Farmer’s Market Traffic Mess I’m writing in response to “Farmer’s Market to Expand” (Feb. 2). As a homeowner in the Fairfax area, I am extremely concerned about this expansion. I have lived in the Fairfax area for six years, and have seen an increasingly frustrating traffic problem go from bad to worse. The thought of the Farmer’s Market adding 750,000 square feet is appalling, and the thought of having to live with that kind of traffic problem is frightening. The worst traffic congestion in the Fairfax district can be found at the corner of Third Street and Fairfax Avenue. This traffic congestion is caused by the Kmart, Ralphs and Sav-on on the southeast corner, the Farmer’s Market on the northeast corner, and a multi-storied building on the southwest corner. Compounding the traffic problem is that many senior citizens and domestic workers use this intersection to catch the north/south and east/west buses. As senior citizens pass away, the multi-building, mega-apartment complex Park La Brea (two blocks east of Farmer’s Market) is increasingly renting to young families. Further compounding this problem is Museum Row (four blocks south of Farmer’s Market) and Midway Hospital and the adjoining medical office complex (six blocks south of Farmer’s Market). Daily commuters to this intersection can vouch for me when I say that this intersection is to be avoided at all costs. This area is so densely populated and increasingly so that the Farmer’s Market expansion will turn a horrible traffic situation into a daily nightmare. Some neighborhoods have already instituted permit-parking regulations. I, however, would like to keep my neighborhood’s quality of life enjoyable so friends can visit us without the fear of having their cars towed. I favor free-market enterprise, but unfortunately the Farmer’s Market expansion would be an enterprise that would unfavorably affect the quality of my neighborhood and life. ESTEBAN RAMIREZ Fairfax district

SPOTLIGHT/Woodard/28″/LK1st/mike2nd SNAPSHOT Van Nuys Airport Year Founded: 1928 Origins: A group of businessmen developed what was then called Los Angeles Metropolitan Airport in an old orchard. The venture went bust, but the new operator, Dean Daily, was able to make ends meet by opening the airport up as a film location. World War II caused the airport’s fortunes to soar, but Daily lost control when the government confiscated the operation. Ultimately, control was turned over to the city of Los Angeles. By CHRISTOPHER WOODARD Staff Reporter For years, the 140 or so aircraft maintenance firms, charter services, flight schools and other companies based at Van Nuys Airport were a loose-knit group, too busy competing against each other to join forces. But that began to change in October 1997, when the Los Angeles Airport Commission recommended adoption of an ordinance to limit Stage 2 jets, the older, noisier planes that comprise about half the jets based at the airport. Concerned that such an ordinance could devastate them, the airport’s business community convinced L.A. city officials to delay imposing the law until the economic implications could be studied. Now, armed with a new study that estimates the potential loss would total up to $190 million over three years if the law were imposed, aviation interests, through the Van Nuys Airport Association, have launched a new offensive aimed at killing the proposed ordinance. The association has enlisted the Valley Industry and Commerce Association (VICA), the Mid-Valley Chamber of Commerce and the National Business Aviation Association, a group representing corporate flyers, in its fight. “Collectively, we have 3,400 employees at the airport. If we were one company, we’d be the third- or fourth-largest employer in the San Fernando Valley,” said Jim Dunn, president of the Van Nuys Airport Association. “We’ve had it with all the things making our lives more difficult, and now we’re doing something about it.” Nearby homeowner and anti-noise activist Gerald Silver said he has seen signs that the business community is stepping up its attack on the proposed ordinance. VICA and other business leaders have increased efforts to speak out publicly against the proposal, and they’re lobbying local elected leaders to kill it. Meanwhile, Los Angeles World Airports, formerly the city’s Department of Airports, recently mailed out 30,000 newsletters that Silver calls a promotional stunt, though airport administrators say they simply provide news on the airport. “The spring offensive is coming up,” said Silver, who is prepared to meet the advance. From its humble beginnings as a small airstrip developed by a group of businessmen in the 1920s, Van Nuys Airport has grown into the busiest general aviation airport in the world, with an estimated 500,000 takeoffs and landings per year. The airport and its 577 prop planes, 129 corporate jets and 52 helicopters supports a cottage industry of aircraft maintenance operations, flight schools and other support services, as well as a hotel. An estimated 3,400 people are directly employed by businesses at the airport, which generate $329 million in annual sales and provide airport-related services nearby. With the so-called multiplier effect taken into account, the airport contributes $941 million annually to the San Fernando Valley economy, according to a 1992 economic impact study by the city’s airports department. But along with the economic prosperity comes aircraft noise. Silver and others say the racket, especially from older corporate jets, is unacceptable. He and his fellow activists nearly won adoption of the noise-reduction ordinance, which would prohibit the airport from replacing Stage 2 jets as they are retired or moved to other airports. Silver and his group came close to victory until aviation interests convinced a City Council subcommittee to call for the economic study. The study, conducted by New Jersey-based consulting firm Airport Corp. of America, found an unexpectedly large turnover of aircraft based at Van Nuys. From 1995 to 1997, 34 out of 51 Stage 2 jets left their base at Van Nuys and were replaced by 36 other Stage 2 aircraft. If the proposed ordinance had been in place, their replacement would have been prohibited, and the study estimated the potential economic loss at up to 565 jobs and $190 million. Silver criticized the report as biased in favor of the airport and flawed for failing to consider the negative economic impact of noise in the surrounding community. “Business thrives where it has a thriving residential and retail base,” he said. “When business takes a short-sighted view and drives out residents, it hurts business in the long run.” But Dunn and others defended the consultant’s findings. “It boils down to no aircraft, no jobs, and that affects my business too,” said Dunn, who owns the Airtel Plaza Hotel adjacent to the airport’s runways. The airport receives about 900 noise complaints a year, and 85 percent of those are from just a handful of people, said Dunn. Rep. Brad Sherman, D-Woodland Hills, believes that the 900 complaints are not reflective of a much broader discontent with airport noise. Most residents have concluded that complaining to the airport won’t do any good, he said. A survey that Sherman’s office conducted received 4,400 responses, with the bulk of the respondents saying they think the airport is too noisy. “Very few people need a corporate jet, but a whole lot of people need peace and quiet,” he said. Dunn said that even if the older corporate jets are phased out at Van Nuys, the owners of those aircraft will simply move to Burbank Airport. The noise would simply move to a different part of the Valley, but Van Nuys would suffer the economic loss. Byron Smith, a contract pilot who flies jets for Litton Industries and other corporations with jets based at the airport, agreed with Dunn. “To me and to about 5,000 other people around here, that jet noise is the sound of a paycheck,” Smith said. Smith, former director of operations for the Air National Guard unit that was stationed at Van Nuys, said he and other pilots take precautions to limit jet noise. Under the “Fly Friendly” program at the airport, pilots are encouraged to limit the power they use on takeoffs and landings. Also, a curfew is in effect that prohibits Stage 2 aircraft from landing or taking off between 10 p.m. and 7 a.m. unless it is an emergency. Bob Rodine, who has fought the proposed ordinance as a board member of both the Mid Valley Chamber and VICA, said the city is taking other steps to improve the situation, including setting aside funding to soundproof homes around the airport and to build a so-called “Hush House” in which jet engines can be tested without as much noise impact on neighbors. Bonny Herman, executive director of VICA, said with those steps the airport can greatly reduce its noise impact on the surrounding communities. Meanwhile, she said, VICA will continue its push to have the proposed ordinance killed. “We’re talking to our elected leaders every chance we get,” said Herman. “We hope this will come to a head soon because the airport needs to get this out of the way.” Observers agree there is one thing that may work in the airport’s favor: Three of the original airport commission board members who voted for the proposal have been replaced by appointees of Mayor Richard Riordan, who at one time had a Stage 2 jet based at Van Nuys.

Realestate/29inches/dp1st/mark2nd By SHELLY GARCIA Staff Reporter J.H. Snyder Co. has filed a lawsuit against its financial partners in a deal to develop an office complex in Burbank, alleging Equity Office Properties breached its contract. The suit, filed last month in U.S. District Court in Los Angeles, claims Equity abandoned the Media Center project in January 1998 when it told Snyder not to perform any work on the site. Snyder was to have started construction last year. The suit seeks $7.2 million to compensate Snyder for the costs it incurred as a result of Equity’s action, plus legal fees and other costs. The Media Center project, which was designed to add 585,000 square feet of posh office space to the Burbank market, sat idle for more than a year after the merger of Beacon Properties, the company that first teamed with Snyder in the development deal, and Equity Office Properties Trust. Since the merger a year ago, Cliff Goldstein, a partner with J.H. Snyder, has indicated Equity is no longer interested in the project, and the company is seeking a new equity partner for the development. But Snyder’s effort to find new financing was made all the more difficult by a downturn in the office real estate market that began last summer in Burbank. When Snyder and Beacon first inked the deal in August 1997, the entertainment industry was growing dramatically, fueling a need for high-end office space in the area. The five-acre site at 3300 W. Olive Ave. was conceived to attract its target market with amenities that included operable windows, fiber-optic communication capabilities, restaurants and a health club. But with the office market slowdown, Snyder has not been able to attract companies willing to pay the pricey cost of entry of $3 and more a square foot. According to Snyder’s suit, Equity approved construction on the site following the merger. “Nevertheless,” the lawsuit states, “(Equity) instructed Snyder, on January 26, 1998, not to excavate at the property or otherwise perform work at or with respect to the property. (The) notice constituted an abandonment of the project and materially breached the project agreement.” Jerry Snyder, chairman of J.H. Snyder, and a spokeswoman for Equity said they could not comment on pending litigation. Burbank City Manager Bud Ovrom downplayed the significance of the situation, saying that while Burbank’s office market has clearly cooled, the area’s economy is still strong. “A lot of projects are not moving forward as fast as originally hoped or as big as originally hoped,” Ovrom said. “When the market is right, it’s going to be built, and the market isn’t right now.” Still, the Media Center dispute is the latest in a string of disappointments for Burbank, which until recently appeared to be riding an unstoppable wave of development. Last month, Vestar Development Co. pulled out of a deal to redevelop the former Lockheed Martin Co. site, a 103-acre parcel earmarked for retail and office development. And in August, Ford Motor Co. bagged plans to build an auto superstore on the former Zero Corp. site in Burbank. Lockheed is proceeding with plans to find another builder for its project, but there have been no decisions made concerning the Zero Corp. site, which is owned by Ford. Quick profits on Burbank deal In just six months, brokers from Julien J. Studley Inc. represented the buyer in the purchase of a Burbank office building, signed up a tenant for the entire building, then negotiated its sale for a quick $4 million profit. When Sagamore Equities, a San Francisco-based investment company, bought the building at 3015 Winona Ave. last summer for $10.1 million, it was empty. After the deal closed, Studley brokers Paul Stockwell and Will Adams represented the new landlord in negotiating a 12-year, triple-net lease with Qwest Communications. It was the largest lease transaction in Burbank last year. Just recently, the brokers represented Sagamore in its sale of the two-story, 83,000-square-foot building for $14.1 million. It was the largest sale in Burbank in the last 12 months. The building was bought by Hines Corporate Properties, which was represented in-house by Colin Shepherd and Charles Hazen. Sagamore expects to make several more purchases in Southern California. Encino office building sold A group of private investors has acquired a four-story office building at 16250 Ventura Blvd. in Encino for $2.7 million. The new owners, Mokschinder Singh and Rajinder Mahil, who are engaged in international trade, plan to renovate the common areas of the 28,000-square-foot building, and will occupy a portion of the space. Joel D. Frank and Jason K. Bailey of First Property Realty Corp. represented the buyer. The seller, Ambresco, an institutional investor based in Texas, was represented by Chris Baer and Peter Puzo at Grubb & Ellis. Chemat’s new digs Chemat Technology Inc., a chemical manufacturer, signed a lease for 30,490 square feet of industrial space at 9030 Winnetka Ave. in Northridge. Chemat, which will be moving from its current headquarters at 19365 Business Center Drive in Northridge, will expand its facilities three-fold with the move. The five-year lease is valued at $1 million. Jerry Scullin of Delphi Business Properties in Van Nuys represented Chemat. David Katz of CBI Partners represented the landlord, trustees of the Dmitri family trust. Camarillo sale The Ezralow Co. has acquired a 98,950-square-foot industrial building at 4030 Via Pescador in the Camarillo Commerce Center. The space is currently occupied by Diamondback Bicycles, which will be relocating to a build-to-suit facility in Camarillo. Tim Foutz of Capital Commercial/NAI, represented the seller, Via Pescador Partnership. Ezralow was represented by Richard Gold of Capital Commercial America. Terms of the deal were not disclosed. News and notes Medical Analysis Systems, a biomedical firm, has leased a 181,354-square-foot industrial building in Mission Oaks Business Park in Camarillo. The 15-year lease is valued at $26.1 million. The tenant was represented by Jim Linn and Bob Crenshaw of Grubb & Ellis and Steve Valenziano of Lones Lang Wooten. The landlord, Pegh Investments LLC, was represented by Bob Flink and Bob Shafer at CB Commercial. A private group of investors has acquired a two-story office building in Thousand Oaks for $3.7 million. The 23,000-square-foot facility is located at 4035-45-55 E Thousand Oaks Blvd. at the intersection of Westlake Boulevard. The seller, North Ranch Atrium LLP, was represented by Brian Forster of Told Partners. The buyer, K2M2 LLC, was represented by Joe Jusko of Seeley Co.

Fasttrack/garcia/26″/LK1st/mark2nd By SHELLY GARCIA Staff Reporter Roger S. Bloxberg and Todd J. Helfstein were just neophytes in the software business when they noticed something intriguing. The pair had developed a line of software tools to help people write business letters and other standard types of correspondence, and the package included a dictionary of quotations. They found that when they promoted the software package with the phrase “8,000 quotations for everyday life,” sales improved considerably. It was a lesson in the importance of separating yourself from the pack. And the two have been doing it ever since. Armed with that insight, the partners set their sights on providing clip art software, developing the first of what was to become the core business of Calabasas-based Nova Development Corp. “Art Explosion 40,000.” Within several years, Nova had developed a series of clip-art titles, each featuring larger and larger libraries of images and each drawing more sales than the previous version. Since its first clip-art software launched in 1995, company sales have grown nearly six-fold, $13 million in 1998, which earned it the No. 2 spot on the San Fernando Valley Business Journal’s 1999 list of the “Fastest Growing Private Companies.” Nova’s history actually dates back to 1984, when the two partners, political science students at UCLA, got an internship at Ashton-Tate, a now-defunct software publisher. “If these dorks can be doing this, we can too,” Bloxberg recalls thinking. He and Helfstein, who have been friends since the sixth grade, each invested $700 to develop an educational-testing software package that enabled teachers and school administrators to analyze class test scores. The software received an enthusiastic response. After that, attending college became more like an errand. Indeed, it took Helfstein nine years and Bloxberg 10 years to graduate. But the pair soon tired of selling to schools and turned their attention to the retail channel of distribution with a writing tools package. Moving into graphics software was a natural extension of that business, they said. “It’s the whole idea that we’re helping people express themselves on the computer,” Helfstein said. “We don’t know what business you are in, but we’re going to give you enough tools.” Art Explosion 40,000 was Nova’s first big success. At the time, the largest clip-art library available was a collection of 10,000 images that retailed for $100. Nova’s package, by contrast, had four times the number of images and retailed for just $49.95. The software quickly found a following among small-business users interested in developing their own letterhead, business cards, newsletters and other communications. The success did not go unnoticed by competitors, which began releasing ever-larger clip art libraries and forced Nova to keep up. “This has been a struggle for a long time,” Bloxberg said. “We know there’s something to this number thing, but we refused to put the Nova name on anything that’s less than a top-quality product.” The company’s pockets were not nearly as deep as some of its competitors, but it did have one advantage. Nova’s small size made it nimble, and it could wait for its publicly held competitors to announce their plans and quickly respond within the same selling season. A year after the release of Explosion 40,000, Nova introduced Art Explosion 125,000, followed in 1997 by Art Explosion 250,000 and, last December, Art Explosion 600,000, a package that includes, among other things, illustrations of most of the Shakespeare characters and scenes from the Bible such as the 10 plagues and the parable of the prodigal son. In the meantime, Nova began to expand its offerings outside the clip-art category. In 1996, the company introduced Web 20,000, a software program of Web-site art, and followed up the next year with Web Animation Explosion, a package of 5,000 animated sequences for Web sites. For the 1998 holiday selling season, Nova added Art Explosion Seasons, Events & Holidays, a package of 15,000 images for designing communications and decorations for holidays like Halloween or birthdays and anniversaries. Nova now ranks No. 2 in the clip-art business, with a 9.9 percent share of dollar sales and a 17.7 percent share of unit sales in 1998, according to PC Data, a market research firm that tracks software and hardware sales. The company’s newest title, Seasons, Events & Holidays, ranked No. 1 for the 1998 holiday season, with sales of 32,276 units. But the business is fickle, said Ann Stephens, president of PC Data. “It’s not an easy market right now just because there’s an overabundance of product,” Stephens said. “They have to be clever and make good decisions.” To cement its position, Nova has moved to expand its offerings into new areas where it can leverage the customer base it has already developed. Last October, the company introduced its first utility program, software that can execute design tasks besides offering a library of images. The software, Art Explosion T-Shirt Factory, allows users to create personalized shirts, hats, tote bags and other items, either by using a library of artwork included with the software or personal photos or drawings. “It’s not the T-shirt per se, it’s the intention of publishing graphics utilities that’s important,” Bloxberg said. The partners are hoping to capitalize on their existing market of clip-art users by designing programs made to interface specifically with that software. And, like the early history with clip art, Bloxberg and Helfstein believe that the competition can also present an opportunity. “We’ve got hundreds of thousands of Art Explosion users that don’t like the programs they’ve been using,” Bloxberg said. Nova Development Corp. Year Founded: 1984 Revenues in 1994: $600,000 Revenues in 1998: $13 million Employees in 1994: 5 Employees in 1998: 44 Top Executives: Roger S. Bloxberg, chief executive; Todd J. Helstein, president Goal: To become the leading developer and publisher of graphics and creativity programs under $200 worldwide Driving Force: The advent of desktop publishing and the Internet has changed the world forever. Businesses and consumers are demanding more sophisticated tools.

Profile/Netherby/28″/cw1st/mark2nd Snapshot: Irene Tovar Position: Executive Director, Latin American Civic Association Born: Los Angeles, 1939 Education: Bachelor’s degree, Cal State Northridge Personal: Single, no children Most Admired person: Cesar Chavez for his commitment to a cause. By JENNIFER NETHERBY Staff Reporter As a young teaching student at Cal State Northridge in the early ’60s, Irene Tovar was appalled at the high drop-out rate among Latinos. So she joined other students and teachers in doing something about it. Today, the Latin American Civic Association runs the biggest Head Start program in the Valley with 28 sites serving 1,400 children aged 3 to 5. The organization also runs two affordable housing programs and is planning a third in North Hills that will feature a social service center for area youngsters. Tovar left LACA in the ’70s to, among other things, act as an advisor to former Gov. Jerry Brown on the appointment of Latinos to state boards and commissions. She returned to LACA in 1993 as executive director, and has since instituted literacy training for low-income parents of Head Start students and is working to establish a youth mentor program in which she hopes to involve businesses. Question: Who are your clients, and what does LACA try to do for them? Answer: A lot of our clients are Latinos, and they’re working poor. That means that their needs are multiple from child care, affordable housing, health, recreation, youth services, family counseling, English as a second language, educational issues all those are very crucial issues that LACA attempts to in one way or the other serve. Basically what we’re trying to do is improve the quality of life of the Latino community in the San Fernando Valley. Q: What do you try to accomplish through Head Start? A: The issue of Head Start is, you’re trying to stabilize the environment of the child so the child can be prepared to start elementary school and succeed in his education. Now more than ever it’s important because the number of children who are poor have increased. Therefore Head Start becomes even more relevant in meeting the needs of poor children who have limited resources, and their parents don’t have the means to take them to a child care. Q: You’re developing a mentor program for students. How will it work? A: What we’re talking about is getting young people to come (to LACA) to see how a non-profit works and to afford them the opportunity to experience what the actual world of work is within the interests they have. They will receive credit. We in turn will provide them the experience. If we find that this young man or woman has the kind of skills that we want, we may eventually hire that person. One of the things I’ve been trying to move in the hearts of men and women, especially in the private sector, is, why not at least take one young person every summer and employ them and teach them what it is to work in the world of work? And we would be happy to be that linkage. Q: You’ve proposed a literacy training group for parents of your Head Start students. Why is it important? A: Head Start is an anti-poverty program and our objective is to upgrade the skills of the parents so they can break the cycle of poverty. So obviously, education and developing skills is one of those important aspects of it. Most of our parents do not have a high school education. And most of our parents are very limited in their ability to read and write. And that’s one of the reasons they fall into poverty. Our objective is to upgrade their skills so they can be more marketable. Q: You’re planning an affordable housing project in North Hills. What does the project entail, and how will it be funded? A: We will have a building that will be built for us to provide social services. In it we will have child care with an emphasis on latchkey programs. We want to be developing an environment where the neighborhood feels comfortable coming to us. That’s part of upgrading the standard of education and ability of the neighborhood. (For the housing component of the project) we’ve partnered with a for-profit developer who will build (single-family) homes that will be sold to low-income families. HUD (the federal Department of Housing and Urban Development) comes in and does part of the financing and helps the people who are interested in becoming first-time homeowners. Q: Your old building in San Fernando was destroyed by the Northridge earthquake. What came out of that for LACA? A: There’s a saying in Spanish which means “Out of something bad, something good can come.” And what’s happened is, we were able to move from our old dilapidated building to this new building. Our objective now is to purchase a permanent building for LACA and our goal is to see how we can convince the private sector, at least in the summer, to provide one young person a job experience. Q: What’s next for your organization? A: A long time ago LACA had a lot of youth programs. But the funding became limited. So we’re trying to go back and see how we can focus with young people. The next challenge is, how do we work with young people so they don’t have antisocial behavior? Part of that has got to be with the cooperation of the business world. Q: What can the business community do? A: Look at the neighborhoods. They’re stripped out of opportunity for young people. We need to see how we can convince the private sector to provide one young person a job experience. To direct their energies somewhere else. Q: LACA recently organized a symposium on secession. What’s your view on secession and its impact on Latinos? A: We have approached CSUN and asked them to do an analysis of the impact of secession to low-income families. You know, what does that mean in terms of taxes, what does that mean in terms of job opportunities, what does that mean in terms of political empowerment to the Latino community. What we really are doing right now is studying the implications. The initial reports we’re getting are not very favorable to the poor and to minorities. But we haven’t taken a formal position. We’re promoting the idea that we should start really actively analyzing it. Q: As a former state official, how would you grade local hiring and pay for Latinos? A: We’ve improved but we have a long, long way to go. In both realms, public and private, the representation is not the best. If you find them, you find them in the lower entry-level jobs, the lowest paying jobs. So what we’re trying to do is ensure businesses that when they hire men and women that can perform the jobs, the clients will come to those businesses because they know that they cared enough to find someone who communicated with them. I must say, I have found some companies that have been very wise to note that if they hire Latinos, they’ll have more Latino clients. And the Latino community are purchasers.

SFV Newsmakers 2-8/24inches/dp1st/mark2nd Banking & Finance Ted Dondanville has been appointed vice president and manager of the Glendale office of Citizens Business Bank. He will be responsible for the day-to-day operations of the office and the loan portfolio. Most recently, Dondanville was vice president at Glendale Federal Bank. Entertainment Audrey Finci has been promoted to executive vice president of Walt Disney Art Classics and Disney Direct Marketing. She will head worldwide operations of the two businesses, which were integrated in 1998. Finci joined Disney Consumer Products in 1988 as director of group finance. Thomas Park has been promoted to executive vice president of The Disney Store Worldwide. He will be responsible for global oversight of the entertainment-retail group, including continued growth of The Disney Store and ESPN-The Store, as well as the Disney Sourcing organization around the world. Park joined Walt Disney Co. in 1991. Jordan Sollitto has been promoted to senior vice president of promotions and studio stores marketing for Warner Bros. Consumer Products. He will be responsible for the marketing efforts of the Warner Bros. studio stores as well as their promotional tie-ins and sales promotion activities. Sollitto previously served as vice president of promotions and branded foods for the consumer products division. Jim Warren [pic lanm2-8] has been promoted to chief operating officer of Burbank-based BRC Imagination Arts. His new position includes an increased focus on organizational growth and stability, with an emphasis on hiring, training and supporting growing creative and project management staffs. Warren joined BRC in 1993. Winifred Webb has been promoted to senior vice president of investor relations and shareholder services at Walt Disney Co. She is Disney’s primary contact with Wall Street entertainment analysts and the institutional investment community. In addition, she also oversees the group responsible for stock transfers and relations with individual shareholders. Previously, Webb was a vice president. Health Care Ruth Holton has been named senior program officer for special projects at the California Wellness Foundation. Her responsibilities will include collaborating with the foundation vice president to develop priorities for special projects, funding allocations and evaluation procedures. She will also make grant recommendations for special projects to the board. Dee Jay Mailer has joined Health Net as senior vice president and chief administrative officer. She will be responsible for all operational functions, including information systems, security, provider compliance and audit, and meetings and events. Previously, Mailer was senior vice president and chief executive of Kaiser Permanente Hawaii. Jeffrey Weisz has joined Kaiser Permanente Woodland Hills Medical Center as associate area medical director. He will work with physicians and employees to ensure that each member receives quality care with a personalized approach. Weisz joined Kaiser in 1978. High Tech James Gramacki has been named vice president of telecom operations for Camarillo-based Vitesse Semiconductor Corp. He will be responsible for the management of the production process. Gramacki joined Vitesse in 1989 as the design center manager. Insurance William Hawkins [piclanm2-8] has joined the Sherman Oaks office of the Penn Mutual Life Insurance Co. as general agent for the company’s Los Angeles agency. He will be responsible for recruiting and developing producers in greater Los Angeles and Orange counties. Most recently, Hawkins served as general agent for New England Financial. New Media Jim Moloshok [pics of all three la2-8] has been appointed president of Warner Bros. Online. Previously, he served simultaneously as senior vice president of Warner Bros. corporate marketing and advertising services, and senior vice president for Warner Bros. Online. Also, Jim Banister has been appointed executive vice president. He will oversee strategic initiatives for Warner Bros. Online, including the creation and launch of its new vertical narrowband/broadband entertainment portal, and the creation of broadband interactive entertainment programming. In addition, Jeff Weiner has been named vice president of planning, development and administration. He will oversee financial analysis, strategic planning and business development. NingNing Yu has been named vice president of engineering for North Hollywood-based Net Effect Systems. She will be responsible for the efforts of the company to develop, test and produce software that helps companies utilize electronic commerce sales channels. Prior to joining, Yu was vice president of engineering at Vertel. Restaurants Bob Paine has joined the management team of Glendale-based IHOP Corp. as director of field marketing. He will oversee eight regional marketing managers while directing field marketing activities, which include leadership of the company’s media planning and buying functions. Most recently, Paine served as senior vice president of marketing for Heartland Automotive.

toledano/drugs/24″/dt1st/mark2nd By JESSICA TOLEDANO Staff Reporter Employers and consumers should get ready to dig into their pockets, once again, to pay for health care. This time, the culprit is drug prices. Managed care companies say that rising demand for brand-name drugs, along with skyrocketing prices and increased regulation, will force them to pass through more of the bill. “If costs continue to go up, we will not be able to afford pharmaceutical coverage,” said Dr. Alan Jacobs, director of pharmacy operations for Health Net in Woodland Hills. “Legislators have to make informed choices. If they tie our hands and stop us from making good-quality decisions, then we will not be able to afford it.” Jacobs was referring to a move by the Department of Corporations last week to investigate six health maintenance organizations in California for deleting or switching drugs from their formularies (list of covered drugs) after open enrollment season. Also, a new statute is going into effect July 1 that will require health plans that remove drugs from their formularies to continue providing them to patients who were taking them at the time they were removed. Many managed care companies have controlled the cost of drugs by refusing to cover brand names, thus forcing patients to use cheaper generics. But over the past year, pharmaceutical companies have started to advertise brand-name drugs on television, and doctors feel obligated to prescribe the drugs when patients insist they are the only ones they want. As a result, generic alternatives are being refused, and the trend is costing managed care companies more money at a time when they can ill afford it. In the last year, health plans nationwide have seen their profit margins drop sharply. Pharmaceutical costs in general went up last year 10 to 15 percent. Jacobs cited one drug for arthritis, called Embrel, which costs $12,000 per patient, per year. To make up for the losses, managed care companies imposed double-digit premium increases last year. Some employers saw their monthly rates rise as much as 16 percent. “Drug costs are the single greatest driver of rising health costs,” said Walter Zelman, president and chief executive of the California Association of Health Plans. “The plans are feeling pressure from a number of sources.” Meanwhile, pharmaceutical companies saw a 30 percent jump in profits industrywide. Drug company executives say the cost of developing cutting-edge medicine is very high. Jeff Trewhitt, a spokesman for the Pharmaceutical and Research Manufacturers of America, the trade organization for companies like Amgen Inc. and Genetech, said industry profits are three times higher than most industries, but they are quickly re-invested in research and development.

Lawlist/LK1st/mark2nd By JENNIFER NETHERBY Staff Reporter San Fernando Valley law firms continued to see modest employment growth in 1998, with 10 of the Valley’s top 15 firms either increasing their litigation staff or holding steady, according to the Business Journal’s list of the biggest firms in the San Fernando Valley. This is the second year in a row that a majority of the top firms have reported increases. Still, the ranking changed little over the past year, though four firms made their debut in the top 15. Glendale-based Knapp, Petersen & Clark held the No. 1 position, despite the fact that it added two new partners and dropped five attorneys. Wasserman, Comden & Casselman held its No. 2 spot, increasing its ranks by two attorneys. “Right now, across the board, there’s been growth in all areas,” said Barry Harlan, managing partner at No. 7-ranked Lewitt, Hackman, Hoefflin, Shapiro, Marshall & Harlan. Harlan said the strongest area has been his firm’s real estate practice, fueled by growth in both residential and commercial development. “It’s the general economy and fact that home sales are so strong,” he said. Encino-based Horvitz & Levy moved up a spot to the third biggest firm, increasing its ranks with two attorneys and one partner. The firm specializes in appellate cases. “We’re seeing bigger and more important and complicated cases,” said Managing Partner Barry Levy. “We’re seeing all kinds of diverse cases. We’re doing more cases in entertainment litigation.” Levy said the firm has been attracting bigger clients, with cases ranging from patent infringement to work for insurance carriers, all on appeal. Most firms on the list handle a broad range of law. The most popular areas were real estate, insurance and civil litigation. Knapp, Petersen & Clarke also saw a strong increase in its corporate real estate practice, the firm’s spokeswoman Debbie Maginn said. She said the other areas of the firm’s practice have held steady. Harlan said he expects growth to continue in 1999. “We predict it will be one of our best years,” he said. Martin Rousso, managing partner at Hemar & Rousso said he believes elder law will become a high-growth area in the coming years, with the aging population. Personal injury law on the other hand is on the wane, he said. Rousso said his firm, which specializes in commercial litigation, has also changed the way it charges clients, to attract more customers. “Flexible fee structures, that’s where the market is going,” he said. “Clients are more value shopping because they can get quality work at value prices.” James Goudge, managing partner at Dennison, Bennett & Press LLP, said his firm has seen an increase in employment litigation and discrimination claims, which he attributes to a heightened awareness by the public. Meanwhile, he said his firm has seen a decrease in auto claims. “It’s just a mixed bag,” he said.

Oped/16″/dt1st/mark2nd By MEL KOHN The Los Angeles business tax reform proposal submitted by the mayor’s office should be viewed as the initial step to tax reform in our city. In analyzing the proposal, the Valley Industry and Commerce Association, representing businesses in the San Fernando Valley, asked three questions: Does Los Angeles need to be a more business-friendly city? Does the Los Angeles business tax system need simplification? And does compliance with the city business tax rules need to be greater? The answers by VICA were yes to all three questions. The status quo is detrimental to business in our city. The proposal sent to the Ad Hoc Council Tax Committee addresses the questions asked by VICA. Los Angeles’ goal is to attract and retain businesses. Tax relief will be provided to businesses throughout the city in the amount of $23 million, a positive for the business community. The present city business tax system is complicated and cumbersome. The proposal condenses the present 64 tax rate categories to six, and eliminates multiple tax rate categories by utilizing a primary industry code system based on a company’s Standard Industrial Classification (SIC). The proposal also points out that the city is losing at least 27 percent of its annual business tax revenue, which is approximately $75 million, due to underreporting and non-compliance. The programs recommended are positive steps to increase compliance. Through the proposed amnesty program, many non-filers will be in the system. Besides the additional first-year revenue generated, revenue in subsequent years will also be increased. The upgrading of the business tax computer system and plan to review the collection and audit process will also reduce lost revenues from non-filers. A benefit of simplification of the business tax categories will be a reduction in audit times for businesses and an increase in compliance audits. The proposal should make Los Angeles more competitive and offset a portion of the tax relief through increased compliance. However, VICA believes the proposal does not answer all questions of tax reform, and further evaluation of the tax rates must be done. This primarily needs to be done for the businesses that are currently using multiple tax rate categories and which would be condensed to one rate. There are other issues that need to be addressed in the near future. The next step should be to analyze whether a tax on gross receipts is the better method for raising revenue. The proposal does not address other types of city taxes or identify other sources of city revenue. The effect of business tax relief should not be measured only by the tax reduction. The tax savings to businesses will create additional working capital and income. These dollars, not all of which would be spent in the city, will be put into the economy, whether for consumables or payroll. I have followed the progress of the current Los Angeles business reform proposal for nearly two years, both in my role as a CPA and business advisor and as a member of the business community. The concept of business tax reform has been the goal from the beginning. However, questions now generated by the report may defer the plan being put on the ballot in June. VICA believes tax reform is a process and every process needs a beginning. The proposal provides for further study of Los Angeles tax reform by the formation of a business tax advisory group to shepherd the process of future tax reforms. These reforms are needed because for every business that does not come to our city or leaves, the loss of revenue is not limited to city business taxes. Other revenues such as utility user taxes and sales tax are also affected. The concept of tax reform will benefit the whole city, both businesses and residents. Mel Kohn is managing partner of Kirsch, Kohn & Bridge CPAs located in Encino and is co-chair of VICA’s Local Issues Committee.

Retail/garcia/21″/LK1st/mark2nd By SHELLY GARCIA Staff Reporter Recently, when a neighborhood shopping center went up for sale in Northridge, more than 20 bidders came to the table. Neighborhood retail centers are a dime a dozen in the San Fernando Valley. But what made this one, the Devonshire Reseda Shopping Center, so attractive was the fact that it was almost half empty. Sound crazy? It isn’t. For the bidders on this Northridge center and others like it, a half-empty center is chock full of opportunity. It promises the chance to bring in a whole new breed of strip-center tenants that are more likely to stay longer and pay a higher lease rate than the mom-and-pop retailers that have traditionally inhabited these centers. “Things have changed. Retailers have changed,” said Jay Kerner, president of KMI Real Estate Group Inc., which just bought the Devonshire Reseda center for $19.5 million. “Where before, (retailers) wouldn’t go into a storefront, now you’re seeing them go into street locations.” In the past, better retailers flocked to the malls, leaving the strip centers to doughnut shops, nail salons and takeout Chinese restaurants. But since then, as malls have lost some of their cachet and competition for the retail dollar has intensified, retailers have begun to seek out neighborhoods where they can be close to their target markets. Often, that is a neighborhood center, typically of 100,000 square feet or less. “We continue to be over-stored, so the name of the game is location,” said Richard Giss, a partner with the retail services group at Deloitte & Touche; LLP. “If you can find a location closer to your demographic, retailers are more interested than they’ve ever been.” By trading in its mom-and-pop tenants, a center owner can often raise rents from an average of $1 to $1.50 a square foot to $1.75 to $2.25 a square foot. Just as important, the owner stands to attract tenants that are better capitalized, so turnover, and the expense it brings, is reduced. But for most centers, which are 20 years old or more, the strategy hinges on the vacancy rates. Developers need a significant amount of vacant space in order to renovate the look of the center in a way that will draw upscale tenants. Vacancy rates in shopping centers in the San Fernando Valley are averaging under 10 percent, according to Marcus & Millichap, an Encino real estate brokerage. As a result, these kinds of centers are few and far between. “For every one that’s available, there are 100 people who want to buy it,” said Matthew May, a partner with Madison Partners who just represented the buyers for Plaza del Sol, a small center in Encino which is 70 percent vacant. “A lot of these transactions are not listed for sale,” May added. Many have absentee owners or managers who have not taken an active interest in the property and, as a result, failed to fill vacancies when they arose. Or, as in the case of Devonshire Reseda, the management may have prepared for an eventual sale by deliberately leaving spaces vacant as the leases expired. “I look for these opportunities all the time,” said Dave Norcott, managing director of Seeley/Colliers, who brokered the sale for KMI. “It’s a difficult process.” Many older centers have tenants who have been there for 10 years or more. Their businesses may be marginal, but by now, the rent is dirt cheap and they’re unwilling to leave. “If I can find one opportunity a year in a serious endeavor, I’m feeling happy,” Norcott added. Only 13 shopping centers of 50,000 square feet or less changed hands in the San Fernando Valley in the first nine months of 1998, according to Marcus & Millichap. In the next largest category, centers of 50,000 to 100,000 square feet, there was only one sale for the same period. The activity level has remained relatively constant over the past two years. For the sites that do become available, developers hope that a facelift, coupled with a good location, will attract a different class of tenant to make the project worthwhile. “There has to be an upside potential relative to the near future vacancy,” said Kerner. “The whole idea is to achieve greater rents.” In addition to stores like The Gap, Old Navy and Starbucks, coveted for their ability to attract other upscale merchants, developers have set their sights on restaurants that encourage leisurely diners rather than doughnut and sandwich shops or takeout joints. “In a center like Northridge, I could definitely see an operation like an Islands coming in,” said Kerner. “Places that have atmosphere.” KMI, which has not yet begun its remodeling, has not yet signed any lease deals, but it is not alone in believing in the potential to transform these centers into upscale shopping and entertainment venues. “A lot of mall retailers are going on the street,” said May, pointing to national chains like Ethan Allen, Athlete’s Foot and The Good Guys. “You’re not going to have a ticket broker and a nail salon. You’re going to have more food uses and services like a day spa.” But while some national retailers have lately ventured out of the mall, others say the opportunity to attract these stores to neighborhood centers is limited. “You’re not going to see a rush to strip centers,” said Giss at Deloitte. “Some retailers can be successful as a stand-alone operation, but it is a minority. I see (the movement to street locations) as people taking advantage of a particular opportunity, not a shift in the landscape.” At the same time, a renovated shopping center does stand to attract more traffic than its older neighbor, and that’s good for real estate values, Giss points out. “You take a center that’s long in the tooth and dress it up and all of a sudden, it’s filled, and it’s going to pull from some other center that hasn’t renovated.”