It’s finally under way…maybe. With one tenant in tow, Selleck Development Co. is set to begin construction on an industrial and retail complex on Van Nuys Boulevard in Panorama City. The 253,000-square-foot development will include a warehouse and distribution build-to-suit along with a restaurant and retail stores, said Dan Selleck, president of the company. Selleck has inked a deal with Universal Wilkes Co. Inc., a warehouse distributor, for a 197,000-square foot facility. In addition, the company is planning to build about 15,000 square feet of retail space. The project is across the street from The Plant, an industrial complex and retail shopping center that Selleck developed with Voit Development Co. Selleck acquired the 11-acre parcel, a former Carnation manufacturing plant, in May 1999, but the company waited to begin the project while it explored a number of options for the property. With the deal with Universal Wilkes in place, Selleck is due to begin construction next month. However, the Los Angeles Unified School District has tried to stop the project, saying it now wishes to build a school there. The school board targeted the site as part of a study of potential school locations over a year ago, but made no attempt to contact Selleck or try to purchase the property until recently. Selleck was granted a conditional use permit for the development over the objections of school board officials. “We are having ongoing negotiations (with the school board),” said Selleck. “I’ve been told they’ll be submitting an offer shortly. Obviously, timing is critical for us at this juncture.” Voit Gets Busy Semtech Corp. has selected Voit Development Co. to develop the first phase of a 220,000-square-foot corporate campus in Camarillo. The 83,360-square-foot facility is part of a three-building complex the company expects to build on the 13-acre site. Among the amenities Semtech is including in its new corporate headquarters will be a half-court basketball court, weight room and exercise room. “One of the key elements behind Semtech’s success has been attracting the best engineers,” said Tim Regan, project manager for Voit. “That means offering not only a great compensation package, but a great facility.” Semtech, a manufacturer of analog semiconductor chips, will move from Newbury Park. The first phase of construction is scheduled to be completed by July 2001. Poliquin Kellogg Design Group is the architect on the project. Sun Valley Deal An investment group that includes two of the brokers who handled the transaction has acquired a 75,000-square-foot industrial facility in Sun Valley for $4 million. The multi-tenant industrial park at 9960-9900 Glenoaks Blvd. sits on a 3-acre parcel of land. The investors include Ross Thomas and Michael Hooker, both with Delphi Business Properties. Thomas represented the buyers and the seller, G & G; Business Center. Fast Sale Turbonetics, a manufacturer and distributor of turbochargers, has acquired a 21,700-square-foot industrial facility in Simi Valley for $1.8 million. The company plans to use the building, at 2255 Agate Court, for research and development, assembly and distribution. Turbonetics will be relocating from Moorpark. Craig Weisman, a broker with TOLD Partners, represented the buyers. Stuart Scott of Daum Commercial Real Estate Services represented the seller, Alan Pocrass. Chatsworth Lease InfoLink Screening Services Inc., a company that provides background screening for job applicants and employees, has leased 18,000 square feet of office space in Chatsworth. The company will relocate its corporate headquarters, now in Encino, to the new facility at 9201 Oakdale Ave. this month. The seven-year lease is valued at $2.6 million. Sheryl Mazirow of Grubb & Ellis represented the tenant. Bennett Robinson of CB Richard Ellis represented the landlord. Apartment Market Strong Buoyed by vacancy rates of 4.4 percent, apartment rents in the San Fernando Valley inched upward to an average of $818 per month in the first half of 2000, from $805 per month at the end of 1999, according to a recently released report by Marcus & Millichap Real Estate Brokerage Co. The Marcus & Millichap report found the highest Valley rents in Glendale, Studio City, Encino and Woodland Hills. Investment sales activity also rose in the first half of the year. About 177 sales totaling $303 million were transacted during the period, compared to 166 sales totaling $276 million for the same period in 1999, according to the report. Marcus & Millichap cautioned however that activity may slow as sellers raise their asking prices to levels higher than many buyers are willing to pay. News and Notes Maclauren Properties has acquired a 14,000-square-foot parcel in Van Nuys for $425,000. Ron Feder with R.J. Feder & Associates, represented the seller, Armand & Judith Grant Trust. Bill Sherwood at Coldwell Banker Commercial represented the buyer. R.J. Feder also brokered a 4,500-square-foot lease to Parts in Motion, Inc., a computer parts company, at 21018 Osborne St. in Canoga Park. California Bank & Trust will relocate its Encino retail banking offices to a 3,192-square-foot location at 16130 Ventura Blvd. in Sherman Oaks. The bank was represented by Ari Waldstein of NAI Capital Commercial. The lessors, M. David Paul & Associates, represented themselves in the deal. Staff reporter Shelly Garcia can be reached at 818 676-1750, ext. 14, or by e-mail at [email protected].

The on-screen contestants in last summer’s “Survivor” weren’t the only ones stymied by their location. “You could get lost very easily at night with absolutely no bearing, especially when it was raining,” says Matt Battaglia, an engineer with Wexler Video, the Burbank-based video equipment company that wired Palau Tiga, the remote island off the coast of western Borneo where all the action took place. “It was tremendously muddy and rainy.” The island is five kilometers long, a kilometer wide and dense with forest canopies and footpaths barely wide enough for a single person to walk. “You would walk down a trail, look back and it didn’t look the same,” he says. “It wasn’t a place you would want to spend any length of time.” The tropical island presented a host of challenges for Wexler Video, most significantly protecting equipment from the damaging effects of humidity and salt water. Battaglia was on the island months ahead of the actual shoot with “Survivor” producer Mark Burnett’s crew to decide what equipment was necessary: which special backpacks would protect the cameras for transport, what special procedures would be required to de-humidify the equipment after each shoot and what would be needed for special cleaning procedures. “There are hundreds of pieces of equipment to choose from,” says Battaglia. “We had to research and put together the best equipment for the job.” As it was, over 81 cases of equipment were sent to the island, including cameras, wireless microphones, TV monitors, playback machines and Avid editing systems. Chris Thompson, president of Wexler Video, says his staff spent about two and a half months preparing for the show, purchasing, testing and picking out what would and what wouldn’t work. “We put our equipment to a special program to make sure it was ruggedized and would work, or they wouldn’t have a show,” he says. Reality TV pioneer Wexler Video has carved out a niche for itself, supplying video equipment to the reality TV industry for more than a decade. The company was established by CEO Robert Wexler in 1984. The beginnings consisted of a simple store-front equipment video rental company in which Wexler did most of the work himself. “We started out as more of a general service rental company in as much as we had a broad spectrum of rental equipment,” says Wexler, whose first major account was the 1984 Summer Olympics in Los Angeles. The opportunity to enter the world of reality TV came a decade ago with an “out of the blue” phone call from Bunim-Murray Productions. “We basically helped them set up their first ‘Real World’ house for MTV,” says Thompson. Since then, Wexler has created solutions for a multitude of “Real World” challenges, specializing in creating the unobtrusive technology required for the show. “In a recent episode, they took a bunch of kids into a spooky, dark, abandoned prison in which we put 45 cameras,” says Thompson. “It worked real well, so well in fact that a few of the kids fled in the first few hours,” says Thompson. John Murray, president of Bunim-Murray Productions, has high praise for Wexler. “Not only have we needed equipment, but answers and new ideas as well,” Murray says. “We’ve learned so much together that going with someone else now would be like getting a divorce.” Wexler has provided equipment and expertise for many other reality TV shows, including “Eco Challenge,” “Bug Juice for Disney,” “Road Rules” and the highly successful “Cops.” Unflattering images Battaglia says, “Initially for ‘Cops,’ we had a camera in the back of the squad car, but the back of the cops’ heads wasn’t a flattering shot. “We had to come up with a system to shoot the two officers in the front with a portable miniature camera and a recording system that would go in any police car,” he says. “We successfully integrated off-the-shelf stuff to make a system that was basically portable.” Back on Palau Tiga, video photographer Biff Bracht and his wife Alicia Alexander spent the entire two months with the Survivor contestants. “Wexler’s equipment was great stuff,” says Bracht. “It really took a beating and held up under the most brutal conditions.” Wexler Video was asked by Survivor Productions to create equipment for its “Survivor II” series in the Australian outback, but turned down the opportunity. “There are so many reality-based shows in this area that I see no reason to put our stuff through those rigors again,” says Thompson. “This is a business and putting the equipment and our staff in the riskiest of situations is not the direction I would like to take the company. So, if I have a choice of situations, I will choose the situation that makes better business sense.” As for the show itself, Thompson says he knew it was going to be big, but not the phenomenon it became.

docusource inc. competes with some of the largest copier companies in the United states, and manages to keep its clients coming back for more Xerox Corp. may be the Goliath of the copy machine business, but Docusource Inc. has found that, with the right attitude and ammunition, you can take on the giants. The Chatsworth company sells and leases what its executives see as the best office copiers on the market, backed up with a guarantee of fast, efficient service. The seemingly simple formula has allowed the independent to grow revenue 700 percent in the last eight years. Today, Docusource has 1,500 machines in the field cranking out an estimated 30 million copies a month. The company’s goal is to grow revenue from $21 million in 1999 to $100 million by 2007. “It’s a huge marketplace dominated by Xerox, but we find we can compete very effectively,” said Lester Walker, chief executive and partner. “We’re not necessarily a price leader, but we provide the best service.” With offices in Chatsworth, Irvine and Rancho Cucamonga, Docusource has positioned itself to go after the estimated $2-billion copy machine market in Southern California. The company’s commitment to service is illustrated by the fact that 30 of its 105 employees are roving service technicians who take care of 300 clients in L.A., Orange, Ventura, Santa Barbara, Riverside, San Bernardino and San Diego counties. Docusource guarantees that its machines will be up and running 95 percent of the time and that its technicians will be on the job within four hours of a call. “This is mission-critical equipment,” said Walker. “Companies can’t afford to have it down.” One of the keys to the company’s success is its cost-per-copy plan, which accounts for more than 50 percent of sales, said Walker. Instead of buying a machine, a company leases the equipment based on the number of copies it uses. That gives executives the flexibility to switch to larger or smaller machines depending on their copying needs. “Executives like it because it frees them from being in the equipment business,” said Walker. Too much down time Joe Serra, a buyer for Yamaha Motor Corp. USA, said poor service was his biggest frustration with Xerox and the reason his company switched to Docusource to take care of a large part of its copying needs. “I was spending two hours a day of my own time trouble-shooting equipment, and that’s not good,” he said. Docusource has made good on its promise of fast service and 95-percent uptime for its equipment, and through the cost-per-copy plan Docusource takes care of all the service and supplies, including paper and toner. “It really cuts down on the paperwork. We ended up getting five machines, and we only have to cut one check a month,” said Serra. As an independent, Docusource isn’t bound to any one manufacturer, so it sells what its executives believe are the best copiers in the business. Walker is quick to admit that Xerox, the company’s biggest competitor, makes the best high-volume copier. So the company buys used Xerox machines and completely rebuilds them at the company’s De Soto Avenue headquarters. RICOH, on the other hand, was the first company to make a laser copier that ties directly to a company’s computer network. Companies increasingly are switching to laser machines to avoid the extra steps of printing a document and having to walk it over to the copier. Canyon can’t be beat for color copying, says Walker, so the company offers those machines as well. “This level of equipment allows us to play in a bigger environment,” he said. Docusource’s target market is large corporate clients, such as CB Richard Ellis, Fox Television and Hilton Corp. When a company wants to upgrade to newer or better machines, Docusource will offer to buy their old equipment. The company then fixes up the old machines and ships them off to brokers in the Middle East or Latin America. The wholesale division accounts for 25 percent of sales. Walker concedes that in a business dominated by Xerox it can be tough convincing executives from a large company to go with a relative unknown. “Nobody gets fired for buying from Xerox,” he quipped. But unlike other independents, Docusource has the sophistication in sales and marketing to go after the big-name clients and the service to keep them happy after the sale. Taking on IBM Walker, who previously worked as a turnaround specialist for Deloitte & Touche, was a consultant to Docusource for four years before joining the company as CEO and a partner in January 1994. “I realized this could be a $100-million business,” he said of the opportunity. The other owners, Dave Marder and Jon Rashap, brought sales and marketing savvy to the partnership; Walker brought his business expertise and banking contacts that he used for a needed infusion of cash. In 1998, the company took on two additional partners, a couple of long-time independent dealers out of Orange County named Craig Wiegman and Jerry Ruppert. The move gave Docusource a bigger foothold in the lucrative Orange County market and doubled the size of the company. Tom Kardashian, a San Fernando Valley-based business executive, said he got to know Docusource through The Executive Committee, a group of CEOs that act as sounding boards for one another. He attributes the company’s success to the drive and focus of its partners.

challenging times for the president and ceo of an insurance company doing big business in the san fernando valley Bruce W. Marlow has his hands full. Since assuming the post of president and chief executive of 21st Century Insurance Group in February, Marlow has dealt with rising costs, declining earnings and the possibility that claims dating back to the Northridge earthquake may be reopened. As if that weren’t enough, the recent resignation of Insurance Commissioner Chuck Quackenbush amid allegations of impropriety has cast a critical eye on the insurance industry. It is against that backdrop that Marlow is attempting to change Wall Street’s perception of the company from its stodgy, old-school roots into a new-economy business able to attract and hold the attention of investors. The $870 million company based in Woodland Hills carved a niche for its auto and homeowner insurance business by selling directly to consumers. By eliminating the middlemen (insurance agents), the company says it is able to operate with lower costs, passing those savings on to its customers. The strategy served the company well, until recently. As competition has forced auto insurance premiums downward, 21st Century’s earnings have suffered dramatically. For the second quarter ended June 30, the company reported net income of just under $5 million (6 cents per diluted share), compared to net income of nearly $32.9 million (38 cents) for the like period a year ago. Revenues rose only slightly to $218 million for the quarter, compared to just under $212 million a year earlier. The earnings performance continued a downward spiral that began in 1999. On Sept. 14 of this year, 21st Century announced it would cut dividends payable on Oct. 5 by half, to 8 cents a share, as a result. The company also wants to institute higher auto premiums in California by 6.4 percent, along with other cost-cutting measures. More threats to the bottom line loom. State legislation that goes into effect next year will give homeowners an additional year to file earthquake-damage claims, potentially opening 21st Century and other insurers to new claims. Wall Street reacted sharply to the passage of the legislation this summer. On June 30, shares of 21st Century tumbled to $15.75 from a 52-week high of $23 on May 1. While Marlow keeps one eye focused on boosting the bottom line, the other is turned to the company’s online strategy, an element he feels is crucial, not just for boosting profitability, but also for re-establishing 21st Century’s presence on Wall Street. Question: How will the legislation extending the statute of limitations on earthquake claims affect you? Answer: Within hours of the earthquake, literally by 7 a.m., people were in the parking lot here, because the building was damaged, issuing checks to pay for their additional living expenses. This is a company that did everything it possibly could, performed in an extraordinary manner to service its customers, lived up to all of its commitments, even though living up to all those commitments basically spent the company out of existence. It spent well more than the equity that was in the company. This company complied with its contracts, complied with the law. Now somebody’s decided, well, those rules, those agreements, those understandings that you’ve conducted business under are now changed, and we’re changing them, not on a going-forward basis, but changing them six years later. It’s like watching a sporting event and saying, “We don’t like the outcome, so let’s play another quarter. Let’s add a few more innings onto that baseball game.” Q: Isn’t the intent of that bill to make sure that those who feel they didn’t get a fair hearing on their claims are able to do that? A: The basic facts of the Northridge earthquake for 21st Century were that the company had over 46,000 claims. The company paid over $1.1 billion in losses. It’s very hard to look at those facts and think that somebody was trying to do anything other than the best job they could for consumers. If you have 46,000 claims, it’s unlikely that all 46,000 of those people are going to be 100 percent satisfied. I don’t think it’s possible to do anything 46,000 times and have everyone be 100 percent satisfied. At this point in time, we have less than 50 claims outstanding. If there was a real pattern of wrongful behavior, I think we could rely upon the legal system to have taken us to task on that. It hasn’t happened. We’re going to comply with the law. Q: These issues seem to have affected your stock price nevertheless. How do you deal with that as a CEO? A: The stock price for 21st Century dropped in early June as the issues of the retroactive reopening of earthquake claims came up. That’s perceived in general by the stock market as a pretty extraordinary event, and one that creates concern for them, for us and, I think, will be a point of concern for any other company that’s California-based. I think, in general, the stock market has always been demanding of steadily improving performance. But I think what’s new now is that the market really wants to understand what the vision is for the company. Is there a future? There’s a big divide between Old Economy and New Economy. You can see great names, great companies that some of us grew up with that have now become completely marginalized. Then you have New Economy companies which seem to have just a terrific future. So as a CEO of a public company, what I need to communicate and what I need to demonstrate in the performance of the company is what the future will be. Q: What is the future for 21st Century? A: The future for 21st Century will be as a consumer-driven organization that serves consumer needs in a highly efficient and attractive manner. 21st Century is a company with a great franchise and a great reputation among consumers. It has a very low-cost operating position, but it has an opportunity, with the development of the Internet, to become a much bigger company. It allows you to shop for insurance and understand what different prices are and do it at your leisure, when you have time to do it. It’s, at most, two to three years that we have to demonstrate that we are not going to be an Old Economy company that will just be marginalized, but can in fact offer a pretty dynamic product and set of services to our customers. Q: What has caused the decline in profitability and how do you hope to reverse that? A: The reason is fairly straightforward. There was a decision made to cut prices at a time when the basic cost to settle claims was increasing. On a going-forward basis, we need to address both those issues. I’ve been in the insurance business for 25 years. This is a difficult challenge, but it is something we understand how to do. We’re confident we can return this company to a high level of equity and strong pattern of earnings growth. Q: How much progress have you made so far on delivering your product over the Internet? A: There’s already a Web site available that allows a consumer to do quite a few transactions. You can go to the Web site and get a quote and buy a policy, and it will take you about 20 minutes. Q: What remains to be done? A: We want the site to provide more guidance to people, so they understand what their range of choice is. We want the site to handle most of your routine transactions, so if you’re changing a car or if you’re changing your address that it can comprehensively handle it immediately at the site. Q: What will it take to implement those features? A: The issue is, it’s a different experience. How you handle a customer when they call on a telephone and what kind of information you provide to them in what sequence is different than when a customer comes in on the Internet, so there is a significant element of tuning that has to go on. We do customer focus groups and we take people and put them in front of a computer and ask them to do something like buy a policy and let them work on our site and let them work on competitors’ sites and just see which way seems to work the best for them. Q: Do you think that the resignation of Insurance Commissioner Chuck Quackenbush has affected consumers’ perceptions about the insurance industry? A: I don’t think consumers are necessarily connecting Quackenbush to the insurance industry. And there haven’t been very explicit statements as to what’s gone on. I think consumers are wary about everybody. I think consumers are wary about their elected officials. I think consumers are wary about the government bureaucracies. I think they’re wary about the companies they do business with. I don’t think as a consumer today that you feel you can rely on anyone to really be your protector. So does it increase their sense of concern on their part? I’m sure it does.

Franklin’s Hardware has been a Woodland Hills institution since 1952. Chip Kurzeka has been part of that tradition since 1982 when he bought the business from his father. With new Home Depot and Orchard Supply stores moving into his territory over the last couple of years, competition has been fierce for the Ventura Boulevard store. But Kurzeka survives by paying close attention to his affluent customers and catering to their demand for specialty products and services. Contributing reporter Christopher Woodard talked to Kurzeka about the challenges of running a mom-and-pop operation in a highly competitive market. “My dad bought the store in 1969. It was pretty much a general store in a sense. There were greeting cards and sporting goods and about half the store was housewares. As a kid growing up, I’d help my dad run his store, and going into the family business just seemed like a natural after I finished college. “My biggest challenge starting out was learning how to buy and how to price merchandise. One of the most important things I learned was where to find merchandise to take care of customers. “My biggest challenge today is making a profit. Rents are expensive, workman’s comp has gone through the roof and we pay a lot of business taxes. It’s real difficult. We lost a portion of our business (when Home Depot and Orchard Supply moved into the area a couple of years ago). I had to cut back my staff by a couple of people, but now we’re starting to grow again. “We’re able to compete because we have a very high service level. When a customer comes in, they get someone to greet them and say hello. Customers get someone to show them where merchandise is and, if we don’t have something, they don’t get a flat, ‘No, we don’t have it.’ We’ll see if we can find it for them. “We serve an affluent community. Our customer demands can be great, but we try to live up to that. We sell specialty fixtures. We do a lot of service work: screens, re-key locks, cut window glass. We do a lot of those types of things that people are willing to pay for. We try to carry quality, higher-end merchandise, not a lot of imported stuff. It allows you to get the price up and also the margins. “We try to do what we do the best that we can, and we’re always looking for new niches. We’re looking at putting in a UPS shipping station to attract more customers. Our biggest advantage is that we can adapt and change quickly. Our hands are not tied by a corporate structure.”

Free Internet service providers have traditionally offered subscriber databases as their most attractive asset to advertisers. But Westlake Village-based NetZero Inc. goes beyond that, trumping its in-depth profiles of subscribers’ online behavior to the point where it is guaranteeing advertisers an increase in hits. Web surfers know their every click around the Net can be observed and shared with advertisers. But how much does Big Brother really know? Everything, if you’re a registered user at a free ISP like NetZero. And it is because of not in spite of this watchful eye that NetZero stays afloat in the fast-diminishing free ISP market. Now, NetZero is dangling an unusual carrot in front of new advertisers. It is offering a guaranteed 33-percent increase in Web site traffic for new, qualifying advertisers. NetZero’s technology allows it to monitor the increased visits to an advertiser’s site during the advertising campaign. The traffic flow will be measured and compared to the four-week period before the campaign began. If the promised increase is not realized, NetZero will give the advertiser an additional 33 percent of purchased impressions spread over the following month. Like many growing Internet companies, NetZero is posting ever-larger net losses, $26.9 million (27 cents per diluted share) for the second quarter ended June 30 vs. a net loss of $8.2 million (72 cents) in the year-earlier quarter. Nonetheless, advertisers appear to be buying. For the second quarter, NetZero reported revenues of $18.7 million, up from $16.9 million in the first quarter ended March 30 and way up from $3.7 million in the second quarter of 1999. “Of all the free ISPs, NetZero is the best at monetizing traffic,” said Goldman Sachs Group Inc. analyst Vik Mehta. “They’re not only bringing new users in, they’re providing advertisers the ability to reach out to them. In doing so, they’re providing a value, and that’s what the whole business is about.” “NetZero is leading a charge to greater knowledge of audience,” said Jupiter Research analyst Marissa Gluck. “The online advertising market is looking for greater efficiency, so being able to know your audience is incredibly important.”

Local developers have acquired La Reina Place in Sherman Oaks with plans to pump about $1.5 million to $2 million into a major renovation of the shopping plaza. Golden West Properties and Jade Enterprises in L.A. acquired the 60,000-square-foot center from Japanese investors, Robert Dollar Building, which had had owned it for about 15 years. The purchase price was not disclosed. “That portion of Ventura Boulevard is the busiest portion of Ventura Boulevard,” said Tom Pashaie, a partner with Golden West Properties, which has developed about a half dozen centers in the central San Fernando Valley, including the popular Encino Place. “That was attractive because of the constant foot traffic as well as auto traffic.” The area, roughly bordered by Van Nuys Boulevard and Kester Street, sits at the heart of Sherman Oaks, but it languished through most of the 1990s, attracting a hodgepodge of tenants. While national retail tenants moved into Studio City to the east, they bypassed the Sherman Oaks area. But the La Reina facelift, coupled with the renovation under way at the Sherman Oaks Galleria, could substantially change the complexion of the area. Both centers are due to be completed in the fall of 2001. “From a positioning standpoint, La Reina is probably ground zero,” said Greg Whitney, senior associate with Grubb & Ellis Inc. brokerage. “There’s some upside and potential to do better things.” Piecemeal expansion Built about 50 years ago, the focal point of the center is an art deco theater, from which the center draws its name. But since then, the center was expanded piecemeal, and the developers now hope to carry the art deco theme throughout the project. A stairway that cuts the center in two will be replaced with a large fountain, and the outdoor seating in front of the center will be expanded and made more uniform with landscaping. Pashaie likened the design to the look of the outdoor seating section at Sunset Plaza in West Hollywood. The developers also plan to revamp the second floor of the center to make the shops more visible from the street, “so the building will have more presence and mass,” Pashaie said. “The front would be more like terraces in France or England, and there would be seating and benches and flowers on the second floor.” Other touches will include columns, glass banisters and a large clock. Apparel shops The retail lineup, which includes Starbucks, Noah’s Bagels and Topz, will stay the same, although Pashaie said that he would like to bring in some upscale apparel shops as current leases expire.

You would think a company that has grown its revenues 273 percent since going public in 1995 would be ready for a breather, but not MiniMed Inc. The company, which makes insulin pumps and other products for diabetics, is moving from Sylmar to a $70 million biotech center at Cal State Northridge. The move will triple the floor space to 654,000 square feet as the company prepares to boost its manufacturing and support personnel from 1,400 ultimately to 4,500 workers. “When we moved into our Sylmar facility I didn’t think we could fill it up. Then all of a sudden we were out of space,” said Kevin Sayer, the chief financial officer. “Now we have a lot more room to grow.” MiniMed’s insulin pumps, smaller than most pagers and costing about $4,500 each, allow diabetics to administer insulin to themselves in smaller, controlled doses without having to whip out a syringe. The company has taken off as more diabetics have come to appreciate the convenience and benefits of using a pump to control their disease, said founder Alfred Mann. “We’ve created some products that make a major difference in people’s lives, products that improve quality of life and reduce the risk of long-term damage from diabetes,” said Mann. “That’s pretty exciting.” Up until the early ’90s, MiniMed was a money loser, but Mann was convinced that insulin pumps would catch on among diabetics. Certainly, the pumps were more convenient than using a syringe, but Mann also believed the pumps provided a more effective treatment for diabetes. A study published in the New England Journal of Medicine in 1993 backed up Mann’s theory. Researchers found that diabetics face fewer dangerous complications such as heart disease, kidney failure and blindness if they monitor their glucose more intensely and inject insulin more frequently. It took about two years for the benefits of so called “intensive therapy” to filter down to doctors and their patients, but once word began hitting the street, MiniMed’s revenues, and fortunes, took off. After losing money in 1994, the company earned 6 cents a share on $56.9 million in revenue in 1995, starting the company on a growth spurt that has never stopped. By the 1999 fiscal year, the company was earning 70 cents a share on $212 million in revenue. In the second quarter ended June 30, net income was $8.6 million (13 cents a share) vs. $4.9 million (8 cents a share) for the same period last year. “I think we’re very well positioned from a product perspective,” said Sayer. In fact, the company has several other products in its pipeline, but the one closest to release is a device that will allow diabetics to constantly monitor their glucose levels without having to continually prick their fingers. Once the monitor hits the market, most likely by next year, MiniMed will create a treatment option that should substantially increase its market share, said Phillip Nalbone, an analyst with Salomon Smith Barney. “Add the glucose sensor to the pump and you have a very powerful product,” said Nalbone. MiniMed also has partnered with Eli Lilly & Co. to produce a disposable insulin cartridge for the company’s insulin pumps. It makes refilling the pumps more convenient and allows MiniMed for the first time to book revenue from insulin. Sayer doesn’t expect approval from the U.S. Food and Drug Administration until 2002. The company is also seeking FDA approval for a disposable patch designed to treat people with type-2 diabetes, the most prevalent form of the disease, which strikes people later in life. Considering Americans are growing fatter and more sedentary every day, and the number of new cases of type-2 diabetes is skyrocketing, so could the market for the patch. The incidence of the disease increased 33 percent nationwide between 1990 and 1998 and about 800,000 new cases are diagnosed every year. Experts say roughly 3 million people in the United States with type-2 diabetes need insulin injections to prevent some of the damaging side effects of the disease, such as blindness and circulatory problems that can lead to amputation. Mann is also excited about an implantable pump and glucose monitor that is currently being tested in animals. The device would create the first closed-loop system that controls insulin levels like the body’s own pancreas.

For years, Wizard of OsZ was the place small San Fernando Valley businesses went for their first computer and came back to when they didn’t know how to use it. Started before even the first IBM personal computer went on the market, the company transitioned through the years to become a maker of its own brand of computer and seller of software. But in the last month, the Chatsworth computer reseller was sold to Bill Harder who has replaced the well-known OsZ name with the less quirky HarderTech and plans to regear the business toward the computer consulting and networking market. “They’ve kind of been an icon for some time,” Harder said of the buyout. “But the company has been on a down slide. I intend to build it back up.” Harder said he wants to turn the company around with a new focus and to grow revenues from $1.5 million in 1999 to $3.5 million in the next three years. Harder bought Wizard of OsZ for an undisclosed price from Michael Adackapara, a chemical engineer who was running the company as a side project. Adackapara had been shopping the company around for the last four months so that he could focus on his chemical engineering career. He could not be reached for comment. At the same time, Harder was searching for a computer consulting company that he could buy. He had recently turned business around for North Hollywood-based MKA Systems, a computer consulting firm, where he doubled revenues in his four years as general manager. “I decided I wanted to do it myself this time,” Harder said. “It’s a lot easier to start a business from an established one than from scratch.” When Harder took over business in September, OsZ had just four of its 13 staff positions filled and was consistently losing a number of its 3,000 clients. Loyal following Since its inception in 1981, Wizard of OsZ had grown a loyal audience among Valley computer users and techies. At times, it was one of the only computer stores in the Valley. Art Schlefstein started the company shortly after he bought his first Osborne computer, a precursor to the PC. The Osborne, which sold for a pricey $1,795 in 1980, was a “luggable” machine with a 5-inch black-and-white screen that ran a word processing and database program and could be moved from location to location. “It was the first good business computer to come out with software and a complete package,” Schlefstein said. “Before with the Apple, you had to buy the keyboard and everything separate and there was no software.” Schlefstein had put his name on a waiting list and bought one of the first Osbornes sold in the L.A. area. But after getting it home, he couldn’t figure out the first thing about how it worked. A programming friend helped him get started and eventually wrote a networking program for the Osborne that allowed access to a bulletin board system where Schlefstein could download other software and connect with other users. Before long, Schlefstein was getting requests from other Osborne users for copies of the networking software. About that time, he formed Wizard of OsZ, the name suggested by a lawyer friend and meant to relate to Osborne computers. “It was a stupid name for a company,” Schlefstein said, “but we were just having fun at that point.” Giving way to Microsoft In the first few years of business, Wizard of OsZ developed a national customer base for its software programs made for the Osborne computer. The company got into the manufacture of games and graphic design programs and had a groupie following among programmers. But by 1983, the PC had arrived on the scene and it was clear the Microsoft DOS operating system would obliterate the Osborne. Schlefstein switched the focus of his company from a software maker to a hardware seller, but kept the OsZ name. Eventually, the company began making its own computer systems and selling them under the OsZ computer name. “It took off,” he said. “People heard about us through word of mouth and the fact that we were so big in Osbornes.” Schlefstein sold the business in 1998 after being diagnosed with cancer. As for the name change to HarderTech, he said it’s sad, but he is hopeful that Harder can turn the business around. “I’m surprised he decided to change the name since that is why he bought it,” Schlefstein said. Harder said he decided on the name change because the company’s focus is now on networking and software consulting. “A certain number of people thought the company was a gaming company,” he said. “And 90 percent of our business is corporate and Wizard of OsZ didn’t exude a lot of confidence.” Harder said he will focus on building the staff and luring back clients who have left the company over the last couple of years. He will target businesses with under $50 million in revenues and train them to better utilize their computer systems and software. “Small to medium-sized businesses generally don’t have a full-time computer support staff but need specialization in different areas,” Harder said. “We want to help our clients take their computers to the next level beyond Word and Excel and into information management. Then they can have access to information that will help their decision-making.”

Bud Burgquist’s father, now 82, started the Green Thumb garden shop on Sherman Way in 1946. In those days, Canoga Park was mostly farmland and Sherman Way was the only business district for miles around. The Green Thumb, which Burgquist is now a partner in, is still on Sherman Way, but the shoppers and farms are gone. Today, Sherman Way is a collection of billboards, neon signs and a mishmash of storefronts that make it look like a down-and-out Midwestern town. “We have an old downtown that’s been around for a while,” Burgquist said. “It’s kind of worn out.” Now, business and property owners in the area want to take the district back to the past, boost pedestrian traffic and window shopping and make it more of a destination point, something like Santa Monica’s Third Street Promenade or Old Town Pasadena. Since the 1994 Northridge earthquake, they have banded together to apply for federal and state grants, forming a business improvement district to revitalize the stretch between Canoga Avenue and Topanga Canyon Boulevard. This past month, they took another step: getting the L.A. City Council to approve more restrictive rules in the first zoning overlay district in the city. Bans on businesses painting buildings in fluorescent colors, new automotive service businesses opening on Sherman Way, all new billboards and lighted signs are among a host of regulations meant to make the area more people-friendly. Sherman Way business owners are blunt about the longstanding condition of the area. “Without (the overlay), it’s a hodgepodge of crud,” said Rocky Rhodes, owner of Rocky Roaster, a coffee shop at Canoga Avenue and Sherman Way, and president of the Canoga Park Main Street Association. The plan will likely take some time before yielding visible results: The new zoning regulations are only enforced when an existing business does a major expansion to the premises or when a new business moves in. “We want to restore the old town atmosphere,” said Burgquist. “The community overlay is a template. It causes a situation where people who have businesses have to make them look like they are a part of the area.” Business and property owners pushed for the district. The effort started four years ago when the city planning department, while updating the community plan, began holding focus groups with Canoga Park residents. Jim Holmes, planning associate with the planning department, said it became clear people wanted to clean up the commercial area. With community input, the department set the guidelines for what would be acceptable in the overlay zone, a rectangular portion of Canoga Park along Sherman Way from Canoga Avenue to Topanga Boulevard and from Sherman Way north to Wyandotte Avenue. The planning department had been looking at overlay districts for Los Angeles after such districts had yielded favorable results in cities like Pasadena, where they had been used with business improvement districts to enforce a certain design look. Holmes stresses that the overlay only complements the business improvement district and other revitalization efforts. But it offers a way to enforce BID efforts. “They are one small piece of revitalization,” Holmes said. “Five or six or 10 years down the road, they will have had a fairly substantial impact.” By then, businesses will have to maintain at least 70 percent of their building facades as window space on the sidewalk, meant to induce window shopping. And the hope is that most billboards will be gone, along with the tall, brightly lit signs that tower over buildings. So far, there has been little opposition. And that lack of opposition is one reason the planning department moved forward with overlay plans, Holmes said. Another was that Canoga Park already had other revitalization efforts in place. The area also has been designated as a “main street” by the state, qualifying it for grants to improve everything from school facilities to sidewalks. “For me, this is another element to help Canoga Park become a very vibrant and viable business community in the city,” said Councilwoman Laura Chick, whose district covers Canoga Park. “My hope here is that the design overlay encourages businesses to be part of a team effort and to create a look that draws customers, that draws people.” While business and property owners stress the cohesive look that the overlay will eventually create in the area, Chick and Holmes say the guidelines allow for some variation and individuality. Rhodes said he has heard little dissent among fellow business owners about the Canoga Park Main Street program. “I think everyone here would like to live in a better neighborhood,” he said. “Business owners may grumble, but for the most part they’re for it.”