persfi/poteshman/–“/dt1st/jc2nd Applying for a mortgage can be a complex, expensive and emotionally-charged experience. To make the process go more smoothly, you may want to consider the following steps before applying for a mortgage. One of the first things the bank will request is a credit report. Good credit is critical to securing a mortgage, and lenders place a great deal of credence on the information they find in your credit report. That’s why you should make every effort to be sure that the information in your credit report is correct. Often, consumers assume that their fiscal responsibility has resulted in a clean credit report and are surprised to learn that mistakes on credit reports are all too common. Occasionally, incorrect entries are caused by mispostings due to similar names. You should be particularly wary if you have a common surname such as “Jones” or “Smith,” or if you are a “junior” or “senior.” In addition, a dispute with a merchant over a billing error or returned or damaged merchandise may remain on your credit report long after the problem has been resolved. By getting a copy of your credit report before applying for a mortgage, you will know what creditors have reported, be prepared to explain any discrepancies, and have time to correct any errors. To request a copy of your credit report, contact one or more of the major credit bureaus: Experian (800-392-1122); Equifax (800-685-1111); and TransUnion Corp. (312-408-1050). You’ll be charged a nominal fee (unless you’ve been denied credit in the last 60 days). The lender who reviews your mortgage application will be looking not only at how much you owe, but also at the potential amount of credit available to you. In fact, for the purpose of calculating your debt, some lenders consider the minimum monthly payment that would be due on each outstanding credit account, regardless of whether or not the account is active. The lender’s rationale is that it is possible that, at some point after you obtain your mortgage loan, you could potentially use these accounts to run up debt that could affect your ability to make your mortgage payment. The best way to avoid the risk of having too much credit available to you is to identify credit cards or lines of credit that you don’t use and notify those creditors that you wish to close the accounts. Be sure to ask the creditor to indicate on your account that it was “closed at the customer’s request.” This notation makes it clear that the account was not closed by the creditor for “adverse” reasons. You should allow 60 to 90 days for creditors to close your accounts and notify the credit reporting agencies. Once you apply for a mortgage, you’ll need to submit a great deal of paperwork. To pave the way for a timely response to your lender’s request for employment verification, you may want to alert your human resources or payroll department in advance to elicit their cooperation in completing and returning the information promptly. Other items you may be asked to produce include: the names, addresses, and phone numbers of previous employers, W-2 forms, your last two paycheck stubs, copies of your bank statements, account numbers and balance information for each of your credit cards and any outstanding loans, and copies of your tax returns from the last two years. You also may be required to provide verification of other income, such as Social Security benefits, interest and dividends, rental income, and alimony that you want the bank to consider in qualifying for the loan. Moving deduction Would you like to claim a tax deduction for some of your unreimbursed, job-related moving expenses? Here is how to determine if you qualify. The first step in qualifying for the deduction involves a distance test. To meet this test, the location of your new job must be at least 50 miles farther from your previous residence than the distance between your previous job and your old residence. For example, if the distance between your former job and your former residence was 10 miles, the distance between your new job and your old home must be at least 60 miles. If you had no former place of work, the distance from the old residence to the new principal place of work must be at least 50 miles. In addition to satisfying the distance test, you must meet a full-time work requirement at the new location. The requirement differs depending on whether you are self-employed or an employee. If you are an employee, you meet the full-time work requirement if you work at least 39 weeks during the 12-month period after relocating. The requirement for self-employed workers is more stringent. You must work full time in the general area of your new principal workplace for at least 39 weeks during the first 12 months and a total of at least 78 weeks during the 24-month period after relocating. Under current tax law, you are allowed to write off those moving expenses that the Internal Revenue Service (IRS) classifies as “reasonable.” These qualifying expenses include the basic cost of moving your family’s belongings to your new home, as well as the family’s trip to your new home. Expenses you incur for packing and transporting your family’s furniture, personal effects, cars, and other belongings from your old home to your new home are deductible. You may also deduct costs you incur for transportation and lodging (but not meals) while you and your family are en route to your new home. Other expenses associated with relocation such as pre-move house-hunting trips, meals in transit, temporary housing, and expenses incurred in selling, purchasing, or leasing a residence in connection with a move were previously deductible within certain limits, but no longer qualify as deductible expenses. Mel Poteshman, CPA, is president of Poteshman Consulting International & Co., a West Los Angeles-based business consulting firm. Serving the Los Angeles business community, PCI & Co. provides general business, real estate and international trade advisory services.

VOIT/PROFILE/MIKE1ST/jc2nd By JEANNETTE DeSANTIS Contributing Reporter As president of the rapidly expanding Voit Cos., Robert D. Voit has developed 7 million square feet of commercial real estate and today manages a portfolio of more than 16 million square feet of commercial space on behalf of Voit and other clients. But unlike many of L.A.’s most prominent commercial real estate titans, Voit was not born into a multi-generational real estate family. In fact, his family was quite surprised when Voit told them he had decided to leave his job at the East Los Angeles-based Voit Rubber Co., which had been founded by his grandfather and was run by his father, to pursue a different career path. It wasn’t long before the young Voit found that commercial real estate was the perfect fit for his savvy negotiating style and detail-oriented mind. In 1962, he was hired by the real estate brokerage firm Coldwell Banker in Los Angeles and two years later moved to the firm’s San Fernando Valley branch. In 1971, with a decade of experience under his belt, Voit felt confident enough to start his own commercial real estate firm. Voit, 57, developed much of Warner Center but sold 343,000 square feet of office space in the Warner Center Business Park last year to CarrAmerica Realty Corp. But his company still owns and manages properties throughout the West and is involved in efforts to redevelop the former General Motors site in Van Nuys. Question: Why did you chose commercial real estate over the family business? Answer: I had worked at Voit Rubber for a couple of summers out in the production line. I saw my father come home many nights tired and with a briefcase full of work. I just felt that there had to be an easier way to go. It just wasn’t interesting to me and I was desperately searching for what I wanted to do for a career. Someone mentioned commercial real estate and immediately it sounded perfect for me. Shopping centers and offices were something so physically tangible and it just seemed like a worthwhile way to direct my creative energy. Q: What was your first experience in this field? A: I left the job with my father where I was getting $800 a month to work at Coldwell Banker for $400 a month. I was thrilled, but my father said I would never be a good businessman if I accepted a job working for so much less. He changed his mind a little later on. Q: How did coming from a family-owned business help you? A: It gave me the idea that I could actually run my own company. It showed me the unlimited possibilities one has when one is responsible for their own operation. Q: You were once quoted as saying, “I love the deal. Every day is something different.” Could you elaborate on that? A: What that means is that every day could be the day that a new deal is made. Or it could be the day that a new door is opened or new insight is gained on an old deal. There is just always the opportunity to see something new and make it a “go” rather than a “no go.” I find that there is a lot of creativity in making deals. Q: So making deals is a creative outlet for you? A: Certainly. Very little of it is about making money. I try to make an impact on the community and create a consensus among people about the inherent potential in a piece of land. Those are the things that appeal to me and that help lift the standard of the profession. Q: One of your company’s current projects is the San Fernando Valley Civic Center. At what stage is that project? A: Right now we are negotiating a contract to build the first phase of that civic center project, the Marvin Braude Constituency Service Center in Van Nuys. It is an excellent opportunity to really impact an area that has some blight. If we can do our job and work well together, we can not only house 1,000 city employees but also be able to enliven the pedestrian trail and create a new way for people to view their city government. This project will make city government more accessible, convenient for Valley residents. Q: How long will that project take to complete? A: We are looking at occupancy just after the turn of the century. We are hoping it will be the first of what will ultimately be a three-phase intergovernmental civic center extending eastward from Van Nuys Boulevard, offering the citizenry a more friendly atmosphere to take care of city business from getting permits to visiting the Mayor’s Office to getting dog tags. Q: The Voit Cos. is also redeveloping the now-vacant General Motors plant site. What kind of time frame is expected for completion of that project? A: We have been working for two years on that project with Selleck Development Co. and are hoping to close escrow in September. There will be some 35 acres of retail property, including a theater, and 30 acres of industrial property. There is a big need at the moment for 32-foot-high industrial buildings and rail-served properties. By next summer we should have occupancy. Once we start construction in September, it should go fast. Q: Have you found any reluctance on the part of retailers to move into that part of the Valley, which is primarily a low-income area? A: We haven’t found that. There is another way to look at it. There are tens of thousands of shoppers, a population in need of the services of a Home Depot, for instance, who go to the movies and shop. We are also trying to be different with the design of the property, which we are calling “The Plant.” It is still in the planning stages, but we would like to connect the commercial property with the history of the area, and include things in the building that would be reminiscent of the old GM plant. We look at it as an opportunity to make a major impact on an area that could use some revitalization. We are proud to be a part of that and hope the project spurs more redevelopment in the area. Q: So if all goes as planned, how much do you and the Sellecks expect to make on your GM project, and how would that be split between you? A: I’m not going to get into the financial aspects. We don’t put that out in the press. Q: Selleck Development is owned by the family of actor Tom Selleck, and was largely funded until recently by Tom. Right? How did you meet the Sellecks? A: I met the Sellecks because I used to work for Dan and Tom Selleck’s father, Robert Selleck Sr., who was regional manager of the Coldwell Banker office in Sherman Oaks. I was one of his salespeople, and I’ve just stayed in touch with him over the years. Q: How do you view the high vacancy rate in Warner Center, which will be made worse by the departure of CareAmerica and its 500 workers? A: Right now we have an occupancy rate of 92 percent in all the buildings, with the exception of Plaza III. That building is experiencing a occupancy rate of over 50 percent. It was the last building built, and that is the one we are currently working on leasing out. There are some large users like Care America that are leaving, but all that does is create additional space that has to be back-filled. Q: The entire West Valley is experiencing a high vacancy rate, yet office space is hard to come by in the East Valley. Is this a concern of yours? A: The reason for the difference is the entertainment industry. The things we can do to combat it is use more-aggressive marketing efforts and just hope that no more space will open up in the East Valley. Q: What does the future hold for the Voit Cos.? A: We are certainly looking forward for other projects in the area. We don’t mind ones that are considered difficult . Some people shy away from those types of projects that excite public attention, but we welcome that because we think the project ends up better as a result.

careamerica/hm/6-23/15 inches1stjc/mark2nd By HILDY MEDINA Staff Reporter CareAmerica Health Plans in Woodland Hills has signed a 10-year, $35 million lease for 162,000 square feet at the new West Hills Corporate Village, three miles away from its current headquarters. CareAmerica spokesman Ross Goldberg said the 200,000 square feet the company now leases in the Trillium Building at 6300 Canoga Ave. is too much space for the 500 employees working at the corporate headquarters. “We currently have 200,000 … it’s actually more space than we need,” said Goldberg. “The (new) space is more appropriate and will allow for the growth of as many as 100 employees.” Goldberg said CareAmerica leased the Warner Center space three years ago in anticipation that a subsidiary company would move in to share the space. But that never materialized. CareAmerica has been in the San Fernando Valley since its start-up 11 years ago. It is now one of the nation’s largest HMOs, with 500,000 members. Earlier this year, CareAmerica was one of five HMOs that threatened to leave the city in a dispute over L.A.’s gross receipts tax. It is seeking a change in the tax code that would result in a $15 million dollar tax break for it and four other HMOs. Los Angeles Mayor Richard Riordan and City Council members have supported a change in the tax, which they say is unfair because HMOs are taxed on fees that simply pass through the insurer from members to medical providers. Although no change has yet been approved, CareAmerica officials felt confident enough to sign the new lease, Goldberg said. The tax issue was not the only reason for the decision to stay, but “it certainly was a consideration,” he said. The proximity of the West Village location to Warner Center was also ideal, Goldberg said. “We wanted to come up with a location that would have as little disruption (for employees) as possible,” said Goldberg. The new office park was formerly occupied by Hughes Missile Systems. The move is scheduled to occur next year. Jeffrey Dinkin, a partner with Beverly Hills-based Regent Properties, Inc., co-owner and co-developer of the 30-acre office park, credited the city’s actions with sealing the deal. “I can’t say enough about the city in this transaction,” he said. “It’s a great win for CareAmerica, a great win for the community (because) it’s keeping over 500 jobs in L.A.” The 30-acre office park being developed by Regent and Shamrock Holdings Inc. has 420,000 square feet of existing office space that will be renovated for CareAmerica and other tenants. The companies plan to develop an additional 170,000 square feet of new buildings on what are now parking lots, Dinkin said. Total cost for the facelift and new office buildings is expected to be about $100 million and will begin in the next few months, he said. The adjoining 56 acres of the site, now occupied by Coast Federal Bank as its corporate center, is being redeveloped to house a state-of-the-art 911 emergency communications center for the Los Angeles Police Department and a De Vry Institute. The good news for the West Hills Center is bad news for Warner Center, which will lose a major tenant. Bob Pearson, leasing director with AH Warner Center Properties which owns the site being vacated by CareAmerica, said the space will probably be leased out to smaller tenants. The vacancy rate for the West Valley Class A office space, which is primarily in Warner Center, is currently 15.4 percent.

FORUM/jb/mike1st/jc2nd Universal Studios wants to roughly double the amount of development at its 415-acre parcel at Universal City. The plan calls for construction of 5.9 million square feet of theme park attractions, hotels, film studios and offices, plus 6.3 million square feet of parking lots. Opponents of that ambitious plan most notably local homeowner groups, Los Angeles County Supervisor Zev Yaroslavsky and City Councilman John Ferraro have recommended a 40 percent reduction in the project’s size. Do you think Universal Studio’s proposed expansion should be scaled back? Frank Morales Owner Circle Associates of Universal City Los Angeles is lacking a major tourist destination, like what Anaheim has with Disneyland. We have amusement parks, but who really wants to go stay at Magic Mountain for a weekend. Universal City is local to everything, and there is more than just the tour to take. So long as it doesn’t drastically impact the lives of those who live in the area, then I don’t see the problem. Stephen T. Wise President California Furniture Exports We really look at it from an international standpoint. We feel it is such a tourist attraction that it should be expanded to develop more appeal to international tourists. Talk about scaling it back is more of a political compromise the homeowners want a slower expansion and the entertainment industry wants a larger one. Politically, you usually get half of what you ask for, but any growth would be good. Michael Chung Beltan, Michaels & Associates Vice President From a business standpoint, I’d like to see as much growth in the area as possible. Attracting more tourists means more businesses and more customers. But, if the same or almost the same kind of results can happen by scaling back the project, then that sounds like a good idea. People who own homes have rights, and it seems the politicians are recognizing that. Julie Landers Assistant Director, Marketing The Walt Disney Co. I guess, working for Disney, I should say I’m against expansion all together, but I truly think there needs to be more up there to make Universal more of an attraction. But it shouldn’t grow wildly out of control. The neighbors are sacrificing a lot, so Universal should agree to whatever sacrifices are needed to at least make this more attractive for those who live in the area. Nate Brogin American TeleTech I’m not sure if the reasons cited for the scale-back are appropriate. I believe with the incorporation of mass transit, as well as it being a destination location, and that the transportation issues are mitigated. In many cases, Universal has owned property in the area before residents did (so it) is somewhat unfair to ask the commercial property owner to mitigate all the issues the homeowners are requesting.

econowatch/july/dy/10″/dt1stjc2nd The San Fernando Valley home market showed signs of improvement in April, according to this month’s issue of Valley econowatch, but the jury is still out on whether the fledgling recovery is here to stay. The Valley resale home index for April stood at 72.0, up 2.3 percent over March and up 3.3 percent over April 1996, according to Experian, which calculates the index. That means a home that sold for $100,000 in the index’s base year of 1990 sold for $72,000 in April 1997. The volume of Valley home sales also posted a strong gain in April, with 1,812 homes changing hands that month vs. 1,576 in March and 1,724 in April 1996. The simultaneous increases reflect a nascent recovery in the Valley market, where demand for low-end homes in particular is heating up, said Bud Mauro, president elect of the San Fernando division of the Southland Regional Association of Realtors. The Southland Regional association was created after a recent merger between the San Fernando Valley Association of Realtors and the Santa Clarita Valley Association of Realtors, although the two divisions still maintain separate presidents. “Activity is at the lower end. Probably 90 percent of the activity is at that range,” said Mauro, adding that “low-end” means houses valued at less than $150,000. The increased demand for lower-end homes means that owners of “starter” homes those homes typically favored by first-time buyers are less willing to negotiate lower prices with prospective buyers. As a result, sellers are beginning to command prices closer to their asking prices, Mauro said. It also means many sellers of lower-end homes, especially those in better condition, are getting multiple offers on their properties, according to Mauro. “It’s not uncommon to get more than one offer on a property nowadays. Nice properties are selling right away going after their first few days on the market.” While most of the signs are positive, Mauro said it is still too early to say whether the fledgling recovery can be sustained and, if so, whether it’s poised to pick up steam. However, he noted that a “trickle-up” effect appears to be starting, whereby low-end homeowners are selling their properties and trading up, creating some new activity for “trade-up” homes in the $150,000 to $200,000 range. “The last three buyers (whose houses) I sold owned condos in the less-than-$125,000 range,” he said. Now they’re trading into homes in the $160,000-to-$200,000 range. If that activity continues, the market will continue to improve.”

icg/bjs/21″/dt1st/jc2nd By BEN SULLIVAN Staff Reporter In the escalating battle between cities for well-heeled, tax-generating businesses, Burbank has a wily field commander in Assistant City Manager Frederic Fletcher. Forget issues like business taxes, public safety and transportation. It was Fletcher’s idea five years ago to use a sophisticated telecommunications infrastructure as a way to attract businesses to town. Firms that use high-end telecom services, it turns out, also tend to buy a lot of electricity, generate substantial revenues and provide high-paying jobs. And once the city has recruited a company as a telecom user, Fletcher believes, it will be easier to convince them to contract with the city for electricity when the power market opens to competition in January 1998. “That’s been at the heart of my marketing plan from the start, but most people haven’t gotten it,” Fletcher said. To that end, Fletcher in 1995 ushered through the City Council a plan to build a 12-mile loop of fiber-optic cable linking Burbank’s downtown, the Media District and outlying commercial areas. Then he implemented the plan and saw it completed last October. Ostensibly, the telecommunications loop’s purpose is to connect the city’s electric utility substations to one another. In fact, it was in the very tunnels and cable rights-of-way that once housed the utility’s copper-based telecom system that the new network was built. But the data that flows between the electric stations fills only about 5 percent of the loop’s capacity. Fletcher and the city are leasing out the remaining 95 percent to animation, post-production and other local entertainment and non-entertainment businesses for their use. The companies supply their own equipment to tap into the loop and can transmit voice and data between buildings along the miles-long circuit. The Entertainment Network Inc. set up shop in Burbank in May specifically to use the fiber optic loop for its system, which digitally connects studios, animation houses and post-production facilities. Chief Operating Officer Rick Ryan said his company will begin testing the system this summer with at least one of the Burbank movie studios so they can, for example, transmit megabit-heavy computer animation files between their animation, production and post-production facilities. (He declined to identify the studio, and neither Walt Disney Co. nor Warner Bros. would comment). In a higher-profile deal, Denver, Colorado-based ICG Communications Inc. signed a 15-year agreement with Burbank last fall to lease capacity on the loop. ICG in turn is using the capacity to offer local telecom services to Burbank clients, including Disney. The company hopes to sign similar deals with Disney neighbors NBC Studios and Warner Bros., and has targeted companies in 45 buildings along the loop that it hopes to gain as telecom customers. “Burbank in terms of the business community is very dense,” said Brian Renner, ICG vice president for business development. “There are a lot of highrises in close proximity to each other, which makes it very efficient for us to access.” While relatively small by telecom industry standards, Burbank’s 12-mile fiber-optic cable can accommodate a tremendous amount of data. The 5 percent of capacity or so that ICG leases from the city, for example, consists of just eight of the loop’s 96 strands. Every two strands can support 48 lines, each of which can carry 672 simultaneous telephone calls. “We can handle about 130,000 calls at a time,” Renner said. Because not all customers will use their telephones simultaneously, the company uses a so-called “contention ratio” of 10 to 1 that allows it to sell more than 1 million connections. For that right, ICG pays Burbank about $150,000 a year, a rate that will remain constant for the duration of the 15-year lease. Burbank doesn’t get rich off the deal, but the ICG rent alone would pay the $1.1 million cost of building the fiber optic loop within a decade, Fletcher said. With the other deals Burbank has penned with local entertainment industry customers, including the Entertainment Network, he said the loop should be paid off within four years. Fletcher said the city did not seek a commission on ICG revenue. “We decided we didn’t want to be a local telephone company. There’s too much red tape,” he said. For ICG, the leasing of Burbank cable gives the company a toehold in a potentially lucrative market. ICG has made similar lease arrangements with Southern California Edison and the Los Angeles Department of Water and Power, giving it access to about 1,450 miles of fiber optic cable stretching from downtown Los Angeles to West L.A. and Sherman Oaks. ICG’s Renner acknowledged that Pacific Bell and GTE California Inc. currently dominate both the Burbank and greater L.A. markets, with about two-thirds and one-third of the local telecom market respectively. ICG provides services to about 1,300 small to mid-sized companies, Renner said, providing about 100 million minutes of telephone use per month. Burbank’s Fletcher said deals such as those with ICG and the Entertainment Network represent just the tip of the iceberg, because there is plenty of room for expansion of the network. “We’ve got a lot of fiber and a lot of capacity available, but the amount is only going to grow,” he said.

entcol/turner/22″/mike1st/jc2nd If Steven Spielberg wanted to make a movie about what his cat had for breakfast, every studio in town would be begging him to accept a massive up-front payment and a share of the first-dollar gross. That’s the movie business. The television business is another matter entirely. DreamWorks SKG’s adventures in TV land have so far been a hair-raising example of how hard it is for a new, untried, unaffiliated company to break into the television production business in the era of deregulation even if that company happens to have the names Spielberg, Katzenberg and Geffen stenciled on the front door. DreamWorks is now almost three years old. Thus far, it has yet to release its first movie, it scored some coups in the music business by signing George Michael and the rock group “eels,” and it has released a handful of CD-ROMs, some critically acclaimed. In television, well, things have been rough. DreamWorks’ sit-com “Champs” went down for the count, cop show “High Incident” was busted after two seasons and “Ink” dried up in a hurry. The disastrous “Arsenio” sit-com starring Arsenio Hall was euthanized after only six episodes. The only DreamWorks survivor is “Spin City,” returning this fall for its sophomore season on ABC. DreamWorks officials declined to discuss other shows in development; nothing else has yet been picked up by a network. Meanwhile, syndication has been a total bust. DreamWorks tested a game show called “Majority Rules” in Phoenix and New Orleans, but ratings were so poor that the studio never even tried to sell the show nationwide. DreamWorks’ really big syndication project was supposed to be a news magazine show starring former CBS News co-anchor Connie Chung and her tabloid TV host husband Maury Povich. DreamWorks reportedly managed to sell the show in about 25 mid-sized television markets, but failed to crack such critical markets as New York, Los Angeles and Chicago. Last month, Povich signed a contract to return to his syndicated talk show, permanently shelving the DreamWorks project. Two weeks later, Ken Solomon, co-head of DreamWorks Television, left to become head of Unversal Studios Inc.’s TV production division. So why is DreamWorks, a company with perhaps the most impeccable pedigree in the entertainment business based on the reputations of its three founders, having such trouble with television? Syndication executives and industry analysts point out that DreamWorks may be a victim of its own timing. Had the studio been launched five years earlier, well before passage of the Telecommunications Act of 1996 and repeal of the financial interest and syndication (“fin-syn”) rules, the story might have been different. The Telecommunications Act led to massive consolidation in the television industry, creating a relatively few giant station groups. The result is that companies trying to launch new shows in “first-run” syndication (meaning shows that haven’t already appeared on a network) have to crack those station groups if they expect to succeed and many of these groups already have alliances to certain production companies, networks or studios. “If you don’t (have an alliance with a station group), you’ve got to sell a new show based on the sheer magnificence of your idea,” said George Back, president of All American Television Distribution. “If the idea (for ‘Povich & Chung’) were perceived as so wonderful, my guess is that they would have been able to sell it.” First-run syndication is an important business for DreamWorks to crack because it is much more profitable to own and sell your shows to individual stations and station groups than it is to sell programming to networks, analysts agree although ownership of hit shows running on a network usually reverts to the producer after five years, and the program can then be syndicated for a bundle. Complicating matters for DreamWorks and other independent TV producers is the repeal of the fin-syn rules, which prohibited networks from owning their shows. It is becoming increasingly hard to sell a show to a network without selling partial ownership as well, meaning the network takes a big bite out of any future syndication revenues. DreamWorks is known to be adamant about full ownership of its productions, which means networks aren’t too anxious to pick up its shows. That uncooperative attitude probably doesn’t help the studio’s first-run syndication efforts, either; the networks, after all, own some of the most powerful station groups in the country. Some observers mention that DreamWorks’ founders Spielberg, Jeffrey Katzenberg and David Geffen made their names in movies and music, not television, which may be part of DreamWorks’ problem. Others point out, though, that DreamWorks has hired capable television executives, and the movie and TV businesses are fairly interconnected. “I don’t see that there’s a huge difference between movie and television production, so the experience (the DreamWorks founders) have definitely applies here,” said analyst Derek Baine with Paul Kagan Associates. Baine says it’s far too early to write DreamWorks’ epitaph, after only two unsuccessful seasons. “TV production is often a crap-shoot nowadays,” he said. “A lot of companies have series that crash and burn out of the chute.” Others acknowledge that DreamWorks isn’t impressing anybody in the TV business so far, but urge patience. “DreamWorks can’t be a full-blown studio overnight,” said research director Art Rockwell with Yaeger Capital Markets. “Maybe TV syndication is just not the way for them to get started.”

aerospace/sfvbj/wd/31 inches/mike1st/jc2nd By WADE DANIELS Staff Reporter A recent hiring spree by Lockheed Martin Skunk Works is sending the Antelope Valley economy surging ahead with renewed growth. Since the beginning of 1996, three new contracts and the relocation of a plant to the area have brought boosted employment from 3,500 workers at the Lockheed facility to about 5,000. And those ranks are projected to grow to 6,000 by mid-1998, according to Ron Lindeke, a Lockheed spokesman. “In a word, the impact of these hirings on the economy here is ‘huge’,” said Vern Lawson, executive director of the Antelope Valley Economic Development Corp. “The key is that the types of jobs from these projects, mostly managerial and engineers, bring new wealth and have a two- to three-times multiplier effect on the community.” The hiring spree started last July when the Skunk Works was named prime contractor for NASA on a $960 million contract to build a demonstrator X-33, a vehicle intended as a successor of the Space Shuttle. Lindeke said some parts of the ship are being built elsewhere in the country but the “vast majority” of the money is flowing into the Antelope Valley facility. In recent weeks, Skunk Works finished hiring for the 600 new jobs for the project. Last November, Lockheed announced plans to employ 900 new workers following its selection as one of two companies to build prototypes for the joint strike fighter, an aircraft being designed for use by the Navy, Air Force and Marines. Lindeke said the contract is worth about $500 million to Skunk Works. About 400 of those 900 workers have been hired so far, Lindeke said. In October, Lockheed Martin began moving 1,000 employees from its Aircraft Services Division in Ontario to its facility in the Air Force’s Plant 42 in Palmdale. About half of those workers have been moved so far. The unit will conduct aircraft modifications and retrofits on aircraft owned by the military, private companies and by other countries. Also last year, Skunk Works was chosen to share a $110 million contract with Lockheed Martin Electronics Division in Orlando, Fla. The two are joining forces to build nine prototypes of a new air-to-surface missile with the same “stealth” technology as used on the B-2. By the time all the hiring is done some time in mid-1998, Skunk Works will have augmented the Antelope Valley work force by about 2,500 jobs, Lindeke said. This will mean a total of about 10,000 civilian aerospace jobs at the Air Force’s Plant 42, a government-owned facility which houses the Skunk Works and several other private aerospace operations, including those of Boeing North American Inc. and Northrop Grumman Corp. Employment at the Antelope Valley’s other major aerospace facility, Edwards Air Force Base in Lancaster, where the aerospace companies have their flight-testing operations, has held steady through the past decade’s economic ups and downs at about 12,000 civilian and military, according to the Lancaster Economic Development Corp. About 3,000 of those jobs are held by civilians working for contractors such as Lockheed’s Skunk Works and Boeing. While Lawson credits aerospace hiring with fueling an economic resurgence in the area, Lawson said the local downturn in the early 1990s was not due to aerospace job losses. He said it was mainly caused by a drop in the housing market. “As far as job losses, we haven’t been significantly impacted since 1987, when the B-1 project concluded and about 6,500 jobs were lost,” he said, referring to the bomber which had been built there. “A lot of people went to work on the B-2 stealth soon after, and many of the rest went into housing construction. At that time housing was booming, but then the recession hit and they lost out.” The housing construction sector had been especially strong during the late 1980s and early 1990s; Palmdale was the county’s fastest-growing city, with its population growing about 4 percent a year. Then, housing values plummeted by more than 30 percent in the early 1990s, Lawson said. Thousands of construction workers were put out of work, and the related residential brokerage and escrow companies also suffered. Plus, while the Antelope Valley’s aerospace sector did not suffer significant post-Cold War job cuts, the nationwide recession of the early 1990s took its toll; thousands of Antelope Valley residents who commuted to L.A. urban areas lost their jobs. When the Lockheed Advanced Development Co. (now known as the Lockheed Martin Skunk Works) moved from Burbank to Palmdale in 1993 and 1994, the 3,000 or so relocated workers brought a major economic booster shot to the community. But even with that, housing sales continued to decline. Over the past year, however, the steady economic recovery of the greater L.A. area is helping to boost the Antelope Valley. Real estate officials said the new Antelope Valley jobs were a significant factor in fueling a 24.3 percent rise in single-family house sales last year over 1995 and an 11 percent rise in the first five months of this year over the like period in 1996. “Our office is seeing about 15 to 20 sales of houses a week, where last year at this time it was seven to eight a week,” said Ralph Bozigian, co-owner of Fred Sands, Mid-Valley Realtors. in Lancaster. “The new hiring activity has helped greatly, but we also get a lot of new people who can’t afford houses in places like the San Fernando Valley.” Bozigian said another indicator of the area’s improving economy is that about twice as many storefront leases have been signed so far this year as were signed in the first half of last year. “We’ve leased to doctors, a CPA, beauty salons,” he said. “Consumer confidence is strong; when you go to a restaurant on a Friday or Saturday night there’s a lot more people there than even a couple years ago.” Even with this growth, the Antelope Valley is far from secure when it comes to aerospace jobs. The longevity of a number of projects remains in doubt. Northrop Grumman, the area’s second-largest aerospace employer, plans to cut some 300 of its 3,000 jobs this summer from its B-2 Division, a production facility at Plant 42. Hundreds more may disappear after the last of 21 stealth bombers on order from the government is delivered in 1999. However, this doesn’t necessarily mean the end for the program. Congress may end up ordering more B-2s and the jobs could be saved; in late June, the House of Representatives approved funding to begin building nine more planes. “We’re not expecting approval of this anytime soon because that money must be approved by the Senate, which has announced defense priorities that do not include the B-2,” said Jim Hart, a Northrop Grumman spokesman. In addition, two of the Skunk Works projects may end within a few years. Because the joint strike fighter and the stealth missile are prototypes, they are not guaranteed to go into production and those jobs may be cut. Some smaller aerospace companies in the area are in the same boat. Tracor Flight Systems is one example. Last July, the aircraft components maker, located in Plant 42, won a 10-year contract to build wings for McDonnell Douglas Corp.’s MD-95, a 100-seat passenger jet. Tracor is adding 150 employees to its 80 in Palmdale and 320 in neighboring Mojave. However, the merger of Boeing and McDonnell Douglas expected to be completed this summer is likely to result in a halt in production of the MD-95 and other McDonnell Douglas jets. Tracor vice president and general manager Donald Sullivan said the contract was finalized before any glint of a merger was on the horizon, and he is unsure what will happen to the contract upon the merger’s completion. “I can’t be certain the sun will rise tomorrow, so I can’t be certain what will happen with this contract,” Sullivan said. As for Boeing North American, its Antelope Valley facilities were acquired from Rockwell International Corp. when Boeing bought Rockwell’s space and defense divisions last year. Since the massive job cuts in 1987 when B-1 production ended, employment at Boeing’s newly acquired divisions has held steady at around 550 in Lancaster and Palmdale. Most of those workers perform modifications and servicing on B-1s, 96 of which are still in operation. Rick Vanesler, Boeing’s director of quality assurance, said the company does not expect to add to or subtract from its Antelope Valley work force as long as those planes are still flying.

familian/16 inches/1stjc/mark2nd By DANIEL TAUB Staff Reporter Familian Corp. has announced it will relocate its longtime Van Nuys headquarters to Pomona by early next year, saying the San Fernando Valley isn’t a central enough location to support its growing distribution operations, . The move that will cost Van Nuys 120 jobs but save the company more than $100,000 annually in business license taxes. Familian, which operates 23 Familian Pipe and Supply showrooms throughout Southern California and has annual sales of more than $500 million, will locate a new “super-hub” distribution center at the former Chesebrough-Pond’s USA Co. facility in Pomona. Familian bought the facility for more than $11 million, according to Lee & Associates Commercial Real Estate Services, which brokered the deal. The 300,000-square-foot facility will employ 200 workers, 120 of whom will be transferred from Van Nuys, where the company has been based for more than 30 years. Familian will vacate its three-building, 28,000-square-foot administrative and corporate offices on Saticoy Street, but will maintain its 40,000-square-foot showroom there. Company officials say they wanted to locate the new distribution center in the San Gabriel Valley because it is a more central location, and closer to the growing Inland Empire and Orange County. “It was just a matter of finding a suitable building as well as a good location,” said Len Gross, Familian’s chief financial officer. Unlike other companies that have left L.A. city limits in recent years for Glendale, Burbank, Agoura Hills and other neighboring locales, Familian’s move was not based on L.A.’s business tax structure, Gross said. “This is a new type of operation. We didn’t distribute in this manner when we were here in the (San Fernando) Valley,” Gross said. “It’s a whole new method of distribution and that’s why we wanted to be there instead of here.” Nevertheless, Familian did hire Kosmont & Associates Inc. which puts out an annual “Cost of Doing Business Survey” for Southern California to broker the company the best deal in the San Gabriel Valley. Kosmont said the company will cut its business license taxes by upwards of $100,000 annually by moving to Pomona, which does not tax businesses based on gross receipts. “We looked at a variety of cities,” Kosmont said, adding that Ontario, Industry and Diamond Bar were among the cities considered before Familian chose Pomona. “The economic incentives from the city really made a difference,” he said. Kosmont and Gross declined to say what incentives Pomona offered Familian, but Kosmont said they involved help in acquiring and developing the property. “The city of Pomona was very supportive and aggressive in getting Familian to make a decision to move to Pomona,” Kosmont said. “Had they not gotten the economic incentive package from Pomona, they would have gone elsewhere.” L.A. Assistant Deputy Mayor Rocky Delgadillo, who oversees L.A.’s Business Team, said that the team had not worked extensively with Familian, since it was committed to moving to the San Gabriel Valley. “Pomona’s been real aggressive. They’ve been a viable competitor with us,” Delgadillo said. Familian, owned by British corporation Wolseley LLP, sells piping, plumbing supplies, heating and air conditioning systems, appliances, and other supplies through its 101 Familian Pipe and Supply warehouses in the Western United States. Familian’s primary customers are contractors. Among the 120 employees who will make the move to Pomona are accounting, data processing, marketing, human resources, tax services, credit and sales workers.

GOLD/25″/dt1st/jc2nd By JOE BEL BRUNO Staff Reporter Take a drive down any of Los Angeles’ main thoroughfares, and you’ll see how Al Gold has left his mark on the city. Don’t look down the street look up. Festooned on light poles around L.A. are banners promoting everything from the L.A. Philharmonic at the Hollywood Bowl to the Los Angeles County Natural History Museum. Pacoima-based Gold Graphics Manufacturing Co., a business that began with hand-painted signs sold from the back of Gold’s car, is now one of the region’s largest banner advertising companies. And last month, it became the first Valley business to receive a loan from the federally funded Los Angeles Community Development Bank. The $1 million loan will be used to help hire new employees and replace equipment damaged in the Northridge earthquake. “What piqued our interest is that (banner advertising) is a viable industry, and (Gold) has got a great track record,” said Robert Alaniz, a spokesman for the Community Development Bank, which is a partnership between government officials and commercial banks to provide funding to invest in poor neighborhoods after the 1992 riots. Pacoima is considered an “empowerment zone” by the bank, meaning businesses there are eligible for low-interest loans. “Gold had a bad turn of luck because of the earthquake, but we knew that given a break he could get back on track,” Alaniz added. Gold Graphics produces “point-of-purchase” advertising, meaning it creates displays consisting of everything from cardboard cutouts at retail stores to large outdoor banners. Perhaps its biggest coup to date was the contract to supply promotional signs for the World Cup soccer tournament in 1994. That year was momentous for Al Gold for more reasons than one. It was also the year he was nearly driven out of business. He had just begun work on the $2 million World Cup contract when his workshop in North Hollywood was practically destroyed by the Northridge earthquake, which caused an estimated $1.5 million in damage. Arriving at his 50,000-square-foot warehouse on the morning of the quake, Gold found the ceiling caved in. Banners were strewn across the floor and machinery was broken beyond repair. Worse yet, the damaged equipment wasn’t covered by insurance. For the first time since the company was founded in 1951, Gold realized his business was at stake. Instead of waiting for federal emergency funds to come through, Gold took it upon himself to keep the assembly line going. He leased new quarters a block away, and financed the move out of cash flow from the World Cup banners. By the time the first game kicked off, about 50,000 of the banners were distributed in the nine host cities including Los Angeles. Not only was the company able to recover from the quake, but business began to boom. Gold, 66, says the World Cup deal has helped his business triple in size in just a few years. Gold Graphics employs 120 workers including two of the owner’s nephews, a son-in-law and a stepson. “After the earthquake, I thought we were done for it was a shambles, and I thought we had lost the business,” said Gold, who added that after the quake his staff showed up at 6 a.m. for meetings and worked seven days each week. “I had no gas, no power, and no equipment then I had to produce 50,000 banners for the World Cup,” he said. “It was the biggest challenge I ever faced.” After completing the World Cup work, Gold received federal loans of about $1 million to offset costs related to the quake. Added to that was last month’s $1 million loan from the Community Development Bank, which Gold says will make his company stronger than ever. The loan, $400,000 of which comes from TransWorld Bank of Sherman Oaks (the Development Bank partners with private institutions on its loans), will be used to replace quake-damaged printing equipment and add 42 employees over the next two years. Although most people take point-of-purchase advertising for granted, it’s a big business worth $12 billion nationally in 1996, according to the Point-of-Purchase Advertising Institute in Washington, D.C. “There is a bombardment of messages in this business,” said Joe Casper, the institute’s communications manager. “You have to be innovative and beat out a lot of other media. The displays and signage that this industry has come up with is captivating and that’s a sign Gold Graphics is doing well.” Gold, a New York native, launched his career in the banner industry by making his first signs at home. His first deal was with an auto polish firm that bought $800 worth of signs. Gold later rented a $90-a month-store on Venice Boulevard and began to grow a business. He enlisted the help of his brother, Don, then a lingerie salesman. Both men still share ownership of Gold Graphics, with Don filling the role as president. And, right off the bat, both men found a niche to be filled at the region’s large oil companies. They promoted gas products at stations owned by Chevron Corp. and Unocal Corp. for decades. The business enabled them to move to the San Fernando Valley in 1961, opening up a factory and even branch offices in Houston and New York. As the company grew, Gold began to diversify. Along the way, he and his brother found new customers at car dealerships, financial companies, supermarkets and retail shops. Sporting events came down the pipeline years later, when the Olympic games came to town in 1984. At the time, many of the executives in charge of putting the games together had already worked with Gold. So, when it came time to putting together the visual packaging, Gold Graphics got the job. Gold eventually got half the contracts for banners and signs that were displayed at dozens of venues during the summer games some of which are collectors items today. Noting that sports was big business, Gold then began to focus on Super Bowls, local sports teams, and later the World Cup. He also diversified by signing up the Hollywood Bowl and the Los Angeles Music Center. “For the bang-for-the-buck approach to things, this really works,” he said.