By Jeannette DeSantis Contributing Reporter Since the early 1970s, Brentwood developer Gerald L. Katell has been a fixture in the San Fernando Valley, building his trademark projects across the skyline including the Northridge Business Park, the Agoura Hills Business Park and the Nordhoff Industrial Complex. But Katell will probably be best remembered as the man who ended years of battling between homeowners, city officials and developers by purchasing the 21.5-acre parcel of land called Warner Ridge in Woodland Hills. Since the mid-1980s the land located at the western edge of Pierce College near DeSoto Avenue has been left untouched because of two court battles and a lack of funding. But when Katell stepped into the picture last fall, he turned the controversial office and housing project into a promising development once again. The land entitlements are in place, tenants are lined up and construction on the 690,000-square-foot office tower complex is expected to begin early next year. It is scheduled to be ready for occupancy in mid-1999. Question: How did you get involved with Warner Ridge? Answer: Spound Development worked on the project in the late ’80s and early ’90s, and they ended up in a lawsuit with J.P. Morgan, which had become their partner. That lawsuit was ready to go to trial in October of 1996. Just before then, there was a whole series of three-way negotiations basically over one weekend last fall. The net result was that J.P. Morgan agreed to sell the property to me and at the same time, J.P. Morgan agreed to a settlement with the Spound bankruptcy estate that settled the lawsuit. Q: What attracted you to such a controversial development? A: Well, certainly not the controversy. What attracted us was the fact that it was such a well-located project and that the controversy was really over to the extent that the entitlements had all been approved and everybody now knew what was allowed to be built there, and the project could move forward. And I think that in most cases like this, once things are resolved people like to see them finally get done. Q: Some have said that it was actually your political savvy, more than anything else, that made the Warner Ridge project a reality. A: It is certainly a process I am familiar with I have built in cities like Agoura Hills and Thousand Oaks and Los Angeles, and one has to be both cognizant of and work closely with the neighborhoods and with the communities. I have always done that. When I build projects I am not building them for somebody else. I still own most of the projects I developed. Therefore, I want to build projects that I am proud of and I will keep. I am also sensitive to what the project is going to look like. One of the very critical aspects of projects that I always do is the landscaping because over time, especially with fairly low-rise buildings that really are my trademark, the most noticeable thing about the project is the landscaping, not necessarily the buildings. If you really do a nice job on the landscaping the project really gets more beautiful over time. Q: What types of concessions are you willing to make with the Warner Ridge project to appease the neighbors? A: I plan to meet with the homeowners associations. I haven’t done that yet. The reality is that the entitlements are all in place. There is no request at this point that I need to make. Everything is in place to proceed with the project. So I think my role now is to give information and to communicate so that people know what I am doing and when I am going to do it. But I am not going to be asking for anything that doesn’t already exist. Q: There are several new projects planned for construction in downtown L.A., like the Disney Concert Hall, a new sports arena and a new cathedral. If there is a revitalization of downtown, what will that mean for the suburbs? A: I am all for a revitalization of downtown L.A. The only thing that I see is that the corporate growth from what the brokers are telling us tends to be more oriented toward suburban, lowrise campus types of projects than it is toward downtown highrises. Because of those factors and others, the downtown highrises are renting for cheaper rates than the suburbans, so there will be some tenants that will say, “OK, we will go downtown because it’s cheaper.” So I would expect that downtown will continually and gradually improve, and those projects you mentioned will certainly help in that process. But we feel that the long-run growth will be in suburban places like Warner Center, Agoura Hills and Calabasas. People still prefer to work closer to home. Q: How has the real estate business changed since you first started in Los Angeles, back in 1971? A: The approval process has tended to become gradually more difficult over the years. In the 1970s and early 1980s it was easier to move a project through. Also, in the real estate business in general, especially in the ’90s, the places people get their capital and the nature of the businesses that are involved in development have changed. There certainly is a big wave of real estate investment trusts that are becoming very big players. We haven’t yet seen them become players in the development side we don’t know whether that is coming down the road or not but they are certainly becoming players in terms of the ownership of properties. Because of the grave difficulties of the economy and the overbuilding of the’80s, there are many developers who are not around anymore here in the later ’90s. Those of us who are still here and have survived the tough times are starting to see a lot of new opportunities to develop. Q: Times have been especially tough for the San Fernando Valley, with the Northridge earthquake and the recession. Do you see an upswing? A: There definitely is an upswing in the Valley. Industrial is doing extremely well. There is very limited space available for industrial tenants and industrial growth. The office market is improving. It is not a rip-roaring market like some other parts of the country, like Northern California’s Silicon Valley, which is on fire. We don’t have that. But we are seeing nice steady growth and absorption of all the space that has been overhanging the market. I think the effects of the earthquake are pretty well behind us now. Growth as it affects new development is really now dependent on other factors, on the particular industries that are growing. Q: What other factors? A: Well, the entertainment industry is driving the growth of the eastern end of the San Fernando Valley as well as the Santa Monica and Westside markets. But we think that the west end of the Valley will also start to see significant growth. There may be some entertainment companies moving in that direction, so we are hopeful of that, although not too much of it has happened yet. We think, more significantly, the high-technology and software companies are producing a lot of growth in those sectors. We are also going to see if we can bring those companies that are facing very high rent rates in Northern California down to Southern California with better rates. Gerald L. Katell Title: President, Katell Properties Born: Jan. 29, 1941 in New York Education: B.S. in civil engineering, MIT. M.B.A., Stanford University Most Admired Person: His wife, Sharon Katell Career Turning Point: Meeting partner Ray Watt in September 1976 Personal: Married, four children, two grandchildren Hobbies: Mountain biking, tennis, jogging, skiing

By JOE BEL BRUNO Staff Reporter There is one thing that drives many of the San Fernando Valley’s fastest growing public companies: technology. The Valley is proving itself not just to be a center for entertainment, but a growing region for high-tech firms. Ten of the 25 fastest growers are in that arena, producing everything from digital cameras to high-bandwidth switch systems. Leading the pack is Xylan Corp., No. 1 on the List, which latched onto the demand for computer networking to become one of 1996’s hottest initial public offerings. The Calabasas-based company, which opened for business in 1993, makes switches that move data over computer networks. Among its competitors are heavy hitters like Cisco Systems Inc. and 3Com Corp. “There is a lot of competition in what we do,” said Kevin Walsh, Xylan’s vice president of marketing. “But our growth comes from the fact that we are packing more and more technology into one single device. For being new, and a smaller company, we’ve been able to move quicker and stay just ahead of the competition.” Xylan’s sales grew 333 percent to $128 million in 1996. Besides being the Valley’s fastest growing public company, it ranks No. 12 on the Business Journal’s List of 100 fastest growing public companies in L.A. County. Earlier this year, Xylan was caught in an industrywide glut of data networking stocks and at one point dropped to as low as $12.38. The stock recently recovered to about $20 on Nasdaq but still is far from the $76 upon first going public in 1996. Despite its stock tumble, Xylan revenues for the six months ended June 30 were $93.1 million, compared with $51.6 million for the like period a year ago. Xylan has kept up its revenues in part through a strategy of signing a relatively small number of very large deals, instead of multiple smaller deals, Walsh said. For example, it recently signed a three-year, $2 million agreement with First National Bank of Maryland to upgrade bank teller machines. Another company booming last year was Chatsworth-based MRV Communications, which secured the No. 2 spot on the List. It posted a 126.6 percent increase in revenues last year, coming in at $88.8 million. However, the best of the 5-year-old company lost $9.6 million. MRV designs high-speed network switching systems, similar to Xylan. Most of its growth has come from sales agreements with several leading computer companies, including Intel Corp., Fujitsu Corp. and Digital Equipment Corp. MRV wasn’t the only company on the List to experience strong revenue growth, yet lose money. Others include Cinema Ride Inc. at No. 13, Film Roman Inc. at No. 14, Jerry’s Famous Deli Inc. at No. 15, Dycam Inc. at No. 16 and Children’s Wonderland at No. 25. But by far the biggest difference between revenues and profits was at Trikon Technologies Inc. The Chatsworth-based company, No. 3 on the List, saw revenues grow by 98.3 percent over 1995 to $42.2 million. However, the company lost $94.5 million. The company was previously called Plasma & Material Technologies, but changed its name in March after making the $150 million acquisition of United Kingdom-based ElectroTech Group. “It was a big one-time purchase that’s why our profits are so low,” said Trikon spokesman Frederick Reynolds. “Our customers want fewer vendors with more solutions. So, to be a player, we made the acquisition and changed our name to expand our products and broaden our markets.”

By Bill Desowitz Contributing Reporter As the nation’s largest licensee and distributor of laserdiscs, Chatsworth-based Image Entertainment seems headed for the technology industry’s endangered species list. After all, most experts believe laserdiscs eventually will be replaced by Digital Versatile Discs, or DVDs smaller discs that can store not just films but music albums, computer programs and other data. DVDs are expected to replace not just laserdiscs, but compact discs and CD-ROMs as well. But Image officials aren’t worried. Despite the fact that analysts expect DVD one day to become a dominant home movie technology, Image will keep supporting the lackluster laserdisc industry while at the same time covering its backside by venturing into DVD as well. This hasn’t been easy time for Image, which currently distributes more than 5,000 laserdisc titles (movies, music videos and various specialty programming) to 2,500 retail outlets. While DVD has yet to take off, its mere presence has put a devastating chill on laser hardware and software sales for almost a year. The chill is certainly reflected in Image’s financial results for its fiscal year ended March 31. Net income plummeted 89 percent to $845,000 (6 cents a share), from last year’s $7.6 million (49 cents a share). With its own manufacturing capability and an extensive distribution operation, Image continues to release about 50 titles a month, capturing 40 percent of the U.S. laserdisc market. The company has exclusive deals in place with Buena Vista Home Video (a division of Walt Disney Co.), 20th Century Fox Home Entertainment and Playboy Home Video, among others. A couple of the more notable films Image will soon be distributing on laserdisc are Disney’s animated “Sleeping Beauty” and “The Hunchback of Notre Dame.” Image President and Chief Executive Martin Greenwald maintains that the DVD hype is exaggerated. “Dealers are way in front of consumer demand,” he said. “They are building up a pipeline of software, but trying to get a pipeline in too quickly. And DVD is confusing retailers. They overbuy DVD titles and underbuy laser. They are not taking a realistic posture.” To better compete with DVD, Greenwald expects laserdisc prices to fall 25 percent in the next year. As of mid-June, the Consumer Electronics Manufacturing Association reported that 100,000 DVD players were shipped to retailers. But Greenwald claims that only about 50,000 to 60,000 have actually been sold to consumers. Right now, only a handful of the big home video distributors are supporting DVD with software. Disney, Fox and Paramount Pictures are holding out for a variety of financial and copy protection reasons. However, Warner Bros., the largest DVD software manufacturer with a 50-title catalog, remains optimistic about the prospects of the format. After initially testing DVD in seven U.S. cities, Warner will expand nationwide in the fall and will support its expansion with a heavy promotional boost during the holiday season. Sony Pictures Entertainment has announced that it too will expand its DVD catalog this fall. “The test exceeded our expectations,” said John Powers, Warner Bros.’ director of marketing/DVD. “We shipped approximately 1 million units, with 48 percent going to consumers. Based upon the extraordinary success, our product will be available in every city in the U.S. and Canada, and it will be available to all of our retailers.” Without full industry support, Greenwald believes DVD will never take off unless the rest of the studios get involved. Which would be good news for Image Entertainment. But while Mike Yocco, an analyst with Carmel-based Paul Kagan Associates, agrees that more studios must get into the act for DVD to be successful, he is cautiously optimistic about the technology and thinks the outlook for companies like Image may be grim. “The laserdisc is now dead,” Yocco said. “People are looking to the new (digital) technology. Is it going to be niche or mainstream? Because DVD is priced closer to VHS sell-through and the format has a lower per unit cost than laser, it has a better chance at succeeding.” That’s why Image has no intention of ignoring DVD. It has already started aggressively licensing titles. The company, for example, has just announced a 12-title deal with Orion Productions Inc. that includes such hits as “Silence of the Lambs,” “Robocop” and “Dances with Wolves.” Image’s overall plan is to release 60 DVD titles by the end of the year. “This is a content-driven industry and 95 percent of the consumers out there don’t care how much better DVD is than video,” Greenwald said. “My skepticism comes from the reality of lasers versus video. If there is a future for DVD, it’s with the combination player, which lets you play laser and DVD that’s the Holy Grail.”

Hed — Awakening in Pacoima Pacoima has an awful image an area where gangs and drugs predominate, a place of low income, high unemployment and little hope. It’s not insignificant that the people who attach such labels to Pacoima tend to live far, far away from Pacoima. Talk to the business people and residents of that San Fernando Valley community, as reporter Jeannette DeSantis does in this month’s Spotlight feature, and you get a somewhat different perspective. Certainly, Pacoima’s bottom-line economics remain discouraging: Its per-capita income is among the lowest in Los Angeles County so low, in fact, that it was the only Valley community to qualify for a federal Empowerment Zone designation (established following the 1994 Northridge earthquake). It also has one of L.A.’s highest illiteracy levels. But as DeSantis points out, Pacoima has a vacancy rate for industrial real estate of just 3 percent, among the lowest in the area, and on the retail side, it’s a bustling community of grocery stores, auto shops and other mom-and-pop-type merchants. It’s also where the city of L.A. plans a major redevelopment project, in the area around Hansen Dam. Among the possibilities: a walking trail, sports facility or amusement park. An advisory committee chosen by Los Angeles City Councilman Richard Alarcon will consider the best of five proposals submitted. After that, any project still has several major hurdles to clear. But clearly, the redevelopment has momentum and if realized, it would go a long way toward providing the kind of cultural and recreational activities that are so much in demand in that part of the Valley. What’s happening in Pacoima is the result of several factors, including a much-improved economy and an activist councilman in Alarcon, who seems focused on turning around the area’s poverty-and-crime image. But it’s really more than that it’s the community itself, which, ever-so-slowly, is showing signs of empowerment. “There is a general sense that things are cleaning up here,” said Alarcon. “There is an improved sense of community and in turn that has an impact on such things as crime.” As could be expected, government is playing a significant role in this awakening. In addition to the empowerment zone designation and Hansen Dam development, Pacoima businesses can qualify for loans through the Community Development Bank, which opened a branch in the area in late July. Those and other government-supported breaks provide a substantial boost both to businesses looking to stay in Pacoima and those coming in from other locales. Such efforts seem appropriate. There’s nothing wrong with jump-starting a community with government funds especially one that’s been given up for dead by many in Los Angeles. But coaxing an economic renaissance through government-subsidized giveaways only goes so far. The tricky part is coming soon. At some point, Pacoima, like any other community, must show an ability to stand on its own and phase out the giveaways. Otherwise, it always will be left to depend on the kindness of governments an impractical approach in a capitalist world.

Sports and CSUN I understand the frustration expressed by the San Fernando Valley business leaders in your recent article on the decision by Cal State Northridge to eliminate certain men’s sports (“Valley Business Leaders Slam CSUN Officials,” July San Fernando Valley Business Journal). Their frustration and sadness mirror the reactions of campus leaders, including those who had to make the difficult judgment call that has caused such controversy for the last month. However, it seems to me that the public and media reactions largely ignore one crucial element of the decision: The core concern of this university as of any other university must be its academic programs. I believe that the decision made by President Blenda Wilson was necessary in light of other possible alternatives, some of which might have compromised the university’s ability to serve the thousands of students whose primary reason for coming here is to obtain a quality education. For example, to make up for the $800,000 deficit in the athletics budget, funds might have been drawn from academic programs. But $800,000 represents the annual cost of maintenance, repair and support for all desktop computers (approximately 5,000 workstations) on campus. Or, the same amount could be used to equip a new 40-station student computer lab in each of the university’s eight colleges. With decreases in state support for higher education and a California economy that is just beginning to recover from recession, unpopular decisions on budget allocations have to be made daily at the university. Since the late 1980s, all academic programs have become more efficient, doing more with less in responding to student and community needs. As the university’s chief academic officer, I could not in good conscience ask these programs to sacrifice more for the sake of athletics. As tough as the decision was, I believe President Wilson had no other choice. A viable collegiate sports program needs to play in a conference, and the Big Sky Conference in which Northridge participates requires 14 sports, including football and basketball. In addition, football is the only sport able to generate significant revenue in the long run, no matter how little that may be initially. I sincerely hope that the frustration expressed by many of the business leaders of the San Fernando Valley is balanced by the benefit they derive from hiring the well-educated Northridge graduates of the future. LOUANNE KENNEDY Provost and Vice President for Academic Affairs California State University Northridge

By Bruce Dobb As the San Fernando Valley economy picks up steam, the last business sector to improve is the commercial shopping districts in older, residential communities. Commercial areas are invariably the first to show signs of blight when a neighborhood deteriorates and the last to snap back when things turn around. From Sherman Way in Canoga Park to downtown Van Nuys to Hollywood Boulevard, people wonder whether anything can be done to restore blighted shopping districts. The success of Santa Monica’s Third Street Promenade and Pasadena’s Old Town attest to L.A.’s hunger for pedestrian-friendly public spaces that invite mingling and social life. Areas that have been revitalized are teeming with shoppers and lease rates and retail sales there have more than tripled during the ’90s. Revitalization can happen in the Valley, but not without a comprehensive public/private partnership plan. Commercial revitalization has been successful in San Diego’s Gaslight District, Baltimore’s Gay Street, Philadelphia’s South Street and even downtown Long Beach. There’s no reason it can’t be done successfully in the San Fernando Valley, if the correct program is in place. Here’s a step-by-step approach to creating such a program: – Define a concentrated area that represents a cluster of shopping for a specific community or neighborhood. In Eastern cities, these areas are typically easy-to-define corridors along densely packed commercial areas that have lots of foot traffic. In Los Angeles, they are spread across wider areas, have greater need for parking and are harder to define. But the merchants know who their customers are, and they can usually determine what the area of concentration should be. – Organize the stakeholders. Merchants, property owners and nearby residents all have a vested interest in restoring their communities, but they don’t necessarily share objectives. The merchant wants to grow a business by attracting more customers who may not necessarily be nearby residents. The property owner may want to increase property value in order to sell, but may not be interested in new investment. Part of organization means providing the leadership needed to build consensus. Without it, efforts to revitalize will fail. – Design architectural standards, or some type of overall visual means of tying together the elements of a shopping district and giving it an identity. For example, say a district has a lot of antique stores, which is why people want to shop there. Gas lamps and wrought-iron street fixtures will enhance the old-fashioned image. Another district has an increasing number of stores that cater to the Latino market’s need for furniture, toys, kitchen appliances and other household needs; street signs in Spanish will help that area. Whatever the theme or unifying feature, the lighting, streetscape and signage should all add to an impression among customers that this area will satisfy his or her needs. – Create a mechanism to start the reinvestment process. This may be the establishment of a Business Improvement District, the enactment of an ordinance to require uniform signs and facade improvements, or a code-enforcement effort that targets a designated area. The important thing is that everyone is required to reinvest at the same time. This avoids the “free ride” mentality that says, “I’ll wait until my investment increases in value because of everyone else’s efforts, and then sell.” – Offer affordable financing to those who need it. Not every merchant or owner can invest now. To make the revitalization happen quickly, a number of programs are available from the Small Business Administration, the state of California, the Community Development Bank and local banks that are geared to small business. The city must pay for the services of an economic development specialist who can uncover these money sources and make them available for merchants and others in need of help. – Combine advertising, promotional and security efforts on the part of those seeking to revitalize the area. Poor security, more than any other single factor, is cited as the reason shoppers avoid older shopping districts. Security encompasses parking issues, lighting, policing and merchant cooperation. Good promotional efforts and advertising are also reasons that some malls are successful. Street fairs, newspaper ads and special events can be a large boost to a commercial area and are sometimes necessary to attract shoppers back. Valley commercial area stakeholders are just starting to realize that they could be sitting on gold mines, if only they could bring back shoppers. L.A. City Council members Laura Chick and Mike Feuer have aggressively sought to transfer funding from the Metropolitan Transportation Authority into such programs as the L.A. Neighborhood Initiative Program, formed recently to help rebuild commercial shopping areas in the city. Other City Council representatives from the Valley have supported non-profit organizations that help small businesses, and other initiatives to revitalize blighted shopping districts. The plan outlined above is a road map for commercial revitalization that merchants, property owners and residents can follow. These are also the people who must provide the last, most necessary ingredient hard work. Burce Dobb is the chief credit officer for the Valley Economic Development Center’s revolving loan fund and a regular contributor to the San Fernando Valley Business Journal.

Banking & Finance John Hoisch has joined Sutro & Co.’s Woodland Hills branch office as first vice president, investments. Hoisch joins Sutro after seven years with Schroder Wertheim in West Los Angeles. Prior to that he worked at Bateman Eichler and Drexel Burnham Lambert. Barbara G. Oakes has been named senior vice president and manager of Consumer Credit Administration at Glendale Federal Bank. In her new post, Oakes will oversee credit policy for the bank’s line of consumer lending products, as well as the analysis and management of the bank’s portfolio of consumer loans. Oakes previously was senior vice president and manager of Corporate Credit Quality Assurance. She will be based in Glendale. Agoura Hills-based Charter Pacific Bank has named Jonathan Meeks regional vice president. Meeks formerly was senior vice president for business development at California Federal Bank. In his new position, he will be responsible for the Agoura Hills-San Fernando Valley region. Entertainment J. Brian McGrath has been named international president of Universal Studios Recreation Group, which is based in Universal City . In this newly created position, McGrath will oversee all international activities in the Recreation Group, including oversight responsibility for Universal Studios Japan, which is scheduled to open in 2001. Prior to this promotion, he was senior vice president of international business development for Universal Studios. He will continue to maintain that role in addition to his new responsibilities. Christine Stern has been promoted to director of advertising administration at Universal Music Group, which is based in Universal City. Stern will oversee the co-op advertising process and serve as the liaison between Universal Music & Video Distribution’s field staff throughout the United States, the company’s home office in Universal City and its record labels. Prior to her promotion, she was associate director of advertising. Also, Linda Richards has been promoted to director of system administration at Universal Music & Video Distribution. She will oversee the administration, development and staff training for several in-house computer systems, and manage the in-house use of information systems. Prior to her promotion, she was manager of end user support. Health Care Gary Morgan has been named vice president of individual sales at Health Net/Foundation Health. Morgan will oversee the company’s individual sales unit in Woodland Hills. He previously served as vice president of sales for the central region at Blue Shield of California. High Tech/Aerospace Michael Bolcerek has joined Spatializer Audio Laboratories Inc. in Woodland Hills as chief financial officer, vice president of finance. Bolcerek has also been appointed an officer of the company being named secretary of Spatializer. He previously served as assistant treasurer with NeXT Computers. Steve Moulios has been promoted to vice president, sales and marketing of Facilities and Services Corp. In his new position, Moulios will be responsible for implementing and executing the company’s marketing plan, setting and attaining sales and marketing goals, and supervising the sales staff. He previously was a sales representative. Dale Reed has been named vice president of marketing at Westlake Village-based Trompeter Electronics Inc. In his new position, Reed will oversee all product marketing, new product development and the company’s advertising program. Prior to joining the company, he was general manager at electronics manufacturer Soladyne. Marketing Richard F. Cain has been named vice president of marketing and operations at Plog Research Inc., which does marketing research, forecasting, pricing and consulting. Cain previously was marketing manager for Plog’s parent company, NFO Research Inc. He will be based out of the company’s corporate offices in Reseda. Real Estate Daniel Miller has joined Encino-based Capital Commercial Real Estate as senior associate. Prior to joining the company, Miller was with Team Realty Inc., specializing in tenant representation. In his new position, he will continue in that specialty for office and retail properties, and investment sales. John P. McDermott has been appointed regional manager of the Encino office of investment brokerage firm Marcus & Millichap. McDermott joined the firm in 1989, serving as an agent, sales manager and most recently regional manager of the firm’s San Diego office.

By Lisa Steen Proctor Contributing Reporter A chance late-night meeting with a rock band that never hit the big time became the seed for Michael Laskow’s career. One night in 1978 while making a run to a 7-Eleven, Laskow bumped into the members of a band with which he had once worked as a studio engineer. The band, Laskow remembered, had been very good. But the band members told him they “couldn’t get through any doors.” Laskow always kept that meeting in the back of his mind. And 13 years later, while working one day as general manager of a post-production company in Hollywood, Laskow recalls, “My boss ticked me off. I went back to my office, kicked back and thought about what I could do. I remembered that I had identified a need 10 or 15 years ago.” The result was Taxi Inc., a Woodland Hills-based company that helps unknown bands get record deals. Laskow started it with $75,000, most of which came from an old friend. Since Taxi’s founding in 1992, the company has almost doubled its revenues every year, and Laskow says it’s on track to hit $1.5 million in revenues this year. Bands, songwriters and other musicians buy a membership to Taxi for $300 a year. The annual payment allows members to submit material (at an additional fee of $5 per submission) for Taxi’s “Who’s Looking for What” list a compilation of the material being sought by Taxi’s contacts, including record companies, music publishers and film and TV music supervisors. The submitted material is then reviewed by Taxi screeners, who decide which submissions should be sent on to the company contacts. A member whose material is not forwarded is provided with a written critique (and thus, says Laskow, tips on how to further hone his or her craft). Adam Dudley of the Austin, Texas rock band Spacelady had a rocky start with Taxi, but now he believes its services are worthwhile. As a new subscriber, Dudley initially complained that the screeners were too concerned with a tape’s production values, rather than the songs themselves. But after complaining and getting a personal call from Laskow (who he now calls a “cool cat”), Dudley was sold. “They can relate with people who are frustrated with dealing with L.A. (jerks),” said Dudley. “And they give really insightful, articulate, relevant critiques.” Laskow admits that it’s often tough to convince skeptics that he’s not just out to take their money. So he encourages prospective subscribers to call the Better Business Bureau, and he points out the quality of his pool of screeners many of whom are former artists-and-repertoire (“A & R;”) executives for companies like Virgin Records, A & M; Records and Mercury Records. “There’s a lot of turnover in these jobs and we get these people as screeners while they’re between jobs,” said Laskow. Laskow himself has an established reputation and numerous contacts in the music industry. Starting as a floor-sweeper at a recording studio in Miami after graduating from college, Laskow worked in the music business for 20 years. He eventually became a studio engineer and producer, working with the likes of Eric Clapton, Crosby Stills Nash & Young and Neil Young. Contacts, a strong reputation and 20-hour work days are the ingredients necessary to make it, says Laskow, who is not aware of any other companies that compete with Taxi. “We always expect competitors and several have tried, but they’re out of business in less than six months,” he said. “We have established a beachhead.” Its reputation, Laskow says, allows Taxi into the doors that its members can’t even knock on. A & R; departments at most record companies won’t listen to the flood of unsolicited material they receive, relying on recommendations from well-known managers or music attorneys. But Taxi has convinced some major labels, including Virgin, A & M;, Arista Records and MCA Records Inc., to depend upon the company to weed out the potential hitmakers from the tens of thousands of submissions its screeners review every year. (Last year, Taxi reviewed 40,000 submissions; this year, it is on track to review 60,000.) “It’s great that they can act as a filter and hear hundreds of thousands of tapes and pick those that are ready to be heard,” said Bruce Wheeler, marketing director for MCA Records. “Some A & R; people look at (Taxi) as a necessity because of the amount of material floating out there.” MCA was recently sold on one of Taxi’s finds, signing a deal with a Dallas band called Bobgoblin. But, Laskow says, not every member is so lucky. “About 40 percent of our members have at least something sent (on to a contact),” he said. “But only about 6 percent will score some kind of deal. The deal may be a single-song deal by a small publisher, or it may be a six-figure deal like Bobgoblin’s.” Despite the odds, Laskow is genuinely concerned about ensuring that good talent doesn’t go unsigned. “I get to earn a living helping people who have wanted something all their life,” said Laskow. “It’s really a rush.” Taxi Inc. Year Founded: 1992 Core Business: Hooking up bands, songwriters, composers and other musicians with record companies, music publishers and movie and TV music supervisors Employees in 1994: 2 Employees in 1997: 7 Revenues in 1994: $250,000 Revenues in 1997 (projected): $1.5 million Top Executive: Michael Laskow Goal: To expand the ways in which the talents of unsigned artists are exposed to more people. Driving Force: The ability and expertise to sift through a flood of music for A & R; departments and publishers in an increasingly competitive music business.

By Jeannette DeSantis Contributing Reporter In Pacoima, English is a second language, fast food means a torta con frijoles and your neighbor is likely to be a co-worker at the local factory. Well-known for decades as the industrial backbone of the San Fernando Valley with a vacancy rate for industrial real estate of only 3 percent Pacoima is also a family-oriented community of mom-and-pop stores, auto mechanic shops and abarrotes, small grocery stores that specialize in Mexican food. “It is one of the most unique communities I have ever seen,” said Joe Salas, branch manager of Pacoima’s only bank formerly TransWorld Bank until the small Valley-based institution was bought out by Glendale Federal Bank. “There are a lot of businesses that could come to Pacoima and make a success of themselves,” Salas said. “There are the tax benefits and the people here who work hard. I think a lot of business people are really missing the boat.” Salas isn’t the only one who feels that way. Los Angeles City Councilman Richard Alarcon is struggling to change Pacoima’s reputation as a poverty-stricken and crime-ridden community. “There is the general sense that things are cleaning up here,” Alarcon said. “There is an improved sense of community, and in turn that has an impact on such things as crime.” Over the years, the blighted condition of Pacoima has worsened, with trash-lined streets, dilapidated storefronts and graffiti-scarred walls. But many business owners agree that conditions began to improve when Alarcon was elected to represent the Seventh District in 1993. And at about the same time, the L.A. Police Department took a more active role in cleaning up the streets through its new community policing strategy. Pacoima’s crime rate has fallen by about 30 percent over the past four years, but L.A.P.D. officer Carlos Solano said the area remains a high-crime district. “Gangs are still a big problem in Pacoima,” said Solano, who is a senior lead officer for the area and works with the community on a daily basis. “And with the gangs, you have the offshoot crimes of robbery, drugs and graffiti still happening. Things are getting better, but there is always room for improvement.” In addition to the safety improvements, Alarcon points out that three bars have recently disappeared in Pacoima and reopened as beauty salons and boutiques, and five new traffic signals have been installed during his tenure. Walter W. Mosher, president of Precision Dynamics, which manufactures health care products, agreed that the community is beginning to shed its “war zone” image. “At first we didn’t leave when things got bad because the cost of moving was too high,” said Mosher, whose company has been in Pacoima since 1989. “But the community has made progress and we figure it is better to get involved and try to fix things than just to leave.” Some incentives offered by the government to attract and retain business have been effective. First, there is the federal Empowerment Zone designation that covers 1.7 square miles. The zone was established after the Northridge earthquake in an effort to revitalize some of the poorest neighborhoods in Los Angeles affected by the temblor. (Pacoima is the only community in the Valley that qualified for the designation, because of its high poverty level.) The designation means that local businesses qualify for loans through the Community Development Bank, which opened a branch in Pacoima July 28. The bank, backed by federal funds, provides low-interest loans on the condition that recipients hire from the local community. In addition, tax breaks are offered to businesses that fall under the state’s Enterprise Zone in Pacoima, located between Arroyo Avenue to the north, Foothill Boulevard to the east, Telfair Avenue to the west and Sheldon Street to the south. The benefits include tax credits for companies that purchase certain machinery such as equipment that cleans the air and water and a reduction in electrical charges from the Department of Water & Power. Despite such government efforts, Pacoima remains very much a work in progress. The district’s main retail corridors are less than inviting, with hand-painted business signs often misspelled cracked sidewalks littered with broken glass, and graffiti. In addition, some businers owners complain that the local Chamber of Commerce has not done enough to mobilize the business community. Javier Romero, lifelong Pacoima resident and owner of Romero’s TV on Van Nuys Boulevard for the past 40 years, says that though city officials have done their best to help the local business community, the business community has done little to help itself. “Just recently, me and a few others sent flyers to all the businesses about a meeting Alarcon was having here,” Romero said. “We should have had at least 40 to 50 people there, but only five showed up.” Another time, he said, a woman called the Pacoima chamber in search of a television repair shop and was told the community had none. “Now I have been here for 40 years,” Romero said. “That really made me mad.” Board member Gregory Viega said the group is working to make younger business owners more active members, and to gain the confidence of the older members. One sign of Pacoima’s recovery is the city of L.A.’s plan to develop a portion of Hansen Dam. Almost 80 percent of the dam property sits in the community of Pacoima, including the public golf course and banquet facilities of Tavern on the Green, while the rest of it is located in the communities of Lake View Terrace and Shadow Hills. The city has received several use proposals for the property including a water park, a sports complex, a sound stage and animation facilities and a high-tech business complex. But while the Community Redevelopment Agency and the DWP have each contributed $90,000 to create the vision, there is still no actual financing for construction of any of the projects, Alarcon said. “Anything we do with Hansen Dam is going to be a plus,” said Viega. “The water park would be perfect for Pacoima because Hispanic families typically don’t leave their kids behind and would probably visit the park with their children.” Alarcon is also fond of the water park idea for the family-oriented community but said that his main priority, and the biggest obstacle Pacoima faces, is convincing others that the community is a good place to do business. “Now what we have to do is gain the confidence of investors,” Alarcon said. “We have to let them know that Pacoima is ready to succeed.”

By LARRY KANTER Staff Reporter Like sibling rivals getting on in years, Palmdale and Lancaster twin cities of the high desert are putting their differences aside to focus on cooperative ways to increase their economic clout. Palmdale and Lancaster have each given away millions of dollars in development subsidies and forfeited tax revenues in their zeal to gain auto dealerships, shopping centers and other retailers. But those incentives have come at a price less money for police, parks and other services. As a result, the two cities are now weighing a plan to share future sales tax revenues. In theory, the proposal would reduce competition between them for new business since each community would share equally in the tax revenues. “The tens of millions of dollars that have been spent to bring retailers into the market could have been spent on other quality-of-life issues,” said Palmdale Mayor Jim Ledford. The arrangement would be the first of its kind in California, but one that does not seem surprising for the Antelope Valley. Separated from the rest of Los Angeles County by the San Gabriel Mountains, the Antelope Valley is in many ways a region unto itself. And despite their often intense rivalry for jobs and business, the Valley’s two biggest cities Lancaster and Palmdale have been cooperating for years on a variety of fronts. In 1992, the two cities formed the Antelope Valley Transit Authority to coordinate local bus lines as well as shuttle service to Los Angeles. It also was five years ago that business leaders created the Antelope Valley Regional Partnership in an effort to boost the region’s industrial base. More recently, the Antelope Valley seceded from the South Coast Air Quality Management District to create its own Antelope Valley Air Pollution Control District. In doing so, the Antelope Valley was explicitly distancing itself from the AQMD, which has come under attack for being too tough on business, in particular small business. And the distancing may grow greater still. The Legislature last month approved a bill, AB 303, which would create a commission to study splitting L.A. County into two or three smaller entities including a new, separate county encompassing the Antelope Valley. “We are a distinct region, and there is a natural inclination towards self-determination,” said Assemblyman George Runner, R-Lancaster, who authored AB 303. “There is a great deal of change taking place in the Antelope Valley. There is a sense of regional self-sufficiency that is coming into its own.” If signed by Gov. Pete Wilson, AB 303 would authorize L.A. County and its cities to create and finance an advisory body called the Los Angeles County Division Authority, which would examine the pros and cons for splitting up the nation’s most populous county. “L.A. County, in terms of geographic size and the size of its population makes it very difficult to deliver services,” said Runner. “When you have a local government official who represents two million people, it hampers the ability of that official to truly be accountable and responsive.” The flurry of regional efforts raises the question: Are Palmdale and Lancaster likely to one day join forces as the city of Antelope Valley? Combined, the two municipalities would have a population of more than 240,000, making it the third largest city in Los Angeles County, after Los Angeles and Long Beach. But Ledford said he doubts any such union will occur. “The cities are both unique in their own right; they each have their own unique identities,” he said. “But jobs created in Palmdale benefit Lancaster and vice-versa. There is no reason that we can’t coordinate our efforts.” Indeed, every time Lancaster negotiates for a new development, it does so knowing that Palmdale stands ready to offer a more enticing deal and vice versa. With aerospace comprising most of the area’s industrial base, both cities were hit hard by the defense cutbacks of the 1990s and are often desperate for new employers. Last month, for example, Lancaster gave $1.6 million in incentives to Michael’s Stores Inc. to build a regional distribution center. In a similar vein, Palmdale agreed two years ago to refund 50 percent of the sales taxes generated by Dillard’s department store to the company in exchange for locating in that city. The potential for escalating bidding wars for new development led to the proposal for sharing sales taxes. Details of the joint sales tax plan have yet to be worked out, and it would ultimately require voter approval. Business interests accustomed to playing each city against the other to get the best deal may turn out to be a potent foe. Howard L. Brooks, executive director of the Antelope Valley Board of Trade, a local business association, said the sales tax plan would diminish incentives for bringing business to the Antelope Valley. “If I know I’m going to get half of the tax dollars, why should I do the work to bring the businesses here?” Brooks asked. But Brooks did agree that it makes sense to abandon granting incentives to attract retail businesses. “Incentive dollars should be used to bring in industrial, not retail, jobs. If industry is here, the retailers will come anyway,” he said. “But a cooperative attitude is a good idea.” Cooperation seems to have worked with the new Antelope Valley Air Pollution Control District, which was born July 1 after a six-year effort to break free from the South Coast Air Quality Management District. The new district will serve a population of about 320,000 and an area of about 1,300 square miles. “The air pollution problems here are not nearly as severe as in the basin,” said Vern Lawson Jr., executive director of the Lancaster Economic Development Corp. and a member of the new district’s board. “It is an issue of home rule. Now we’ll be able to more adequately control our desert airshed.” Lawson said the district’s less stringent regulations will help attract industrial businesses to the region particularly companies from elsewhere in Los Angeles that might be considering moving out of the state. “The Antelope Valley offers an option to companies thinking of leaving the state entirely,” he said. “They can come here and still be in a position to use their suppliers and keep that tax base in L.A. County.”