SARA FISHER Staff Reporter Los Angeles has emerged as the leading domestic center of illegal software duplication, according to Microsoft Corp. officials, who are releasing a study this week pegging software piracy losses in California at $1.5 billion annually. Microsoft officials point to the huge presence here of small entrepreneurial businesses and the common practice of loading software onto multiple computers. “Southern California is the mecca of entrepreneurs, and we have mostly small businesses here,” said Chuck Davis, Microsoft’s Southern California anti-piracy specialist. “They tend to be the ones that illegally load software on multiple drives.” But according to law enforcement officials, Los Angeles is also a major center for another kind of software piracy the mass duplication of programs for worldwide distribution. “New York is the home of soft goods counterfeiting, like Gucci products, and Los Angeles is the home of software counterfeiting,” said Los Angeles Deputy District Attorney Lawrence Morrison. “We’ve traced counterfeit products from L.A. throughout Asia, Canada, Europe and even Russia. Piracy is rampant here.” Morrison and FBI officials say the presence here of two major port complexes and of organized crime families with links to Asia have contributed to L.A.’s emergence as a counterfeiting capital. “The majority of counterfeiters have some ties to Asian organized crime, and those communities are largely based in the San Gabriel Valley,” Morrison said. “These groups have an international distribution channel established, and can send out shipments through the ports or up through I-5.” Law enforcement officials do not have an estimate on the actual amount of piracy locally since they acknowledge they can apprehend only a fraction of the perpetrators. Microsoft’s new study estimates that software piracy in California alone cost manufacturers $1.5 billion in lost revenue between May 1997 and June 1998. The figure was calculated by comparing local computer sales vs. software sales. As a ratio, sales of computers far outpace the sale of software needed to make those computers operate giving Microsoft a rough barometer with which to estimate illegal duplications. Nationally, illegal software duplication was estimated at $2.7 billion in a 1997 study by the Business Software Alliance and the Software Publishers Association. Microsoft is releasing the study to raise awareness of the problem and the economic damage to the state in lost sales-tax revenue and other costs. “It is tremendously important for the software industry to learn how we can better manage our intellectual property,” said Sam Jadallah, a Microsoft vice president who oversees the anti-piracy division. “Increasing people’s awareness of piracy is the first step.” Software piracy is a broad term. It encompasses professional counterfeit operations that crank out large volumes of software as well as casual counterfeiters who peddle software on a small scale and small businesses that install the same program on multiple computers without proper registration. While the Business Software Alliance targets businesses that pirate software within their own companies, law enforcement agencies focus their efforts on counterfeiters. “(Software) piracy has grown up here in Southern California,” said Charles Neal, an FBI special agent in Los Angeles who oversees the local computer crimes squad. “There is no hard data regarding L.A. as the piracy capital, but all indications (when compared to other FBI bureaus) at the least show that we are very high up the list.” The FBI, the Los Angeles Police Department and the District Attorney’s Office all have handled a relatively modest number of software counterfeit cases, but the number is growing rapidly. Morrison recalled one local pirate who called himself “Captain Blood” and advertised cheap software “rentals” in newspaper classified ads. In another case, a Baldwin Park man in his early 20s had used his home to set up a full professional operation down to the industrial shrink-wrap machine to stamp out $5.6 million worth of “Microsoft” software, Morrison said. Neal said L.A’s largest piracy activity is concentrated in Asian-American communities in the San Gabriel Valley, where the involvement of organized crime and tight ethnic connections makes it difficult for law enforcement officials to intervene. The counterfeit operations in this area tend to be the professional outfits that have millions of dollars in sophisticated machinery and churn out thousands of fakes. Much of the counterfeit goods get shipped out through the ports to Asian countries. According to the Business Software Alliance’s July study on global piracy, 52 percent of software in the Asian Pacific region has been pirated. Law enforcement officials say they haven’t been able to pursue software pirates to the extent they would like because dealing with violent street crime and drugs is a higher priority. “We have to stack it against drugs, frauds and everything else in this jurisdiction,” Neal said. “We have to prioritize, but it is a problem.” Due to the FBI’s constrained resources, it only pursues software piracy cases that constitute over $500,000 in contraband. However, with pirates able to send out illegally copied software instantaneously over the Internet, the FBI is having an increasingly hard time determining the extent of the crime. “We have a 16th century legal system trying to accommodate cyberspace,” Neal added. “It doesn’t work too well.” The LAPD similarly has trouble keeping pace with its copyright-infringement cases, said Detective Terry Willis, the sole member of the LAPD’s computer crimes unit. Willis, who said he has been buried under the same software investigation for the last 10 months, expects at least one other officer to join his unit by the end of the year. Another problem is that with overcrowded prisons, non-violent offenders like software pirates tend not to have the book thrown at them, Morrison said. “California still has a volume discount for multiple crimes, meaning that counterfeiters face relatively light sentences,” Morrison said. “There is a bill in the state Legislature to increase the stringency of sentencing but the penalties are not yet high enough to be a real deterrent. Without that deterrent it’s not surprising that software pirates take up residency here.” While law enforcement agencies struggle to keep pace with this growing category of white-collar crime, Microsoft the world’s biggest software company is making its own efforts to curtail the damage. Davis educates local businesses and software owners about the various kinds of fraud be it illegally installing the same software on multiple machines or buying a “fully loaded” computer with illegally installed software from a reseller. He checks out classifieds online and in traditional media, hunting for people advertising Microsoft products at cut-rate prices. He also cruises swap meets, apparently a popular place to sell bootleg software, in search of counterfeits. “The bottom line for our customers to know is that if the price is too good to be true, it is,” Davis said. “It is hard for anyone, even a trained eye, to tell if a product is a counterfeit or not when it is done well.” Microsoft also contracts teams of freelance test buyers in major cities. They buy software from a variety of channels, searching for counterfeits. If discovered, counterfeits are turned over to local law enforcement. According to Davis, Microsoft’s level of test buying has increased as piracy grows more prevalent. Davis also is crusading to deter casual pirates, even the home computer user who installs a friend’s copy of software, by showing the impact on the local economy. Microsoft’s new study calculates that California has lost $171 million in sales-tax revenue and $815 million in lost wages for the software industry. “The trickle-down effect is huge, and anyone violating copyright law is not just taking money from software companies but from the local economy,” he said. “It’s also not just lost taxes, but even the deliverymen and invoice printers who lose business. People don’t realize that when they ‘borrow’ software from the office, they end up hurting their own neighborhood.”

NBC Moves Forward with Job Cuts Television network NBC announced Sept. 17 that it plans to eliminate as many as 300 jobs, nearly 5 percent of the network’s 6,500 employees. All divisions will be affected by the cuts, though there was no word on how many jobs would be cut at the Burbank studio lot, where about 900 employees work. A memo from NBC President Robin Wright said the move is necessary due to increasing costs and competition, and the network needed to make the changes as part of its strategy to hold on to its No. 1 position among TV watchers. An analyst suggested that NBC, whose parent company is General Electric Co., is following the lead of other networks such as CBS, which also recently announced plans to cut as many as 300 jobs.

CHRISTOPHER WOODARD Staff Reporter A developer has unveiled plans for the second of two industrial complexes along the Ventura (101) Freeway high-tech corridor, hoping to fill a niche for smaller, single-tenant industrial buildings. Santa Ana-based Burke Real Estate Group plans to develop a $10.2 million industrial complex in Camarillo called the Burke Camarillo Corporate Center. The project, which is being developed in an existing industrial park south of the 101 Freeway, will feature 18 buildings of less than 10,000 square feet each for a total of 120,000 square feet. The complex, which was approved by the Camarillo City Council on Sept. 8, comes on the heels of Burke Real Estate’s development of Grande Vista Business Park, a $13 million project in Thousand Oaks that the company began developing last year. Burke has already sold or leased 70 percent of that project. “What we found in Camarillo and Thousand Oaks is there’s a hole in the market in terms of 5,000-to-10,000-square-foot buildings for sale,” said Jason Harris, a project director at Burke. “We’re serving that demand there.” So far, the company already has commitments from two companies wishing to buy into its Camarillo project and a third is close to signing, Harris said. Bob Pettit, a Thousand Oaks-based broker working with Burke to market the properties, said both projects cater to smaller, mostly high-tech companies looking to take advantage of the tax and other benefits of owning their own buildings. Most of the clients are fleeing multi-tenant industrial parks, where annual rents can range from $65 to $80 a square foot. Buildings at the Camarillo Corporate Center are being offered for sale at $86 to $92 a square foot. “These are entrepreneurial guys who are tired of paying rent,” Pettit said of the project’s target market. The Camarillo project is located along Calle Plano, near the intersection of Calle Carga and Calle Bolero. Development is slated to begin in December, with completion expected next summer. Burke’s Thousand Oaks project, at 3225 Grande Vista Drive, was the first speculative industrial project to be undertaken in Ventura County in nearly 10 years. Burke has pre-sold or pre-leased all but six of that project’s 22 buildings. Burke has eight other developments under construction in Los Angeles and Orange counties, but Harris said the absorption rate in Thousand Oaks has been unprecedented in the company’s experience. He expects the same success in Camarillo. “(The Thousand Oaks project) is really hitting its stride. We’re not sure how deep the market is, but we’re cautiously optimistic,” Harris said.

Border Dispute Louise Marquez , the manager and marketing director of the Panorama Mall says she’s getting mighty tired of Van Nuys getting credit for the turnaround in Panorama City. When the area was blighted, folks called it Panorama City. Now that construction has begun on “The Plant,” a retail and industrial complex on the site of the former General Motors plant, and the area’s economy is improving, crime is down and there’s a sense of prosperity in the air, Marquez says folks keep referring to it as Van Nuys. Indeed, Bob Lumley, senior vice president at Voit Cos., which is developing the industrial portion of The Plant, thought it was located in Van Nuys. So did his partner in the project, Dan Selleck of the Selleck Development Group. They even call it Van Nuys at the Mayor’s Office of Economic Development. “What do they know?” says Nancy Hoffman at the Mid-Valley Chamber of Commerce, who says the border between Panorama City and Van Nuys is actually at the railroad tracks, north of Saticoy Street and south of The Plant. In fact, The Plant has “always been a Panorama City zip code,” Hoffman notes. The problem is that the GM plant was always called the “Van Nuys Plant,” not because it was located in Van Nuys, but because it was located on Van Nuys Boulevard. “Everyone assumed it was just Van Nuys,” Marquez said. “The actual railroad tracks are the boundary, but a lot of people don’t know that.” A Juicy Rumor, But It’s Not True A rumor has been making the rounds among commercial Realtors that Bristol Farms, the gourmet grocery store, is about to be bought out by Austin, Texas-based Whole Foods Market. Good rumor, but it’s simply not true, said Stephen Kaplan, a principal with Oaktree Capital Management LLC, one of Bristol Farms’ primary investors. “We’re not selling the company. In fact we’re in the process of investing another $15 million,” Kaplan said. The El Segundo-based company just opened stores in Newport Beach and Mission Viejo and is preparing to open yet another store in Beverly Hills next summer. Kaplan said rumors about Bristol Farms are common due to interest in the chain by what he sees as a near cult following by Southern Californians. Speaking of new store openings, when is the company going to reopen in Woodland Hills? The company closed its Topanga Canyon Boulevard location in May, saying it was looking for a hotter location on Ventura Boulevard. Officials with Oaktree Capital say the company is negotiating for a suitable space and has no plans to put Woodland Hills on the back burner. A Costly Remark If it weren’t for an offhand comment that Carl Schatz made to a banking journal shortly before he opened the Encino State Bank last October, the institution might have another name. Schatz was set to open what would be the fourth Valley-based banking institution he has founded, and figured on calling it the Bank of Encino, the same name he used for a bank he opened in 1953 and for another in 1986. Those banks ultimately were sold to other banks, which did away with the Bank of Encino moniker. As plans took shape for a new bank, Schatz commented to a banking industry publication that he wanted to use the name “Bank of Encino” because it was worth a million bucks. When officials at Western Bank read the passage, they took action to stop the use, even though they had done away with the name when they bought Bank of Encino in 1995. “They said, ‘If the name’s worth a million bucks, then we shouldn’t let anyone use it,'” said Schatz, who thus called the new bank Encino State Bank and who is the bank’s chairman and chief executive. The bank celebrates its first anniversary on October 2. It’s a Dirty Job But… The office of City Councilwoman Laura Chick has been getting complaints about a certain bar in the West Valley for some time now. The place is a “bikini bar,” where waitresses serve drinks and dance in skimpy bathing suits, but because they’re clothed, there isn’t much anyone can do about it. But lately one of the councilwoman’s constituents called to say that the bikinis had come off, and the girls were dancing topless at the bar. The development would change the business use of the establishment and warrants police investigation, said Eric Rose, district director for Councilmember Chick, who declined to name the establishment. But after lodging his complaint, the caller shifted gears, and asked Rose if he thought the police might need someone to work the case undercover. “He was willing to do it for free,” Rose said.

SHELLY GARCIA Staff Reporter Few people had heard of Daniel F. Selleck when he began exploring the possibility of developing a 33-acre site at the former General Motors factory in Panorama City into a retail shopping center. The president of Westlake Village-based Selleck Development Group Inc., a company he runs with his father Robert Sr. and brother Bob, had previously only been involved in small, community shopping centers with one or two stores. So when the large project began to grab community attention, many thought it was a third brother, the actor Tom Selleck, who was behind it. No one’s making that mistake now. Along with Voit Cos., which is handling the 600,000-square-foot industrial portion of the development, Selleck is helping to transform a community that had been marked by blight and crime since the GM plant closed in 1992, severing the area’s main economic artery. Even before it opened, “The Plant” was 98 percent leased, something Selleck says he’s never experienced with his other centers. The first retailer on the site, Party City, opened last month, and Babies R Us, Home Depot, Ross Dress for Less and Officemax and a 16-screen Mann Theatres will follow in the coming months. Selleck, who grew up in neighboring Van Nuys, remembers visiting the GM plant during a sixth-grade field trip. The parents and relatives of many of his friends were employed there. But it wasn’t merely nostalgia that brought him back. “My father has worked in the real estate business since 1948,” Selleck said, “and we felt that the area was still strong and had been somewhat overlooked by some of these retailers.” Question: The area that surrounds “The Plant” had become pretty desolate since the closing of the General Motors factory. Why did you think retailers would be interested in locating there? Answer: The key was the size of the parcel, the ability to bring in many retailers and not just one freestanding retailer. It’s very difficult to find a large developable site in the San Fernando Valley. There are a number of big-box tenants that had interest in this area of the Valley and the demographics we’re in the center of the population base in the Valley. There are a half million people within a five-mile radius. Yes, the area had been somewhat depressed over the years and, with the closing of the plant, the local economy was not strong, but typically real estate is cyclical and we go through these cycles and go out of these cycles. Nothing had really been done from a new development standpoint of any size in this area in the last 20 years, so we felt there was significant potential. Q: Did retailers share your optimism initially? A: I’d say it was a struggle at the start. Not only were we coming out of a difficult recession in Southern California, but it took some convincing on the area because it did have some higher crime. We felt that was because the area had a lack of investment and we could solve the security problem. Some tenants backed away because of the area, others saw the potential and stepped up. Babies R Us committed quickly, and I think they were instrumental in bringing in other tenants. Q: What were some of the projects you’d done prior to this? A: This is the largest project I’ve ever been involved with, but I did a 44-acre community center anchored by a Home Depot and Sam’s Club in Torrance. Most of the other projects we have done have been neighborhood or community shopping centers. We developed a couple of neighborhood centers in the San Fernando Valley and a couple of neighborhood centers in the Antelope Valley. Q: Do you think there are other opportunities like “The Plant” available in the Valley in today’s market? A: I think this (development) is going to make people look at this area. I think there’s some potential, but there are not an awful lot of sites like this that are available for future development. Q: At the same time, there seem to be other markets around the Valley where a large amount of retail development is continually taking place. In Woodland Hills, for example, there are four electronics stores within a few blocks of each other. Does all this development make sense? A: I think certain areas are becoming overbuilt, such as consumer electronics and large bookstores. In the retail business, we had five or six years that were very slow and we had some pent-up demand. But you have to be careful when things get better that you don’t do something stupid or feel that there is no end to the demand in the market. I see a number of submittals (project proposals) that I don’t react to, that I feel are marginal. But I think our economy is going to stay strong and I think there are opportunities in the area that are good opportunities. Q: How do you survive the cyclical nature of this business? Is there a way to manage the risk when you’re working so far in advance? A: I happen to have a very small company, so I don’t do a lot of deals. And I’m very hands-on for the deals I do. I will always be a small, entrepreneurial company doing maybe two to three deals a year, trying to understand the deals myself as opposed to having a staff person doing it. And even as difficult as it is to stay small during the boom times, you don’t take on every deal that comes across your desk. I have to be disciplined enough to say, ‘I’ve got enough on my plate, and I’m not going to do anymore,’ or I have to joint venture with somebody and spread the risk a little bit, and that’s worked out very well. Q: How did you get involved in this business? A: My dad was with Coldwell Banker. I certainly heard a lot about real estate at the dinner table and had an interest to learn more about it. In college I went to work for a developer over the summer leasing his vacant space in a shopping center. I did OK. It was interesting because they were the toughest spaces to lease, and I went and cold-called the neighbors and knocked on doors, but somehow or other I enjoyed it. Shortly after I graduated from college I went to work for Coldwell Banker Commercial, and was a broker for seven years. Then I went with a partner down in the South Bay and have been developing since 1984. Q: Did you ever think of doing anything else? A: I thought about going into banking, and I was probably going to have to go back to college and get my MBA, and I think having had that experience of dealing in the business world during my junior year and part of my senior year, I really enjoyed it and I didn’t want to go back to school for an MBA. Q: How do you think the current state of the financial markets is going to affect your industry? A: I’ve found that the last 30 to 45 days have been pretty volatile. A lot of the major institutions have pulled back from the commitments they made, but were not yet in writing. Lenders typically tie their interest rates to 10-year or 30-year treasury bills, and as those have dropped, the interest rates have gone down. I think lenders are reassessing their rates. I think that they’re trying to find equilibrium now, and the market may be somewhat volatile until that equilibrium is found. Q: How does that affect you? A: You always have to be aware of your exit strategy (the way you pay off a construction loan, either by converting it to a permanent loan or selling the property). I think we’ve seen a strong investment market for buyers, although the REITs (real estate investment trusts) have slowed down. And the financing market was very strong and that’s gotten a little more volatile, so we’re going to evaluate our alternatives. We still have some time. We don’t have a gun to our head. So we’re going to take a wait-and-see attitude, but certainly the volatility will have a bearing on what our ultimate exit strategy turns out to be.

BENJAMIN MARK COLE It’s the choppiest market in memory, lurching forward or back in 5 percent chunks every few days, but evidently small investors are holding pat, if local stock clubs and advisers are any indication. “We have a buy-and-hold strategy. We invest for the long term. The recent downturn in the market, in particular the much lower price of individual stocks, is now a buying opportunity,” said Mary Citron, who operates an investor club in the San Fernando Valley that is affiliated with the National Association of Investors Corp. Other NAIC investors concur. “(The market downturn) gave us a chance to buy some stocks we couldn’t afford before,” said Henry Bernard, who has operated the Buttonwood Four investor club since 1982 in Lake View Terrace (The NYSE was started under a Buttonwood tree). Bernard alluded to certain investing guidelines, such as price-earning ratios, to which the club must adhere. Gordon Peay, chairman of the Los Angeles Chapter of the Society of Certified Financial Planners, said his clients echo the sentiments of those in investor clubs. “With just a few exceptions, everybody is very comfortable,” he said, describing his 200-or-so clients. “People are in the market based upon long-term expectations, and are looking for future growth. We fully expect the market to go up and down in the short term.” The stolid fortitude of local investors and investment clubs is matched nationwide, said Jonathan Strong, spokesman for the Madison Heights, Mich.-based NAIC, a non-profit umbrella organization for 37,560 investment clubs with 730,000 members nationwide. “We are finding that members prefer to hold during market ups and downs. If anything, in down periods, they like to add to their holdings,” said Strong. Junk is good Market turmoil and fears of weakened economies are bad news unless maybe you are in the junk-bond business. Investors tend to shy away from junk bonds when the economy starts to look iffy after all, most junk bonds are called “junk” because they are more risky than corporate blue-chip bonds, or government gilts. Typically, a junk-bond company carries more debt than a well-rated company, and thus may have trouble honoring that debt if the economy unravels a bit. But economic gyrations mean higher yields on junk bonds, and thus investment opportunities, said Howard Marks, founder and chairman of Oaktree Capital Management LLC in downtown Los Angeles, a junk-bond firm with $11 billion under management. “The spreads have widened on junk bonds to about 500 basis points over (U.S.) Treasuries. It has been as low as 200 and 300 basis points. All of a sudden, we have some of the highest spreads ever, exceeded only in 1982, then in 1986, and then in the early 1990s,” said Marks, a 20-year veteran of buying junk bonds. Institutional investors are back in the junk-bond market, attracted by the yields. If anything, Marks is concerned that the junk-bond market has been too good. “Buyers aren’t showing enough discernment and selectivity when buying bonds. There has been a little bit too much euphoria,” said Marks, and that is allowing some second-rate issues, even by junk-bond standards, to come to market. Re: small caps What you call a small-cap stock may not be what the next guy calls a small-cap stock, especially if the next guy is Scott Leonard of Santa Monica-based Leonard Capital Management. “You want to know what the market cap is of a small-cap stock according to Morningstar? Anything under $1 billion,” says Leonard, who puts the upper limit at $250 million. Actually, Chicago-based Morningstar Inc., an investor service that rates mutual fund performance, even puts some companies with market caps well in excess of $1 billion under the “small-cap” banner. That’s because Morningstar considers any mutual fund a “small-cap fund” if the median company in its portfolio is below $1 billion, meaning as many as half the fund’s holdings could have market caps above $1 billion. Leonard argues that the definition of small cap is more than just semantics: The performance of small-, mid-cap and large-cap stocks varies greatly, depending on how one defines each of those class sizes. For example, the Russell 2000 the stocks just below the largest 1,000 stocks, in terms of capitalization have been laggards during the 1990s compared with the S & P; 500. The S & P; 100, an index of the biggest blue-chip companies, has done even better. Since 1980, the S & P; 100 index is up about 675 percent, compared with 450 percent for the Russell 2000. But wait before disregarding small caps as an asset class, says Leonard. “What makes the Russell 2000 a good benchmark for small caps? It’s just an arbitrary index the media likes, similar to the Dow Jones Industrial Average of 30 stocks,” he points out. To truly assess the performance of small caps, one must look at stocks whose market caps (shares outstanding times share price) are in the bottom two deciles (tenths) of all stocks, says Leonard. Measured another way, that would be all publicly held companies today that have market caps below $250 million. An average market cap of a small-cap stock is $156 million, by Leonard’s estimate. An index of small-cap stocks under that definition, those in the bottom fifth, has risen 899 percent from 1990 to present, beating even the handsome S & P; 100 performance for that time period, according to the Chicago-based Center for Research in Security Pricing. Some call these small companies “micro-cap stocks,” which Leonard takes exception to. “Mutual fund guys call them that, because they are too small for them to invest in. But they are just small-cap stocks,” he said. For Leonard, the question of small caps outperforming blue chips is interesting on its merits, but even more important when one creates a portfolio of investments. The stocks in the bottom two deciles have low “correlation coefficients” with the S & P; 500 stocks. That means the blue chips often go one direction while the “micro caps” go another. That translates into diversity, says Leonard. “For my clients, I put about one-third of their equity investments into small caps, to balance what happens in the S & P; 500 stocks.” By the way, Dimensional Fund Advisors, the big money shop in Santa Monica with $23.4 billion under management, runs several mutual funds devoted to the smallest stocks. Two of those funds are known as the DFA 6-10 Small Cap Portfolio and DFA 9-10 Small Cap Portfolio. The numbers serve to indicate into which deciles (as measured by market cap) the funds invest. Contributing Reporter Benjamin Mark Cole covers the local investment community for the San Fernando Valley Business Journal. He can be reached at [email protected].

SAM ROTNER Property and business owners along the Northridge commercial corridor, primarily those on Reseda Boulevard, have been concerned for several years about steady physical deterioration, as well as the decline of property values, in the area. To cope with these issues, approximately 40 property and business owners, homeowners and civic leaders united with academic leaders from Cal State Northridge beginning in 1996 to create a Business Improvement District. A BID is an organization established by property owners and/or businesses to reverse an area’s negative image and attract new customers in an effort to increase sales, occupancy and property values. It provides enhanced improvements and activities such as security, maintenance, landscaping and marketing, in addition to service currently provided by local government. The district is proposed to run along Reseda Boulevard, from Roscoe Boulevard to Lassen Street. The Northridge BID will be a single non-profit organization governed by a board primarily representing those who pay an agreed-upon assessment. With support from CSUN faculty and students, an innovative five-year marketing and public relations campaign has been developed by the BID. This plan will make residents aware of the transformation occurring in the area and will foster a sense of community through artistic expression of the diverse individuals who live and work in Northridge. After conducting extensive surveys with business owners and residents on ways to improve Reseda Boulevard, and after reviewing recommendations from CSUN students, the BID’s Advisory Board settled on the “Northridge Oasis” as an appropriate theme for the district. In fact, an underground spring flows under the railroad tracks at Reseda Boulevard and Parthenia Street. To the Gabrioleno Indians, this was their “zelzah,” or oasis. The Northridge Oasis theme will encompass music and art and establish Northridge as the center of culture in the Valley. Sub-themes may be developed within the district, such as a Health and Wellness Oasis or a Campus Oasis. The Historical Northridge Oasis will be at the center of the district. Each year during the BID’s five-year term, a theme-related festival will be held to increase resident involvement in the area’s improvements and to promote a sense of community celebration. The first annual event may be a Renaissance Fair on Jan. 17, 1999. This date will be the fifth anniversary of the Northridge Earthquake. The process of creating a BID for the boulevard is in its final phase. The final draft plan for the district was presented to and approved by property and business owners over the summer. The Northridge Business Improvement District (BID) formation advisory board submitted its management plan to the city Clerks Office in August, along with supportive petitions from owners of the majority of property owned in the district. The clerk will process the documents and schedule an approval hearing before the Los Angeles City Council, but no time has been set. The problems that are normally confronted in establishing a new volunteer group are numerous. Starting from “scratch” was very time consuming. It is difficult to sell a concept that is only beginning to develop. As the concept for what this district should be became clear, the efforts to form the district gained momentum. The BID is fortunate to have a very dedicated and determined group to see the project through to completion. The major contributing group is CSUN, with its hundreds of students and many faculty and advisors. CSUN President Blenda Wilson is very supportive of the BID and is aware how important this project can be to the future of CSUN and the surrounding community. Because of the strong support from the entire community and the broad inclusiveness of interested parties in the process, including property and business owners, CSUN, residents, community leaders, city officials, and major companies, we were able to bypass many problems associated with forming a new BID. The Northridge BID seized an opportunity to seek the experts and resources available at CSUN, and CSUN seized the opportunity to develop their community relations for the benefit of all concerned. Although there are at least 11 other BID’s developing in the San Fernando Valley, Northridge is unique in its use of the local university as a key resource in its formation and continued development. It is also unique in combining property owners and tenant business owners simultaneously into a single jointly funded BID. Sam Rotner is chair of the Northridge BID Formation Committee. He is the former owner of Cycle World, the Reseda Boulevard business he opened in 1963, and still owns the property.

JILL ROSENFELD Staff Reporter With home prices at their highest level since the early ’90s and the economy still holding up, Angelenos are spending money on landscaping to the delight of everyone from sprinkler installers to landscape architects. “In leaner times, they’d bypass the yard in favor of finishing something on the inside,” said Steve Silva, a Hollywood Hills landscape architect who has seen his business double in the last year. “That’s what I always hear from my clients: the landscape is the icing on the cake.” The landscape industry feels the effects of a strong real estate market later than brokers, architects, or developers, according to Richard Sperber, president of the landscape installation division of Environmental Industries Inc. The Calabasas-based nursery and maintenance company counts the Getty Center and the L.A. County Museum of Art among its clients. “Landscaping is the last thing done,” Sperber said. “We feel the boom a little later than everyone else, and the slowdowns a little later also.” Sperber said that in the last year, the nursery business has seen a 25 percent to 45 percent increase as residential and commercial property owners alike spruce up their outdoor areas. Much of the growth in the single-family home sector has been driven by high-end homeowners. “People have more money, and they’re leapfrogging into the house of their dreams,” Silva said. “There’s always a steady market for your basic no-brain smaller stuff. The major growth has been on the high end.” Garden Statuary in Tarzana has capitalized on the trend, increasing its revenue this year by targeting upscale clients who invest in fountains and concrete work worth over $20,000. “Our business is strictly discretionary spending, and so far this year, people have been in a spending mode,” said Wolf Anders, who has been helping with the marketing side. Discretionary spending has driven an increase of irrigation systems sales at Pierre Sprinkler & Landscape, said co-owner David Reed. “People have extra money to make improvements. We’ve seen a jump in the amount of sprinkler installations we’re doing, mostly for people who’ve been living in a house for three years, can refinance their home based on a higher value, and are finally doing the irrigation,” he said. Meanwhile, retailers like Sperling Nurseries in Calabasas have noticed stepped-up sales among the do-it-yourself crowd. “There are so many new homeowners, and gardening has become such a big hobby, this has been a very, very busy year,” said Liz Kimmel, a saleswoman for Sperling. “They may have put all their money into a house and can’t afford a formal landscape architect, and so they want to do it for themselves.” The spate of public-works projects around Los Angeles County is also a boon to the landscape business. In addition to the Getty, Environmental Industries has done landscape work for the new Queensway Bay development in Long Beach and improvements around Santa Monica’s pier and beach. Calvin Abe, past president of the American Society of Landscape Architects’ L.A. chapter, said he and others have been very busy with work in all sectors. “In the last six months, there has certainly been a lot more work in the private development sector,” he said. “A lot of developers are building for both commercial and industrial build-to-suit tenants, and a lot of high-end multifamily housing is going up.” Over the last year, Abe has hired three people for a total of eight employees to keep up with the demand. He has also hired part-timers, he said. Damage from El Ni & #324;o has also been a factor, several contractors said. “El Ni & #324;o has made a lot of people want to clean up, and do tree work,” said Andrew Williams, who owns Compton-based Pacific Landscape.

CHRISTOPHER WOODARD Staff Reporter A plan by the L.A. Department of Water and Power to study the possible development of 1,300 acres at its empty Chatsworth Reservoir has ignited a rancorous dispute between the agency and preservationists. Opponents of development, mostly neighbors and conservation groups, say the property is home to deer, coyote, bobcats and other plants and animals and to develop it would rob the San Fernando Valley of one of its last natural spaces. Residents, working with L.A. City Councilman Hal Bernson, are pushing to have the DWP donate the land to the Santa Monica Mountains Conservancy at a cost of $1 a year so it can be kept as open space. But the city’s utility, led by DWP board president Rick Caruso, have held up the transfer, saying the cash-strapped department owes it to the taxpayers to at least study other options for the land. The property, unique in size in the mostly developed San Fernando Valley, may be worth as much as $50 million, Caruso said. Some of the land could be set aside as a nature preserve, but a portion of it might be earmarked for youth baseball or soccer fields or set aside for limited development, he said. “All I’m saying is before we give it away, let’s understand what we have and what kinds of uses could go on the property,” said Caruso. That suggestion, especially from Caruso a real estate developer who built the Promenade at Westlake Village and is building a similar upscale retail outlet in Calabasas touched off an angry reaction from neighbors. When Caruso’s reappointment to the Board of Water and Power Commissioners came before the L.A. City Council on Sept. 11, two dozen residents showed up to demand his ouster. The 6-4 vote in favor of Caruso’s reappointment was two short of the majority needed for a second term. However, Caruso was automatically re-appointed because it was the last day for the council to act and opponents were unable to muster the eight votes needed to win his removal. Frank Salas, an executive assistant to the DWP’s general manager, said his office is preparing to undertake a study on the reservoir that the staff intends to present to the City Council in 90 days. “What we envision is a study that will provide a look at all the options available while still preserving a pristine wildlife sanctuary,” he said. Development of part of the land will not be ruled out in the study, he said. One of the options might be to build recreational facilities, possibly even a golf course. But the thought of any development on the property, even for recreational purposes, angers Diorian Keyser, a member of a preservationist group called the Santa Susana Mountain Park Association. “We have enough golf courses and recreational facilities,” he said. “This is an incredible nature preserve that has a lot of plants and animals. It’s the last large open space in the floor of the Valley that is completely undeveloped.” Bill Allen, president of the Economic Alliance of the San Fernando Valley, said as a taxpayer and a DWP ratepayer he applauds the DWP’s decision to study ways to best use the land, and he disagrees that the Valley has enough recreational facilities. “(The DWP) is looking into selling unnecessary assets to reduce their formidable debt burden,” he said. “There might be a nice opportunity to create recreational opportunities for kids.” David Fleming, chairman of the economic alliance, said in addition to setting aside land for green space, the City Council also should take into account the Valley’s need for economic expansion and jobs. Fleming is hopeful the two sides can reach a compromise. “Who knows what the possibilities are until we sit down and work it out,” he said.

Natural Asset A few years ago, the L.A. City Council designated the former Chatsworth Reservoir as the “Chatsworth Nature Preserve/Reservoir.” On March 20, 1998, the council voted unanimously to have the DWP negotiate a 10-year lease with the Santa Monica Mountains Conservancy for its management as a nature preserve. This would save the DWP an estimated $250,000 a year. Better yet, it provides the public with a facility that has great natural, archeological and educational worth. However, DWP Commission President Rick Caruso wants to “study” how much developing a portion of the reservoir property would yield for the DWP. The Audubon Society conducts annual end-of-the-year bird counts. Of the 209 species on this list, 47 are commonly seen all year at the reservoir, 28 are commonly seen seasonally, 47 are seen irregularly, and 44 are seen occasionally. Forty-two of the 47 commonly seen species actually breed there. Among the birds using the reservoir area are Canada geese, golden eagles, and five species of hawks. Among the mammals are deer, coyotes, skunks, bobcats, raccoons, foxes, possums, voles, wood rats, ground squirrels, rabbits and, rarely, mountain lions. Other creatures are rattle and gopher snakes, lizards, frogs, salamanders and more. Vegetation includes numerous valley oaks and other trees, riparian areas and grasslands. A calera (lime kiln), now California Landmark No. 911, was used by Native Americans to make lime for the San Fernando Mission. The Canada Goose Project brings junior and senior high school students from Los Angeles for significant study projects. This group also conducts morning and evening Canada Goose Counts from mid-October to mid-March. Although the facility is completely fenced, a well-worn road allows people to drive by its north and west borders , and nearby residents can view it from all sides and they highly prize what they see. If a portion of it is developed, the developer would have to pay for the utilities and roads within his development. However, expansion of the capacities for the delivery of water and electricity to the development, sewage and flood waters from it, and widening and repairing the main roads would be paid for by the general taxpayer. DORIAN KEYSER Tarzana