lacter///valleyedit/march/1stjc Hed — Tax cheats It’s hardly surprising to see five health maintenance organizations four of which are based in the San Fernando Valley threaten to leave the City of Los Angeles for other nearby municipalities because of a tax dispute. The city’s bureaucrats and many of its lawmakers long have ignored the various tax inequities that make up the inflated cost of doing business in L.A. In only rare instances the DreamWorks SKG project on the Westside is probably the best example has the City Council agreed to work with the Mayor’s Office in creating incentives for business. Other, less-glamorous companies from factories to law offices to even HMOs aren’t so lucky. They’re stuck with tax rates that either are out of proportion to the revenues generated or don’t account for an industry’s particular method of generating accounts. This is not just a case of business complaining about taxes being too high. This is about the fairness in how those taxes are established. The city places HMOs, for example, in the “professional services” category, which requires them to pay $5.91 for every $1,000 of gross revenue L.A.’s highest tax bracket. But the bulk of HMO revenues is immediately paid out to health care providers, such as hospitals and physicians. The HMOs argue, with considerable justification, that they should be taxed only on their net take. It’s no wonder such inequities exist. It has been seven years since the city’s tax code was last updated an eternity given the number of evolving industries that are frequently hard to classify. L.A.’s multimedia industry, which is made up of fledgling businesses that produce compact disks, software, tapes and films, also had been in the $5.91 tax bracket that is, until its leadership put heat on the council after DreamWorks received its break. Last month, the council finally voted to approve an 80 percent tax cut for multimedia firms, bringing it down to the $1.18-per-$1,000 category. A long-awaited report by a group of private consultants points to other inequities in the city’s tax structure, putting L.A. at a disadvantage with nearby municipalities, as well as cities all over the country. We’re not suggesting a wholesale cut in business taxes. L.A., unlike its smaller neighbors like Glendale and Calabasas, faces huge costs including police and fire departments, a full-time City Council and a bureaucracy that deals with everything from land planning to landlord-tenant relations. While it can be argued that L.A.’s city government could be trimmed, such operational needs are inherently high. Taxes make the machinery run, but those taxes should be apportioned with logic and fairness. It’s encouraging to see the council act on multimedia. Perhaps a proposal by Councilwoman Laura Chick to adjust the tax rates for HMOs will receive similar attention. The real answer, though, is not piecemeal addendums to the tax code. The real answer is to address the system’s inherent imbalances by undertaking a significant overhaul. For years, there has been talk around City Hall about just such an undertaking. The time has come to turn words into action.

mike1st/19″/mark2nd BEN SULLIVAN Staff Reporter Woodland Hills business leaders are finding there’s just one problem with being an industry town: Industries can relocate; towns can’t. The same concentration of health maintenance organizations that has long made Woodland Hills the envy of other parts of the city now leaves it economically vulnerable to a threatened exodus of managed care companies from L.A. “It would be devastating,” said Thomas DeLong, a spokesman for the Woodland Hills Chamber of Commerce. “They’re the major companies in the area with the largest number of employees.” Beyond causing a citywide loss of tax revenue, the departure of one or more of the HMOs would have a secondary impact throughout the West San Fernando Valley, said City Councilwoman Laura Chick, whose Third District encompasses much of the San Fernando Valley. The 6,000-plus Woodland Hills employees of the HMOs shop, eat and use the services of hundreds of other businesses in the area, she said, spending millions of dollars annually. “The ripple effect on employee spending in the area would be terrible,” DeLong added. The HMOs in question Blue Cross of California, CareAmerica Health Plans, Health Net and Prudential HealthCare are all located in the Warner Center section of Woodland Hills. They are demanding a lower business tax than the one the city now requires them to pay. They also are squabbling with the city over an estimated $57 million in back taxes the City Clerk’s Office has provisionally determined that the companies owe. The HMOs contend their industry is unfairly categorized in the “professionals” category of the city’s business tax code, exposing them to the highest tax rate of roughly $6 per $1,000 of gross revenue. A measure put forward by Chick would reclassify the companies to the “miscellaneous service” category, which would nominally charge them just $4.41 for every $1,000 they take in. If not granted the tax concession, the four companies and Maxicare Health Plans in downtown L.A. say they will move to a city with no business tax, or one with a tax substantially lower than L.A.’s. The potential annual savings from such a move could range from a few hundred thousand dollars up to several million dollars, depending on the size of the HMOs. “In one fell swoop, it could start to turn Warner Center into a ghost town,” Chick said. “That in and of itself is horrific, but the reverberating effect is also enormous.” Warner Center Properties, the district’s biggest office landlord, would be left with a glut of empty office space. The four HMOs account for roughly 30 percent of total Warner Center occupancy. Finding comparable tenants would be difficult, according to Andy Fishburn, the CB Commercial Real Estate Group’s vice president who heads up the leasing team at Warner Center Properties. With nearly 1 million square feet in office space between them, “they absolutely anchor this marketplace,” Fishburn said. CareAmerica, whose sublease expires at the end of 1998, is the most likely to vacate, Fishburn believes, and the loss of its approximately 225,000-square-foot presence alone would be a major blow to the center. “In all likelihood, you’re not going to find a large player to step right into that,” Fishburn said. Turnover at Warner Center is typically about 50,000 square feet a year. Filling the CareAmerica space would, at that rate, represent the equivalent of roughly four years of brokerage work, he said. As potentially painful as a mass departure would be, there are those who say L.A. should not allow itself to be “held hostage” by a handful of disgruntled corporations. “We must be even-handed in our enforcement,” said City Councilwoman Rita Walters, whose Ninth District includes MaxiCare’s downtown headquarters. “We’ve got companies (in downtown and South Central L.A.) struggling, but they pay their taxes every year.” Walters said the HMOs’ threat to relocate “could be a smoke screen to avoid paying their back taxes” altogether. The HMOs deny that characterization. If the HMOs did move, they probably wouldn’t go far. Nearby Calabasas to the north, or Burbank to east, are considered the most likely destinations for a new home, both because of their favorable taxes and close proximity to the companies’ Valley employee base. Those two cities and others as far afield as Palmdale have been lobbying for the HMOs’ business. Larry Kosmont, president of the Kosmont & Associates Inc. consulting group, said the HMOs rely on upper-middle-class, college-educated employees whose spouses generally also work just the sort of residents who populate the West Valley. Because these employees don’t rely solely on a high salary from the HMOs, many would likely quit before agreeing to a major commute to and from work, Kosmont said. “The key thing for these companies is the availability of a strong labor pool,” Kosmont said. “They have at their finger tips in the West Valley and adjacent area a large pool of educated, second-income wage earners who want convenient access to work. So it’s a perfect fit.”

mike1st/mark2nd Valley forum The Los Angeles mayoral campaign is underway with Mayor Richard Riordan and Tom Hayden as the main contenders. Since the San Fernando Valley has been a hotbed of controversial issues, including talk of secession, the Business Journal Forum asks: What issues should the mayor focus on in addressing concerns of the San Fernando Valley? Melissa Van Meter Manager, Creative Services MTM Enterprises Inc. “Try to figure out the mess of the subway going through the Valley. I’m not sure what the answer should be, but I think somebody should get a handle on it. Maybe also look into more environmental issues in the Valley, since we’re a smog center.” Reggie McDowell General Manager Sheraton Universal Hotel “To ensure that there’s a favorable relationship of tax revenues gained from the Valley with services provided to the Valley services should be equal to the revenue stream from the Valley. Everybody should get their fair share of services.” R. Hank Miller Business Development Officer Bank of Granada Hills “Make it a more business-friendly atmosphere. Try to attract more business to the Valley by cutting down bureaucratic red tape and providing quicker response to business needs, especially in connection with tax issues. Bringing the tax structure in line to be more competitive to surrounding districts.” Paul Craig CEO Capstone Turbine Corp. “Continue to promote the growth of the 21st century transportation program under the guidance of Calstart. Issues to address are those pertaining to the encouragement and support of small start-up companies that will bring an improved economy to the Valley for instance, political support and streamlining of the permit process. The Valley has long been recognized as the premiere automotive innovation center of the U.S. The mayor should continue to support this crucial technology.” Paul Locker President Locker Realty Corp. “I think that, first, the city will have to look at their budget this is where most of the issues will stem from. One of the most important issues in retaining business in the Valley is the image of the city. For example, the image and reputation of the LAPD including its handling of the gang problem in the Valley affects whether we can keep businesses in the Valley. The condition of the streets is another issue. The Mayor’s Office has the L.A. Business Team they have been very helpful and a big factor in retaining businesses. Hopefully, the budget will still allow for the team to stay in place.”

entcol/turner/22″/mike1st/mark2nd In the still fairly unpopulated wilds of Canyon Country, lions, bears, elephants and gazelles frolic through the golden hillsides as if they were still in the African veldt. The difference being, of course, that if a hiker were to stumble across one of these ferocious-looking beasts, the animal would likely demand an air-conditioned trailer, a share of the back-end and a first-look production deal. The San Fernando Valley is home to an array of companies that provide support services to the entertainment industry, but few are as colorful or as unsung as the animal trade. Ever since the early days of movie-making, producers have been demanding animal actors whether they were pets like Rin Tin Tin, horses like Trigger or an exotic African primate like Cheetah, Tarzan’s chimp. The private menageries that housed these hairy Hamlets were originally located in the Valley because, until the era of mass development, it had plenty of wide-open space for them. The Valley has remained the center of the animal-rental industry, but the ranches needed for large livestock and exotic animals are now almost all located on the fringes in such places as Sylmar, Canyon Country and Sunland. Meanwhile, there are still a few businesses supplying trained domestic animals, dogs and cats and such, located in Burbank and North Hollywood. The flight to fringe communities isn’t the only change that has affected the trade in recent years. Changing demands of the entertainment industry itself have forced many operators out of business. “They’re just not making Westerns anymore,” bemoans Denny Allen, owner of A & R; Livestock in Lake View Terrace. “We’re still hanging in there, but now we’re thinking maybe we’ll just give it another year and then hang it up.” Allen who has been supplying horses, antique buggies and wagons to the movie and TV industry for the past 40 years has placed his animals in such productions as “Little House on the Prairie,” “The Legend of the Lone Ranger,” “Lonesome Dove” and “Back to the Future, Part 3” (the one where they go back in time to the Wild West era). But a year and a half ago, he was forced to sell most of his antique carriages and 50 of his 70 horses, because jobs are too few and far between. Even the resurgence of costume dramas and historical epics such as “Braveheart” hasn’t led to an uptick in business for A & R.; “They go to England to make them kind of pictures,” says Allen, who hails from Oregon but has a good deal of Texas stuck in his craw. In better shape are the trainers and renters of domestic pets and exotic animals. Competition is fierce for these companies, but demand is fairly constant. One of the better-known exotic animal firms is Brian McMillan’s Animal Actors Inc. in Canyon Country. McMillan has more than 40 animals on his eight-acre ranch ranging from elephants to tigers to African gazelles. The best way to appreciate the range of different species owned by McMillan is to consider that in Walt Disney Co.’s recent live-action remake of “The Jungle Book,” McMillan supplied nearly the entire jungle. The animals are kept in cages, but McMillan insists that they are treated far more humanely than zoo animals because they are released every day to run around the thousands of acres of open land surrounding the ranch. Even the big jungle cats are too well-trained and accustomed to humans to attack anyone they might encounter while taking their exercise, he says. There are seven separate government permits required to keep exotic animals like McMillan’s, which is one reason companies like his are fairly scarce. There are only about five major exotic animal suppliers, he said, nearly all located on the outskirts of the Valley. The fees paid to rent an animal for a day’s shoot vary depending on the rarity of the animal and the expense of maintaining it. Paul Calabria, co-owner of Studio Animal Services in Castaic, says it typically costs about $250 a day for a trained dog, $950 a day for a lion, $1,500 a day for an orangutan (an endangered species), $600 a day for a chimp, and $2,000 a day for an elephant. A giraffe costs $1,500 a day, Calabria says not because it’s such a rare or expensive animal, but because only one company in Southern California owns a giraffe. Supply and demand, you know. Nearly all the animals are trained to some degree. Not to perform conventional circus tricks, however. “We teach them to do what they would do naturally in the wild, only they do it on cue,” says McMillan. Some animals, such as reptiles, can’t be trained to do even that much. So trainers use various stimuli to get them to do what they want in front of the camera. For example, explains McMillan, if you want a snake to get from point A to point B, you put a heat lamp under point B because snakes are attracted to heat. Even more-advanced animals often require coercion to serve as working actors. Dogs are typically manipulated with food and not just dog food. “Movie dogs get steak,” McMillan says. Calabria whose company handles more than 200 domestic animals, from squirrels to horses says he has also supplied alligators to some productions. And that’s a major training challenge. “You don’t really train alligators, they’re just kind of handled very carefully,” Calabria says.

SFVREColMar97/bb/ inches/mike1st/mark2nd The recent mergers among banks and thrifts have sent shock waves through local real estate markets. Bank of America’s acquisition of Security Pacific Bank, which hurt the downtown highrise market, is fresh in the memories of many local property professionals not to mention the acquisition of First Interstate Bank by Wells Fargo Bank. Now the San Fernando Valley office market may face a similar downturn, with Irwindale-based H.F. Ahmanson & Co.’s hostile takeover bid for Great Western Financial Corp. If Ahmanson, the parent of Home Savings of America, is successful, it would likely vacate much of Great Western’s Chatsworth headquarters complex, Ahmanson Chairman and CEO Charles Rinehart told the Business Journal. If it gets an offer it can’t refuse for the campus’ focal 200,000-square-foot headquarters tower, it would probably sell it. Besides the main tower, which Great Western owns, the thrift leases a dozen or so lowrise buildings on the campus property, under long-term lease agreements. Rinehart said that Ahmanson would likely look to sublease much of that lowrise office space, while maintaining some non-headquarters administrative operations in Chatsworth. Of course, there’s still a chance Great Western will find an out-of-state White Knight to outbid Ahmanson and take over the big thrift’s existing operations without slashing the work force and thereby softening the Valley office market. Given that the Valleywide market has shown substantial improvement over the last year or two, having the 1 million square feet or so that Great Western occupies back on the market probably wouldn’t amount to devastation. But it would hurt. “If nothing else, I’m glad it’s happening in 1997 and not in 1990,” said Madeline Schwartz, a Valley office broker with CB Commercial Real Estate Group in Sherman Oaks. Also, the 1 million feet is mostly lowrise campus buildings, and demand for such space is fairly strong especially from health care and entertainment tenants. “The worst is over; the market has really been picking up,” Schwartz added. She and Grubb & Ellis Co.’s Tom Festa another broker with extensive experience in the west and northwest Valley both stressed that the Great Western campus is accessible to and from the Santa Clarita and Simi valleys, where a highly educated labor pool resides. Both brokers mentioned CareAmerica Health Plans as among the more likely candidates to take over much of the Great Western campus if it becomes available. CareAmerica was in a similar series of lowrise buildings in that same area before taking advantage of a Warner Center sublease opportunity. Its current sublease is due to expire in less than two years. (CareAmerica, however, is one of five HMOs threatening to move out of the city of Los Angeles due to tax considerations.) But Festa also pointed out that the Great Western campus is “just five or 10 minutes” from both Warner Center and the Sherman Oaks/Encino office markets. So if the Great Western complex is abandoned, “it would obviously put some pressure on the market” and delay the ongoing recovery to some extent, Festa predicted, adding that some nearby landlords “would be real unhappy.” He added that the Great Western facilities would see substantial interest from “price-sensitive, larger users” and perhaps get leased up in a relatively short time. Great Western’s primary landlord at the campus developer Jerry Katell, who with partner Ray Watt heads partnerships that own about 700,000 square feet of the space the big thrift occupies isn’t shedding any tears. Great Western is committed to the dozen-some Katell/Watt buildings for between nine and 15 years. So if Ahmanson buys Great Western and subleases the facilities, the owners don’t face any near-term exposure. “We don’t care where the checks come from,” said Katell, adding that he and Watt have been expecting Great Western to be the target of a takeover bid for years. But Katell also said a successful Ahmanson takeover “wouldn’t be helpful to any of us, so I’m voting for an out-of-state buyer not that anyone’s asking for my vote.” Katell has concluded that an out-of-state buyer would be more likely than Ahmanson to retain a significant presence in the lowrise Chatsworth campus buildings. MegaDrive consolidates Speaking of Chatsworth-area subleasing activity, CB’s Schwartz and colleagues just helped a high-tech company called MegaDrive consolidate operations from Hawthorne and Beverly Hills into 32,000 square feet of offices subleased from personal care product maker Alberto Culver at 9201 Oakdale Ave. Alberto recently purchased the St. Ives operation that had occupied the entire building under a lease agreement, and Alberto will continue to occupy some 20,000 square feet. MegaDrive, which committed to the space for about two and a half years, specializes in memory storage software for the entertainment industry. New Linens ‘N Things Big retail chain Linens ‘N Things has signed a long-term lease for a new 39,500-square-foot store to be developed by the Horowitz/Franson Trust. The project site is at Woodman Avenue and Riverside Drive, adjacent to the Sherman Oaks Fashion Square regional mall. No financial details of the “build-to-suit” lease transaction or cost estimates were disclosed. The project is slated to get under way this month. John Beaney of Katz & Associates negotiated the lease transaction on behalf of the landlord, Horowitz/Franson. Leider Commercial Real Estate’s Stephen Leider represented Clifton, N.J.-based Linens ‘N Things, which sells bed, bath and kitchen linens, as well as housewares and home accessories. The chain currently operates 13 stores in California, with three more set to open soon. CNA expands in Glendale In an expansion move, CNA Insurance has leased 23,142 square feet of offices for its in-house legal department at the 701 N. Brand Blvd. tower in downtown Glendale. The five-year lease transaction between CNA parent Continental Casualty and property owner ARAI Corp. of America is valued at about $3 million. The legal group is relocating from CNA’s current location nearby at 500 N. Central Ave. Julien J. Studley Inc.’s Steve Walbridge and Stephen Barker represented Continental Casualty. CB Commercial Real Estate’s Doug Marlow negotiated the deal on ARAI’s behalf. The Koll real estate firm is the property’s asset manager. –30–

newsmakers/jb/21″/mike1st/mark2nd NEWSMAKERS Banking/Finance William A. Shroeder has been appointed as senior vice president for the Bank of Granada Hills. Shroeder was previously with Granite State Bank in Monrovia. In his new position, Shroeder will focus on credit administration. Entertainment/Media Roy Atlas has been named president and chief executive officer for Shotmaker Co. of North Hollywood. Atlas previously owned and operated two Miller/Coors and Pepsi Cola distributorships in California. Shotmaker rents and sells camera vehicles pick-up trucks outfitted with cameras, cranes and other equipment used to film movement scenes in movies. Phillip Muhl has been promoted to the position of senior vice president in charge of business and legal affairs for Walt Disney Motion Pictures Group. In his new capacity, Muhl will oversee the business side for films released by Touchstone Pictures and Hollywood Pictures. He was previously vice president of business affairs for Disney. David Sameth has joined DreamWorks SKG as head of creative advertising. He was previously vice president of creative affairs for MCA/Universal Pictures Production. He has worked on development on several projects including “Carlito’s Way,” “CB4,” “Timecop” and “Golddiggers,” as well as creating the marketing campaign for “Jurassic Park.” Sameth will be based in Burbank. Janice Meagher has been appointed senior vice president of marketing for Universal Studios Hollywood and Universal CityWalk. In her new position, Meagher will oversee advertising, promotions, broadcast development and publicity. She previously served as senior director for Pepsico’s Taco Bell Division. Health Care Neil M. Sorrentino has been named senior vice president and chief executive officer of Calabasas-based Tenet HealthSystem. Sorrentino is responsible for facilities generating about $2 billion in annual revenue. Most recently, he was senior vice president for Tenet’s northern region that covers Northern California and other markets. High Technology Photobit Co. announced the naming of Dr. Eric Fossum as chief scientist and Charles Watson as senior systems engineer. The company develops active pixel sensor technology, which brings video capabilities to computers. Fossum previously worked as the principal inventor of the CMOS technology while working at NASA’s Jet Propulsion Laboratory in Pasadena. He will spearhead Photobit’s research group. Watson was previously a senior scientist at Texas Instruments Inc. He will be in charge of the company’s camera system development. Real Estate Larry Hazzard was named senior vice president of Carter-Burgess’ newly created Construction Management Division. Hazzard was formerly an executive vice president with O’Brien-Kritzberg & Associates. He will be based in Carter-Burgess’ new Encino office. The company handles engineering, architecture and planning for construction projects. Newhall Land and Farming Co. announced that Donald L. Kimball has been promoted to vice president of finance. Kimball joined Newhall Land as director of internal audits in 1986. He was promoted to controller in 1990, then vice president/controller in 1994. Prior to joining the company, Kimball was an audit supervisor at Coopers & Lybrand. Bob Reynolds has been named vice president of land acquisition for The AMCAL Group of Companies. Reynolds has previously worked for Monarch Homes, Nevada Griffin Homes, and the Antelope Valley Building Industry Association. AMCAL, based in Westlake Village, manages more than $100 million of real estate in Southern California and Arizona. Retail Spencer Gifts Inc. has promoted Gene E. Carey to president and chief operating officer of the retailer. Carey joined the Universal City-based gift store in 1988 as regional manager of operations, and was promoted to executive vice president in 1991. Spencer gifts a division of Universal Studios operates 525 retail stores nationwide.

Valley rail line I am disturbed by your suggestion that all subway construction, including the North Hollywood extension, be stopped. To halt the only segment that is actually on schedule and has already completed the two miles of twin tunnels between North Hollywood and Universal City and has gone a mile into the Santa Monica Mountains on it’s two-and-one-half mile journey between Universal City and Hollywood is wildly irresponsible. You are wrong to characterize the MTA board’s decision to delay making definitive plans on the east-west Valley line until the environmental impact report comes in this spring as the board’s “inability to make tough calls.” Understand that, if the Valley line ever comes about, it would be more than 12 years away. The MTA has already eliminated subway as an option for all of it as being not having the density to be cost effective, and they are looking at combinations of aerial, open trench, at-grade, light rail, even dedicated busways for the old Southern Pacific corridor that is already MTA-owned and connects North Hollywood with Warner Center. The exception is the three-mile stretch between the Tujunga wash and Hazeltine Avenue, which is mandated to be subway by state law. To try to modify this law before receiving the environmental impact report invites additional years of lawsuits and delays that would tie up even busway options. The MTA board, in this case guided very wisely by Zev Yaroslavsky, has acted responsibly and is being accused unfairly in the press as holding out until after the municipal elections. I expect to be reading soon that the MTA causes cancer and is responsible for the Dodgers being up for sale. Today’s media-shark-feeding-frenzy of MTA-bashing has a short-sighted, fanatical tunnel vision of its own. We’ve seen all this before in cities like San Francisco, Atlanta, and Washington, D.C., where, during the early construction years, rapid transit projects are regarded as “The Boondoggle That Destroys The City,” and then, upon completion, become “The Beloved City Lifeline.” Georgetown fought to stay out of the D.C. Metro system and now, 20 years later, is lobbying feverishly for a $1 billion extension of the subway to come to them. ROGER CHRISTENSEN Sherman Oaks

eisner.btl/turner The annual shareholders’ meeting of Burbank-based Walt Disney Co. last month was an unusually frosty occasion for more reasons than one. There was a wide variety of questions from the floor for Chairman and CEO Michael Eisner, with many shareholders expressing anger and frustration over the high severence package paid to former President Michael Ovitz and over the lucrative compensation package for Eisner himself. But one shareholder toward the end of the meeting expressed the feelings of many of its 14,000 attendees when she asked Eisner, “Why is it so cold in here?” The meeting was held at the Arrowhead Pond in Anaheim, where a temporary floor was placed over the ice skating rink at the center of the arena (home of the Mighty Ducks hockey franchise). Eisner explained that the ice was causing the cold conditions, to which the shareholder responded that she was sitting in the stands several tiers above the ice. “Well, we also want to get this meeting over with,” joked Eisner, who by that time had been fielding uncomfortable questions for about a half hour.

econowatch/dy/11″/mike1st/mark2nd DOUGLAS YOUNG Staff Reporter Valley hotel operators saw both their average occupancy rate and average nightly room rate post healthy gains last year, according to this month’s Valley Econowatch. On the average night in December, 63.37 percent of San Fernando Valley hotel rooms were occupied, a 9.8 percent improvement over December 1995. The average Valley hotel room rate rose in December to $90.14 per night vs. $83.16 in December 1995. The positive trend capped off a year in which occupancy rates in the Valley approached capacity levels on peak-demand days, according to Bruce Baltin, a senior vice president at PKF Consulting, which tracks hotel occupancy and room rates nationwide. Both occupancy and room rates in the Valley will continue to rise in 1997, though the increase in occupancy will probably begin to slow this year, according to Baltin. “For 1997, we’re forecasting that occupancy will be up about another point or so. That’s the highest it can get,” Baltin said. “Rates will also be up about 6 percent.” Baltin attributed last year’s strong Valley showing to the booming entertainment-related business in Burbank and Universal City, which comprise two of the area’s three biggest hotel submarkets. A strong year for the Universal Studios Hollywood theme park also contributed to the strong year, he added. The Valley’s third major hotel submarket, Warner Center in Woodland Hills, also fared well, Baltin said, thanks to a general growth in business travel. The high occupancy levels will probably generate some interest in new hotel development in 1997, as room rates reach the point where new development becomes attractive, Baltin said. Baltin noted that two hotels the Residence Inn and a Fairfield Inn, both in Valencia were completed in late February. In addition, Newhall Land and Farming Co. and Hyatt Hotels Corp. recently announced that Newhall Land will develop a 250-room Hyatt hotel in Valencia, with a tentative opening date in the spring or summer of 1998. Upon completion, the Valencia Hyatt will be the first new full-service hotel developed in L.A. County since 1992, Baltin said.

PROFILE(wilson)31 incheswithsnapshot/1stjc/mark2nd VALERIE J. NELSON Contributing Reporter Mel Wilson learned a little about seizing the day when his grandmother decided to move her family from Alabama to California in search of a better life. The five-day cross-country trip in a ’62 Chevy landed the 10-year-old boy in the Mission Hills-Pacoima area. He would come to view it as “the Promised Land” for the opportunities it offered a young African-American and his family who had fled the deeply segregated South. More than three decades later, he still sees the San Fernando Valley as a land of opportunity. His many public roles have spanned such positions as president of the United Chambers of Commerce the Valley’s chamber of chambers in 1988 to serving in an appointed position on the crisis-ridden Metropolitan Transportation Authority board since 1993. Four months ago, he merged his 10-year-old real estate and land use consulting company, Mel Wilson & Associates, with Coldwell Banker. He wanted to align his bustling independent company in Northridge with a national firm that gives his smaller enterprise of six agents staff and advertising support. Last month, he became the first non-white president of the San Fernando Valley Association of Realtors. With 6,300 members, it is the largest such association in California. Q: The theme of your inauguration as president of the Realtors’ Association was “History in the Making.” How do you feel about the pomp surrounding this achievement? A: I am the first person of color and the first black person to be president of our association in its 77-year history. I do feel good about it. I’m proud of the fact I happen to be the first. The reason I’m president is much more than my color, but it’s something to be proud of, to show young people of color that they can succeed. I have served in many capacities with other groups. I wasn’t looking for another job or title. But an overwhelming fear came over me two years ago. I saw that organized real estate wasn’t changing rapidly to meet the industry and our client’s demands. Q: Do you have a list of what you’d like the Realtors’ association to accomplish? A: First, I am focusing on dealing with the challenge of opening up what was once our proprietary jewel, the multiple listing service, to the public. Secondly, we need to adjust to the changing demographics for our market. It used to be folks who bought houses here were mostly white. It’s no longer that way. We need to educate ourselves on how to work with people of color. We as an organized trade group need to be cognizant of that change. We also are going to reach out to real estate licensees who are people of color, and encourage them to join our association and to become participants in various companies we have. I am hopeful we can tap into those licensees to get them to join up with firms throughout the Valley. Third, we need to bring our membership up to speed with the technology. Q: Is the need to be open to people of color a necessity in terms of doing business here? A: People who are good business people realize diversity is a good thing. Those who want to be successful in the real estate business are reaching out and seeing value in it. For instance, Realtors might do targeted marketing where English is a second language. Publications are printed in Farsi, Korean or Spanish, for example. We are targeting our market because those are the folks who are the first-time buyers. They are the ones fueling our markets. Of first-time home buyers in 1996, about 40 percent were people of color. Q: Will the long-term effects of the Northridge quake be mostly positive ones for the Valley? Are most of the area’s business districts bouncing back? A: The long-term effect on Northridge, particularly the business community, is actually going to be good. You know how they say, “I don’t care what you say, just get my name right”? I was in San Antonio, Texas, and I said, “I’m from Northridge.” People always respond with, “Oh, the quake.” I tell them about the weather, all the great things here. The name recognition will help us. We’ve gotten a lot of properties that have had hundreds, perhaps millions of dollars invested in them to bring them up to good standards. People who had been thinking of selling their homes or moving out of the area were able to get assistance and pump thousands of dollars into their homes. The quality of the housing stock has risen. Overall, business will benefit from that because people will stick around longer. Q: How has the Valley business landscape changed since you were president of the United Chambers of Commerce in 1988? A: I still see small business thriving. I see more businesses owned by folks of Asian descent. You can drive around and see pockets of communities, specifically Korean in Reseda, the Canoga Park area and the Northeast Valley. I see a lot of Koreans owning those liquor and mom-and-pop stores. I see more entrepreneurial immigrants coming in and buying up a lot of business opportunities. On a larger scale, in a lot of ways, we are the Silicon Valley of the South. Large regional companies are in the area, such as the high-tech area in Chatsworth. Q: What about 10 years from now? What is the business picture for the Valley of the future? A: I see a fairly diverse Valley in the types of businesses here. I see more high-paying jobs coming to the area, particularly from the entertainment and the trade-related fields. Companies that do business with other companies that are international firms will thrive. I see national and multinational firms locating in the Valley. The Valley has a fairly good stock of educated people to pull from. These things will help us sustain a strong economy for the next couple of decades. Q: Regarding your position on the MTA board, what is your reaction to the state Senate Transportation Committee’s call for an overhaul of the board? Even Mayor Riordan has said he wants an appointed board. A: We get 25 percent of all the transit dollars for the country right here at the MTA. You couple that with the politics of it all. When you put together money and politics, you are sometimes going to have controversy. In many ways, we are going to continue to be under the microscope. A lot of things we do, we do really well. Building for the future entails a lot of controversy. Do I think the MTA needs to be overhauled? Yes, we are fair game to be looked at. There ought to be a different structure on the board. Even with a new structure, we are going to have billions to deal with and the policymaking of the organization is going to be under scrutiny. Q: Do you have a grand plan for your political activism? A: I like giving my time and talent to the community. I like working in organizations that can make a difference for everyday people. That can be business groups and other types of policymaking groups. I don’t plan to be on the MTA forever. In fact, I don’t know how long I will stay. SNAPSHOT Mel Wilson Position: President, San Fernando Valley Association of Realtors; partner, Coldwell Banker, Mel Wilson & Associates Born: Boligee, Alabama, 1952 Education: Bachelor of Science, business administration, Cal State Northridge. Most admired individual: His grandmother, who was his mentor. “Very strong, deeply religious and she was a good businesswoman.” Personal: Married for 23 years, three children