Like the stock market, which has seen pockets of strength related to certain industries, the quiet in the real estate market has been broken by certain sectors that are experiencing growth despite the economic maelstrom. One of those pockets is health care. Meridian Health Care Management Inc., a company that provides administrative services to hospitals and medical groups, has just inked a deal for 80,000 square feet in Warner Center, a lease that will expand the company’s space more than threefold. The eight-year lease is valued at more than $17 million. Meridian, which has occupied a 24,000-square-foot facility at Warner Center Business Park, will be moving into 6200 Canoga Ave. The new space was needed to accommodate a growth spurt that the company has experienced over the past five years. “The company has done a good job for its customers, and that’s afforded us the opportunity to do more business with our current customers and to bring on some additional ones,” said Michael J. Alper, president of Meridian. The privately held company supplies services such as eligibility verification and claims processing as well as data gathering to help physicians and hospitals manage their businesses. Meridian has grown from 115 employees to 230 in the past five years. In the coming year, officials said, that roster is likely to expand to 265. Alper said the company began looking for new space in July when it became apparent that its needs were outpacing the space available in its current location. Meridian wanted to stay in the Warner Center area because of the employee base in the market and because of the advantages to locating within the health care hub that the community is known for. Though the company could have gotten a better deal with sublet space, Alper said those deals would not have provided the tenant improvements Meridian required. “We could have had a lower rent rate, but we got it back in TI concessions,” Alper said. Health care companies including Blue Cross of California and Blue Shield of California, Health Net and Aetna US Healthcare are all located in the Warner Center area. Brian Forster, co-owner of TOLD Partners Inc., represented Meridian in the transaction. The landlord, TrizecHahn, was represented by Scott Chalmers and Brett Rocheleau. Janss Center Sold Janss Marketplace, a 455,520-square-foot retail center in Thousand Oaks, was sold to NewMark Merrill Cos. LLC and Rubin Pachulski Properties. Terms of the deal were not disclosed, but principals said it was in the $20 million range. Janss Marketplace, built by the family-owned firm whose development efforts in Los Angeles date back to the 1800s, is at Moorpark Road and Hillcrest Drive. It houses a 12-screen Mann Theatre, Rite Aid, Toys ‘R’ Us, Marshalls, Old Navy, Mervyns, Sizzler and TGI Fridays. Although the outlook for retail properties has been somewhat clouded by the current economic downturn, NewMark Merrill officials said their decision to acquire the center was influenced by the types of retailers housed there. “This particular one has a good stable of fairly recession-friendly retailers,” said Sandi Sigal, CEO of NewMark Merrill. “And the property is in a very protected trade area,” said Sandi Sigal, CEO of NewMark Merrill. The only other shopping center in the area is The Oaks, across from the Janss Marketplace. The center currently is about 85-percent occupied. Sigal said he has been in discussions with potential tenants for the remaining space. Activity in Class A retail shopping centers has been brisk, and the demand continues to outpace the supply, according to Sigal. But while there are plenty of deals being floated, Sigal said there are not plenty of good deals. “You have sellers who are still living on the expectation that rents are going to continue to go up and your vacancy level will continue to be nil. Plus, every center you look at these days there’s a retailer or two we’re concerned about and you want to reserve for it.” Sigal and others say that, with the economic uncertainty and the number of retailers that have filed for Chapt. 11 reorganization, they have had to exercise caution in the centers they consider for acquisition as well as the price they pay. While some areas have shown no softness with respect to the availability of strong retail tenants, others are experiencing problems. “There’s no simple answer,” said Sigal. “Right now we have 47 centers across Southern California and Nevada. In certain centers, next to high-volume retailers or well-performing grocery stores, we have no problem getting great rents. Other trade areas, where it’s a little softer where we are relying on future growth, retailers are a little cautious.” Sigal, along with Jim Patton, director of leasing and acquisitions with NewMark Merrill, Stuart Rubin, president of Rubin Pachulski, along with Greg Forester, CFO, represented themselves in the negotiation. The seller, Merged Centers LP, a partnership controlled by Goldman Sachs, was represented by Brad Burton, vice president of Archon Group LP, and Dixie Walker, senior vice president of Grubb & Ellis. Tourney Pointe Action Mercury Insurance Group, a division of Mercury General Corp., has leased 31,461 square feet of office space at Tourney Pointe in Valencia. The company will be relocating its Santa Clarita staff, charged with regional claims and its marketing headquarters, currently housed at the Valencia Industrial Center, into the new space. Arden Realty Inc., which owns the property, also signed a 15,400-square-foot deal with ACT Litigation. Together, the transactions brings the vacancy rate in the 217,000-square-foot building down to 22 percent. Phase Two Starts in Newbury Park Development Partners LLC has begun construction on Phase II of USA Business Center, an 18-building business park in Newbury Park. The company has leased or sold all but one of the 10 buildings in the first phase of the project to companies including Snap-On Tools, Giant Bicycles and R & S; Sales. Occupancy for the second phase is slated for early 2002. Three of the eight buildings have been pre-leased or sold. Senior reporter Shelly Garcia can be reached at (818) 676-1750, ext. 14 or by e-mail at [email protected].

PEOPLE: Newsmakers Consulting Joe Seibold has been elected vice president of the Board of Directors of the Construction Management Association of America (CMAA). He is currently an associate principal and vice president in the transportation programs division of Carter & Burgess’s Encino office. Previously, he served as regional manager in the company and has over 26 years of project/construction management and claims consulting experience. Real Estate Eric Borstein has joined Lee & Associates Commercial Real Estate Services as an associate broker. Borstein will specialize in the leasing and sales of industrial real estate in the West San Fernando Valley market. Previously, he worked at The CoStar Group and prior to that, he worked in the research departments of two other prominent commercial real estate brokerages. Scott Romick, a veteran commercial real estate broker, has joined Lee & Associates Commercial Real Estate Services. Earlier, he worked in the New York City market for eight years with Newmark & Co. He specializes in the sale and leasing of office property in North Los Angeles. Romick has engineered approximately one million square feet of transactions during his real estate career. For the past three years, he was chief executive officer for Star Sports Corporation, a horse racing publishing company. Mel Wilson has been appointed to a presidential advisory group on housing opportunities by the National Association of Realtors. Wilson is a general manager of Remax Centre Woodland Hills and Calabasas. In addition, he serves on both the national and state Association of Realtors board of directors and has sold over 500 homes throughout the San Fernando Valley. Technology Westlake Village-based, United Online, Inc., a leading Internet service provider, appointed Kenneth L. Coleman to its board of directors. Coleman was most recently the executive vice president of global sales, service and marketing for Silicon Graphics, Inc. until his retirement in June 2001. Prior to joining Silicon Graphics, he served as vice president of product development at Activision, Inc. Westlake Village-based, CaminoSoft Corp. has appointed Jack Lamey as vice president of marketing and Jim Hayden as vice president of sales. Lamey will be responsible for both marketing communications and product marketing. Prior to joining CaminoSoft, he was director of partner marketing for Ethentica. He has held other marketing and sales management roles at AST Computer, AC Nielsen and Information Resources Inc. Hayden will be responsible for managing the sales organization and will work closely with the marketing and customer service team. Most recently he was vice president of web business development for Zamba. Prior to joining Zamba, he served as director of business development for Cambridge Technology Partners and Cambridge Management Consultants.

By CARLOS MARTINEZ Staff Reporter When it comes to publicity, as the saying goes, ‘just spell my name right.’ But for film studios and others who live and die by their press, getting names spelled correctly isn’t the only challenge. What is most difficult is managing the myriad requests that come from media outlets all over the world. Digital Savant Inc., a three-year-old Web design and software development company in Van Nuys, came up with a solution a Web site that allows journalists to download information, photographs and other publicity materials on line. “Now, the studios don’t have to worry about having to mail their materials all over the country,” said Alex Shohet, company CEO and founder. Thanks to its proprietary software, Media Taxi, Digital Savant has gained a group of clients that include Warner Bros., 20th Century Fox and several divisions of Walt Disney Co. In just three years, the company has grown from $200,000 in revenue to nearly $1 million so far this year. “During the heyday of the Internet, we had 40 people working for us, but we were probably overstaffed. Now we’ve leveled off to 12 people,” Shohet said. Besides providing journalists with easy access to publicity shots and other information, the software also allows a studio’s internal staff to access information like length, number of episodes or other data used in selling TV shows or tracking programming. The services saves thousands in mailing costs and provides studios with information on who visits the site and what they most seek in order to help with planning future publicity strategies. “We’ve been extremely proud of our Web site since its launch two years ago,” said Jeffrey Schlesinger, president of Warner Bros. International Television. By using the company Web site, Schlesinger’s sales staff around the world can access images and information on films and shows for potential clients. “We literally revolutionized client servicing in the international television arena,” Schlesinger said. Lisa Gregorian, senior vice president of marketing for Warner Bros., said the company’s Web site serves 1,200 users, including journalists and acquisition, marketing and advertising executives who access the site on a daily basis. “In the future, we would like to deliver high resolution files and on-air promotional material,” she said. Shohet said the studio keeps track of publicity material by giving journalists passwords that give limited access to the site and its publicity contents. “A college newspaper, for instance, can access only certain pictures of a movie that’s coming out, while a larger publication, like ‘People’, for instance, can access better quality images,” he said. Rob Wallace, a Los Angeles-based independent Web consultant, said Digital Savant’s Media Taxi software is as sophisticated as he’s seen for a studio Web site. “I don’t think anybody else is doing what these guys are doing with these Web sites,” Wallace said, referring to the mix of publicity and sales information for in-house users. Digital Savant was founded in 1998 after Shohet sold his software development firm, Computer Physicians, in order to start a service targeting Hollywood studios. “I realized that they needed Web sites that were geared directly for their business,” Shohet said. Fox Television Distribution, Digital Savant’s first client, asked the company to develop a Web site that would be easy to maintain and update and would give the studio more control over visitors to the site and the material available. “It’s the way to do publicity today,” said Mark Kosters, director of photo publicity for Fox Television Distribution, Digital Savant’s first client. “Mark (Kosters) doesn’t have to know anything about Web technology, but he can actually change and update the Web site whenever he wants to,” Shohet said. The company first approached Warner Bros. with the idea of managing its Web site, but Shohet then sold the studio on trying out software that would store and coordinate information on all 40,000 film and television titles in the studio’s library. So far, the company has created and maintains the sites for New Line Cinema, USA Films, Deloitte & Touche, ESPN, CNN, Fine Line Pictures, Fox Sports, among others.

Disney Hopes Baby Steps Boost Consumer Products By CARLOS MARTINEZ Staff Reporter The Walt Disney Co., once the last word in children’s entertainment, is tapping into outside sources to try and bolster its struggling consumer products division. In recent weeks, the Burbank-based entertainment behemoth acquired Baby Einstein Co., a five-year-old company that sells books, compact discs and videos intended to introduce infants and toddlers to the arts. The acquisition will provide Disney with an entree into the infant and toddler market, a business that has grown in double digits in recent years, according to industry reports. It also will shift some of Disney’s consumer products focus away from older kids, which have proven more elusive than their parents and grandparents, the baby boom generation. “It fits perfectly into the whole Disney image, catering to families and children with wholesome family entertainment,” said David Miller, an analyst with Sutro & Co. “But I don’t know if it’s going to mean a turnaround for a division that’s been essentially sucking wind for the better part of the last 18 months.” In Disney’s most recent quarter ended June 30, the company reported that revenues fell by 6 percent and operating income declined by 3 percent over the period last year in its consumer products division, primarily as a result of declines at Disney stores. The company’s stable of characters and the corresponding licenses have lost some of their popularity as other film and television-based characters have risen to prominence. Disney hopes the acquisition will pump some life into the division as it taps a new and growing market. “We’ve seen Baby Einstein carve out a very strong presence in a fairly new market niche of developmental learning for infants and we want to take advantage of this opportunity,” said Russell Hampton, vice president of corporate development and strategic planning. Baby Einstein was established in 1996 by Julie Aigner-Clark, a former English teacher who started the company in her basement. Baby Einstein develops and sells videotapes, DVDs and CDs for babies intended to expose them to poetry, music and art. Disney is currently unveiling a new collection of books and toys as part of a partnership agreement with Disney Publishing Worldwide and Hasbro Inc. signed in June. “We felt that we could be useful in that, given our distribution strength, we could use it to grow the Baby Einstein product and expand the product line beyond video to books, toys and other merchandise categories,” Hampton said. Last year, Baby Einstein posted $10 million in total sales, with revenue for 2001 projected at between $25 million and $30 million, said Baby Einstein CFO Bill Clark, Aigner-Clark’s husband. Neither Baby Einstein principal would comment on their decision to sell. An announcement on their Web site noted that the sale would “allow us to spend more time with our little girls, who are growing up by the minute.” The two will assume roles as consultants to Disney. A year and a half ago, Disney began shifting its focus from older children to toddlers, Hampton said. As part of that initiative, Disney began developing a series of books for young parents and their babies when the opportunity to acquire Baby Einstein came up, Hampton said. “We’ve actually had a relationship with infants and with infant apparel and publishing, but we never had a very synchronized approach to infants like this,” said Hampton. Jeff Pittsburg, president of New York-based brokerage Pittsburg Institutional, said Disney may be onto something with its acquisition. “Disney’s been having a lot of problems and some say they shouldn’t spend money, but sometimes the best time to buy something is when it’s the darkest and this could be that,” he said. The $750 million bath Disney took with its now-defunct Go.com Web portal gave the company reason to reassess its online strategy and its video gaming business, said analyst Shawn Milne of SoundView Technologies Group. Under the deal, Disney will distribute the company’s “Baby Einstein” series of videos, which focus on nursery rhymes and language skills, and the company’s “Baby Mozart” series, focusing on the music of the composer. But Hampton said the company will also expand the brand with a new “Little Einstein” and “Little Mozart” series for toddlers and preschool children, ages 2 to 5. Disney also plans to develop a television show based on the characters from Baby Einstein that would air sometime in 2002 or 2003, Hampton said. Hampton would not say how much Disney would spend on its effort to expand the brand nor how much revenue the unit would generate in the next few years. “I can say that it will help us and our consumer products division,” he said. Disney does not break out revenues for the interactive portion of its consumer products division, which is where the Baby Einstein unit will be housed, but analysts believe it contributed about $100 million to the company’s $25.4 billion in sales revenues last year.

Phil Roman takes a look back at the ups and downs of the business side of the animation world. By CARLOS MARTINEZ Staff Reporter Veteran animator Phil Roman has worked with some of the best American animators, from Walt Disney and Bill Hanna and Joseph Barbera, to Bill Melendez and Chuck Jones. Then in 1984, at age 54, Roman started his own studio, Film Roman Inc., with three employees and $200,000 in sales that first year. By the time the company went public in 1996, it had 320 employees and sales of nearly $30 million. Just as important, Roman gained industry-wide recognition for several highly successful shows including “The Simpsons,” produced by Gracie Films. But managing a publicly-held multi-million dollar business, it turned out, was not something Roman was well equipped to do. Add to that a sea change in the animation market that squeezed independent studios, and Film Roman failed to turn a profit in each year since it went public. In 1999, Film Roman lost $6.9 million on sales of $32.9 million and its stock price was trading at less than half its initial offering price of $10 per share. A management shakeup in that same year saw Roman replaced by a new CEO. And the company’s founder opened Phil Roman Entertainment in Studio City, a boutique shop where he could once again focus on the creative product. This year, the company projects revenue will be between $500,000 and $600,000. Meanwhile, Film Roman has continued to struggle. A merger deal with Pentamedia Inc. of India fell through in April. And earlier this month, the company reported a net loss of $2 million on revenues of $3.7 million for the quarter ended Sept. 30. That compared with a loss of $374,491 on revenue of $5 million for the same period last year. Roman, who remains the largest shareholder in Film Roman, was invited back onto the company’s board of directors earlier this year. Question: What projects is Phil Roman Entertainment working on? Answer: “The Gaudins” is a cartoon being produced in Barcelona and London that is going to be out next year, but I’m also working on “Atomic Betty,” a show that we just showed at MIP Jr., a festival for animation producers in Cannes (France). It got a lot of attention there and we’re really happy with the response. But we also have a live action show, called “Junior Lifeguards,” which is looking really good. We hope to see them on next year, but I can’t really talk about them yet since the networks are still trying to find space for them on the schedule. Q: Where do you get your ideas from? A: Sometimes from a comic strip that already exists. Other times, it’s a voice like Howie Mandel or Tone Loc. They have voices that are very distinctive and you can create a show from that. I remember I went to see Howie Mandel perform and he did this voice and said “I’m Bobby,” and I immediately imagined an animated show with kid with that voice. That’s how we did “Bobby’s World” for Fox. Q: Why do you think “The Simpsons” has been so successful? A: It’s funny. It’s smart and it makes people laugh because they have interesting characters and good stories. It’s in its 12th season and it’s still going and that’s a tribute to the people who do the show. Q: Why did you decide to start your own studio? A: I was already 54 years old and I got to do everything I wanted to do but I didn’t have my own studio and I wondered what it would be like to have my own studio. So I started my own studio and did my first Garfield special (“Garfield in the Rough”). I started in 1984 with three employees and subcontracted out a lot of the work. We got a contract from CBS to do a series of (specials based on)Garfield after that. Q: What was the turning point for Film Roman? A: In 1987 CBS wanted to buy “Garfield” for Saturday mornings. So they bought it as a sort of a head start for the ’88-’89 season. So we went from one to two half hours a year to 13 half hours so we had to expand and double my staff. Then the following year, 1989, “Garfield” was the number one show Saturday mornings and CBS made the show into an hour and doubled our revenue. Then in 1990, we sold a show to Fox, a cartoon show called “Bobby’s World” with Howie Mandel and we doubled again. Q: Why did Film Roman go public? A: We got “The Simpsons,” “The Critic,” and other shows and we were just expanding and growing with shows that were pretty well received, so by 1996, we felt we had a pretty good thing and that we wanted to do some proprietary shows that are part of our library so that’s when we decided to go public in order to (get financing) to do that. And we did some of those shows, but the market started changing. Q: How has the animation market changed in the U.S. A: Nothing is being done in this country anymore, it seems. There’s very little market for independent producers here. The main market now is in Europe. The government passed this financial syndication rule that allowed networks to produce and own their own shows. Before they were just broadcasters. And so they started to produce their own shows and not buy from independents and, if they did buy from independents, it would be for a very low licensing fee. It got very convoluted. Q: How does an independent animation producer survive? A: Now you have to get a partner in Europe or in Canada where there are subsidies to partner with you. Because with a low licensing fee, you produce a show at a deficit so you have to make it up by getting a partner and you in turn give them rights for the show overseas or a particular geographic area. So you cover your deficit and make a little bit of a profit. But you have to be creative. Q: What’s the downside to this new market? A: Making the deal takes longer than actually doing the project. You have to do a lot running around, meeting network executives, finding partners, working with accountants and all these other people. Q: People used to say that by moving animation to Asia, it would kill the animation industry in the U.S., but that didn’t happen. Why? A: Budgets were getting smaller, so you had to cut corners and make deals with foreign producers. But that made animation affordable and as a result, the networks ordered more animation. You could do better animation because all the creative parts were done here, the storyboarding, the writing, the voices, the design. You ship the labor intensive stuff (drawing and painting) and you could get that done fairly reasonable over there. But for features, the big studios have their animators here. Q: In 1999, you left Film Roman. Why? A: I went to art school, not business school, so I wasn’t a businessman. In 1999 a new CEO was brought in, so I figured that the company needed a businessman and the board agreed. I was no longer involved in the creative side, talking to writers and directors, but doing business and it wasn’t attractive anymore. I enjoyed working with writers, but now I was dealing with bankers and accountants. So I left and founded this little place. Q: So why did you come back this year? A: I was asked to come back and be on the board. The company felt that I could help on the creative side and with business contacts. It’s my first company and it has my name, so I have a little bit of pride about it and I want it to do well. Q: What’s it like to be majority stockholder and on the board of a competing company? A: We don’t compete directly with Film Roman, since they do different kinds of projects. But I’d like to see it succeed and continue on. At one time it was the premier company for animation and I’d like to see it regain some of that. Q: What are some of the problems facing Film Roman as a public company and how are they different from the challenges you face as an independent animation producer? A: They’re the same problems. You’re dealing with the same buyers and they’re dealing as a public company and I’m dealing as a small independent. But I can react a little quicker in some areas and because of my lower overhead, I can compete at a lower level. It’s different companies. They’ll make $50 million. We’ll make between $500,000 and $600,000 this year. Phil Roman Title: President, Phil Roman Entertainment Inc. Age: 70 Education: Attended Los Angeles Art Center. Career turning point: Establishing his own animation studio, Film Roman Entertainment Inc. Most admired person: Walt Disney Personal: Married, no children.

Maybe the secessionists are right. Maybe the new City of the Valley will provide dramatically improved city services, in a small-town atmosphere with smaller representational districts, at reduced costs. Maybe the San Fernando Valley will become a suburban Utopia. Maybe Assemblyman Bob Hertzberg will be its mayor. Maybe not. For the working men and women of SEIU Local 347, city workers who proudly pick up your trash, move your traffic, mow the grass in your parks, keep your sewers working and perform all sorts of basic public services, there are just too many questions, too many risks and not enough reliable answers. In this as in so many arenas, the interests of business and labor are inextricably linked. Uncertainty is bad for business. Uncertainty is bad for workers. The Valley secessionists rely on two basic assumptions: that big government is dysfunctional and neighborhoods need to be seen as central to both governance and community identity. The former argument drew significantly on the anti-government legacies of the Jarvis-Gann Initiative (Prop. 13), Newt Gingrich and, at times, Richard Riordan, who owed his initial victory to positioning himself as an outsider to the ways of government. The mayoral election of 2001 had already begun to show that the catch-all, anti-government perspective was significantly losing ground; the Sept. 11 events and the realities of a rapid economic decline, as a number of commentators have noted, helped change the perspective about government’s role. One of the major points of contention, for example, is the fate of the L.A. Department of Water & Power, in some respects the very essence of Los Angeles’ association with public rather than private solutions. The victory of public power advocates over the utilities for maintaining public control over energy during the 1920s and 1930s became an important outcome for protecting Los Angeles during the recent utility crisis. The secessionists want a piece of DWP while arguing about dysfunctional government. What could become dysfunctional, however, would be the battle over the spoils of DWP and a weakening of that public role in the face of the continuing debate over utility deregulation. On the fate of the DWP, there are far more questions than answers. How are water and electricity going to be provided to the new city? The DWP charges more for electricity when it sells it to people and businesses outside the city. If the Valley secedes, it will become just another separate city to buy electricity from L.A. Then there’s the question of who gets the electricity. In case of shortages, residents and businesses in the city of Los Angeles get priority. Outside customers are the first to be cut. Just as with electricity, LADWP is under no obligation to sell water to residents and businesses in other cities at the same rate it sells to customers in LA. It charges premium rates for others and, as a separate city, the Valley would qualify as one of those. The same is true of shortages in water as in electricity. If there is a shortage, it’s the outside customers that are cut first. Then there’s the question of water rights. No one wants to suggest that the Valley might not have access to L.A.’s water as a separate city. But we all know that there are certain interests that have always resented some of the things Los Angeles did to get its water. Some of them have been looking for a long time for a way to challenge the validity of the city’s water contracts. A contract to sell major amounts of water to a new Valley city could be just the excuse they’ve been waiting for. The average length of a water rights lawsuit in California is 23 years. That’s a whole bunch of legal bills and a quarter of a century of uncertainty. Imagine the impact this could have on property values. The second argument about government accountability and the role of neighborhoods is more complicated. Government accountability is clearly essential in Washington, Sacramento and Los Angeles City Hall. Government becomes more accountable, not when the forces of privatization and deregulation prevail, but when neighborhoods, communities and the varied diverse constituents of a city and region mobilize to stake a claim in government. The future of a united Los Angeles must be based on building community and increasing participation in governance. The role of neighborhoods in helping govern and creating community identity is part of forging genuine accountability of government. The popularity of the idea of neighborhood councils stems in part from the desire to create new community identities. Neighborhood councils are not a secessionist argument; they will function best if they are able to capture the interest of the diverse members of neighborhoods rather than as an extension of one or another particular group in those communities. Neighborhood councils will work best if they are community builders, not community dividers. As for the most basic of local government services, as is being currently discussed, the new city of the Valley would contract with the city of Los Angeles for its municipal services including police, fire, refuse collection and street maintenance for one or more years. The new city would become the largest contract city in the Western world. This means that the Valley as a new city would get its services from the same city departments that provide them now. As a separate city, Valley political leaders would have no say in how those departments are run. And Los Angeles could ask any amount it wants for those services. Does it make sense to leave the city and then turn right around and ask that same city to provide the same services they have been providing all along from the same city departments? Will the new city have any ability to control the delivery or cost of those services? Every city has problems and Los Angeles is no exception. For too long, the city of Los Angeles has acted as if it were alone, as if it did not live in a region. It’s been a city reluctant to look at good ideas that work in other places. This form of Los Angeles “exceptionalism” must die. Ours is a regional economy. Our problems are regional and require collaborative, integrated, regional solutions. We are not alone. The alternative to the myriad unanswered questions and unassessed risks is the hope and possibility born of a sea change in the municipal governance of Los Angeles. The new city charter creates opportunities for neighborhood councils to give people a greater voice in what happens in their communities. A new mayor and an almost entirely new city council are committed to empowering and involving the voice of every neighborhood across the amazing, vast quilt that is Los Angeles. Redistricting is very close and the new charter mandates significant changes in the way in which new council districts are drawn. Perceptive political thinkers predict five seats wholly situated within the San Fernando Valley. City workers are working with city management to continuously challenge the status quo to improve and enhance the level and quality of services we deliver to our customers. Area planning commissions have already begun to move planning and land use decisions to the places where these decisions should be made. Now is not the time to split up. Julie Butcher is general manager of the Service Employees International Union (SEIU) Local 347, which represents 9,000 city workers in Los Angeles. She can be reached by e-mail at [email protected]

Phil Roman Title: President, Phil Roman Entertainment Inc. Age: 70 Education: Attended Los Angeles Art Center. Career turning point: Establishing his own animation studio, Film Roman Entertainment Inc. Most admired person: Walt Disney Personal: Married, no children. Phil roman takes a look back at the ups and downs of the business side of the animation world Veteran animator Phil Roman has worked with some of the best American animators, from Walt Disney and Bill Hanna and Joseph Barbera, to Bill Melendez and Chuck Jones. Then in 1984, at age 54, Roman started his own studio, Film Roman Inc., with three employees and $200,000 in sales that first year. By the time the company went public in 1996, it had 320 employees and sales of nearly $30 million. Just as important, Roman gained industry-wide recognition for several highly successful shows including “The Simpsons,” produced by Gracie Films. But managing a publicly-held multi-million dollar business, it turned out, was not something Roman was well equipped to do. Add to that a sea change in the animation market that squeezed independent studios, and Film Roman failed to turn a profit in each year since it went public. In 1999, Film Roman lost $6.9 million on sales of $32.9 million and its stock price was trading at less than half its initial offering price of $10 per share. A management shakeup in that same year saw Roman replaced by a new CEO. And the company’s founder opened Phil Roman Entertainment in Studio City, a boutique shop where he could once again focus on the creative product. This year, the company projects revenue will be between $500,000 and $600,000. Meanwhile, Film Roman has continued to struggle. A merger deal with Pentamedia Inc. of India fell through in April. And earlier this month, the company reported a net loss of $2 million on revenues of $3.7 million for the quarter ended Sept. 30. That compared with a loss of $374,491 on revenue of $5 million for the same period last year. Roman, who remains the largest shareholder in Film Roman, was invited back onto the company’s board of directors earlier this year. Question: What projects is Phil Roman Entertainment working on? Answer: “The Gaudins” is a cartoon being produced in Barcelona and London that is going to be out next year, but I’m also working on “Atomic Betty,” a show that we just showed at MIP Jr., a festival for animation producers in Cannes (France). It got a lot of attention there and we’re really happy with the response. But we also have a live action show, called “Junior Lifeguards,” which is looking really good. We hope to see them on next year, but I can’t really talk about them yet since the networks are still trying to find space for them on the schedule. Q: Where do you get your ideas from? A: Sometimes from a comic strip that already exists. Other times, it’s a voice like Howie Mandel or Tone Loc. They have voices that are very distinctive and you can create a show from that. I remember I went to see Howie Mandel perform and he did this voice and said “I’m Bobby,” and I immediately imagined an animated show with kid with that voice. That’s how we did “Bobby’s World” for Fox. Q: Why do you think “The Simpsons” has been so successful? A: It’s funny. It’s smart and it makes people laugh because they have interesting characters and good stories. It’s in its 12th season and it’s still going and that’s a tribute to the people who do the show. Q: Why did you decide to start your own studio? A: I was already 54 years old and I got to do everything I wanted to do but I didn’t have my own studio and I wondered what it would be like to have my own studio. So I started my own studio and did my first Garfield special (“Garfield in the Rough”). I started in 1984 with three employees and subcontracted out a lot of the work. We got a contract from CBS to do a series of (specials based on)Garfield after that. Q: What was the turning point for Film Roman? A: In 1987 CBS wanted to buy “Garfield” for Saturday mornings. So they bought it as a sort of a head start for the ’88-’89 season. So we went from one to two half hours a year to 13 half hours so we had to expand and double my staff. Then the following year, 1989, “Garfield” was the number one show Saturday mornings and CBS made the show into an hour and doubled our revenue. Then in 1990, we sold a show to Fox, a cartoon show called “Bobby’s World” with Howie Mandel and we doubled again. Q: Why did Film Roman go public? A: We got “The Simpsons,” “The Critic,” and other shows and we were just expanding and growing with shows that were pretty well received, so by 1996, we felt we had a pretty good thing and that we wanted to do some proprietary shows that are part of our library so that’s when we decided to go public in order to (get financing) to do that. And we did some of those shows, but the market started changing. Q: How has the animation market changed in the U.S. A: Nothing is being done in this country anymore, it seems. There’s very little market for independent producers here. The main market now is in Europe. The government passed this financial syndication rule that allowed networks to produce and own their own shows. Before they were just broadcasters. And so they started to produce their own shows and not buy from independents and, if they did buy from independents, it would be for a very low licensing fee. It got very convoluted. Q: How does an independent animation producer survive? A: Now you have to get a partner in Europe or in Canada where there are subsidies to partner with you. Because with a low licensing fee, you produce a show at a deficit so you have to make it up by getting a partner and you in turn give them rights for the show overseas or a particular geographic area. So you cover your deficit and make a little bit of a profit. But you have to be creative. Q: What’s the downside to this new market? A: Making the deal takes longer than actually doing the project. You have to do a lot running around, meeting network executives, finding partners, working with accountants and all these other people. Q: People used to say that by moving animation to Asia, it would kill the animation industry in the U.S., but that didn’t happen. Why? A: Budgets were getting smaller, so you had to cut corners and make deals with foreign producers. But that made animation affordable and as a result, the networks ordered more animation. You could do better animation because all the creative parts were done here, the storyboarding, the writing, the voices, the design. You ship the labor intensive stuff (drawing and painting) and you could get that done fairly reasonable over there. But for features, the big studios have their animators here. Q: In 1999, you left Film Roman. Why? A: I went to art school, not business school, so I wasn’t a businessman. In 1999 a new CEO was brought in, so I figured that the company needed a businessman and the board agreed. I was no longer involved in the creative side, talking to writers and directors, but doing business and it wasn’t attractive anymore. I enjoyed working with writers, but now I was dealing with bankers and accountants. So I left and founded this little place. Q: So why did you come back this year? A: I was asked to come back and be on the board. The company felt that I could help on the creative side and with business contacts. It’s my first company and it has my name, so I have a little bit of pride about it and I want it to do well. Q: What’s it like to be majority stockholder and on the board of a competing company? A: We don’t compete directly with Film Roman, since they do different kinds of projects. But I’d like to see it succeed and continue on. At one time it was the premier company for animation and I’d like to see it regain some of that. Q: What are some of the problems facing Film Roman as a public company and how are they different from the challenges you face as an independent animation producer? A: They’re the same problems. You’re dealing with the same buyers and they’re dealing as a public company and I’m dealing as a small independent. But I can react a little quicker in some areas and because of my lower overhead, I can compete at a lower level. It’s different companies. They’ll make $50 million. We’ll make between $500,000 and $600,000 this year.

Westlake Village-based Bent Willow Publishing, a relative unknown in the publishing world, says positive pre-release sales and interest in its first book, “The Moon in My Room”, indicate a solid entry into the children’s book market. The book, one of six planned in a series called “Willowbe Woods, Campfire Stories and Sing Alongs,” doesn’t officially hit the shelves until January. But already Bent Willow has secured a nationwide, in-store reading tour with Borders Books & Music following a successful first reading at the company’s Thousand Oaks store in September. Toy and novelty manufacturers have called to express interest in developing a character line for the retail market, and an additional 15,000 copies of the book have been printed to meet expected demand. “I knew it was going to be successful, but I don’t think I knew exactly how successful,” said Bill Wallen, a former Columbia Tristar executive who launched Bent Willow in January of this year, along with Patrick Davidson, former senior vice president for The Disney Channel. Wallen and Davidson, along with Wallen’s daughter, Ila, also the book’s author, started Bent Willow’s parent company, Wallen Davidson, a marketing and promotional firm for the film and cable industry in 1999. Their plan was to earn enough income to start a publishing house and get the book series off the ground. The elder Wallen said executives for kid’s programming at Disney, Nickelodeon and big-name publishing houses all expressed interest in the Willowbe project from the start. Instead, they have kept the project in house and managed to earn close to $1 million of their own money through Wallen Davidson projects. “Whenever the book was shown to someone like Disney or Sony or a publisher, the usual reaction was, ‘This was amazing but, of course, we would have to buy the whole thing,”‘ said Wallen. “So we said, ‘It’s not for sale.’ We are leaving that world so we could do this on our own. And in order to do that, we had to raise enough money so that the business side of me said we have enough to go the course.” The first book features a bear named Will, who takes readers on a journey through the fictitious land of Willowbe Woods in order get advice and ultimately overcome his fear of the dark. He eventually learns that all he needs is a simple nightlight. According to Sue Zussman, area marketing manager for Borders, a typical in-store reading will draw about 30 people and produce sales of about 20 books. Ila’s “pajama mania” reading in September, which featured an actor dressed as Will, drew an audience of about 250 and the store sold more than 100 copies of the book. “All I can say is the book is doing very well,” said Zussman, who is based in Thousand Oaks. She said she pushed for Willowbe because of its local appeal and local roots. “This is a 100-percent Valley based project, and that’s what we were drawn by,” said Zussman. “We want to grow our book from the community. Yes, Borders is a big chain of books, but we are also about what’s homegrown.” Ila’s next reading is set for Dec. 1 at the Glendale Borders store, and another is scheduled for Dec. 7 in Northridge. Bill Wallen said he plans to spend $5 million to $10 million between now and next spring preparing for the launch of the video and CD series for “Moon,” and anticipates expanding his staff from about 12 to 20. “We expect to sell between 100,000 and 200,000 copies of our first book in January, but everyone is saying it’s going to be higher,” said Wallen. So far, the only products set to hit the retail market are a nightlight and a line of “Willow wear,” also due out in January. But Wallen said Bent Willow has been barraged by marketing firms hoping to land licensing agreements for the Willowbe characters. “Believe me, we’ve been deluged,” said Wallen. “And I know that there’s an opportunity for us to develop high quality toys for our franchise, but we want to be sure that we craft the consumer product line very cautiously so that it reflects the same degree of integrity we have achieved in the book. We are growing a franchise here, but we are not a Disney.”

Lending Up at Banks By CARLOS MARTINEZ Staff Reporter More customers and more loans drove high third quarter earnings at San Fernando Valley’s independent banks in the third quarter. Thanks to growing loan portfolios, Santa Clarita-based Valencia Bank & Trust Inc., Glendale’s Verdugo Banking Co. and Encino’s First Commerce Bank reported earnings increased more than 13 percent over the same period last year. The strong results were tied to increases in construction lending, and new loans and refinancing of commercial buildings. “Interest rates have been squeezed and we’re in a declining interest rate environment, so loans are really pushing those numbers,” said S. Alan Rosen, a Calabasas-based attorney who advises local banks. Rosen explained that many business owners are taking advantage of low interest loans, thus driving loan-based earnings for banks. “There is a lot of loan activity and that means a lot of interest income is going to the banks,” Rosen said. One exception to the generally strong trend was Pacific Crest Capital Inc. of Agoura Hills, which reported that earnings for the period ended Sept. 30 were lower than those of the comparable quarter in 2000. But for most other banks, the third quarter brought good news. Verdugo Banking Co. posted the strongest gains of the four community banks during the third quarter. Its loan portfolio increased 25 percent to $106.7 million over the same period last year, when the bank’s portfolio was $85.2 million. “For us loans have stayed very strong because of the rates. We have not noticed significant non-performing loans,” said Verdugo Banking CFO Bob Prout. Likewise, Valencia Bank & Trust’s loan business pushed its net income for the quarter up by 24 percent to $753,940, compared to $606,594 for the same period last year. The bank’s total revenue remained nearly flat at $4.5 million compared to $4.4 million a year ago. The company saw its total loans increase by 13 percent, from $134.1 million to $151.6 million over the same period last year. “We just had tremendous growth in our commercial loans for business, though not so much for construction, but in terms of lines of credit and business loans for expansion and improvements,” said Valencia CFO Jeff Pollard. Rosen said Valencia’s third quarter growth was fueled by the area’s growing economy and business base. “Their loan portfolio grew more than their assets so they obviously put more emphasis on their loans,” Rosen said. “But you can only go so far with loans. You can’t have that without liquidity. You need to have the funds.” Rosen said the four local banks also showed growth in other areas, such as ATM and banking fees, travelers cheques and other non-interest earning sources of revenue. “It’s simple growth that comes from more customers,” he said. “People are turning more to community banks because they’re smaller and because they can get more personal service. With more customers you’re going to have growth.” One example of continued growth, Rosen said, is First Commerce Bank. The bank saw loan revenues increase by 36 percent to $66.6 million from $49 million a year ago. For First Commerce, however, the increased loan business did not translate entirely to earnings. The bank posted net income of $248,000 in the third quarter, up only slightly over the $243,000 of a year ago. First Commerce’s CFO Wendy Moskal attributed the increase in its lending business to the company’s aggressive efforts to attract more customers. “We’ve been very aggressive with our business development program in particular,” said Moskal, who noted that the company’s overall performance improved with growth in customers and deposits. “Lower interest rates are attracting more loan customers, but it’s a double edge sword because it really pushes our margin. You end up making less money on each loan,” she said, noting that the bulk of the growth came from commercial building refinancing, construction lending and commercial building loans. But Rosen credited First Commerce’s CEO Jack Feldman’s leadership for the company’s third quarter upturn. “They’re coming off years of historic losses. Feldman has done a super turnaround job,” Rosen said, referring to Feldman’s emphasis on attracting local customers after years of losses due to a downturn in the real estate market in the mid-90s. “But the bottom line is that all these banks are saying that their loan portfolios are solid, and that they don’t have (bad) loans,” said Rosen. “So that shows that Southern California has not been hit as hard as the rest of the nation.” Pacific Crest Capital reported its net income declined slightly to $1.32 million compared to $1.37 million of a year ago on revenues of $11.9 million and $14.1 million, respectively. Pacific Crest CEO Gary Wehrle blamed dropping interest rates for the softness. He said the lower rates hampered the company’s ability to sell its SBA loans to other financial institutions. Rather than underwrite its own loans, Pacific Crest sells its loans to other banks. Because interest rates have fallen, many other institutions are no longer buying those loans. Rosen said the company’s heavy reliance on Small Business Administration loans and their declining interest rates and declining demand led to the company’s revenue drop. “It just got tougher to find customers for some of those loans,” he said. “The rates were just too low.”

When it comes to publicity, as the saying goes, ‘just spell my name right.’ But for film studios and others who live and die by their press, getting names spelled correctly isn’t the only challenge. What is most difficult is managing the myriad requests that come from media outlets all over the world. Digital Savant Inc., a three-year-old Web design and software development company in Van Nuys, came up with a solution a Web site that allows journalists to download information, photographs and other publicity materials on line. “Now, the studios don’t have to worry about having to mail their materials all over the country,” said Alex Shohet, company CEO and founder. Thanks to its proprietary software, Media Taxi, Digital Savant has gained a group of clients that include Warner Bros., 20th Century Fox and several divisions of Walt Disney Co. In just three years, the company has grown from $200,000 in revenue to nearly $1 million so far this year. “During the heyday of the Internet, we had 40 people working for us, but we were probably overstaffed. Now we’ve leveled off to 12 people,” Shohet said. Besides providing journalists with easy access to publicity shots and other information, the software also allows a studio’s internal staff to access information like length, number of episodes or other data used in selling TV shows or tracking programming. The services saves thousands in mailing costs and provides studios with information on who visits the site and what they most seek in order to help with planning future publicity strategies. “We’ve been extremely proud of our Web site since its launch two years ago,” said Jeffrey Schlesinger, president of Warner Bros. International Television. By using the company Web site, Schlesinger’s sales staff around the world can access images and information on films and shows for potential clients. “We literally revolutionized client servicing in the international television arena,” Schlesinger said. Lisa Gregorian, senior vice president of marketing for Warner Bros., said the company’s Web site serves 1,200 users, including journalists and acquisition, marketing and advertising executives who access the site on a daily basis. “In the future, we would like to deliver high resolution files and on-air promotional material,” she said. Shohet said the studio keeps track of publicity material by giving journalists passwords that give limited access to the site and its publicity contents. “A college newspaper, for instance, can access only certain pictures of a movie that’s coming out, while a larger publication, like ‘People’, for instance, can access better quality images,” he said. Rob Wallace, a Los Angeles-based independent Web consultant, said Digital Savant’s Media Taxi software is as sophisticated as he’s seen for a studio Web site. “I don’t think anybody else is doing what these guys are doing with these Web sites,” Wallace said, referring to the mix of publicity and sales information for in-house users. Digital Savant was founded in 1998 after Shohet sold his software development firm, Computer Physicians, in order to start a service targeting Hollywood studios. “I realized that they needed Web sites that were geared directly for their business,” Shohet said. Fox Television Distribution, Digital Savant’s first client, asked the company to develop a Web site that would be easy to maintain and update and would give the studio more control over visitors to the site and the material available. “It’s the way to do publicity today,” said Mark Kosters, director of photo publicity for Fox Television Distribution, Digital Savant’s first client. “Mark (Kosters) doesn’t have to know anything about Web technology, but he can actually change and update the Web site whenever he wants to,” Shohet said. The company first approached Warner Bros. with the idea of managing its Web site, but Shohet then sold the studio on trying out software that would store and coordinate information on all 40,000 film and television titles in the studio’s library. So far, the company has created and maintains the sites for New Line Cinema, USA Films, Deloitte & Touche, ESPN, CNN, Fine Line Pictures, Fox Sports, among others.