis of Atlantic Group, say Perelman’s moves to unload his stake in Panavision on another company he controls shows a pre-Enron way of thinking. “It’s curious that Perelman is still operating this way, given the scrutiny facing corporations after the Enron scandal,” he said. Despite his maneuverings, some of Perelman’s investments have taken a beating in recent years. His stake in Revlon has shrunk from about $250 million two years ago to $58.2 million today. His 13-percent stake in Sunbeam Corp. is also endangered as the company reorganizes under a Chapter 11 bankruptcy filing.

SPOTLIGHT: Yes, They Can Hear You Now Oak Park Dialect Coach builds business by helping actors and non-native English speakers communicate clearly. By MICHAEL HART Staff Reporter It isn’t just those radio commercials for Hooked on Phonics that make the point that what you say can mean a difference in your life. Joel Goldes makes the same point. Goldes is a dialect coach. In fact, he is The Dialect Coach, a one-person business run out of the spare room next to his daughter’s bedroom in Oak Park that is connected, via phone, to clients as far away as Australia and acting schools in Hollywood, and as close as the leasing office of an apartment complex in nearby Thousand Oaks. Goldes helps non-native English speakers make themselves better understood. He works with actors who either need to learn the elements of an accent for a role they’re playing or to get rid of a native accent or dialect that turns out to be a handicap once they hit Hollywood. “I don’t really take accents away,” Goldes said. “It’s teaching them to produce sounds they’ve never learned to make before.” The Dialect Coach officially became a business when the Southern California native and one-time actor returned to the West Coast from New York two years ago. But informally he had been interested in the speech aspect of his theatrical career ever since he graduated from UC Irvine more than a decade ago. “From junior high on,” Goldes said, “I was always interested in Monty Python and English humor and the way they talked.” Consequently, between his own acting assignments during eight years in New York he found time to coach colleagues. Then one day he was approached by a Reuters news writer who, despite his heavy Brooklyn accent, suddenly and unexpectedly had a new assignment: take over news reading responsibilities on Reuters’ private global TV network. “This was a guy who needed to do very well very quickly,” Goldes said. Goldes helped him out and the former newsroom rat was promoted to on-air announcer in Reuters’ London bureau. That was Goldes’ first experience with a client outside of the entertainment industry, and it gave him the idea he could expand his potential clientele when he and his wife returned to Southern California recently. “On the entertainment side, I knew there’d be a much bigger client base,” he said. And he suspected, given the global nature of the Los Angeles workforce, there would also be more people looking for help with their communication skills. At any given moment, Goldes said, he is working with between 12 and 20 clients. He charges $75 to $95 a session, depending on whether the clients visit him or he goes to them. Most clients can resolve whatever problems they have in six to 24 weekly sessions. “It all depends on how many sounds they’re changing,” Goldes said. Goldes figures he grossed about $45,000 in his first year in business and $80,000 the second. He is the first to admit marketing a relatively obscure service like his during an economic downturn is a struggle. He struggles to crack the invisible wall around the studios, advertises in local foreign-language newspapers and hits every meeting he can on the Toastmasters club circuit (“That’s been a very natural fit,” Goldes said.). He runs ads in the show business trades and cold-calls corporate human resources departments. “Still, I most often hear people say, ‘I never met anybody who does what you do,'” Goldes said. Nevertheless, he believes his business is gradually growing by way of referrals, given all the tax preparers from Australia, computer experts from India, leasing agents from Guatemala and actors from East Texas he has helped with their communication skills. Mercedes Woodward meets with him twice a week. The Guatemalan-born leasing agent at a Thousand Oaks apartment complex learned about him from one of her colleagues who had heard his pitch at a local chamber of commerce meeting. Woodward speaks fluent English, reads and writes well, but still had problems making herself understood in her adopted language. “I got promoted to outside sales and that’s when I knew I had to contact Joel,” she said. “The trouble was that mostly I just couldn’t hear what I was saying. He has taught me how to position my tongue, how to relax my facial muscles. Really, he’s been teaching me how to talk. “My accent won’t go away because it’s part of me, but people can understand me better.” When another client, actor Brett Moses, arrived in town four years ago, he could hardly open his mouth without making it clear he had grown up in Southeast Texas. The accent he brought with him made auditions difficult and he believes he lost parts because of it. “Absolutely,” Moses said. “That was particularly frustrating. I had no control over it.” He began working with Goldes a year ago and still consults with him about once a month by phone. “He was able to help me break it all down,” Moses said. Moses now has a small recurring role on “Passions,” an NBC-TV soap opera, and he’s found a way to manipulate his native Texas accent, as evidenced by the Picante Hot Sauce commercial he recently shot. The Dialect Coach Core Business: Dialect and accent coaching Revenues in 2000: $45,000 Revenues in 2001: $80,000 Employees in 2000: 1 Employees in 2001: 1 Goal: To expand client base in both the corporate world and the film and TV industry Driving Force: The need for foreign-born English speakers to communicate clearly in the workplace

Hopeful Politicians Get Serious About a New City Politics by Jacqueline Fox Aside from state Sen. Richard Alarcon’s recent announcement that he’s considering a run for mayor of a new Valley city, rumors have had to suffice for fact with regard to who in the San Fernando Valley could be pondering a race of their own. Former state Assemblyman Richard Katz; David Fleming, chairman of the Economic Alliance of the San Fernando Valley; and Jeff Brain, president of Valley VOTE, are the three names bandied about most often. But according to Valley VOTE Chairman Richard Close, there is plenty of interest out there, even if we’re not hearing much about it. “No question, we are getting more inquiries about how to run, what the rules are and what the next step in the process is going to be,” said Close. “I think once the (Los Angeles Times) polls favoring secession came out, along with Alarcon’s comments, people began to get more active.” Last week, Close, also an alternate on the Local Agency Formation Commission, the agency weighing secession, asked his colleagues to consider “tweaking” the latest version of the proposed council district map for a new Valley city. He said it doesn’t define the district boundaries as clearly as it should and could be confusing for residents and potential candidates. “The maps that have been available have been very large scale, so people couldn’t see where the boundaries were,” said Close. “Some people, because the maps were so big, don’t know which side of the line they are on.” LAFCO commissioners rejected Close’s request to alter the maps, saying it was too late in the game to do so. The commission is expected to release final terms and conditions for a Valley breakup April 24, not the 17th as planned. LAFCO will determine next month whether to put a secession initiative on the ballot, although it’s widely believed commissioners have already decided voters will have an opportunity to vote on the issue Nov. 5. Close said Valley VOTE would serve as “the clearing house” for all interested candidates by providing up-to-date information in person or via the organization’s Web site. “We want as many people to run for council and mayor as possible,” said Close. “The more the better.” LAFCO commissioners still have to vote on whether to approve the proposed council district map, as well as boundary maps for a new Valley city. They agreed informally last week to place Universal Studios in a new Valley city, with no objections from Universal’s attorney, William Delvac. Portions of Universal Studios currently are in both the city of Los Angeles and unincorporated Los Angeles County. However, earlier versions of maps for breakaway Valley and Hollywood municipalities put the park in both jurisdictions and the county. Delvac asked the commission to consider redrawing the maps so that it’s in one or the other, but not both, along with some property remaining in a county island. Speaking of the Senator Sen. Alarcon (D-Sylmar) and comedian George Lopez have teamed up to launch a charity for Valley organizations and youth programs. The Community and Arts Resources for Education (CARE) Foundation has already raised approximately $85,000 for scholarships for the Young Senators program and Lopez’ alma mater, San Fernando High School. Other unnamed beneficiaries will also receive funding from the charity. “George and I have been friends for about 12 years now and we feel we are blessed to be in the position of being on the cutting edge of both of our fields,” said Alarcon. CARE hosted its first fundraiser April 14 in San Fernando. Lopez, who recently launched his own TV sitcom on ABC, provided the entertainment. Jacqueline Fox is the Business Journal’s politics reporter. She can be reached at [email protected]. Lawsuit Seeks to Kill East-West Busway A group called Citizens Organized for Smart Transit has sued the Metropolitan Transportation Authority to block construction of an east-west busway in the San Fernando Valley. The lawsuit accuses the MTA of ignoring public concerns about safety, failing to consider alternatives to the $329.5-million bus corridor and violating the California Environmental Quality Act, which requires public agencies to consider the likely effect of proposed projects. Two months ago, the MTA board approved an environmental impact report on the proposed bus corridor, a 14-mile route from the North Hollywood Red Line subway station to Warner Center in Woodland Hills, which would run along a former Southern Pacific railroad path along Burbank and Chandler boulevards. The board is scheduled to award a contract in December, and the busway would open in 2005. Among those listed as plaintiffs are people who own property that the MTA may have to acquire to make way for the busway. Other opponents include members of the Orthodox Jewish community nearby.