AS CEO OF FOUNDATION HEALTH SYSTEMS, JAY GELLERT IS A TARGET OF PHYSICIANS, CONSUMERS, REGULATORS AND INVESTORS. BUT AT LEAST THINGS ARE GETTING BETTER. It’s a Friday afternoon, and Jay Gellert is talking about the weather, saying he actually enjoys the blistering heat that’s been roasting the Valley this summer. It’s a good thing, because Gellert has been on the hot seat ever since he assumed his post as president and chief executive of Foundation Health Systems Inc. in August 1998. Like many of its counterparts, Foundation had expanded through the years into a number of auxiliary businesses that, by the close of the decade, left the Woodland Hills-based managed care firm swimming in red ink. As a result, Gellert has spent most of his tenure as CEO divesting the company of those peripheral businesses and closing other unprofitable divisions. It seems the effort is paying off. The $1.5 billion company, which currently ranks as the second-largest employer in the Valley with 8,648 employees, has posted five straight quarters of profits, following two consecutive years of losses in 1997 and 1998. And Wall Street has responded. After falling to a low of $6.25 last October, Foundation’s stock has been trading in the $13 range recently. Gellert concedes that his company is not out of the woods yet. Years of cost cutting have left a lot of bad blood between HMOs, their customers and the physicians who work with them. Question: What led to Foundation Health’s fiscal woes? Answer: We got off track, we got involved with a bunch of stuff that wasn’t consistent with our core mission. The company was in workers’ comp. It opened up plans in a number of states where it had very small penetration Louisiana, Texas and Oklahoma and couldn’t offer the range of products and services people wanted. We got involved in some technology pursuits that we weren’t able to pull off. Q: What’s led to the turnaround? A: We’ve focused on just the basics of our business, and now that we’ve gotten back on track and disposed of the businesses that weren’t in line with our core mission, the stock market is beginning to recognize that there’s some real strength here. Q: What will you do to ensure the company continues to grow and prosper? A: The last couple of years have been a turnaround. This year it’s transformation. We have to move people from making things work that weren’t working to the process of saying, ‘OK, it’s working, but it’s not working in line with what the customer ultimately wants. So it’s about painting a vision of how do we provide products that make you really happy. Secondly, how do we make it so you view us as helping you in your care experience rather than standing in the way. And third is, how do we make it so that basic simplicity in terms of getting questions answered, issues dealt with becomes the watchword of what we’re doing. It’s about building that into our corporate DNA. If we can do that, everything else will follow. Q: A recent poll reported that 56 percent of consumers have a negative view of managed care companies. How do you propose to break through that? A: I think there are three things we need to do. One is eliminating the hassle factor. People can’t understand why it’s so hard to figure out whether their claim has been paid; whether their referral has been made. We have to make that a simple exercise. Secondly, I think that (providing greater) consumer choice (about the degree of services covered) will help us. As consumers make their own decisions rather than relying entirely on what their employer (contracts for), we’ll be able to fine-tune the plan to what people actually want. The third thing we have to do is make the system more efficient so that doctors and hospitals can regain faith in it. Q: Managed care has also been blamed for hindering access to adequate care, particularly in life-threatening situations. How would you address those concerns? A: That’s a good point. In California, the state passed comprehensive managed care reform last year, which, if everyone understood their rights, should eliminate that concern. Everyone now has access to binding third-party review on any dispute like that. The review has to be done in a timely fashion so that, if it’s a life-threatening disease, it’s done in 24 hours or 72 hours. Nobody in the country should ever think that the health plan is the final arbiter of what they’re entitled to in any kind of a serious situation. Q: Do you take the negative criticism about managed care personally? A: No. Some of these complaints are legitimate and, until we’ve responded to them, we should focus on legitimate concerns of our customers rather than personal feelings. Secondly, everyone who complains, with the exception of a few people who use it only for political reasons, is responding to the fact that this is the most important area of their life. We should focus on how do we make them feel better. Q: Do you ever get personally involved in any of these cases where people are helped by your company? A: I think that people underestimate the number of individual cases that all of us get involved in. I’ve been involved in cases where people were just having trouble negotiating the system. I’ve been involved in cases where people have acute crises. Last week I was involved in a situation where a family needed to find a mental health practitioner for their kid, and they didn’t know what to do, and I was able to hook them into one of our services and it’s really given them a good shot. Q: How do customers get to you? I have a hard time even getting a customer service representative for my HMO on the telephone. A: Part of it is I’m here at weird hours and I pick up the phone. Other times you go to a client presentation and meet someone and they call you directly. Or you’re at a community event and someone comes up to you with a specific case. Sometimes we get letters. A lot of us really work hard to follow up on those because it gives us a good chance to see how things really work. If you don’t follow it up yourself, you never get a feel for the human side of this and you treat it as a business. It’s not a business, it’s a service. Q: Why are you and other managed care companies pulling out of the Medicare programs? A: The problem with Medicare is that that federal government has put in place a system that limits the (annual) increase in reimbursement that they pay for seniors in managed care to 2 to 3 percent. Nowhere is there (annual) health care inflation of 2 to 3 percent. When we get a legislative consensus to do this fairly, this program will be a good, stable program. Right now many of us have stayed in for many years losing lots of money on the hope that Congress would react, and it’s gotten to the point when it’s really untenable. Q: Did you start out wanting a career in health care? A: My schooling was in political science and economics, so I had no academic background in this. Honestly, I never in my life had much of a plan or knew where it was going to lead. When I was in my 20s I was working for San Mateo County as the assistant county manager, and the health director’s job came open. I’ve just taken on assignments as they’ve come. Q: What is a typical day like for you? A: I probably spend three or four hours doing real work, writing, doing analysis and things of that sort. Then probably another three or four hours interacting with the people who work here with me. The other third is on external things. Some of it is Wall Street related, some of it is politically related. I, along with the people who work here, have to find answers but never just academic answers because this line of work isn’t academic, ever.

15 Largest Employers in SFV largest employers

Pasadena’s aspiration to become a biotech hub just got a little closer to reality, with a $125 million biotech incubator/office project being approved for a site next to a future Blue Line station on the city’s east side. The Los Angeles to Pasadena Metro Blue Line Construction Authority Board has selected the partnership of SMV Technology Partners and Kearny Real Estate Co. to purchase and develop a site near what will be the eastern terminus of the light-rail line. The partners still need entitlements from the city. The project, to be called the Pasadena Science and Technology Campus, could encompass as much as 500,000 square feet, including an existing historical laboratory-office building. SMV includes developers Jeffrey B. Allen, David Worrell and Stuart Farber. Kearny is affiliated with the real estate investment funds managed by Morgan Stanley Dean Witter. The SMV-Kearny partnership went head to head with Lowe Enterprises, which had proposed a traditional office development. “Pasadena’s been trying to nurture the biotech industry,” said City Councilman Paul Little, a member of the Blue Line board. “In our long-term economic development picture, SMV’s complex with technology and biotech is compatible with what the city’s been trying to do.” Little said there’s already a “healthy group of tech companies in east Pasadena,” including EarthLink Network Inc., as well as smaller firms and the famed California Institute of Technology. “There’s a huge demand, especially for lab space,” he said. O’Malley Miller, an attorney at Munger, Tolles & Olson LLP, who represented the developers, said: “It gives an opportunity for professors to have incubator space for biotech startups not far from campus.” The site sits at the southeast corner of Sierra Madre Villa (from which SMV derived its name) and Foothill Boulevard, right next to the Foothill (210) Freeway. It’s on the other side of town from the Raymond Avenue corridor, where the city and Huntington Medical Research Institutes have been trying to foster a biotech corridor. SMV-Kearny plans to restore the Stewart Pharmaceuticals building on the site, built in 1951 and listed on the National Register of Historic Places, as well as the landscaping. Some old warehouses on the property will come down. The partnership has also agreed to build a 2,500-space parking structure as a public-private project, with 1,000 spaces reserved for Blue Line riders and the rest reserved for tenants of the SMV-Kearny project. The site is one of three “joint development opportunities” being pursued for sites adjacent to future L.A.-to-Pasadena Blue Line stations. The authority is currently in the process of selecting development proposals for sites in Chinatown and on Del Mar Boulevard, at the southern edge of Old Pasadena.

The Los Angeles economy is chalking up a year of exceptionally strong growth, according to the latest forecast from the Los Angeles County Economic Development Corp. In particular, record growth in international trade is driving the local economy and is expected to buffer the effects of the long-anticipated “soft landing” of the national economy. The LAEDC reports that the total output of goods and services in Los Angeles is expected to increase by 5.3 percent this year, compared to growth of 5.1 percent last year. Total personal income is expected to increase by 6.3 percent this year, up from an increase of 5.8 percent last year. The value of two-way trade through the Los Angeles port district will be an estimated $229.8 billion this year, a 16.6 percent increase over last year, and is projected to grow an additional 10.3 percent next year. “International trade is the poster child of regional economic growth,” said Jack Kyser, chief economist with the LAEDC. “It’s growing like a house on fire, just like the entertainment industry used to do a few years ago, and it has become one of the linchpins of the local economy.” Fueling the stream of imports through the ports is the insatiable appetite of U.S. consumers for everything from toys to apparel to electronic gadgets from Asian countries. At the same time, the recovery of the Asian economies over the last two years has stimulated demand for U.S. exports. As a consequence, the ports of L.A. and Long Beach have seen month after month of record container volume. The surge has not just created jobs and work for longshoremen, but also for truckers, freight forwarders, logistics operators and affiliated support services. At the same time, the growing volume of goods arriving at the ports is creating concern about the ability of the local infrastructure to handle the flow. “It’s becoming a bigger and bigger challenge,” said Jay Winter, executive director of the Foreign Trade Association of Southern California. “The 710 Freeway is getting very congested and there is an increasing shortage of truck drivers to move all the containers off the docks.” The LAEDC expects higher inflation and interest rates to slow down the national economy, from a growth rate of 4.8 percent this year to 3.3 percent in 2001.

HEALTH NET THE FIRST HMO IN STATE TO PAY FOR CHINESE TREATMENTS In ancient China, a person suffering from chronic lower-back pain or arthritis might have gone to an acupuncture specialist for a treatment and a prescription of Duhuojishnfang, a 12-herb formula that works by relaxing the muscles and improving circulation. Beginning Sept. 1, members of Woodland Hills-based Health Net will be covered for the same treatment, if their employers choose to pay for a new add-on that the insurer will begin offering statewide. Health Net is the first HMO in California to receive approval from the Department of Corporations to offer coverage for acupuncture and herbal supplements. The decision to offer the coverage came after patient prodding, member research and some favorable studies by the National Institutes of Health, which showed acupuncture works to treat chronic back pain, rehabilitate stroke victims, relieve headaches and cramps and alleviate a host of other problems, said Health Net spokeswoman Lisa Kalustian. “Our research shows there’s a growing demand,” Kalustian said. “We know consumers are interested in it because we’ve had customers asking for it.” Health Net’s coverage will be administered through San Diego-based American Specialty Health Plans, which contracts with a statewide network of accredited acupuncture specialists. American Specialty’s primary business has been offering discounts on chiropractic and acupuncture treatment to employer groups around the state.

The total assessed value of real estate in L.A. County rose by 6.7 percent last year, according to a report from the county Assessor’s Office, and many of the fastest-growing communities in terms of property values are in the San Fernando Valley. The newly compiled figures show that local real estate values have finally recovered all of the ground lost in the recession and surpassed their 1991 peak. Hidden Hills and Santa Clarita showed the most significant increase in assessed values among Valley area communities, registering jumps of 10.5 percent and 9.0 percent, respectively. Burbank (8.2 percent) Calabasas (8.0 percent), and Westlake Village (7.6 percent) also surpassed the overall county figure. “Most of the increase in these communities is attributable to changes of ownership, new construction and restored valuations,” said Gilbert Parisi, special assistant to County Assessor Rick Auerbach. Auerbach’s report shows that the average market value of single-family homes in L.A. County that changed hands last year rose 7.1 percent to $245,000, surpassing the 1991 peak value of $238,000. The total assessed value of commercial, industrial and residential properties in L.A. County rose last year by $36 billion to a record $569 billion. That outpaces the 6 percent growth in total assessed valuation in 1998. “We have a strong economy, with high consumer confidence and low unemployment,” Auerbach said. “Real estate is one of the key factors in this economic growth.” This is welcome news for local government coffers, which have only recently recovered from the devastating property value declines of the early 1990s. (Under Proposition 13, annual property tax payments to local governments are equal to 1 percent of a property’s total assessed valuation.) What’s more, Auerbach said he expects this upward trend to continue through the rest of this year. “I expect next year’s assessment roll to show a very similar increase in the 6 percent to 7 percent range,” he said. “We’re not seeing any letup in property transfers, and the overall economy remains in good shape.” In Burbank, valuations rose from $9.5 billion in 1999 to $10.2 billion this year. Almost a third of the increase (31 percent) was from increased values on properties that were sold. In Burbank, sales transactions were mostly in the commercial arena, with some industrial and residential. The city’s office vacancy rate remains virtually unchanged from last year, hovering around 7.3 percent, according to Grubb & Ellis Co. Monthly asking rents are holding steady, too, averaging around $2.80 per square foot. High-end home sales In the upscale residential community of Hidden Hills, most of the increase came about because of changes in ownership, with homeowners selling their properties for considerably more than they had paid. The aggregate assessed valuation in the community moved from $533 million in 1998 to $589 million in 1999. “Everywhere in Los Angeles there’s a shortage of land,” notes Jack Kyser, chief economist with the L.A. County Economic Development Corp. “So if you have a well-located parcel with something valuable on it, you’re going to experience higher valuations that ever before.” The upturn in property values across the Valley is based on a number of economic factors, such as low unemployment, low residential and commercial vacancy rates and high consumer confidence, Kyser said. “The increased property values are a reflection of the Valley’s economic recovery from the downsizing of the defense industry and the 1994 earthquake,” he said. “There’s a heck of a lot going on over there.” The west and north Valley are experiencing new growth from the advanced technologies industries. The east Valley is faring well, too, Kyser said, “despite the uproar surrounding runaway production.” Commercial growth, particularly in the form of office and retail space, is the primary driver. Of course, the upturn isn’t floating all boats equally. A few Valley communities are seeing assessed valuation growth rates below the county average, though not by much. Agoura Hills posted a gain of 5.6 percent, Glendale 5.8 percent and San Fernando 6.1 percent. Less impressive are the Antelope Valley communities of Palmdale and Lancaster. Though real estate speculators continue to insist that L.A. County’s future growth spurt will take place to the north, so far these areas are not enjoying the resurgence that is being experienced by the rest of the county. Palmdale’s property values rose by 3.9 percent, while Lancaster’s were up 4.1 percent. Meanwhile, San Gabriel Valley cities like Covina and South El Monte posted gains in the 2 percent range. “The demand simply hasn’t been there in these areas,” Auerbach said. “In fact, many of these cities still remain below their pre-recession peaks for total assessed valuation.” But, for the first time in nearly 10 years, not a single city in L.A. County saw its total assessed property values decline. In fact, only three cities posted gains of less than 2 percent: Cudahy (1.1 percent), Covina (1.6 percent), and Artesia (1.9 percent) About $15 billion of the $36 billion increase in property values came from reassessments triggered by ownership changes. Under Proposition 13, property assessments are limited to 2 percent growth per year, unless a property changes hands. Then it is reassessed at the current market value. Another major factor in the overall increase was the restoration of original assessed values of homes under Proposition 8. That measure allows residents to appeal to have their assessments lowered when market conditions are soft; however, the assessments are restored once the market firms up again. Last year, $9 billion was added to the assessment rolls from value restorations on about 320,000 parcels. The standard 2 percent hikes mandated by Proposition 13 accounted for $8 billion of the increase, while new construction contributed another $4 billion to the countywide assessment roll. “For the last three years we’ve been aggressively and proactively reducing property values because of changes in the market,” Parisi said. “Now that things are turning around, we’re going back and bringing them in line with current market conditions.”

The aerospace/defense industry has been very slow to adapt to the world of e-commerce, but that is about to change and L.A.’s community of aerospace subcontractors isn’t very happy about it. That’s because, while a new Internet exchange being developed by some of the biggest aerospace companies is expected to save those giants billions of dollars, the savings will come at the expense of smaller subcontractors and suppliers. By the end of September, a consortium of major aerospace/defense contractors Boeing Co., Lockheed Martin Corp., Raytheon Co. and BAE Systems will launch a global online trading exchange called Exostar SM. The four companies have hired e-commerce specialist Commerce One to supply the core technology for the site. The exchange, in essence, will be used to award to the lowest qualified bidder the contracts for parts, supplies, and services needed by these giants. Although the Internet exchange initially will be used to purchase non-aircraft commodities and services (such as office supplies or cafeteria services), it will ultimately also be used for the procurement of highly customized aircraft parts and supplies. The volume of e-business to be conducted is gargantuan. The four partners combined spend $71 billion annually on goods and services, and expect to save between 10 percent and 15 percent on these outlays by procuring them through the exchange. That would amount to between $7 billion and $10 billion in savings. But their gain will come out of the pockets of the subcontractors. “There’s no question about it,” said King Lum, director of progress with Ace Clearwater Enterprises, a Torrance-based aerospace manufacturer. “The small companies are going to get squeezed by the big ones that’s the name of the game. This type of exchange benefits the buyers, and the only thing we can do is to become more efficient in order to stay competitive.” Lum acknowledged that Internet exchanges can also benefit smaller companies Ace Clearwater, for example, can get better deals on so-called “exotic raw materials” it uses in its manufacturing process. But those savings don’t make up for the degree to which Ace and other subcontractors will have to lower their prices to win contracts from the giants in online bidding. “Many second-tier contractors are concerned about being forced to do business in a way that is disadvantageous to them,” said Jim Schwendinger, global leader for aerospace and defense at Deloitte Consulting LLC. “The concern is that they will need to go through an exchange that is owned by their customers.” Buyers win, sellers lose That means the balance of power will shift heavily toward the buyers of parts and services. The Internet exchange will make it easier for more suppliers to bid for contracts, ultimately making the process more competitive and thus less lucrative for subcontractors. It will also give the buyer direct access to the prices that their competitors are paying for similar goods and services so if a subcontractor is selling parts to Lockheed for a very low price, it has no chance of negotiating a better deal with Boeing, because Boeing will know all about Lockheed’s deal. “It will be an open exchange,” said Hugh Burns, a spokesman for Lockheed Martin. “Vendors and buyers will have access to the same information and it will create new opportunities for both.” Exostar SM is not the first Internet-based procurement exchange for the aerospace/defense industry. Boeing already has its own proprietary exchange, as does General Electric Co. for its commercial and military aircraft engines division, and United Technologies Corp. and Honeywell International Inc. are launching MyAircraft.com this summer. But those exchanges are private. Exostar is the first effort by so many big players to share information with each other. “Unlike in the Internet industry, where change is generated from the bottom by new startups, in the aerospace and defense industry change is generated from the top down by the big players,” said Jon Kutler, president of Quarterdeck Investment Partners Inc. “They are looking to take costs out of the supply chain through these exchanges, and the local businesses have no choice but to go along with it.” According to Kutler, the wave of consolidation among big defense contractors in the 1990s has resulted in huge savings for the industry, but those savings accrued mostly to the U.S. government. This time around, the prime contractors are looking to shore up their own bottom lines by straightening out their often-convoluted procurement systems. Further, the exchanges may be just the first step in a more thorough integration of the e-business model into the industry. To further streamline communications between contractors and suppliers, many companies may in the near future undergo costly overhauls of their data systems. Currently, because so many different incompatible systems are used, it is often impossible for companies to communicate directly with each other. A unified system would allow contractors and subcontractors to enter each other’s databases for making and tracking orders, and completing other transactions. While it remains unclear how the changes are going to be made, industry observers expect the aerospace/defense industry in the coming years to adapt to the business-to-business e-commerce model. The challenge for the smaller companies will be to prepare for the looming change. “The big guys are going to determine which interface will be used, and the smaller guys will have to be cautious,” Schwendinger said. “They will want to be proactive and be prepared, but at the same time they will not want to commit too many resources to a system that could get redefined again.”

The words “tattoo parlor” used to conjure up dark images of a counter-culture populated by shady characters. But today’s tattoo parlors are more likely to be havens for artists who find that the body is as good a canvas as any for their pursuits. Just ask Julie Welch, the owner of Yoni Tattoo in Tarzana. A fine artist by training, Welch turned to tattoo work about 10 years ago. She acquired her shop about 18 months ago when its former owner was having trouble making ends meet. Welch spoke with staff reporter Shelly Garcia about the art of running a tattoo business. “I’d been an artist doing paintings and drawings and all kinds of consignment work, and a friend of mine offered to teach me tattoo art. I enjoyed the art aspect, and it was fun. “My old art teacher thinks I’ve wasted my life, but it’s not a waste. I’m still an artist. People are just a walking canvas. “Tattoos seem like they’ve gotten a lot more artistic than they used to be. It seems like there are a lot more artists now than 10 years ago. They’re realizing it is an art form. Generally in the last few years I’ve noticed a lot of suns and dolphins are starting to win popularity over hearts and banners. “We’re more of a custom shop. We don’t have all the usual pictures on the wall like other shops. We work with customers on a drawing on paper until they’re happy with it. It forces the person to think about what they’re getting. It has more meaning for them. “We don’t tattoo drunk people. They think they need to have a drink to calm their nerves, but more than one (drink) thins your blood and makes you bleed more. And half the time they regret it in the morning. “We have a $50 minimum for the first half hour. Anything over one-half hour is $100 an hour. We look at the drawing and give customers an estimate of how long it will take to do the tattoo. The longest I’ve worked on one person was five hours. It was a big dragon piece, two dragons fighting. “Tattoo artists have to register with (Los Angeles) County. You have to take a course on sterilization (of instruments) and show proof of immunity to hepatitis or have had the (immunization) shots. “We have release forms that people have to sign, saying they don’t have hepatitis or AIDS or other diseases, but we treat everybody like they have something. We use sterile, single-use needles. Everything is covered in plastic and it’s thrown away after each use. “Business has gotten a lot better than it was before. Generally most customers are repeats or new customers from word-of-mouth.”

Syncor International Corp. is turning heads on Wall Street. A 3-year-old diversification strategy at the once-sleepy little pharmaceuticals company has boosted profits and revenues, impressing analysts and running up the stock price by about 170 percent. “It’s not often you find companies where everything is going great, and Syncor just happens to be one of those companies right now,” said Mitra Ramgopal, senior equity analyst with Sidoti & Co. LLC in New York. “They’re firing on all cylinders and they’re being rewarded.” Shares in the company, which were trading at about $27 apiece in early January, have soared closing on Aug. 4 at $75.63. Syncor has announced a two-for-one stock split effective Aug. 9. The Woodland Hills-based company has long enjoyed a solid, albeit low profile as a maker of radiopharmaceuticals, high-tech compounds used to diagnose cancers and coronary disease. But sales and earnings languished until 1997, when Syncor began acquiring medical imaging centers and expanding its distribution in overseas markets. As a result, Syncor grew to a $520 million company in 1999, from sales of $381 million in 1997. For the second quarter ended June 30, Syncor reported net income of $9.1 million (69 cents per diluted share), up from $6.4 million (50 cents) for the like year-earlier period. Revenues jumped 18.5 percent to $154 million for the quarter. “I think we saw some very strong growth out of medical imaging, both in revenue and improvement in profitability,” said Bob Funari, Syncor’s president and chief executive, who assumed his current posts in 1996. “We saw good strength in pharmacy services, and the overseas (division), which was unprofitable in the second quarter of last year, became profitable this year.” At the time Funari stepped into the CEO spot, Syncor enjoyed a whopping 52 percent share of the radiopharmaceuticals market, but its single-business strategy was limiting its growth potential. An earlier attempt to diversify by moving into “positron emission technology” (a technique for the early detection of cancer) had been unsuccessful, and employee morale suffered as a result. Funari believed that the company’s skill set could be applied to a broader range of technologies, and began looking for those opportunities. Since then, the company has acquired 50 medical imaging centers (locations used to administer MRI tests), and on Aug. 4 it announced an agreement to acquire an additional 14 centers for $39.5 million. It has also increased the number of countries where it distributes its products from 6 to 13. In the second quarter, operating income from its medical imaging division increased to $3.1 million, a $2 million jump over the same quarter of 1999. “Obviously, they have a pretty good franchise in radiopharmaceuticals,” said Robert Gold, director of Standard & Poor’s Equity Services. “What I’m looking at is their growth in the imaging-center business. That’s an area that’s very fragmented that’s probably more of a growth opportunity.” Many medical imaging centers are struggling because the business requires large capital investments an MRI machine typically costs upwards of $1 million that are difficult to recoup. Further, most chains only have a single center in a given market, and because patients tend to go to the center that’s closest to their homes, they lose out on a lot of business. Syncor’s strategy is to cluster numerous centers in a given area so that it can dominate the local market, meaning patients have little choice but to go to a Syncor imaging facility. “In our centers, we see as many as 25 patients a day in an MRI room,” Funari said. “Many competitors see half that many.” Syncor’s international subsidiary, Syncor Overseas Ltd., has focused on developing nations where nuclear medicine is still a very new technique. But the investments in those countries nevertheless contributed $200,000 in operating income and $9.2 million in sales to the company in the second quarter. And Funari believes that by entering those markets early, the company will enjoy a strong position when foreigners do embrace the technology. “As health care becomes a bigger priority in those countries, we think those markets are going to grow very rapidly,” Funari said.

By now, most folks have grown accustomed to seeing a smattering of women in real estate brokerages. But the newly opened Sherman Oaks office of Daum Commercial Real Estate Services is another matter entirely. The office, which opened in December to service the office sector, has turned real estate’s stereotypical male image on its ear with a staff made up entirely of women. Four female brokers have signed on since December, when the office opened as a satellite to the brokerage’s Woodland Hills outpost. The staffers are: Paulette Toumazos and Angie Weber, previously of Charles Dunn Co. Inc.; Leslie Kenworthy, whose former company, First Commercial Group, merged with Daum; and Christina Porter, a former Beitler Commercial Realty Services broker, who joined in July. No one at Daum set out to break any molds when they began staffing up the outpost. It just so happened that the entire staff turned out to be women, said Toumazos, vice president for office services, who joined in December. “I think it’s more of a curiosity and it is something that sets us apart,” Toumazos said. Coincidence aside, the brokers say the feminine bent makes for a special camaraderie. “I think it is a little easier to share stuff amongst ourselves,” Toumazos said. “If there’s a woman there who has been through the same situation, she’s anxious to help.” Daum has been expanding from its industrial focus, adding specialists in the retail and office sectors for about a year. But as with most commercial real estate companies, the staff is heavily weighted toward men outside the Sherman Oaks office. “We are sadly outnumbered,” Toumazos said, “but we’re starting to get our numbers up.” Conejo Boom The Johnston Group, developer of Corporate Center at Malibu Canyon, will be adding five new buildings to its Conejo Valley portfolio. The Calabasas-based company acquired two office buildings in Westlake Village for $11.9 million. “We saw there was still some upside in rents and we’re looking for some value-added acquisitions,” said Steve Morse, executive vice president and director of acquisitions. “We closed on these because they have a ground-zero location.” Conejo Valley office space has been filling up quickly, and rents have been rising. Morse said that since the company opened escrow on the properties, monthly rents in the area have risen into the $2-per-square-foot range, and with renovations, he expects to increase rentals on these properties from their current $1.80-per-square-foot levels. Johnston expects to put about $1 million into renovating one of the buildings, at 2659 Townsgate Road, including landscaping and remodeling a part of the building, which was previously used as an executive suite facility. The second building, at 875 S. Westlake Blvd., will also get some landscaping updates. “We’re going to try to tie them more together,” said Morse of the two freestanding buildings, which sit side by side. Johnston plans to call the development Westlake Corporate Center. In addition, the company is set to begin construction on three office facilities in the coming year. – Construction is set to begin next month on a 20,000-square-foot building at Thousand Oaks Boulevard and Moorpark Road in Thousand Oaks. – Work is scheduled to begin this fall on another 20,000-square-foot office building on the remaining land in the company’s Promenade Office Park in Westlake Village. – The company has begun seeking approvals for a 120,000-square-foot office project in Calabasas, with a planned completion date of summer 2002. The strong demand in the area has influenced Johnston’s decision to ratchet up its development plans, Morse added. At the same time, the company has sold the 42,000-square-foot Malibu Canyon Plaza, a retail and office complex at Agoura and Las Virgenes roads. “We built the Plaza in 1989 to provide restaurants and retail conveniences to our nearby office parks,” said Jeff Johnston, the company’s president. “The retail component no longer fits our portfolio.” Legacy Takes Burbank Site About three months after Regent Properties pulled the plug on plans to develop a $100 million mixed-use project in Burbank’s downtown core, another developer has stepped up to the plate. Legacy Partners is in exclusive negotiations with the city on a development agreement for commercial and retail project on a 3.4-acre site bounded by Olive Avenue, San Fernando Boulevard, Angeleno Avenue and Third Street. A year ago, Legacy had been on a short list of candidates to develop the site, but Regent beat it out. Regent later quashed its plans because it was unable to secure financing for a 300-room Marriott hotel. Legacy has submitted several different concepts, with varying amounts of office space, retail, restaurants, residential units and a hotel. “We need to work through the viability of each of the concepts,” said Bill Shubin, a partner at Legacy. “The key issue is, what is the likelihood of getting a hotel at the site?” He said he didn’t know why Regent was unable to do the deal, but that doesn’t mean Legacy will be unable to obtain financing. “We have a whole broad list of financial partners we have financed deals with in the past,” Shubin said. The property, once the site of the police department, is currently a mix of stores, a Masons’ lodge, parking lots and vacant land. Simi Sale Society Capital Group acquired a 30,000-square-foot office building in Simi Valley for $3.7 million. The building, a two-story, concrete and glass structure at 40 W. Cochran St., currently houses the Simi Valley Chamber of Commerce. It is fully occupied. Gary DiMartino, a broker with Told Partners, represented the buyer and the seller, R.G. Harris Family Trust, in the transaction. Staff Reporter Elizabeth Hayes contributed to this column. Staff Reporter Shelly Garcia can be reached at (818) 710-2731, ext. 4316 or by e-mail at [email protected].