For more than 30 years, thousands of residents of the entire San Fernando Valley have looked to the Valley Community Clinic as their ‘family doctor.’ The Clinic is a private, non-profit organization whose services are provided at little or no cost to individuals who can’t afford alternative care the uninsured, unemployed, students, struggling artists, and low-income families who have fallen between the cracks of the health care delivery system. Bit by bit, inch by inch, the Valley Community Clinic building has been restructured, reorganized, and remodeled to make the best possible use of the available, but limited, space. Each year, it gets a little bit more difficult to squeeze in all the patients who need services. Last year, the Clinic provided over 47,000 patient visits at its North Hollywood site (compared with 21,550 visits in 1996). In the fall of 1999, for the very first time in its 30-year history, the Clinic stopped accepting new primary care patients. “We have a highly trained staff; we have supplies; we are open evenings and Saturday, but we just don’t have the examining rooms or the waiting room space,” Ann Britt, President & CEO, lamented. “Just last month, the Clinic remodeled again, turning three counseling rooms into medical exam rooms. This lessened the immediate squeeze on the medical programs, but at the expense of another desperately needed program, mental health counseling. These are tough choices.” The Clinic has been developing a 5-year, long-range plan to address the critical space problems and community needs and is looking to double its current size. They are now considering several possible sites for this expansion. One consideration includes a possible new facility as part of the 1.8 million square foot NoHo redevelopment project headed up by developer J. Allen Radford. Located between Magnolia and Chandler, right off Lankershim Blvd., they are also looking at another possible site in Sun Valley with local developer, Arthur Sweet. “Our Board of Directors and staff are very committed to making expanded access a priority,” says Britt. “Then I always remind them that the real work lays ahead…fund raising to make all this happen!” Information for this article was provided by the Valley Community Clinic.

Heart attacks and coronary heart disease are the leading cause of death for men and women in the U.S., taking nearly 500,000 lives annually. Every 33 seconds someone in the US dies of heart disease and 30% will have no apparent risk factors. Calcification is a recognized marker for coronary artery disease and often occurs early in the plaque formation. Other risk factors include high cholesterol, high blood pressure, smoking, family history of heart disease, inactivity, diabetes, and obesity. Fortunately heart disease if often treatable, and early detection can play a major role in the prevention of heart attacks and other coronary events. The problem is that the methods for the detection of coronary artery disease are often invasive, painful, and expensive. Westlake Diagnostic Center offers coronary artery screening exams that detect calcium in the arteries. This new state-of-the-art technology for evaluation of coronary calcification uses very fast sub-second spiral CT scanning to detect the amount of calcium in the arteries that feed the heart. The amount of calcium is measured and given a score. Calcium scoring is a direct indication of the level of atherosclerosis, or hardening of the arteries. Studies have repeatedly shown a very strong correlation between this score and the risk of coronary artery disease. According to a study presented at the 47th Scientific Session of the American College of Cardiology, coronary artery calcification detection is a strong, if not the strongest risk predictor, of having a heart attack in asymptomatic patients. This new exam is quick, painless, and does not require any needle injections, fasting, or other preparations, and lasts about 20 minutes. If calcification is detected, there is at least some coronary disease present. Together with other risk factors, this information will help the physician in choosing the appropriate management for the patient. Board certified radiologists interpret the exam and the results are mailed directly to the patient and their personal physician. If the patient is self referred and doesn’t have a physician then the radiologist will ask the patient to select a cardiologist from the cardiology panel, for further evaluation. Roy Gottlieb, D.O. is Medical Director for Westlake Diagnostic Center, a full service imaging center that also offers MRI, CT, mammography, ultrasound, bone densitometry, fluoroscopy, and general radiology.

As a physician, Dr. Kenneth Hoffer is a bit of an oddity. He has never had to wrangle with health maintenance organizations or managed care contracts. He hasn’t had to deal with the AIDS epidemic or the uninsured, and he hasn’t been affected by the county health care crisis. Although he doesn’t work on the front lines of medical care, Hoffer, a Santa Monica ophthalmologist, was recently elected president of the Los Angeles County Medical Association. His election comes at a critical time for the organization, which has steadily been losing members over the last decade, from a high of 10,360 in 1988 to 7,425 last year. By his own account, Hoffer is a bit of an aberration for the job. The 56-year-old physician prefers to travel by train rather than by plane. He is a solo-practitioner who has worked since 1974 as a specialist in cataract and lens-implant surgery. Many of his clients are either from well-to-do households or covered by private insurance. He is also the first ophthalmologist to be elected president of LACMA. He admits he doesn’t know much about the AIDS epidemic, public health or HMO contracts. But those issues have little to do with his main goal: to streamline the county medical association’s structure. He hopes to combine the organization’s two governing bodies into one. LACMA is overseen by a board of trustees that handles financial matters, and a council that handles policy. They meet on separate days, have different members and don’t coordinate their activities well, Hoffer said. Having one group that handles both finance and policy would be better for responding to the concerns of local doctors disheartened by the HMO system and their low reimbursement rates, he said. Many physicians felt LACMA should have saved them from being trapped in low-paying HMO contracts, Hoffer said, but that was impossible. “If they thought about it, there was nothing LACMA or the California Medical Association could have done to prevent it,” Hoffer said. “So LACMA gets a bad rap. To offset that, you really have to educate physicians and prospective physicians that we are there to defend them.”

Anyone can hang out a shingle and call himself/herself a consultant, but finding a good one requires some homework. That’s because selecting the right consultant is like hiring a key manager , even if the business association is a brief one. That’s why it’s important to take the time up front to find the most qualified and best suited individual or firm for the assignment. Consider the following criteria: industry expertise, number of years in business, certification, overall knowledge, referrals from satisfied clients and even personality. Begin with Internal Decisions Before the search begins, start with a clear understanding of your objectives. What do you expect the outcome to be? Designate a primary contact or sponsor inside your company, someone who this consultant will be working with for direction, approval, review and advice. Understand the scope of the project. Not so much in terms of dollars, but time too. For example, you might look at it as an assignment that will take two to three days to complete, but a consultant might see it as a two to three month project. Without one side feeling like they’re giving away the store, an agreement will have to be reached in terms of how much time is realistically needed to complete the project. Determine if the project requires a multi-person engagement. Is a single consultant, consulting firm or group of consultants needed? Lastly, determine any critical elements in terms of timing. If there is no room for project extensions or other schedule changes, make sure everyone involved knows the exact deadlines and expectations in advance. However, once a system has been put into place, if things change within the organization, it is realistic to expect that systems changes will then be needed – do not expect a one-size-fits-all. Avoid Common Mistakes During the initial interview, when the environment can be likened to a sales situation, it is not uncommon for both parties to be guarded. Yet, without a full understanding of everyone’s roles and responsibilities, success is unlikely. It is unrealistic to expect a consultant to be able to fix problems within the company that are ingrained in the company culture. Consultants can work with and assist people, but if the company hasn’t solved a solvable problem, then there has to be reasons. Just bringing in a consultant generally doesn’t make those reasons go away. If the person or committee that originally set up a project changes substantially, it’s important to re-evaluate the project status at that time. Sometimes the replacement individual(s) either don’t want to do the task at hand or aren’t as convinced about the importance of the project as the original people. How likely is that to happen? Very, when someone quits, or is fired, or earns a promotion and moves to another part of the company and is no longer involved in the work or the outcome. This happens all the time, and when it does, it may pose a serious problem. Be realistic about the likelihood of directional changes and project expansion. Once into a project, it can become apparent that the project is more complicated than originally expected. If something bedevils the company, the project may be more difficult or problematic than everybody initially understood, and adjustments need to be made. An outsider really can’t make things happen internally. If the staff doesn’t “buy-in” to the project, regardless of what it is, they may misdirect or ignore the consultant and in one way or another derail the project. As in any relationship, both parties need to be involved for the relationship to work. If not, the relationship falls apart. Beware of consultants who don’t take the time to learn about your company and appear too eager to use an off-the-shelf approach. Be sure unincorporated consultants met the IRS’ requirements for independent contractor status to avoid subsequent tax penalties The same evaluation criteria should apply to consultants found through Internet broker services and the Internet search engines. While both offer new avenues to find consultants, they do not remove the need to carefully evaluate the candidates. Both may imply more with respect to qualifications and credentials than is applicable. Finding the Consultant The process of finding a consultant is not as easy as dialing 1-800-Consultant. Talk to peers and colleagues. Whom have they used in the past? Contact professional associations. Professional management consultants’ organizations often have services to help find consultants. If a license or certification is required, lists of potential candidates are available through licensing boards. Look for Certification The initials “CMC” following a consultant’s name means that he or she is a Certified Management Consultant and has met the certification requirements of the Institute of Management Consultants USA (www.imcusa.org). A CMC has at least three years of experience in the full-time practice of management consulting; has provided multiple references, (most of them officers or executives of clients served), has passed a qualifying interview by senior CMCs; and, has been examined to confirm understanding and commitment to the Institute’s Code of Ethics. The Interview Is the consultant listening to you? Does the consultant have preconceived ideas about the project even before knowing what it is? Are the approach and potential solutions unrealistic? When a group is to be involved on the project, interview individuals who will be working on the project before making a decision. Frequently those who make the initial contacts and presentation are not the ones who will be working on the project. Be comfortable with their approach and the compatibility of the consultant(s) and your company. Ask questions as well as listen to their presentation. For example: What is your applicable experience in the area under consideration? In your opinion, what are the most critical aspects of this project and what will you do to meet that challenge? Please discuss briefly any relevant projects you have completed. In what areas do you expect difficulties, either in the schedule or in the study/design? How do you plan to manage the project and from where? Why should we select you and/or your firm? Personality and Fit Choose the consultant who is inquiring and curious, somebody who wants to know and understand the company, the situation and the content of the project. Avoid an individual with preconceived ideas. Look for a friendly personality in order to overcome possible suspicion from company employees , somebody who is able to build a team, if needed, and effectively interact with the company’s personnel. Once into the project, if people are not working well together, initiate discussion and resolutions before people begin to take sides that harden over time. This will only serve to create as many problems as there are sides of the issue. Fees and Billing Typically the consultant’s bill is based on effort. In cases where the amount of effort can be easily determined before the engagement begins, the fee may be fixed. The fee may also be results-based if this is appropriate. In dealing with this issue, remember that how things go with outside consultants will be similar to using internal employees to perform these same activities when it comes to normal complications and delays that enlarge or lengthen the project. Since these dynamics are difficult to know or quantify before they occur, consultants tend to bill for the effort they invest in a project. In the same way that a project can expand internally it will expand using external consultants and with this expansion will come additional cost. To monitor and control project costs establish benchmarks, include regular progress meetings and reports, and timely billing. The more intense the activity, the more frequent the reporting. Meetings are necessary not only to keep the company apprised of what has been accomplished, and/or what is being worked on, but also to identify as early in the process as possible those things that might somehow compromise the project. Provide an opportunity for the project management team to ask the consultant how things are going. If people are having misgivings about anything, get those on the agenda as early as possible before they become major issues. Get regular billings from the consultant so you know what the costs are. Have a budget, and track the fees against the budget. If you have one person working half time, you get a certain level of cost. If you have ten people working full time, you have another. The goal is to know how quickly resources are being consumed. While an expectation about what the cost is going to be is important, it may be impossible for the consultant to come up with a firm amount initially. That’s because the consultant doesn’t know what’s going on internally in the company. In terms of equipment, costs are easily determined. However, dealing with a business process may not be quite as exact. Be realistic about expansions or changes. If the scope of the project expands significantly over what was initially discussed, expect this to be reflected in the compensation package. Reaping the Benefits Consultants can be an invaluable and cost saving resource to a company. They’re already trained to do the job. But just like any commercial transaction, define your terms and contractual obligations up front to ensure success. The fee and payment arrangements, agreed milestones and timelines for review and completion, reasons for which the contract may be amended or terminated, confidentiality aspects of your resources and professional liability should all be clearly defined to ensure success. Jerry Savin, CPA, CMC, is CEO of SITKA Systems, Inc., a Santa Monica-based management consulting firm. Mr. Savin specializes in information technology assessment and business information systems. He also teaches courses on business information systems and management consulting for universities and professional associations, including UCLA, the California Society of CPA’s (CSCPA) and the Institute of Management Consultants USA (IMC). For more information, call (310) 230-1470 extension 8947.

INTERNATIONAL TECHNOLOGIES NETWORK HELPS AMERICAN BUSINESSES SET UP VENTURES IN CHINA, AND CREATES ITS OWN PARTNERSHIPS WITH CHINESE TECHNOLOGY COMPANIES When S.R. Nair began opening factories in China in the late 1980s, his Chinese partner insisted that a dormitory be built in each one so that workers could take an afternoon nap. More than a decade later, much has changed in China. “They’re more open and aware of what’s going on in the outside world, and they’re adapting to it,” Nair said. “It’s become easier to negotiate with them.” For Nair and his partner, John Farid, neither of whom speak Chinese, that has meant a boom in business. In 1995, Nair and Farid opened Thousand Oaks-based International Technologies Network Inc. to consult for American businesses interested in working in China but unfamiliar with the customs. The company has grown rapidly since that time, from $500,000 in revenue in 1995 to an expected $10 million this year. The company started out purely as a consulting business drawing on the experiences of Farid and Nair, who had worked in China for more than a decade before starting ITN. Changing focus ITN’s first client was a Chinese chip manufacturer looking for an American partner. Unable to find any company willing to buy in, ITN decided to change its model: ITN would become the Chinese company’s partner. The joint venture was relatively successful and was eventually bought out by a U.S. competitor. Today, a key component of ITN’s business is forming partnerships with Chinese companies that manufacture air-conditioning units, circuit boards for mobile phones and television components. ITN focuses on exporting and trading the manufactured products, while the Chinese partners, some of which were state-owned before the partnership, help finance and run the company in China. Most of the products are sold to companies in other Asian countries and in Eastern Europe. ITN also makes venture capital investments in emerging Chinese firms, many of which are in the process of being privatized. It recently invested in a state-owned speaker company that supplies equipment to Phillips Electronics and other consumer-electronics manufacturers. ITN’s investment will be used to help take the company private and change it from a money loser to a money maker, Nair said. But that transition can be an extremely difficult one in China. “In state-owned companies, there’s no incentive (to perform well), and a lot of overhead,” Nair said. “When we privatize, we trim the staff and put in a reward system for people who stay.” The cultural differences between America and China sometimes take a toll on ITN. In one joint venture, a company that made parts for circuit boards, ITN’s role was to appoint the company president while the Chinese partner would appoint a vice president. But the partner titled the vice president the “Chinese president,” creating a dual management and operating structure that ITN found unworkable. Eventually, it was forced to sell the firm to its Chinese partners. Many of the challenges have been resolved through a personal touch. When doing business in China, Nair said, one meets with company leaders in person and puts more emphasis on a handshake than a contract. It also requires learning the culture and working within it. “I met with the vice minister in one of the cities we do business in, and he said, ‘We like U.S. companies, just don’t try to bring your laws here,'” Nair said. In 1997, with a couple of venture deals under its belt, ITN returned to its main mission: consulting for American businesses that were interested in setting up manufacturing facilities and other operations in China. The company’s consulting clients include Minnesota-based Sheldahl Inc. and Florida-based Jabil Circuits Inc., both of which are involved in electronics manufacturing. It also began making contracts in Europe to sell products from China. Many of the products made by ITN’s Chinese joint venture companies are sold to firms in Eastern Europe and Turkey. Entering the franchise business That same year, the Chinese government lifted restrictions that forbade companies from forming franchises. So last year, ITN signed an agreement with Chem-Dry, a professional carpet cleaner based in Utah, to open Chem-Dry franchises in China and Turkey. ITN has marketed the service to U.S. hotels and the U.S. embassy in the five cities where it does business. So far, that part of the business is still losing money. Craig Donaldson, CEO of Chem-Dry parent company Harrison Research Inc., said he chose ITN as the master franchisee in the China market because of the company’s previous business success in the country and its knowledge of the market. Chem-Dry sets up master franchises in which one company manages all the franchises in a certain country, either owning the franchises outright or selling them to individuals within the country. ITN has decided to own all the Chem-Dry franchises itself. “Our business is a common-man’s franchise,” Donaldson said. “We want someone willing to roll up their sleeves and relate to prospective franchise owners, who are often newcomers to business.” Nair, a native of India, began his work in China as a banker in Hong Kong. He met Farid while his bank was helping the latter finance a deal in China, and the two later went to work for a consulting business until it folded in the early 1990s. That prompted them to form ITN. Farid currently lives in Beijing and handles business in China while Nair works out of Thousand Oaks.

With retail sales statistics painting a grim picture for conventional department stores, as young consumers flock to boutiques and discount outlets instead, Robinsons-May is fighting back with a major marketing push. The chain is revamping its juniors and young men’s sections and launching a $1 million advertising campaign. “We strongly believe in this customer (segment), and want to be their department store of choice,” said Jay Levitt, president and CEO of Robinsons-May. The restyled departments for young men and women will be updated with more “cutting-edge” merchandise and music, along with a new visual look, in an effort to lure the Generation-Y customer. This age group, between the ages of 10 and 19, spent $129.6 billion nationwide in 1999, according to the Rand Youth Poll. Robinsons-May officials say the Gen-Y market comprises 19 percent of the chain’s customer base and 21 percent of its total sales. Department store sales have been flat so far this year for the most part, and in some cases down. May Department Stores, the St. Louis-based parent of Robinsons-May, recently reported a 12 percent decline in second-quarter earnings. Other department store chains like Sears and J.C. Penney are also reacting to the changing market by updating their own somewhat stodgy images, said Al Frank, partner in the retail services division at Deloitte & Touche. Frank called Robinsons-May’s effort to focus on the teen market “clever.” “This is all about creating a new image and letting the teens know they have a reason to go there,” Frank said. The concept should stick, he added, if “they can stay the course.” Some of the best-performing boutiques and specialty stores are those targeting the teen market. The so-called “echo boom” children of the baby boomers are coming of age, and these young people generally have larger allowances and make more at part-time jobs than their predecessors did. The Glendale Galleria has picked up on the trend by grouping these stores together and providing a section in the mall intended as a gathering place for the Gen-Y customer. Robinsons-May learned from focus groups that teenagers want value, service and attention when they are shopping. Simply put, the store is targeting this group because “they are spending a hell of a lot of money,” said Robinsons-May spokeswoman Jennifer Patterson. Salesclerks will be re-made, as well, with younger, hipper workers shifted from other departments into the juniors and young men’s areas. These clerks will be encouraged to wear clothing from the racks of the new department. “The employees will be from that age group, instead of a 60-year-old ‘floater’ who wears pantyhose,” said Patterson. (“Floater” is department-store slang for a worker who isn’t assigned to a particular department, but who roams from department to department.) The new look is being tested in 14 of Robinsons-May’s Los Angeles-area stores, including Laurel Plaza in North Hollywood.

It’s not a pretty sight. So far this year, the average managed domestic equity fund has been kicking its bogey, the S & P; 500 index, in the teeth. In the first six months of the year, the average manager beat the index by 4.32 percent. Over the last 12 months ended June 30, the gap was even larger 11.61 percent. Indeed, the lagging performance continued in the month of July, with the average fund losing 1.0 percent while the S & P; 500 index lost 1.9 percent. The figures raise some serious questions. Is the heyday of the Standard and Poor’s index funds over? Will Couch Potato investors, who have triumphed through years of carefully applied sloth, finally have to put down their mint juleps, rise from their hammocks, and start the grueling work of picking through the thousands of domestic fund offerings? The answer to both questions: probably not. But the immediate future may not be as rosy as the last 15 years. Let me tell you why. The case for indexing is intact. Indexing started in the mid-’70s when researchers noticed that professional managers, as a group, regularly failed to beat the S & P; 500 index. Studies showed that about 70 percent of all managers would trail the index. There was great puzzlement over how so many smart people could fail to beat a dumb index. The answer, then, was costs. Even though the costs of running large institutional pension accounts the accounts that dominated the investment world at the time were small compared to the typical mutual fund, research indicated that professionals could not outrun the combination of their fees and the costs of transactions. Today, the cost of a retail mutual fund is higher than the cost of running a large institutional pension account was then, and portfolio turnover rates have soared. As a result, the overall cost of running a managed account has increased. Bottom line: The cost advantage that gave passive investing its edge is still in place. In spite of that, it will be difficult for S & P; 500 index funds to repeat their performance advantage of recent years. One reason is that the index beat more than 75 percent of professionals in its category in each of the years between 1994 and 1998, as new investors flooded into the market, buying visible names. It hasn’t been below the 50th percentile against other managers since 1990. This is a very rare event. How rare? Put it this way, among the well-recognized funds that have done better than the index, most have been in the top 25 percent of their category only two or three years in a row. Yes, we’re talking about funds like Janus Twenty, Fidelity Growth, AIM Constellation and Vanguard Primecap. The most likely future is one in which the S & P; 500 index funds rank in the second quartile rather than the top quartile, as stocks outside the index do better than stocks inside the index. In other words, instead of only one in five funds beating the index, it may be one in three. Picking a better fund will be less of a long shot but it will still be against the odds. Is there a simple but still passive way to cope with the shift? Indirectly, yes. The S & P; 500 index accounts for 75 to 80 percent of all market value in America. You can dilute but only dilute a period of relative underperformance by owning shares of a broader index. Question: My husband and I are in our early 60s and are retired. We recently attended a seminar that exposed us to IRS 72(e), which would allow us to shelter all interest income, including our IRAs, from Social Security taxes until we draw out the monies. It also does away with the rule that you must withdraw at 70 years of age and is insured to $1 million. To use this rule, we would have to place our money in a variable annuity offered by Golden American Life Insurance Co. Supposedly, we would still be in control of our IRAs and other monies turned into a special annuity that is protected from government taxing of our Social Security benefits. The gentlemen who came to our home said he had to have four licenses to be able to offer this to us, and that not many people were willing to secure them in order to work with people on this basis. He also said this rule protects our money from litigation and bankruptcy. We did not discuss managerial fees. Since we have never heard of this rule in all the retirement/IRA seminars that we have attended in preparation for retirement, we are not sure if what he is telling us is valid. We are puzzled. I am enclosing the brochure and other materials. G.D., Dallas Answer: The brochure, printed by Senior Benefits of America Network, is titled “How to Avoid the Taxing of Social Security Income.” It states: “Let’s say you have a $100,000 IRA in a mutual fund that you are not touching. Let’s say it earned 10 percent last year, or $10,000. You don’t need the money and you reinvest the dividends and capital gains. The IRS will still count that income against you when evaluating the Social Security tax!” (Underlined in brochure.) In fact, the brochure is wrong. Earnings inside an IRA account whether dividends, interest or capital gains are not taxable. Money from IRA accounts is taxed only on withdrawal. Further, the marketing brochure says that only a “deferred annuity, fixed or variable, when registered under Internal Revenue Code 72(e) is exempt from Social Security taxation.” This is also balderdash. As with an IRA account, a tax-deferred annuity allows you to defer taxes until you withdraw money at a later date. It does not exempt them. Calls and faxes to Senior Benefits of America Network were not returned. The compliance officer for Golden American Life Insurance had no comment before seeing the document and then did not return phone calls. Whether this is a case of ignorance or misrepresentation, what we’ve got here is a sales seminar pure and simple. The salesmen did not discuss fees because the cost of their product is worse than the tax burden they offer to “protect” you from. Now let’s try a specific example. Suppose that you had invested in a GoldenSelect variable annuity five years ago. What would your return have been? Their limited maturity bond fund sub-account earned 4.09 percent a year, net of fees. With fees like that, who needs to worry about the taxman? Worse, any accumulated income would still be subject to taxes when it was withdrawn. Vanguard GNMA, a low expense, no-load fund frequently mentioned in this column, earned 6.52 percent annually over the same period. A five-year Treasury earned at a 6.01 percent rate over the same period. Questions about personal finance and investments may be sent to Scott Burns, The Dallas Morning News, P.O. Box 655237, Dallas, TX 75265; or by fax: (214) 977-8776; or by e-mail: [email protected]. Check the Web site: www.scottburns.com. Questions of general interest will be answered in future columns.

With computers, as with people, it’s what’s inside that counts. But everybody could use a makeover now and then. For some, a new haircut or cooler clothes will suffice. Others feel the need for a trip to the tattoo parlor or a plastic surgeon. The same sorts of choices are available to computer owners. Though most people settle for their plain beige boxes, a growing number of geeks are going to great lengths to give their old computers a new look. Most PC makeovers begin with a simple paint job. It might sound crazy to apply a wet sticky substance like paint to an expensive electronic gadget like a computer. But anyone who can figure out how to download e-mail should be smart enough to remove the outer case and front panel from the chassis before breaking out the Krylon. A visit to the Cool Case Gallery at Virtual Hideout (www.virtualhideout.net), a site featuring customized PCs, reveals a selection of tricked out paint jobs worthy of any hotrod magazine. The photos submitted by visitors show computers decked out in everything from a sleek gunmetal blue to a detailed airbrushed masterpiece featuring skulls and faux shotgun holes. Speaking of holes, they’re popular, too. Many users install custom portholes in their cases, revealing a glimpse of their computer’s guts. While this sort of thing wouldn’t look good on your average supermodel, it does wonders for a PC. Neon glow Of course, a window does you little good if it’s too dark to see what’s inside. So a number of people have installed neon lights inside their cases, giving them a radioactive glow worthy of an old science fiction flick. A few have gone so far as to conduct some interior decorating, hanging skulls and disco balls amid their cables and circuit boards. Many makeovers focus on improving the computer’s cooling system, a concern for people who tweak their processor to run faster and hotter than the factory recommends. While these so-called “overclockers” usually just add a couple of fans, sometimes they get a little carried away. Take, for instance, the guy who won the coolest-case competition held earlier this month at Quakecon (planetquake.com/ quakecon2k/casecontest.shtml), an annual gathering of video game aficionados. He replaced one side of his computer with a giant floor fan. To make room, he constructed a new case out of PVC pipe and Plexiglas. Now that’s a cool computer. Replacing the case entirely is the most dramatic step a computer redesigner can take, the equivalent of tearing down the walls of your house and starting over from scratch. It’s not for the faint of heart or, for that matter, the sound of mind. But for the truly obsessed, it’s the only way to go. One fellow built a new case entirely of clear plastic, covered the bottom with rocks and hung little fake fishes inside. Voila a virtual fishbowl. Others have replaced their cases with suitcases, creating portable PCs that definitely aren’t meant for laptops. Then there’s the guy who installed his motherboard, hard drive and other components in a cardboard shipping box, complete with packaging tape on the seams. When the authorities finally catch up to him and haul him back to the funny farm, his family can just buy a few stamps and mail it to him. Up for bids The absolute Mac Daddy of customized computers was built by Chris Horn, a Brown University student with a knack for woodworking. According to his Web site (home.nycap. rr.com/snozberry/index.html), he spent 350 hours building the coffee table-shaped case from African mahogany, cherry-veneered plywood and cobalt blue tile. He’s put it up for sale, and bids start at $4,000. Don’t laugh: One look at the case and you’ll realize he’ll probably get more than that. Thankfully, buyers of new computers don’t need to go to these lengths to get a decent looking machine. Inspired by those colorful iMacs and their more powerful Apple cousins, PC makers are designing models with translucent plastic inserts and decorator designs that improve on the basic beige box. But if you want your older computer to stand out from the crowd, you’re going to have to break out the toolbox and do it yourself. To contact syndicated columnist Joe Salkowski, you can e-mail him at [email protected] or write to him c/o Tribune Media Services Inc., 435 N. Michigan Ave., Suite 1400, Chicago, Ill., 60611.

The developers of a proposed housing project and the city of Glendale have reached an unusual agreement to settle a long-running dispute. Under terms of the deal, Gangi Development Co. will give up most of its plan to build a housing subdivision on 21 acres of hillside land in exchange for the right to build a townhouse development on a two-acre parcel near the Foothill (210) Freeway. Land swaps are always difficult to execute, but this one is especially unusual, the two parties point out, because it gives the city so much more property than the developer will retain. But the settlement makes sense, Gangi officials said, because it allows the company to meet its financial objectives and retains the goodwill of the community, which has opposed the original project. “We wind up with essentially the same profit at the end of the day and alleviate all the controversy,” said Robert Gangi, in-house counsel for the company. Gangi purchased the 21-acre site at Deer Pass Road in the early 1990s with plans to build a nine-unit residential subdivision. Years later, when Gangi began preparing a final tract map for the development, the company found that it would have to grade more of the hillside than was originally thought. Running afoul of city ordinance The expense of the additional grading was only part of the problem. In the early 1990s, Glendale passed an ordinance that required developers to obtain separate approval if they wanted to build on the city’s hillsides. And Glendale turned down Gangi’s request for the additional grading. “The City Council felt that with the differential in the amount of dirt (being moved) that there might be other environmental consequences,” said Scott Howard, Glendale’s city attorney. The community dug its heels in, too. Homeowners had fought for the hillside ordinance in an attempt to put a stop a development called Oakmont View, a 572-home project proposed for the Verdugo Mountains. Although Gangi’s project was much smaller, allowing the development to go forward could have set a dangerous precedent, residents believed. (The battle over the Oakmont continues, and the developers are currently preparing a second environmental impact report.) “This was one of the first tests of the hillside ordinance,” said Dennis Brumm, president of the Whiting Woods Homeowners Association. “Even though Deer Pass was small relative to Oakmont, it would set a standard.” Gangi disagreed with the city’s decision to block the project and in 1998, the developer filed a lawsuit against Glendale. But ultimately, Gangi chose to take another tack. “You can either get into ugly litigation or find a deal where everybody comes out better,” Gangi said. Frank Gangi, the senior member of the family-owned company and father to Robert and Mark Gangi (the latter is managing the project), came up with the idea of a land swap. A city-owned, two-acre parcel near the Foothill Freeway at Pennsylvania and Encinal avenues was vacant, and it was zoned for multifamily housing. But the problem of working out the details in a way that would pencil out comparably to the larger hillside site remained. Although land exchanges have been proposed in the past, the parties rarely reach agreement on a deal, and few of these transactions are ever closed. “It’s somewhat unique for us to actually go through with a land exchange,” Howard said. “One property owner believes the land is far more valuable than the other, so you can’t usually come to agreement on the relative value of the exchange.” For this deal, both parties began with their own appraisers and then evaluated the other’s report. For Gangi, getting a fair deal meant comparing the revenue the company would earn from selling the lots on the hillside property versus the cost of developing that land, against the revenue building condos on the smaller lot would yield versus the cost of that development. The company ran the numbers and found that it could recoup its investment in the 21-acre site if it built 18 townhomes on the smaller lot and retained two lots of the hillside property for development. Although Gangi and Glendale have reached tentative agreement on the swap, some details remain. The developer and the city have to firm up the exact number of townhomes to be built, and the city has to approve a design for the housing project. The two lots Gangi would retain on the hillside also must be approved by the city, which is awaiting details on precisely where those lots would be located. But city officials say they are confident that a final agreement will be reached in coming months. “I’m optimistic that we’re going to be able to work something out,” Howard said. “It’s a tribute to the Gangis and also the City Council and city management for keeping an open mind.”

Fortunes of Vitamin Maker Suffer as Sector Gets Weak Bad press has caused vitamins and other nutritional supplements to fall out of favor. And that’s very bad news for Chatsworth-based Natrol Inc. The company’s stock has slipped from a high of $9.38 on Sept. 20 to an all-time low of $2 last week. “Our stock is getting hit by the overall sector in a big way,” said President and Chief Executive Elliott Balbert. Company officials and analysts say the declining price is an industry trend brought on by a softening in the consumer market. The supplements industry saw growth ranging from 20 percent to 40 percent a year between 1994 and 1999. But in 1999, industry growth slowed to around 12 to 18 percent and has since declined into the single digits, Balbert said. Earlier this year, research firm Adams Harkness predicted the industry would see growth of only 9 percent in 2000. “The answer is a mystery to a lot of people because this was a trend fueled by aging baby boomers, and there are more older baby boomers now than ever,” Balbert said. “I believe some of it is because of the negative press that has dampened enthusiasm. Between 1994 and 1999, you couldn’t pick up a magazine, paper, watch TV or listen to the radio without hearing something positive about supplements.” In 1998, the industry was so hot that pharmaceutical giants like Warner-Lambert Co. and Bayer AG entered the supplement market. But over the last few years, a number of studies have been released questioning the effects of everything from Vitamin C to St. John’s Wort. “The industry of nutritional supplements has weakened over the last several months,” said analyst Scott Van Winkle of Adams Harkness. “A lot of the (manufacturers have been forced) to take products back. Retailers have ordered product expecting to sell it, but instead it sits on the shelves.” Natrol hasn’t been forced to take as much product back from retailers as other companies, Van Winkle said. Even so, investors have turned from the stock because of the weakened overall market. Some analysts believe the market, and Natrol, will bounce back. Adams Harkness rates Natrol “accumulate,” believing the stock is undervalued and will rebound eventually. “We think the stock’s undervalued but we can’t tell you why to buy it,” Van Winkle said. “It may take a little while to get back up.” Balbert is confident the stock is undervalued and the company is snatching up its own shares so far, a very bad investment. In the second quarter the company bought back 500,000 shares at $4 each; the value of investment has dropped by about half since then. Some analysts still see trouble ahead. On Aug. 11, U.S. Bancorp Piper Jaffray downgraded Natrol’s stock from buy to neutral. The downgrade was based on market trends and the company’s second-quarter performance, which missed industry expectations of 11 cents in earnings per share by a long shot. Natrol reported a net loss of $2.4 million (18 cents per diluted share) for the quarter ended June 30, compared to net income of $1.9 million (14 cents) for the like year-earlier period. But the company continues to report increasing sales growth, with revenues rising 34.8 percent to $24.1 million during the quarter. Balbert blamed the net loss on several factors. First, the company lost $1.1 million in business after a customer for which it manufactures supplements under a private label dropped Natrol. The company also lost a portion of its inventory because it expired before the products could be sold, and saw an increase in product returns. Further, the company increased its spending on marketing and sales promotions. “Natrol is a solid company,” Balbert said. “Management is motivated and we’re very bullish about the business.” Van Winkle said the company remains financially solid. “They still have a good return on business,” he said. “Their revenue growth is strong, their results were just not up to expectations.” The company is continuing to expand into new product lines, including a recently announced women’s sports nutritional line, Cory Eversen’s Solutions, and a children’s line, Kids Companion. Last year, it acquired Prolab, a sports-nutrition supplement maker. That addition boosted sales by $6 million in the second quarter. “We’re creating new market segments, we have 37 products under development that we’ll be rolling out in the weeks ahead,” Balbert said.