Publicly Owned Companies

MrShowbiz.com, one of the oldest entertainment news-oriented Web sites on the Internet, will shut down this fall as the Walt Disney Co. retools its Web businesses and dumps the money-losers. “This is part of an overall restructuring for the Internet group,” said Michele Bergman, a spokeswoman for Walt Disney Internet Group, who would not say how many jobs would be affected by the move or the overall savings expected from the closing of both MrShowbiz.com and its sister site, WallofSound.com. “We will be focusing our efforts on our main Internet sites,” she said. The Disney Internet Group now employs about 1,500, after 535 jobs were cut when Disney eliminated financially troubled Go.com in January. The two sites will be integrated into Disney’s ABC.com site. MrShowbiz.com, a premier entertainment news Web site for much of its six-year existence, features film reviews, contests, trivia games, film clips and sound bites from movies and celebrities. Starwave Entertainment Group, founded by Microsoft Corp. co-founder Paul Allen, sold the two sites to Disney in May 1998 for about $100 million. MrShowbiz.com seemed to flourish in an earlier era when there were few Web surfers and fewer Web sites. Even as times changed and competition became more intense, the site managed to hold its own while other Web sites experienced declining advertising revenue, analysts say. “It was the main place to go if you wanted to know about show biz,” said Dan Keen, a Web expert with Media Track, a Web consulting firm in Los Angeles. “WallofSound had its niche before anyone else, but it didn’t last and that’s the nature of the web.” Under Disney’s ownership, the two sites never returned to earlier profitability or status. Keen said competition from a wealth of newer sites, among them Hollywood.com, left the two pioneer sites struggling for advertising revenue. In its early days, WallofSound.com attracted attention with its glossy graphics and myriad music-related content about band reviews, tour dates, music samples and news. Arthur N. Newman, an equity analyst with the investment bank, ABN AMRO, said he is encouraged by Disney’s efforts to consolidate its Internet business and eliminate its non-performing units. “They’ve taken a bath with these Web sites and it’s time to cut them loose,” Newman said. Disney’s ABC.com, however, has remained a solid revenue producer due to its content based on ABC network television shows and their fan base, as well as continuously updated news from ABC correspondents and wire services, Newman said. He added that ESPN.com and Disney.com also enjoy a similar advantage with their programming emphasis. While Disney won’t say how much of a loss it may incur by closing down the two sites, Newman says the news is good for investors who have grown weary of the company’s spotty Internet strategy. In January, the company closed its Go.com site and took a $790 million loss as a result. The site had featured games, contests, news, chat rooms and information on sports and leisure, but could not compete with the likes of Terra Lycos, Yahoo! and others. Disney, which has announced the layoff of 4,000 employees over the course of this year in a number of its divisions, says it’s focusing on its ABC.com site which will now have material from US Weekly Magazine, in which Disney recently purchased a 50-percent stake. “Our objective with the (ABC.com) Web site is to take full advantage of all the resources of ABC, the Walt Disney Internet Group and Disney’s new relationship with US Weekly,” said Dick Glover, executive vice president, Walt Disney Internet Group. ABC.com will officially include its new content, including material produced under the MrShowbiz moniker, in September, Glover said. The MrShowbiz.com and WallofSound.com offices in Seattle will close and content from their brand name will be produced at Disney Internet Group’s North Hollywood headquarters. Lanny Baker, an analyst with Salomon Smith Barney, said the move is in keeping with other recent Disney cost-cutting efforts. “There’s still value in the MrShowbiz name and they’re taking advantage of that,” Baker said. According to company figures, Disney Web sites attract about 17 million visitors a month.

Joe and Harry Gantz claim they’re just a couple of guys from Cincinnati who make documentaries. But to their fans, they’re the pioneers of reality TV. “They’re a couple of real talented guys,” said Dan Morada, a spokesman for HBO, where the brothers’ Emmy Award-winning “Taxicab Confessions” has become one of the cable network’s bonafide hits. “We were doing reality TV before there was reality TV, but we didn’t know it,” said 42-year-old Harry Gantz. Their first documentary in 1986 was a film that simply showed couples fighting with one another. “We’d just tape them while they argued. It was all very spontaneous,” recalled Harry Gantz as he spoke at the brothers’ Woodland Hills office. But now the “pioneers” are beginning to feel the constraints of cable TV. They think they may have found another medium that will eventually pay off, if not financially, at least artistically: the Internet. The Gantz Brothers went on line in February with CrushedPlanet.com., a Web site with streaming video of uncensored standup comedy and a variety of programs that involve hidden cameras catching all sorts of people “being themselves,” Harry Gantz said. After three months, CrushedPlanet has a fairly modest 1,400 subscribers paying $5.95 a month. The site joins other so-called reality Web sites like alltrue.com and CrapTV.com. What they share with CrushedPlanet is content that would not be acceptable on TV, even cable. “The reality craze that’s happened on TV is basically contests and take strangers and put them in a room or somewhere on an island or something, and I’m glad it exploded, but we’re making things a little different,” Harry Gantz said. The Gantz brothers insist CrushedPlanet isn’t merely a commercial enterprise. “Sure we’d like to make money on this, but it’s more about getting our stuff out to the public. It’s something that we have complete control over and don’t have a middleman,” Harry Gantz said. Perhaps more important, the brothers say, is being able to show material that HBO and other cable channels won’t. “There are limits, even on cable. But here, we can do anything. That’s the great thing about the Internet,” Harry said. For instance, the Web site’s “First Apartment” details the lives of young couples who agree to live, eat, sleep and have sex in front of the cameras. “Couples Arguing” takes its premise from the brothers’ first documentary with its often shocking language that comes with couples arguing in front of the camera. When one of the program’s five couples feel an argument coming on, they page CrushedPlanet.com and wait in separate rooms for a camera crew to arrive before they continue the fight. Other programs include “Sex and Psyche,” a documentary-like program about sexual obsessions and fantasies that pushes the envelope of good taste; “Eavesdropping,” which catches ordinary people in unusual situations, for instance at a party for selling sex toys; and “The War on Comedy,” filmed at the M & M; Soul Food Kitchen restaurant in South Central Los Angeles. The program features uncensored appearances by comics whose topics include race relations, sex and drugs. The Gantz brothers started the Web site on a shoestring there is no venture capital funding, no marketing budget, just a statement from the two that they hope to attract subscribers in February 2000. Like many dot-coms, they started out hoping to sell advertising, then switched in January to a subscription service. “We know what’s been happening to dot-coms, that’s why it’s just us and no other investors. We know what can happen in this business,” Harry Gantz said. Still, so far so good, said Jonathan Kramer, a Los Angeles-based Internet analyst, of the brothers’ enterprise. “If you can build a good subscriber base, you’re in a good position to turn a profit,” Kramer said. “But it’s a challenge to stay ahead of the game.” Harry said, “For us, the Internet is the place to be. It’s a way for us to distribute our work and show it directly to the public. “So if people are willing to pay $12 a month for HBO and $20 a year for their favorite magazine, why not pay to subscribe to us?” Joe Gantz, 46, says he’s proud to be part of what he considers the small group that founded reality programming. Only a few years ago, he said, there were just a handful of reality programming producers. “Today, there are hundreds.” Although the Web site keeps them, their four employees and a varying number of camera crews busy, the Gantz brothers say they’ll continue to produce programs for television. Recently, they completed a pilot for HBO titled “No Joke,” which shows comics performing and peeks into their personal lives. “We thought the show would be inexpensive and we thought that we didn’t want to do a generic comedy show and we found this whole new world there,” Harry Gantz said. The Gantz duo also has another installment of their “Taxicab Confessions” scheduled for HBO next year. “‘Confessions’ is a difficult show to do,” Harry Gantz said. “We go out for six weeks all night and get 38 rides and we try to get as much good footage as we can.” The program features a specially designed cab in which six tiny cameras record everything passengers say and do. At the end of the ride, they are told about the cameras and are asked to sign a waiver. About 75 percent of the passengers agree to allow themselves to appear on television. Those who agree are paid $500 and get a free taxi ride. The program features frank talk about relationships and sex. At times, it shows couples having sex, though not explicitly. The Gantz brothers say the relationships between the passengers and the cab driver is the real draw. “The cab is the great equalizer,” Harry said. “It doesn’t matter whether they’re rich or poor or what they do for a living. It shows that these people are human and that they have feelings.”

Los Angeles can hold on to its airport. And, it can keep its zoo and its beleaguered plans for expansion of its port system, thank you very much. These are just a few of the regional assets Valley secessionists will not be seeking some control over should a final separation agreement be approved by the majority of the voters here and across the city. But secessionists will be asking for their fair share of these investments and other city assets in their final application for separation, which is being handed over to the Los Angeles Agency Formation Commission (LAFCO) Tuesday. “We are recommending that certain regional assets be maintained by Los Angeles,” said Richard Close, chairman of Valley VOTE, the group spearheading the push for a breakup. But, Close said, the Valley is entitled to credit for its fair share of the value of those assets, which could dramatically reduce the subsidy Los Angeles says a new Valley city would have to pay for its independence. In March, LAFCO released the findings of a nearly year-long study on the feasibility of Valley secession, concluding that the area’s strong tax base would allow it to generate roughly $1 billion a year in revenue and could operate with a budget surplus. However, the study also concluded that the Valley would have to pay the city roughly $68 million a year to make the split “revenue neutral,” as required by state law. But, said Close, factor in the Valley’s entitlement to the city’s assets and that subsidy figure already being carefully scrutinized by Valley VOTE’s consultants could change significantly. Because details of the report have been embargoed until they are turned over to LAFCO on Tuesday, Close could not give the Business Journal a specific dollar value of the Valley’s portion of those assets. In fact, said Close, his group’s final application focuses on the overall plan for a breakup, not the details. Those, he said, will be left to consultants to tackle over the next few weeks. “We are in general agreement with the report,” said Close. “Primarily, we have tried to deal with concepts of implementation of the plan. We only had 45 days to do that, so we were looking at the big picture rather than focusing on the small details. But our consultants will be submitting questions as to how certain numbers and conclusions were arrived at.” Close also said potential revenue from assets, along with projected revenues to the city for instance, money expected to come to Los Angeles from a recent tobacco settlement are also likely to affect the numbers in the report. Valley VOTE is also requesting that residents of the new city continue to receive water and electrical power services from the Los Angeles Department of Water and Power at the same rates charged to customers who live south of Mulholland Drive. The initial findings of LAFCO’s report deemed DWP, along with other programs, such as 9-1-1 emergency services and the city’s complex computer systems, next to impossible to split up. Instead, the report suggests that a new city would likely be forced to “contract” out for those services, yet does not specify what the Valley ought to pay Los Angeles to do so. Close cautioned that those services would not be contracted out, but rather delivered to the Valley under costs and conditions set forth by LAFCO staff, which has the power to do so under state law. “Some people have incorrectly used the term ‘contract,’ and that is legally an incorrect term,” said Close. “That presumes that either side can say no.” And, that one side has power over the other a concept that would only serve to undermine secessionists’ self-sufficiency. The LAFCO report suggests that all city services, such as police, fire, trash pickup and animal regulation, would continue to be provided to the Valley for a fee during an eight-month transition period while the new city either sets up its own programs or decides to stick with what is already in place. “What we are proposing is that the transition periods be different for different services, because some may need more time than others to implement. Some of them may take a couple of years,” Close said. Valley VOTE is not, however, specifying a preference for contracting out for those services indefinitely or establishing its own services. “We believe these types of decisions should not be made by Valley VOTE,” Close said. Julie Butcher, general manager of the Service Employees International Union, Local 347, said a new Valley city would do well to keep ties with the union rather than do business with what she called “sleazy” independent companies. “Our union members, particularly in trash collection, are very proud of the service they provide,” Butcher said. “So we are worried that (a breakup) would cost people more. But the bigger picture is our union members do an excellent job, and I think people of the Valley would be less served by smaller services.” Butcher tiptoed around the union’s formal position on secession, but said members have been working to improve services in the Valley. “We have been struggling to help in the areas where people want to leave to show that we are stronger together as a whole,” she said. The union represents roughly 12,000 workers in Los Angeles and other cities who provide services ranging from garbage collection to traffic control. If voters were to approve secession, Valley VOTE’s application calls for a 60-day period between the November 2002 election and the date that a new Valley city council and mayor would assume their positions. “Once the effective day has come, all governmental decisions are made by the new mayor and city council,” Close said. Valley VOTE is also requesting that LAFCO begin the process now of establishing boundaries for 14 Valley city council districts, which would each have approximately 90,000 people. Established districts currently represent an average of about 240,000 people. The Los Angeles City Council now has 45 days to comment on the final application. However, it can only make recommendations, not changes. Then LAFCO must conduct a comprehensive fiscal analysis of the final report, which would be used as a draft for a ballot measure. That is expected to be completed in late August following what are likely to be several rounds of public hearings. Although LAFCO staff has the final say over whether the application is approved for a ballot measure, Close said the likelihood of the panel rejecting it is “2 percent or less” because they have already said it’s feasible. Close said his group expects a lot of criticism to come from the council and anti-secessionists, but insists that the focus should remain on doing what’s right for the residents of the Valley. “We are excited about the LAFCO report because it says that the Valley is extremely viable,” said Close. “But I think we need to keep focused on the real goal. Unlike a divorce where a couple fights over the plates and the silverware, this is over local control and focusing on making the Valley a better place to work and live and raise a family. And this report shows we meet all the legal tests for doing so.”

THQ Inc., the Calabasas Hills-based maker of children’s video games, and Viacom’s Nickelodeon have agreed to co-develop products that will be launched as video games first, then as TV shows and films. Although THQ has produced video game content based on Nickelodeon characters and story lines for the last few years, this will be the first time the company’s products will be used as the creative premise for any of Nickelodeon’s films or TV shows. THQ will also be fully involved in development of the original characters for the games, signaling a reversal in the way the two sides of the entertainment world have done business in the past. “Typically, we license (established) Nickelodeon products to produce the software for the video games and then pay a royalty,” said Jeff Lapin, THQ’s vice chairman and chief operating officer. “This is about both parties working together to create a new brand with its own identity, and both parties will actually invest in promoting the brand.” With this new agreement, Nickelodeon and THQ will propose story and character ideas. Those accepted by both parties will be produced first as video games and, if successful, TV shows and/or movies. Nickelodeon and THQ are already both reaping hefty returns from retail sales of the 1998 release of “Rugrats Search for Reptar,” characters originally featured on television that THQ then produced for the Sony PlayStation, Nintendo 64 and Game Boy color console platforms. Retail sales on the video game have already exceeded $125 million on 4 million-plus units in the U.S. alone, Lapin said. This year, THQ will produce games based on Nickelodeon’s popular TV character “Jimmy Neutron: Boy Genius,” set to debut as a motion picture in December and a TV series in the fall of 2002. THQ’s venture into film is part of a growing trend in the video game industry. At least three films based on popular video games are set for release over the next few months. They include Tri-Star Pictures’ “Final Fantasy,” based on the Japanese company SquareSoft Inc.’s game of the same name, and Paramount Pictures’ highly anticipated “Tomb Raider,” which started as a popular action/adventure game produced by London-based Eidos. Video game makers are hot Hollywood’s renewed interest in the economic potential of video games is helping THQ and its competitors capture the attention of Wall Street too. While tech stocks took a harsh beating in 2000, shares of some of the top U.S. video game publishers continued an upward climb, and THQ was at the head of the pack. THQ reported record net income for the fourth quarter ending December 2000 of $21.5 million, or 99 cents per diluted share, a 45-percent increase over the previous year when reported net income was $14.2 million, or 73 cents per diluted share. Revenues for the last quarter of 2000 were $190.9 million, a 50-percent increase over the same period in 1999 of $127.6 million. THQ’s stock was trading at$43.66 ?? last Friday, down about a point from its 52-week high of $44.99 on May 2. The lines between entertainment for TV and the personal computer have become less and less clear. Industry experts say, with the growing economic potential in video games, the industry is once again capturing the attention of non-interactive entertainment companies in other words, Hollywood. “(The Nickelodeon/THQ deal) is an indication that the interactive entertainment industry is becoming a much bigger segment of the overall entertainment business,” said Miguel Iriban, an analyst with Wedbush Morgan Securities in Los Angeles. In the past, said Iriban, the studios tried to move into the video game market, but never really had any success doing so because of the technical snags they hit trying to create their own games. “Now they are taking their content ideas straight to the experts,” Iriban said. THQ’s and Nickelodeon’s first joint project is still under development, according to Stephen Youngwood, Nickelodeon’s vice president of interactive and book publishing, and should be released late in 2002 or early 2003. “It takes about 18 months to make a good video,” he said. Youngwood would not discuss the financial details of the deal. Under the terms of the deal, THQ will oversee all aspects of the video game production, Nickelodeon the development for TV, film and other products. But both companies will have an equal say in which products get green-lighted and which ones are given the big thumbs down. Bryn Harmon, an analyst with the Portland, Ore.-based Red Chip Review, said THQ and its competitors are poised for a significant boom as the other two of the three top console makers Microsoft and Nintendo roll out their new products later this year. “Everyone who is making the games for those consoles is working like mad to get game content ready,” Harman said. “A lot of people are expecting video game revenue growth of between 25 to 35 percent over the next year.”

Mel Kohn Title: Managing Partner Company: Kirsch, Kohn & Bridge Education: B.S. in business administration from UCLA ersonal: Married, with two grown children Most Admired Person: No one A longtime valley accountant has staked out a position in the business tax reform debate Mel Kohn is an accountant; he doesn’t mind crunching numbers. In fact, he loves it. That passion has led him to many opportunities where he can help local businesses other than his own. As managing partner and founder of the Encino accounting firm Kirsch, Kohn & Bridge LLP since 1960, Kohn has become known as much for his passion for helping local business people as for his accounting skills. So it may have come as little surprise to those who know him that the California Chamber of Commerce named Kohn and five others from throughout the state its California Small Business Advocates of the Year. His work with the Valley Industry and Commerce Association (VICA) has resulted in the California State Legislature’s passage of the Local Agency Special Tax and Bond Accountability Act, or Truth in Bonding Act a measure aimed at ensuring that bond money is used for the projects for which it had originally been intended. Kohn is also chairman of the city’s Business Tax Advisory Committee, aimed at reforming a convoluted business tax system and allowing local businesses the opportunity to reduce their tax burdens. But while that effort is still ongoing a final decision by the Los Angeles City Council on the committee’s recommendation may come later this year Kohn says he’s merely pleased to be a part of a project aimed at helping local businesses. His privately held firm keeps its revenues confidential, but Kohn says the business is thriving, giving him all the more reason to share his knowledge and expertise with local businesses. His clients come from construction, manufacturing, health care, publishing and real estate, among others. VICA President Bonny Herman said she is pleased Kohn’s contributions to the business community have been recognized. “Mel Kohn has not only committed countless hours of his own time to reforming the city’s complex business tax system,” she said, “his leadership and volunteerism have motivated the committee’s 18 other members to do the same.” Kohn’s community activism, however, isn’t limited to the business community. Last year, he served as principal for a day at Encino Elementary School and eventually established a program there to help students learn the importance of managing money. Question: What led you to become a business advocate? Answer: I’ve always given back. First of all, to the profession; I’ve been very involved with the CPA society and served on the boards of various groups. I’ve always felt it’s important that people get involved in their community, whether it’s advocacy or nonprofit or anything involved in the community. I wanted to do something with business, not something to do with an illness or a disease charity. This was something that you can actually see and do on a professional level that has an impact. Q: What is your interest in VICA? A: I hadn’t heard about VICA until I read one of my clients was getting involved in it (in 1995). It really comes down to it being local, in the community. It’s here and you can touch it and see it work. So I joined and got involved in a lot of things. I generally pick local issues instead of state or federal issues to work with. I like to see results that impact this community. Q: For instance? A: The first thing I did (in 1995) was try to do an historical 20-year summary of the budget of Los Angeles, trying to do a mini-LAFCO (Local Agency Formation Commission) study. The goal was trying to determine what revenue and expenses the Valley had. It was real thorough and we couldn’t get far enough and really it was because of information. It was very hard to get. So if you see what LAFCO did and how long it took them, it’s exactly what we had to go up against. Q: How do you feel about Valley secession? A: It’s up to the voters to decide. The bottom line is helping provide economic growth in the Valley. I don’t want to sound like a secessionist, but there are a lot of things wrong with how the city taxes business. But it can be corrected. Economic growth deals with creating jobs and keeping jobs and that’s what we’re about, no matter who’s in charge of the Valley. Q: The chamber award also cited your work in the Truth in Bonding Act that was recently passed by the state legislature. What was your involvement in that? A: You look at the whole history in the Valley. There was a police station in the late ’80s that never happened; then you have things like the school repairs bond, (Proposition) BB, that took a long time. We wanted to have somebody watching the bond money. It’s putting trust back in the community that makes sure that, what they voted for, they’re going to get. Q: When will we see business tax reform? A: Soon. It’s taken more time than I anticipated in getting a result. It’s basically going to happen right now in a motion before council. Last year we laid out the blueprint for tax reform, a significant document because it laid out what the business community felt should happen with tax reform. Q: What are some of the reforms? A: We started off with a very unique concept. Pay as we go (an installment plan for taxpayers instead of a lump sum payment), that’s what the recommendation is. We want to pay as we go and have an amnesty (to void penalties) and get all the people that are not paying to pay, which we feel will raise $30 million. We also want the city to have an appeals system so that the taxpayer can appeal, so that they know that there’s someone out there who can help. We heard a lot of complaints that the tax system is unfair. So if you live in L.A. and you’re five blocks away from El Segundo, you’re competing against someone there and you have this burden that they don’t and that’s unfair. Q: What got you interested in teaching children about money management? A: It was something I could do. The kids had fun and, being principal for a day, I never realized what a principal does. It’s like being a CEO of a company. You have to deal with teachers, you have to deal with students, you have to deal with teaching methods and it was really overwhelming to see what a principal has to do. Q: What’s been the key to your firm’s success? A: We feel that business is a relationship. Anybody can crunch numbers. We’re all accountants. It’s a people business. It really is. We really deal in relationships and our product is accounting. Accounting is a unique profession because we have to basically perform services to our clients that are dictated by business and government. Q: How has your business changed over the years? A: Now, individual taxpayers can do their own tax returns and it’s terrific that they can be involved in that. There have been a lot of technical changes like computers and things like that, but the bottom line is that you still have to deal with people and provide personal service. You have to build relationships and that never changes. Q: How have your civic duties impacted your business? A: I haven’t gotten any business from that. I’ve gotten some referrals. But this isn’t my networking group. It’s strictly taking care of the community for me.

Education President Bush has named Simi Valley City Councilman Glen Becerra to the White House Commission on Presidential Scholars. Becerra, 34, is a member of the Simi Valley Education Foundation. Entertainment Patrick Fitzgerald has been named senior vice president, sales and distribution, for Buena Vista Home Entertainment (BVHE), announced Robert Chapek, president of BVHE. Fitzgerald comes to BVHE from Citibank, a subsidiary of Citigroup, where he served as vice president, business development, sales and distribution, for Latin America. Prior to his tenure at Citibank, Fitzgerald served with the Campbell Soup Company for 14 years. Finance The Verdugo Banking Co. announced the appointment of Michael F. Maluccio as chairman of the board of directors, replacing Eugene D. Fortner. Fortner, who had been chairman of the bank since its inception in 1991, will continue to serve as a director. A founder and original board member of the bank, Maluccio is president and CEO of Glendale-based management consulting and investment company, the Maluccio Co. James E. Whitney has been named senior vice president of the Bank of Granada Hills and manager of the bank’s SBA Loan Division. He previously served as the senior vice president and manager of the SBA Division of American Pacific Bank, one of the largest SBA generators in the nation. Insurance Bruce W. Marlow, president and CEO of 21st Century Insurance, announced Douglas K. Howell has been appointed senior vice president and CFO; Richard Andre senior vice president, human resources; and Dean Stark senior vice president, claims. Prior to joining 21st Century Insurance, Howell was senior vice president, CFO and treasurer of GuideOne Insurance Group. He has also served as vice president of finance and corporate development for Bankers Life Holding Company. His responsibilities included strategic acquisitions, finance, budget and planning. Andre now is responsible for overseeing the company’s human resources operation, including hiring over 500 new employees per year. Prior to joining 21st Century Insurance, Andre was vice president of personnel at Fidelity National Title Insurance Company. Stark is responsible for overseeing 21st Century’s claim operations. He holds a Chartered Property Casualty Underwriter professional designation. The company also announced the retirement of Richard A. Dinon, senior vice president. Internet/Telecommunications Chatsworth-based 101communications announced Dan Altman was promoted to executive vice president, responsible for the finance and shared services departments of the company, including circulation, production and IT. Altman joined 101 from Intertec Publishing, where he served as executive vice president and CFO. Steven Crofts was named senior vice president, events and European operations. He oversees all 101 conference groups. Crofts, founder of The Data Warehousing Institute, which was acquired by 101communications in December 1999, is now senior vice president, conferences and events for 101. Michael Valenti was promoted to senior vice president, human resources. Valenti joined 101 as vice president of human resources in September 1999, following a 30-year career at the Los Angeles Times, where he held executive positions in the human resources department. Gordon Haight was promoted to general manager of 101’s core Igroup of publications and Web sites. As such, he will oversee the entire product group. Mark Sande, formerly 101’s vice president of marketing, was named publisher of Syllabus Magazine. Sande is responsible for the monthly publication targeted at educators and education technology, its annual conference and two regional conferences and Web site. Mark Long is the new president of North Hollywood-based SageMetrics, a business intelligence service provider. Long oversees all business operations as well as sits on the SageMetrics Board of Directors. He comes to SageMetrics from Intraware where he was vice president of strategic development. Manufacturing Capstone Turbine Corporation has named Michael G. Tingus president of Capstone California, a newly formed and wholly owned subsidiary headquartered in Woodland Hills. Prior to his appointment, Tingus was senior vice president and regional manager at Colliers Seeley, a commercial real estate development and property management firm. Capstone California has retained Robert H. Fleet as senior vice president. Fleet was a senior consultant in the builder division for Wells Fargo Home Mortgage, working exclusively with Pardee Homes. The company has also retained Edward Edelman as regional director of engineering. He has 16 years in control systems, fuel systems and software engineering and has worked at Allied Signal and Sundstrand Power Systems. Real Estate Lawrence A. Scott was just named vice president of development, Southern California, for AvalonBay. Scott will oversee the company’s efforts from Ventura to San Diego and the Inland Empire. Sales AXS Technologies announced Raad Bunni will head up AXS’ Northwest sales efforts as a sales manager. Most recently, Bunni was senior director of channel development for Rilux Corp. where he oversaw business development, OEM and channel sales. Prior to Rilux, Bunni was director of national sales for Dage-MTI, Inc.

Scott Schaffer, senior vice president of San Gabriel Transit Co., became very busy on New Year’s Day this year. That’s when his company became one of two franchised taxicab providers in the San Fernando Valley. Schaffer’s company was already well-known elsewhere in Southern California, operating 400 cabs in 50 cities in Los Angeles, Riverside and San Bernardino counties, before it took over the franchise previously held by Valley Cab Co. Schaffer spoke to Business Journal reporter Jacqueline Fox about the challenges of taking over an established market, finding enough drivers and cars to meet the demand, and establishing a presence in a new market with 1.6 million potential new customers. “Initially, the real core problem was from a labor standpoint. First of all, where our other fleets are more like co-ops (co-owned vehicles), the Valley is different. We had to provide our own cars and we had to have enough cars to cover the business and enough business to retain drivers. “We have 60 vehicles in the Valley today and about 84 drivers. But we are actually behind on our implementation schedule, which essentially says that we have to put 166 cars out on the street by Jan. 1, 2002. “Not only did we spend a lot of money buying new cars, we also spent a significant amount of money doing a marketing program to get our name out there. We did that through cable TV, direct mail advertising and just going out to bars and leaving our cards. “So we are now four full months into that and doing between 400 and 600 orders a day, but that’s compared to United Taxi (the other Valley franchisee) which is doing about 1,800 orders a day. “Getting good taxi drivers to come on board has been tough, especially in today’s tough job market. But we were fortunate in that many of the Valley Cab drivers were willing to come over to us, which is very common actually. And, unlike in our other areas, where cab drivers own their cars, we own these cabs. So it’s easier to hire (in the Valley) because drivers don’t own their own cars and they don’t need money to buy one. They just need a job. On the other hand, we now have a waiting list of about 20 drivers and not enough cars to put them in. A taxi costs about $12,000 when it’s all said and done. And I buy four cabs a week, so spending $50,000 a week isn’t always that easy on top of paying the other bills.”

As L.A. city officials review new plans for getting a long-troubled multi-million-dollar commercial and residential development underway in North Hollywood, those who have watched the project come in and off line for the last few years say the third time could just be the charm. Real estate developer J.H. Snyder Co. is close to obtaining city approval for his project, a 1.2 million-square-foot retail/commercial/residential complex long, and still hopefully, called the NoHo Commons. Developer J. Allen Radford, managing partner of Santa Monica-based JARCO Inc., had tried since early 1998 to get a commercial project off the ground at the 15-acre L.A. Community Redevelopment Agency site along Lankershim Boulevard next to the Red Line subway station. Twice he was forced to scale back his proposal, which he once described as “gold plated.” And twice Radford asked for extensions on negotiations with the CRA before finally conceding earlier this year he could not come up with the funding needed to make it fly. Now city officials, the CRA and even one long-time critic of Radford’s project say Snyder’s proposal appears to be more conducive to both residents and business owners. “We are in the process of working with Snyder to bring more detail into the plan as we get a better sense of the overall market, to see whether some parts of it should be expanded or made smaller,” said Dave Stolzer, senior real estate developer for the CRA. Stolzer described Snyder as a “very strong developer,” and said the city is confident he would not have the trouble Radford did securing underwriters for the project and ultimate CRA approval. Jerry Snyder’s $180-million version of NoHo Commons would include 150,000 square feet of retail space, 200,000 square feet of office space, a supermarket and roughly 750 apartment units. And, he said, he’d keep the name. In addition, Snyder hopes to win approval on a bid to build a new high school on a portion of nearby land. That facet could be the linchpin for the rest of the project, long viewed as the cornerstone of revitalization for the blighted area dominated by automotive and industrial businesses. “We totally redesigned the project,” said Snyder. “We think it’s a viable one and we won’t have any trouble with funding, we know that already.” Snyder declined to say who he has lined up to back his project, which would be built in three phases and, if approved relatively quickly, could get underway by the end of the year. Roughly four acres of the land belongs to private parties, which, if necessary, the city could take much to the chagrin of several local business owners under its powers of eminent domain in order to secure a developable block of land. In 1997, Radford proposed a $1 billion, 43-acre development with 4.2 million square feet of offices, stores, restaurants and movie theatres; a 300-room hotel; and 10 sound stages. Last year, those plans were scaled back to a $400 million, 22-acre development, and no sound stages. Glen Hoiby, an attorney based in the NoHo district and member of a committee that tracks development in the area, is one of several critics of Radford’s initial proposal. He said his preference is a project that is balanced in scale and size that wouldn’t result in overcrowding. “I did see a brief overview of the Snyder project and it seems the plan is somewhat more practical,” Hoiby said. “It’s smaller and more of a mixed use and doesn’t have a movie theatre and seems to have a little greater potential for commercial success.” Hoiby said the fact that the city could use its powers of eminent domain has fed into the project’s long history of false starts. “NoHo has really been somewhat stagnant for many, many years,” said Hoiby. “One of the big problems all along has been getting funding for the developers and I don’t know that the city was ever really all that concerned about that.” Also threatening to scare off potential tenants for the project is a local push for a so-called living wage for those who eventually work at NoHo Commons. Radford had said that threatened to kill the project altogether. Snyder, on the other hand, said he has been in “negotiations” with living-wage advocates and “is working on a compromise that both sides can swallow.” With the deal under discussion, employees of the proposed supermarket, should it remain a part of the overall project, would be paid union wages. Stolzer said the CRA board will likely review the final Environmental Impact Report for Snyder’s development over the next few weeks, but he couldn’t predict when it would be green-lighted. “I wish I could say one month, two months, but we are really doing all we can to expedite the project,” he said.

After the hard freeze of 1999, Sunkist Growers Inc. figured to bounce back by 2001. However, today the Sherman Oaks-based citrus fruit co-op is still watching its revenue drop and its market share erode as it accuses the European Union of dumping Spanish Clementine oranges onto the U.S. market at prices lower than domestic growers can sell them for. Sunkist, which markets 65 percent of all citrus fruit sold in the U.S., claims the European Union has given the Spanish citrus industry about $15 billion in total subsidies in the past four years in an effort to gain a foothold in the U.S. market. It blames much of its 2000 revenue decline on the imported oranges. Sunkist, which last year lost $4.1 million on $846.7 million in revenue, has taken the offensive and asked U.S. trade officials to pressure the European Union to halt what it calls unfair subsidies to Spain. According to Kam Quarles, director of Sunkist’s Washington D. C. office, a 140-percent increase in imports of Spanish Clementine oranges has coincided with losses of between $12 million and $15 million for Sunkist over the past four years. “We’ve had only limited success in our efforts to identify and quantify all these subsidies,” Quarles said. The EU, however, has admitted that it built a Spanish packing plant, featuring state-of-the-art computers and packing equipment aimed at speeding up packing and shipping of citrus to the U.S. and elsewhere. But more importantly, the cost of packing and shipping Spanish citrus to the U.S. even with low-paid Spanish labor would be prohibitive without other government subsidies such as fixed fees to growers for produce, Wootton claims. The dilemma comes at a time when the Valley-based co-op is trying to put its financial house back in order after severe crop damage in the winter of 1998-99 caused about $1 billion in crop losses. While the latest trade scrap is not exactly the “War of the Oranges,” it is close, said Michael J. Wootton, Sunkist vice president of corporate relations. “There has to be a reciprocity in these trade relationships. Otherwise, we’re disadvantaged and we can only stand to be disadvantaged for so long before we become noncompetitive,” Wootton said, noting that the company does 70 percent of its business in the U.S., the remainder overseas. Two weeks ago, Sunkist asked the U.S. International Trade Commission to investigate European Union trade policies to determine whether unfair government trade subsidies have allowed Spanish Clementine oranges to flood the U.S. market. Several treaties between the U.S. and the European Union put limits on trade subsidies. Scott Mabs, director of grower services for California Citrus Mutual, a non-profit grower trade group in Exeter, Calif. which also represents growers with Sunkist, said Sunkist has a good case that could result in sanctions against the EU. “We’ve looked at the situation and it does appear that Clementines are being dumped,” he said. “It used to be that you could rebound from a freeze rather quickly. Now, with all this competition, it’s a lot harder to get the buyers back and get that supermarket shelf space back.” Sanctions or tariffs possible If the commission finds the EU violated trade agreements with the U.S. with illegal subsidies, it could impose up to 100-percent tariffs on orange and lemon shipments, or other sanctions. About 10 years ago, the commission imposed a 100-percent tariff on European citrus, but backed off when the Europeans threatened to ban U.S. wheat from Europe. Quarles told commissioners government subsidies to Spanish orange growers have severely impacted Sunkist’s navel orange operations. However, it’s unclear how much revenue the import of Spanish oranges has generated for European growers. Wootton said the U.S. has few restrictions on foreign citrus imports, giving low-cost foreign producers a leg up on Sunkist and smaller domestic citrus producers. “It’s just a question that, if we’re going to be an open market, then we need to make sure that other markets are available to us,” he said.