When Warner Bros. releases “Collateral Damage,” a film starring Arnold Schwarzenegger, later this summer, viewers will glimpse people falling through an elevator shaft as if they were taking the fall themselves. Hair-raising special effects are nothing new to the film industry, but thanks to a new camera system developed by a Van Nuys company, the way the audience sees some of these effects will be all the more intimate. Four-year-old Coptervision made its mark with a remote controlled mini-helicopter fitted with a camera for close-range aerial photography. The Coptervision system can film from under bridges and inside tunnels at angles that traditional systems cannot. The company’s most recent invention, Rollvision, goes several steps further. Weighing just 15 pounds and able to roll or pan a full 360 degrees, or tilt 180 degrees, the camera can be set up on anything from a bicycle to a Steadicam, allowing it to fit into almost any space and to film action from points of view that previously took many hours to set up if it could be filmed at all. “The idea of a camera head that can pan and tilt and roll is not brand new,” said Mark Centkowski, president of Innovision Optics Inc., a Santa Monica-based firm that makes, sells and rents specialized production equipment for film and television and is helping Coptervision to market Rollvision. “What Coptervision has done has been, they’ve taken that idea and made it very lightweight and portable, and that’s the uniqueness.” Sarita Spiwak, co-founder, president and chief executive officer of Coptervision, spent years helping her physician husband build his medical practice. When the practice was sold, Spiwak began looking for a new venture. By chance, she met up with Carlos Hoyos, a photographer and film director who, for years, tinkered with remote-controlled camera equipment in his garage, and the two Colombian & #233;migr & #233;s formed Coptervision with Hoyos as vice president for research and development. Shortly afterward, Spiwak’s daughter, Daniela Meltzer, joined as vice president and chief operating officer. Within a year, Coptervision launched its first product, a remote-controlled helicopter that the company rented, along with a crew, to production companies. Coptervision has been used in filming for live sports coverage, films and music videos and on TV series such as WB Network’s “Charmed.” The executives won’t divulge sales revenues, but they say Coptervision has grown by about 30 percent each year since its launch in 1997. The trouble is that the system requires a specially trained crew to pilot the helicopter, work the camera equipment and manage the microwave transmissions that power it, and that has limited growth prospects. So when the industry began to show interest in using the company’s lightweight camera heads separately from the helicopters, Hoyos created the newest product. “We noticed a lot of people expressed interest in the camera design itself because you could detach it,” said Meltzer. “The idea for Rollvision started with that. We took it off the helicopter and put it on different platforms, Steadicams, tracking and rail systems.” Rollvision was mounted on the race cars in “Driven,” a feature film about Formula One races starring Sylvester Stallone. “You really felt like you were in the car,” said Spiwak. For “Collateral Damage,” it was attached to a cable that traveled down an elevator shaft. And in “The Scorpion King,” an upcoming sequel to “The Mummy Returns,” it was used to film an action shot that shows wrestling superstar The Rock hurtling down a two-mile drop from a mountaintop. “You felt you were flying with The Rock,” said Spiwak, who was on location to watch the filming. The company has even had inquiries from the military, but executives said they are wary of putting in the additional research and development needed to meet its requirements. Instead, Coptervision hopes to establish a distribution system for Rollvision that will expand the company’s reach both nationally and internationally. “It’s going to add a lot,” said Spiwak of Rollvision. “With sales and rentals and the interest out there, it’s going to put the company at a different level.”

For Ixia, there is no more immunity. Six months ago, the Calabasas technology innovator looked like a company that would escape the economic slowdown that was sapping dollars from others in its sector. As the developer of equipment that tests next-generation technology, the company thought it was safely insulated from the problems affecting other 101 Corridor companies. Regardless of the problems companies like Cisco Systems Inc. and Juniper Networks (both Ixia customers) were having, it seemed certain they would continue to invest in research and development. But a reduction in spending on development of new products by some of the Internet’s biggest players indicates an economic slowdown may be more prolonged than many, including Ixia President and CEO Errol Ginsberg, once expected. While the conventional wisdom a few months ago dictated that business in the technology sector would pick up once orders for equipment caught up with inventory, the fact that customers of companies like Ixia are cutting back on R & D; spending indicates the situation may be more complex than that. “Testing companies tend to be buffeted somewhat in a downturn,” said Syed Harder, an analyst with Frost Securities, “but in a severe downturn, obviously everybody gets hit.” Ixia’s net income in the first quarter of this year was $4.7 million on revenues of $28.8 million, up from $1.3 million in the same quarter of 2000 on revenues of $11.2 million. Ixia went ahead last October with an initial public offering that saw its stock streak from an opening price of $13 to more than $30 in a matter of days: a familiar story two years ago, but not in late 2000. Things change. On July 19, four-year-old Ixia announced its string of 12 consecutive profitable quarters was intact, but just barely. The company reported net income of $66,000, zero earnings per share, on revenues of $15.1 million. In the same quarter a year ago, Ixia had net income of $940,000 on revenues of $17 million. “We’re in a tough market and it’s difficult to do business right now,” Ginsberg said. “We have seen a significant decrease in Q1 and Q2 orders from our customers as many of them grappled with declining sales within a tougher telecommunications market.” In fact, Ixia may be one of the last companies that make equipment to test and analyze high-speed networking technology to feel the pain. Tollgrade Communications Inc., for instance, saw its net income fall in the second quarter for the first time since September 1999. Tollgrade had $5.8 million in net income on revenue of $28 million in the second quarter, after recording $7.8 million net income on $32.6 million in the first. In the second quarter of 2000, Tollgrade had a net income of $5.2 million on revenue of $22.4 million. While other Ixia competitors have not announced earnings yet for the second quarter, their stock prices have fallen, if not as precipitously as Ixia’s in recent weeks, just as consistently over the same time period. Ixia reached its 52-week high of $39 in late January and plunged to $9.94 on April 6. It closed on July 20 at $14.35. In late January Tollgrade traded as high as $48, closed at $16.93 on March 19 and at $21.35 on July 20. Agilent Technologies Inc., another one of Ixia’s competitors, reached a high of $68 on Jan. 18, dropped to $25 on April 6 and was trading July 20 at $30.30. “Ixia is like everybody else, they’re tied to the tech cycle,” said Michael Ching, an analyst with Merrill Lynch. “The customers they’re selling into are cutting expenses.” While the Nortels and Ciscos of the world are certainly not shutting down their R & D; departments, CFOs are making the same financial decisions for them that they are for other parts of their companies. “Say these companies like Ixia are selling five test platforms into an R & D; group,” said Harder. “In a tough environment like this, they’re cutting that back to two platforms.” Analysts have not lost all confidence, of course, in either Ixia or the sector. “Their customers just need to get their houses in order a little bit,” Ching said. “Once their customer base stabilizes, they’ll come back very strongly.” Meanwhile, investors get the same advice about Ixia as they usually do the Chicago Cubs: Wait until next year. “This quarter and the next quarter will be flattish,” Harder said, “but that will be followed by a gradual trend upward.”

Six months ago, Chatsworth’s Capstone Turbine Corp. looked like it was ready to cash in on California’s energy crisis. Companies worried about possible rolling blackouts would turn to the affordable and efficient micro turbine power generators pioneered by Capstone. But as California plods through the summer and the crisis abates somewhat, Capstone has yet to profit from its opportunity. The company builds 30- to 60-kilowatt generators that run on natural gas, using state-of-the-art microturbine technology similar to a jet plane engine with one moving part a turbine suspended in air as it spins. “There’s a marketing problem out there that I can’t put my finger on,” said Craig Shere, an equity analyst for Standard & Poor who at one time expected the company to sell 3,000 units by the end of the year. But after six months, the company is well short of Shere’s projections, with 728 units sold through June 30. “I know there’s a need for this product. But the question is how quickly will the market accept it and how much market share can this company get,” Shere said. Others are asking the same question. That includes Microsoft co-founder Paul Allen, an early investor in the company, who sold all 838,000 shares he owned early this month. Other analysts are also worried about the company’s performance. Merrill Lynch’s Sam Brothwell cut his sales estimates for this year from 2,800 units to 2,100 and from 7,900 to 4,100 for 2002. “They’re just not generating the kinds of sales that we expected and we frankly don’t know why that is,” he said. The company’s sales staff was hailed for earning two 100-unit contracts earlier this year, but has kept a low profile since then, Shere said. Capstone Chief Financial Officer Jeffrey R. Watts said marketing micro turbines is a time-consuming, difficult job at best. “The process is long and takes time. It can take anywhere from 12 to 16 weeks in meeting with customers and getting an energy audit (evaluating their needs) and coming back to meet with them again,” Watts said. “We spend a lot of time educating people about power generation and requirements, so it’s an education process. All they know is that they turn on a switch and the lights come on.” Nevertheless, CEO Ake Almgren said earlier this week he is optimistic about meeting the company’s year-end goal of 2,000 units. Almgren told investors in a conference call last week that Capstone expects to sell 600 units in the third quarter and 4,000 units in 2002 when, he insists, the company will become profitable. “During the second quarter, we substantially enhanced our production and our sales efforts,” he said, adding that the company has expanded its marketing efforts in Europe. Brothwell said the company’s troubles may stem from skepticism about a new, unproven technology versus generators that run on diesel or electricity, made by Honeywell International Inc., Ingersoll-Rand Co. and Caterpillar Inc. Brothwell said many companies panicked in the first days of the energy crisis and opted for old-technology generators rather than try Capstone’s refrigerator-size micro turbines. Brothwell, like Shere, has downgraded Capstone stock from a buy to accumulate. Capstone’s stock price has dropped steadily in recent weeks, going from $39 in mid-May to $16 a new 52-week low on July 10. The 52-week high of $98.50 came on Aug. 31, 2000, two months after its initial public offering. Shere said the nearly $2 one-day drop to the new low was sparked by Allen’s stock sale. Also, according to filings with the Securities and Exchange Commission, Almgren has sold 155,000 shares of Capstone stock since February, Watts 250,000 shares. “When you have insider selling and a large venture capitalist selling his stock, people start to get nervous and you have a slide like this,” Shere said. The company’s stock had climbed to $38.25 on May 29 after hovering most of February, March and April in the $20 to $29 range. Since then, the stock has steadily headed south to its July 10 low. On Thursday, it closed at $12.81. Shere said a steady stream of small contracts through the spring buoyed the stock price, at least until orders began drying up last month. “They need to get a few big contracts to get back on track, but we’re not seeing that,” he said. Last week the U.S. Department of Energy awarded Capstone a $3 million contract to develop heating, cooling and power generation systems for its own buildings. But announcement of the contract was not enough to have an impact on the company’s stock price, which has remained flat. Almgren said he believes the company will meet its goal for the year with increased sales of its new 60-kilowatt unit in Asia and Latin America. However, he did not address the paucity of sales in domestic markets hit hard by energy shortages. Nevertheless, the company’s second-quarter figures, even though they continued to show net losses, indicated improvement over numbers for the same period last year. Capstone reported a net loss of $10.3 million on $13.6 million in revenue in the most recent quarter of 2001, up from a staggering net loss of $429.1 million on $6.1 million in revenue in 2000. In 2000, the company lost $591.3 million, due mostly to $559 million worth of charges for research and development costs. In 1999, it lost $56.2 million.

As Valley businesses began to feel the sting of an economic slowdown last year, trimming the fat became common practice, and that included corporate travel budgets, taking a big bite out of retail travel agencies’ customer base. Factor in the cuts in agent commission fees from airlines (they’ve gone from 10 percent to 5 percent since 1995) and competition from the number of on-line travel sites that have sprouted up, and the retail travel industry has had it any way but easy. But while leisure travel has remained relatively flat through the first half of the year, some Valley-based travel agents and industry experts say they are starting to see a turnaround in corporate bookings. They indicate that some of their corporate clients are returning as travel budgets loosen up. Other clients are simply souring on on-line travel sites where personalized service is virtually unheard of. As a result, the corporate business has begun to somewhat offset the losses on the leisure side of the industry and agents are either reporting positive year-to-date sales figures, or predicting them by the year’s end. “It’s kind of interesting, really,” said Joe McClure, owner of Montrose Travel, No. 15 on the Journal’s 2001 list of largest privately owned Valley-based companies. “I would say that between last summer and the first quarter of this year we saw cuts in corporate travel spending of as much as 25 percent. But now, we are getting calls from corporate accounts in our database who say they shop on line but can’t get the level of service they need. That means we are getting a significant amount of new business to offset the softening of our existing business.” Sales at Montrose Travel for the first half of the year were up 14 percent over the same period in 2000. McClure said he expects those figures to remain stable right through Christmas. “We estimate our new business growth (for the year) will amount to close to 30 percent,” he said. Business has not been quite as brisk at Crene’s World Travel in Northridge. Sales for the first two quarters this year were down by about 20 percent compared to 2000. General manager Tim Walsh said the downturn was directly related to the tech-wreck, which hit one of his biggest corporate clients whom he refused to identify right in the gut. But he too is beginning to see light at the end of the tunnel. “One of our large corporate accounts was a tech-related firm that went through significant downsizing,” said Walsh. “But guess what? Some of those clients are landing at new corporations, and they are coming back around. So, not only do we see corporate travel spending starting to strengthen, we are getting some of the business we already had back. And, I think corporate spending will ease up even further in the third and fourth quarters because I’ve seen some more movement in recent months.” Nancy Linares, chairwoman of the Association of Retail Travel Agents based in Lexington, Ky., said she’s hearing from many of her roughly 10,000 member agents throughout the country that corporate clients are moving from the Internet back to the agents. She suggested many corporate clients jumped ship for Internet travel sites, such as Expedia, Travelocity and Biztravel.com, because of the perceived convenience. But consider how much time it takes to book an online itinerary, and the lack of service on the other end, and eventually, she said, the immediacy of Internet booking is far outweighed by the service an agent can provide. There’s another potential silver lining for travel agents. The Valley is home to many mid-sized technology firms. And, says one industry expert, because they are typically heavy users of retail travel agencies, their growth will precipitate increases in travel activity, bringing more business to the local agent. “What is good for the retail markets is the fact that, because the big companies out there have had to undergo such severe cutbacks, it’s the small companies that are making progress in new developments of products,” said Tim Small, vice president of business development for Rosenbluth International, a Philadelphia-based corporate travel management firm. “So the small to mid-sized agents will see a trickle-down effect from that.” Earlier this month, McClure acquired Montrose-based Village Travel, a consortium of five smaller agencies that merged over the last few years. “Historically, we were worth about 10 times our earnings. Now it’s closer to about four and five times,” said McClure. “And that is the result of smaller commissions and, yes, the online competition. But because I don’t charge any fees to my clients, I’m able to stay competitive. But the smaller agents are going to have to start charging fees to survive.” Walsh, from the 25-year-old Crene’s World Travel, said he rarely charges his corporate accounts fees. Despite the outlook for modest growth, he’s aware of the threat of being bought up by a larger agency. He’s hoping to see leisure travel bookings pick up over the third and fourth quarters, but he also said he expects more threats from the airlines. “I foresee agency commission fees going down to zero sometime down the road here, which will hurt us very much,” said Walsh.

The first quarter of 2001 was filled with good news for Tekelec. The Calabasas-based developer of telecommunications components saw solid earnings growth and an impressive 40-percent increase in revenues. Officials braced to do even better in the second quarter. But what materialized was something no one had anticipated. “Very late in the second quarter we saw an abrupt change in customer behavior,” said Erik Randerson, director of investor relations for Tekelec. Instead of the $.16 per share it anticipated earlier in the year, Tekelec said it would end the quarter with per share earnings closer to $0.02 or $0.03 on revenue expectations that were reduced to around $70.5 million from original estimates of about $89 million. Tekelec, which will report its second quarter performance on July 26, expects to revise its third quarter guidance at that time too, in all likelihood, another downward adjustment. And the company is not alone. Amgen, Superior Industries International Inc., Pinnacle Entertainment Inc., K-Swiss Inc., Luminent Inc. and Vitesse Semiconductor Corp. have also issued warnings that their second quarter will not meet expectations set earlier in the year. “If you were to compare what people thought was going to happen in calendar year 2000 to where we are now, no one was able to call it,” said Dan Benson, partner in the technology group at Deloitte & Touche LLP. “The telecom industry didn’t just have a downturn, it drove off a cliff.” Looking out over the horizon at the end of 2000, most expected an economic slowdown that would last one or two quarters at the most. What unfolded instead is a sagging economy with no foreseeable letup, and one that has left virtually no industry sector untouched. “This year is kind of a write-off,” Benson said. “Then it’s a question of whether it’s going to happen in Q1, Q2 or Q3 of next year. Everyone seems to hope you just need to get through this year, and hopefully things will be better next year.” Somewhere between the now-optimistic predictions of 2000 and the current slowdown, California’s economy came face to face with a number of unforeseen circumstances: an energy crisis that drove up costs for manufacturers and threatens to create even more problems as the summer wears on; an oversupply in telecommunications that put an abrupt halt to orders and to the capital these companies need to further expand the infrastructure; a strong U.S. dollar that that has busted the export market; a threatened entertainment strike that left companies scrambling for product they are unlikely to replace until the fourth quarter or later; and a consumer that has proven to be more fickle than even the naysayers predicted. To be sure, there are some bright spots. Health care, a big player in the San Fernando Valley economy, is prospering. Countrywide Credit Industries Inc. saw an 18-percent earnings boost to $1.00 per share in its first quarter ended May 31 and anticipates another rise to $1.15 to $1.20 per share in the second fiscal quarter. And The Cheesecake Factory Inc. saw earnings per share climb 30 percent to $0.25 in its most recent quarter ended April 3. But the number of entertainment and telecommunications companies in the San Fernando Valley threatens to make what is a national economic downturn an even tougher pill for the Valley to swallow. “You have two issues,” said Jack Keyser, chief economist at the Los Angeles Economic Development Corp. “The East Valley is a hotbed of motion picture and television production activity and then, of course, you have concerns over what’s happening in the tech industry, so you have some over-concentration and you may be feeling a little more of the pain than firms in other areas might be feeling.” Some of that pain has already unfolded. & #711;Van Nuys-based auto components manufacturer Superior Industries in June warned that its second quarter revenues and earnings would not meet consensus estimates, largely because of the company’s increased energy costs. As revised, the company reported net income of $13.3 million or $0.51 per diluted share in the second quarter of 2001, down nearly 40 percent from $21.9 million or $0.83 per share for the comparable period last year. & #711;Camarillo-based chipmaker Vitesse was anticipating turning a pro-forma profit of anywhere between 3 cents and 7 cents a share on sales of $90 million to $110 million in the third quarter ended June 30, 2001. But late last month, the company revised its outlook. Vitesse met its revised guidance when, on July 19, the company reported a net loss of $11.9 million or $0.06 per diluted share compared to income of $32.0 million or $0.17 per share for the same period last year. Sales plummeted to $60.1 million for the most recent quarter, versus $114 million a year ago. & #711;Luminent, a Chatsworth-based provider of fiber optic components also lowered its revenue projections for the second quarter to $41 million. The company will report its full second quarter financial performance on July 23. & #711; Biotech giant Amgen lowered its revenue and earnings per share projections for the year 2001. The company is projecting sales growth percentages in the low teens for the full year, down from earlier projections in the mid- to high teens and it adjusted its earnings per share projections downward to the low double digits, from the mid-teens it once expected. Amgen’s second quarter financials will be released on July 26. & #711;Pinnacle earlier warned that it will incur a net loss of $0.10 to $0.17 a share instead of the profit of $0.50 to $0.55 it forecast in mid-April. Pinnacle will release its results on July 24. Only K-Swiss turned in a happy surprise. The company had revised second quarter earnings per share estimates to $0.27 to $0.34, saying it would miss consensus estimates of $0.35. Instead, K-Swiss reported on July 20 that earnings per share reached $0.39, versus $0.37 a year ago. Other local companies began to see their fortunes shift in the first quarter of the year. & #711;Vertel Corp., a maker of telecommunications software, laid off about 15 percent of its workforce after posting a net loss of $2.9 million for the first quarter of 2001. & #711;Entertainment giant The Walt Disney Co. ended the first quarter with a net loss of $567 million, or $0.26 a share, on an 18-percent sales decline to $6 billion. Worldwide, Disney has laid off 4,000 staffers since the beginning of the year. & #711;Teradyne Inc., the Boston-based telecommunications company with facilities in Agoura Hills and Thousand Oaks, reported a net loss of $40.1 million or $0.23 per diluted share in its second quarter, the company’s first in over 10 years, and estimates losses through the rest of the year. Teradyne has already cut 1,225 from its payroll. & #711;Aurafin OroAmerica Inc., the company formed recently from the acquisition of Burbank-based jewelry manufacturer OroAmerica Inc., said in recent weeks that it plans an unspecified number of layoffs at its Valley facility. Aurafin OroAmerica said the layoffs are the result of duplications arising from the merger. Some of the other companies looking at shortfalls in the second quarter and beyond are blaming dynamics that do not appear to be the result of the general economic woes, at least not directly. Amgen lowered its expectations in part because a new drug, ARANESP, is taking longer than initially planned to get FDA approval and, therefore, will be slower coming to market. The company also said its projections for dialysis patient population growth are falling short as well. And Pinnacle said two of its casinos have been adversely affected by growing competition in the gaming industry. But for the most part, the thicket of financial worries in the Valley mirrors the economic malaise that has gripped the rest of California and, in some cases, the nation. Second quarter net income for Dole Food Co. Inc. in Westlake Village was $50 million, or $0.90 per diluted share, compared to $45 million or $0.81 per share a year ago, but revenues slipped to $1.23 billion from $1.24 billion, and Dole said its third quarter will likely fall below consensus estimates as a result of weak currency exchange rates and higher prices for fuel and electricity. Superior’s performance fell as a direct result of increased energy costs. Officials at Superior said they knew the company was unlikely to repeat the huge sales increases of 2000, and the company planned accordingly, but they did not plan for the energy crisis. “We knew last year was an outstanding year,” said Jeff Ornstein, vice president and chief financial officer. “We weren’t looking for a major increase. The one surprise was the energy (crisis) that happened very suddenly and was not forecast.” Superior instituted a number of cost-cutting measures including layoffs at its Midwestern plants and an extension of the company’s customary one-week plant shutdown in California to two weeks. All in all, Ornstein says the company’s performance in the second quarter “isn’t that bad considering the doom and gloom that’s been pervasive in the auto industry.” And with automakers now back on track, he is hopeful that the rest of the year will show improvement. Not so in the telecommunications sector. “The infrastructure build-out looked like it would go forever, and it stopped,” said Deloitte’s Benson. “That’s why you see these huge inventory write-offs.” Believing that the future lies with bandwidth, telecommunications firms from Nortel Networks to Verizon saw no limit to the networks they were building until demand came to a screeching halt. Some estimate that orders for components, a large part of the telecommunications industry in the Valley, have dropped by 50 percent as a result. Tekelec began to notice the change when its customers began kicking orders upstairs for signatures. By the second quarter, the orders just stopped coming, said Randerson. No one can say for sure when demand will pick up again. In the meantime, companies like Tekelec are just hoping to wait it out, Randerson said. “No one’s really expecting an uptick in the second half.”

When Darrell Felton was released from a Massachusetts jail last February, few realized that he was not who he seemed to be. The 20-year-old repeat offender had switched plastic identification wristbands with his brother Matthew, who was in the same jail but on a lesser charge and soon to be released on bail. Darrell Felton managed to evade police for 14 hours, but was eventually captured when his brother’s friend, who posted the bond, called police. The incident is unfortunately not all that uncommon in today’s jails and perhaps one of the biggest reasons why San Fernando’s Precision Dynamics Corp. is pushing new electronic wristband technology with county jail officials and police departments. Had the Felton brothers been wearing its new Smart Band wristband, they would not have been able to remove it and exchange identities without electronically alerting jail officials, the company says. The Smart Band is a new generation of electronic identification devices being tested at hospitals and jails that contains microchip technology that can track and identify the wearer. In the case of inmates, it allows jail officials instant updates on their status, location and police records. But unlike Felton’s wristband, this one is impossible to remove without alerting authorities. Electronic ankle or wristbands cannot be removed, allowing prison officials to continually monitor the whereabouts of inmates. However, many jails use flimsier, but cheaper, plastic ID tags. The bands, currently being tested, are smaller and less expensive versions of traditional electronic ankle monitors. They are nearly impossible to break and contain transmitters that allow jail officials to locate an inmate electronically and gather information unlike the older, less sophisticated ankle monitor. Moreover, new information can be added to a file on the inmate changes in status, added sanctions or privileges that can then be accessed by other officials by way of the wristband. It can also be used by inmates as a sort of debit card when they make purchases at the jail store. “In the past, you had to show the band, for instance, or you couldn’t scan it. Now, it can be read through the arm and through clothing,” said Oswaldo Penuela, vice president of operations and engineering for privately held Precision Dynamics. The Smart Band is made of a sturdy plastic that is nearly paper thin and carries an integrated circuit board with a tiny antenna. Scanners can read the tags and transfer the information onto a database to keep constant track of a prisoner’s whereabouts. John Gordon, a spokesman for the L.A. County Sheriff’s Department, which operates the Men’s Central Jail in Los Angeles, said the department is talking with Precision Dynamics about a potential contract. “It’s the next step in improving security in the county jail,” Gordon said. Identification mix-ups with inmates have resulted in several dangerous inmates walking away during transfers to the county Court House in downtown Los Angeles, he said. But because the band is impossible to remove without officials knowing it, exchanging them would be impossible. Company officials say it would reduce the element of human error in identifying inmates, and it can lock in information on the chip so that it cannot be modified. County Sheriff’s officials say the new electronic band would mark the first time high-tech wristbands would be used to track prisoners in L.A. County jails. Previously, jails used wristbands with names on them or with bar codes, Penuela said. But now, the wristbands can provide criminal history and other personal information. Penuela said the company is also in contact with several area police departments that have expressed interest in the wristbands for their own jail facilities. Precision Dynamics has made non-electronic plastic identification bracelets for hospitals since it was founded in 1956. But it wasn’t until 1998 that the company first began developing an electronic wristband or so-called “Radio Frequency Identification Band” containing a microchip that stores medical information about a patient. Irwin Thall, sales manager for Precision, said the band is the first such application of radio frequency and microchip technology, although similar technology is used on the Speed Pass, a key chain-sized device used to pay for gasoline at Mobil Oil gas stations made by another company. With a special reader, hospital staff can check the information on the wristband. So far only Kaiser Permanente has agreed to test the product at one of its facilities. Smart Bands are now being tested at Magic Waters, a water park in Chicago, and a U.S. Immigration and Naturalization Service holding facility in Batavia, N.Y. Ahmed Enany, executive director of the Southern California Biomedical Council, said Precision Dynamics is on the cutting edge of wristband technology. “I don’t believe anyone has gone as far as they have in that area,” he said, adding that hospital wristbands have changed very little in the past 30 years. A drop in cost in the microchip sector has made the bands even more affordable, costing the companies that use them about 50 cents each, instead of about $100 10 years ago, Penuela explained. Band scanning equipment starts at $300 and goes up to $3,000, depending on the size and scope of the system. Marketing of these Smart Bands has just begun, so the company is reluctant to discuss revenue estimates. Thall said Precision Dynamics can produce up to 8 million wristbands each year. Already, Precision Dynamics says it collects between $30 million and $40 million from its non-electronic wristband business, which includes sales to theme parks.

A brouhaha over a proposed shopping center in Agoura Hills is taking some unusual twists. Unlike most development battles that pit business against environmental groups and community residents, this feud has business facing off against business, it has those against the project suggesting that the city council pass a law curtailing development without voter approval, and it has at least one local resident leveling some pretty extreme charges against city officials. The ruckus revolves around a proposal by Selleck Development Group to build a 255,000-square-foot shopping center on the south side of Agoura Road between Kanan and Reyes Adobe roads, a 24-acre parcel that was deemed blighted and earmarked for commercial redevelopment about five years ago. Selleck has acquired all but one of the parcels needed for the development and reached a tentative agreement with Home Depot to anchor the center with a 139,000-square-foot store. The developer has also held discussions with a gourmet market, day care center and other, smaller retail shops, and is working on an environmental impact report and other studies the city requires to evaluate the project. But even before those reports are complete, a group spearheaded by four businesses and one private citizen has begun a campaign to prevent Home Depot from moving in by taking the issue directly to voters. The group, which calls itself Citizens for Responsible Growth, wants to pass a law prohibiting retail stores larger than 60,000 square feet from being built in the area. Such a law would effectively block any big box store, Home Depot in particular. What makes the Agoura Hills initiative different is it is aimed at a parcel that was earmarked for retail with the blessing of the community and led, not by environmentalists, but by a handful of businesses that fear the competition posed by Home Depot. “In Agoura Hills right now there’s a Do It Center, there’s a Roadside Lumber, there’s a Fence Factory, there’s a fashion door company and an Agoura building materials company,” said Mel Adams, the owner of Agoura Equipment Rentals and Supplies Inc., and one of the founding members of Citizens for Responsible Growth. “If Home Depot comes in, every one of those stores would be gone because they can’t compete with them.” Daniel F. Selleck, president of the company that bears his name, has reached agreements to purchase all but one of the parcels he needs for his proposed $40 million development. Adams is the last holdout. He claims that Selleck has made no attempt to negotiate with him. “He has told me flat he will not move me,” Adams said. “That the city will take my property with eminent domain and he refuses to negotiate.” But Selleck counters that he has held many meetings with the landowner, one of five that control the parcel he needs for his development. “I’ve probably been in Mel’s office on his site at least one-half dozen times,” said Selleck. “I’ve had at least four meetings with Mel and various representatives of his, including his attorney and CPA, in my office. I have entered escrow on another piece of property in the city of Agoura Hills and attempted to relocate Mel onto that site, which did not work out,” Selleck said, adding, “in case there is any miscommunication, I plan to give Mel a call and let him know I’m available.” At least one of those meetings was attended by Agoura Hills City Manager Dave Adams. “In my presence, there was a meeting where we all jointly talked about the sites,” he said. Traditionally, the job of approving or rejecting new developments falls to a city’s planning department and city council, but communities are increasingly turning to the ballot box in their fight against development and the traffic and other problems they think many of these projects bring. But even before the city has had a chance to review the project, Citizens for Responsible Growth has set up a Web site, Saveagoura.com, hired a spokesman and a land attorney and claims to have recruited hundreds more local residents to its cause. The group claims that any large development on the site would adversely affect the character of the community and create traffic congestion. And it says it is unwilling to leave a decision on the project in the hands of city government. “We just wanted to put that type of power back to the people’s hands,” said Al Abrams, a Tarzana resident who was hired by Citizens for Responsible Growth as their spokesman. “When you’re dealing with something that’s of such huge size, that has such an impact on the character of the town, it’s something the people of the city should be involved with.” At the same time, Abrams said the group intends to ask the city council to sign off on its new law without any vote at all. “We intend to go to the city council and say, ‘We know we’ve got the signatures to win. We’d like you to consider just signing this into law,”‘ Abrams said. Dan Crisafuli, one of the group’s founding members, believes the city has not been forthcoming in its negotiations with Selleck. “The city of Agoura Hills is a cloak-and-dagger government that does not let the citizens know what is going on behind closed doors,” said Crisafuli, the only private citizen in the anti-development group. “If you try to get information that’s public record, they hide it from you.” For its part, the city points out that the group is jumping the gun. Since Selleck made an initial application for the development in February, officials have asked him to respond to about 30 different points and questions, and it has not yet received the reports it needs to proceed with public hearings and the other steps that govern the planning process. Until they get the report, there’s not much to discuss. We have an incomplete application,” said Adams. Both Selleck and city officials say it is curious that the group spearheading the protest is made up of businesses that sell or rent many of the same products carried at Home Depot. In addition, they say, the area in question was previously approved for commercial development. “There was a whole series of public hearings in 1995 and 1996,” said Adams. “There’s no reason to suspect an outcry at this point.” Selleck is continuing to work on the required studies, and he expects to submit a completed application for the project in the next two months. “We’re hoping in the next 30 or 40 days to submit the EIR,” said Selleck, who is himself a resident of Agoura Hills. The report would detail the potential traffic the new development would draw and the number of oak trees which would have to be cut down oak trees are protected in Agoura Hills along with other potential consequences of the project. Selleck said he has held few meetings with homeowners because the full study is not yet complete, but already he has reduced the size of the development to limit the number of trees that would be affected and he is offering up to 24 acres of open space as part of a plan to relocate a Los Angeles County animal shelter which currently sits on the redevelopment site. The area is a half mile from the nearest home and, if redeveloped, could provide what city officials estimate would be about $700,000 annually, or a 25 percent increase in sales tax revenues, funding that is badly needed to widen roads such as the Kanan interchange at the Ventura (101) Freeway and the two-lane Kanan and Adobe Reyes bridges, which cannot accommodate the current traffic in the area. “There seems to be a concerted effort to quash this effort of even evaluating the project,” said Jeff Reinhardt, Agoura Hills city councilman. “I guess that’s something that’s within their right to do, but it seems to me there’s more to it than what they’re telling the general public.”

Ask almost any broker in the San Fernando Valley about business, and you’ll hear the same refrain: “Everyone’s on hold.” Now, with office vacancy and absorption rates tabulated for the second quarter, it turns out that, rather than “on hold,” the market is just holding on. Office vacancy rates, which began to inch up in the Valley in the first quarter of the year, moved even higher in the second quarter. And the negative absorption recorded in the first quarter of the year has deepened, spreading to still more submarkets. The overall vacancy rate for office space in the Valley reached 14 percent, the highest level recorded in several years, according to data just released by Cushman & Wakefield. Some traditionally strong submarkets Thousand Oaks and Westlake Village in Conejo Valley, Calabasas and Woodland Hills in the West Valley and Sherman Oaks in the Central Valley saw vacancy rates skyrocket well into the double digits, the Cushman & Wakefield report revealed. Thousand Oaks and Westlake Village recorded vacancy rates of 20.5 percent and 20 percent respectively. In Calabasas vacancies reached 12.3 percent for the period. Woodland Hills registered a 14.7-percent vacancy rate and Sherman Oaks reached 11.8 percent. The good news is that Warner Center, tabulated separately from Woodland Hills in the Cushman & Wakefield data, stayed under the double-digit benchmark, with a 9.3-percent vacancy rate. In all, the Valley saw absorption rates reach a mere 53,732 square feet, a far cry from the 149,480 square feet absorbed in the Valley in the second quarter last year, according to Cushman & Wakefield. And many of the same submarkets that posted high vacancy rates also posted negative absorption rates, meaning there was more space vacated than was leased in the second quarter. Specifically, Westlake Village recorded negative absorption of 2,549 square feet; Agoura Hills recorded negative absorption of 10,662 square feet; Woodland Hills registered a negative 53,261 square feet; and Encino saw absorption dip to a negative 28,796 square feet. Brokers who are completing deals are reporting that many tenants are asking for shorter leases, unwilling to bet on an economic upswing anytime soon. “One thing I’m noticing is people don’t have as much confidence in the economy,” said Angie Weber, a vice president with Daum Commercial Real Estate Services. Where the standard lease recently was of five to seven year duration, many tenants are now asking for terms of two to five years. “There’s a lot of people requesting one year,” Weber added. Also representative of the short-term thinking, a number of companies are seeking subleases, where they can get better deals provided they are willing to forego tenant improvements to customize the space to their needs. Duane Cody, a director with Cushman & Wakefield, said he is seeing more companies in the market for sublease space, which allows them to expand or contract without making a long-term commitment. “If you’ve got companies unsure of their needs, if they take a sublease they can re-evaluate and re-do their space in a shorter time frame,” Cody said. Warner Center Sale Brokers around town are reporting that the owners of Warner Center Properties are about to put the complex on the market. It is believed that Steve Silk and Jay Borzi, brokers with Secured Capital Corp., have been hired to market the huge complex, which includes 2.3 million square feet of high-rise and low-rise property that forms the core of the Warner Center business district. The complex is owned in a joint venture by Alaska Permanent Fund Corp. and Harvard University’s endowment fund, which tried last year to put the property up for sale but could not reach agreement on how to market it, brokers said. At current market values, Warner Center Properties could fetch $350 million or more, but because it is so large, the number of prospective buyers is limited, brokers said. Brokers said that new ownership would not likely change the character or tenant mix of the properties, although it could affect the companies that manage the complex, asset managers AEW Capital Management LP and property managers Transwestern Commercial Services. Eyeing More Space GTRAN, a developer of optical transmission products, has leased 24,329 square feet in Newbury Park to expand its research and development operation. The seven-year lease at 2651 Lavery Court is valued at more than $1.5 million. GTRAN, which has corporate headquarters in Westlake Village, expects to renovate the building for its expansion. GTRAN was represented by Tom O’Brien of Coldwell Banker Paller Co. The landlord, C-F Investment Co., was represented by Fred Ferro, Alex Woronovich and J.P. McDonald of NAI Capital Commercial. Fair Exchange A local investment company has acquired a 17,000-square-foot retail center in Northridge and a 5,000-square-foot industrial facility in Thousand Oaks. Durose Corp., based in Northridge, made the investments following the sale of a Sun Valley mobile home park which it owned. The company reinvested the proceeds of that sale in the two new properties in an all-cash exchange transaction valued at a combined $2.7 million. The Northridge property, at Reseda Boulevard and Parthenia Street, is occupied by Auto Zone and Smog Test Only. The industrial building, at 102 Cunningham St. in Thousand Oaks, is occupied by Skeeters Performance Shop. Joe Lopez and Jill Lopez of Westcord Commercial Real Estate Services represented Durose in both transactions and, in the Northridge deal, also represented the seller, M & A; Gabaee. The seller in the Thousand Oaks deal, TR Funding, was represented by Rick Principe of Westcord, who is also a principal in TR. Senior Reporter Shelly Garcia can be reached at (818) 676-1750, ext. 14 or by e-mail at [email protected].

Jim Dunn Title: Owner and general manager, Airtel Plaza Hotel and president, Van Nuys Airport Association Most Admired Person: Wife, Christine Dunn Career Turning Point: Launching the Airtel Plaza Hotel Age: 56 Personal: Married, one son The president of the van nuys airport association leads a group of businesses threatened by an anti-noise ordinance On July 17, a lawsuit filed in November 2000 by a group of Van Nuys Airport business owners goes before a judge for the first time. Companies based at the airport hope to quash a 1997 ordinance adopted by the Los Angeles City Council that aims to phase out Stage2 aircraft, the older, noisier planes that account for roughly half of the jets based at the airport. Residents who live near the airport are pushing for formal adoption of the ordinance, which they view as a vital first step in eliminating their noise problems. Backed by local business leaders, including the Valley Industry & Commerce Association (VICA), in 1998 the airport convinced a city council subcommittee to delay the adoption of the ordinance until an outside firm could conduct a study of the economic impact of the loss of the older aircraft. That study, completed by the New Jersey-based Polaris Group in June 1998, concluded that the ordinance would affect roughly 600 jobs and cost the local economy close to $2 million per year. Two years ago, Jim Dunn, owner and general manager of the Airtel Plaza Hotel at the Van Nuys Airport, became president of the Van Nuys Airport Association, a consortium of 200-plus members, including charter plane operators, airport-based business owners, aviation repair station operators and propeller aircraft associations. As president of the association, which represents airport tenants in negotiations over fees and other issues with the facility’s landlord, the Los Angeles World Airports Association (LAWA), Dunn has found himself on the hot seat more than once. Dunn spoke to Business Journal reporter Jacqueline Fox recently about the similarities between Van Nuys and the long-fought battle over airport noise and expansion in Burbank. He also discussed the association’s accomplishments, his efforts to bring “unbiased” representation to the table to help bridge the gap between airport tenants and LAWA representatives and the facility’s plans to appease neighboring residents. Question: Can you bring us up to date on what’s happening with the adoption process of the ordinance on Stage2 aircraft? Answer: The Stage2 ordinance has gone on from the city council now, which passed it, to the courts because of a lawsuit filed to help stop it from going through. The association is not named in the lawsuit, but members of the association are. They (the plaintiffs) represent a consortium of members of the Business Aircraft Association and airport tenants. Q: What are the costs involved in bringing this to the courts and who is paying for it? A: Because the association is not named in the lawsuit, I do not have intimate knowledge of the costs so far. The association isn’t paying for it, but we support it. Q: What are the problems with reducing the older Stage2 aircraft? A: It’s been determined that the elimination of those jets would affect business dramatically. Many jobs and tenants’ businesses would be wiped out with the elimination of those aircraft. The difficulty here is trying to balance the economic engine of the Van Nuys Airport with the ongoing concerns of the neighborhood. But the airport has more than 100 businesses and 3,400 employees. And if you were to combine all of those together, we would be the fourth-largest single employer in the Valley. Q: How closely are you watching what has been happening in Burbank, where concerns over airport noise and growth have resulted in years of civic discord and costly legal battles? A: An airport is an airport is an airport, and the attitude held by the residents of Burbank is no different from those attitudes of the residents surrounding Van Nuys. Van Nuys Airport is dissimilar because we are a general aviation airport. However, we do have a substantial core of charter flight tenants and their concerns are important. While we don’t want to see this battle drag on forever, we have both the tenants’ concerns and rights to consider, as well as the concerns of the residents. So, yes, we have been watching their struggle very, very closely. Q: What is the status of the soundproofing program for homes in the area and what is the association’s involvement? A: A retrofitting program for residences in a designated area of impact is underway. That program includes additional insulation of those homes, air conditioning and special noise dampers over chimneys. The costs involved are roughly $15 million and it affects about 1,500 homes in the area. The association supports the program. It’s an attempt at mitigation. We think it’s a good idea. Q: Valley VOTE, the group leading the drive for secession, hopes to keep the airport as a municipal asset if it is successful. How realistic is the notion of transferring the airport to a new city entity, and would the association support it? A: Because (a secession vote) is some time away, it really hasn’t been a primary concern. However, there is a great level of awkwardness the association has identified between the tenants and LAWA. As a result, we have had to be in conformity with many of the administrative applications that are part of the LAWA system, which is made up of four very different airport personalities: LAX, Palmdale, Ontario and Van Nuys. So, I think (transferring ownership) is probably not a bad idea. It’s all about local control. How doable is it? An airport is such a political centerpiece in a city that you can negotiate anything. Q: What would you consider to be the primary accomplishments of the association under your leadership and how have they helped improve matters between LAWA and airport tenants? A: One of the main things the association has done with the help of some dedicated and talented members is negotiate with LAWA and the tenants over a new leasing policy. The new policy is designed to level the playing field and make rent prices more balanced among the two categories of tenants: commercial and aviation. And the tenants throughout the airport know this is their best opportunity for equal treatment when negotiating a lease with LAWA. The association is also currently working on setting minimum standards for tenants (such as building upkeep). These are being done through executive directives, this is the issue of the day and we are now in the process of working with a very enlightened LAWA representation. Q: Because your business is a hotel, has it made it easier for you to negotiate with local residents and anti-noise advocates? A: Yes, absolutely. I’m viewed as an almost neutral person in this and it’s helped me start and continue a dialogue with the community and members of LAWA. The hotel is the largest economic contributor to the airport because, not only do we pay twice the amount of rent than other tenants, we also generate about $1 million plus for the community in occupancy tax rates. So we are also a big contributor to the local economy. And, from the residents’ point of view, well, we don’t make any noise.

OK, now with the last political distraction behind us (that being the recently ended mayoral election campaign), are you really ready to secede from the city of Los Angeles? You’ve got a report from LAFCO that, with a little tweaking and horse trading, might make a convincing case that the San Fernando Valley could survive on its own. You’ve got some level of grassroots support, but perhaps not as much as secession advocates think or want. You’ve got a business community that says it supports secession but, off the record and quietly, believes there’s little chance of it happening and are simply hoping for a bigger piece of the L.A. pie. You’ve got a political leadership that is what? Prepared to lead a new Valley boldly into the heart of the next century? There’s a political powerhouse in Councilman Alex Padilla who, far from joining in the latest chorus of “poor us,” has maneuvered himself into the presidency of the L.A. City Council. There’s a new mayor jumping in right about where the old one left off. Now-former Mayor Richard Riordan spent his last night in office receiving an award from the Economic Alliance of the San Fernando Valley. Then two days later, his first full day after being sworn in, new Mayor Jim Hahn made sure the news media understood his schedule would include nothing but stops in the Valley: One symbolic gesture followed by another. And what you also have are surveys indicating that, not only is much of the Valley electorate still truly undecided about secession, they haven’t really thought about it either. According to the Rose Institute of State and Local Government at Claremont McKenna College, more people have no opinion one way or the other about secession than actually support it. Tactically, it gets worse for secession advocates. Assume for the moment that a Valley secession question ends up on the November 2002 ballot. That simple question, yes or no, is not all that will be there. There’ll probably be a question about taxing authority, one about what to name a potential city and some choices on who the first mayor and city council members will be. So, while you’re voting on whether you want to have your own city, you’re voting on who its first elected officials will be, just in case. Valley VOTE officials call this a good thing. They say that if 10 or so candidates run for each of the proposed 15 new council seats, you’ll have 150 secession campaigns going all at once. Using the same kind of quirky math, you might as well add 10 candidates for mayor and you’ve got 160. So, who will these 160 or so political candidates be? Let me tell you something reporters who routinely cover local elections know but never tell readers (and yes, they make their own private assessments of candidates that never get in the paper): There is a single basic storyline to most of these campaigns. In the average city council primary election, for instance, there are usually a couple of candidates who, ideology aside, know what they’re talking about, know how to raise money and run a campaign and give the reporter a feeling they could actually do the job. Then there are a couple who seem pretty bright, have some idea of the public policy issues involved but don’t have the slightest idea of how to run for office. These are the ones that are usually pretty impressive in debates (attended primarily by reporters and campaign managers) but voters never hear of. Then there are usually a couple of candidates who live out the true meaning of the clich & #233; that, in America, anybody can run for president. These are the ones who have the biggest mouths and may know a lot about the effort to remove graffiti on their block or the speeding ticket they got or the property tax bill they don’t understand, but little else. They know even less than the previous group about running a political campaign; the main difference is that they don’t even know what they don’t know. This bunch also runs out of steam well before election day and you never hear from them again. Frankly, the Valley is full of the latter group and woefully deficient in either of the first two. Those 160 campaigns for office will indeed be quite an exercise in democracy, but if there aren’t any competent, respectable candidates, it’s liable to have an impact on those many undecideds that won’t be favorable for secession. Why, people can legitimately ask themselves, would they vote for secession if they’re afraid of who might be in charge afterwards? The time is quickly approaching when secession is no longer just an intellectual exercise or an easy way to rouse a crowd. One day soon, voters are going to get serious, and Valley VOTE needs to be ready. Michael Hart is editor of the San Fernando Valley Business Journal. He can be reached at [email protected]