fastrak/mike1st/mark2nd VALERIE J. NELSON Contributing Reporter Across the country, as many as 3,000 employees of On Assignment Inc. went to work today in the science labs of other companies. And a significant portion of their paychecks will go into the increasingly deep pockets of the Calabasas-based company originally known as “Rent a Chemist.” The temporary staffing company’s ability to match the right scientist to a research project brought it record net income of $5.6 million on record revenues of $88 million last year and helped establish it as the leader in the high-tech temp field. That record 1996 performance was a 29 percent increase in net income and 21 percent increase in revenues from the prior year. Customers most frequently utilizing On Assignment scientist-temps are from the biotechnology, pharmaceuticals and other related industries. Since 1994, On Assignment has made Forbes magazine’s list of the 200 “best small companies in America.” “The unique thing about On Assignment is its emphasis on very high-quality outsourcing. Many of their employees are permanent employees. They only have temporary assignments,” said Bernard J. Picchi, an analyst with Lehman Brothers. H. Tom Buelter, chief executive officer of On Assignment and the one who is largely credited with bringing the 12-year-old company to the forefront of its niche, likens his concept of employment to that of a Hollywood actor. “I’m sure if Tom Cruise were finished making a movie, he wouldn’t consider himself unemployed. He’s simply between two assignments. That’s where the future of employment is going to go. We are ultimately changing the word from ‘temporary employment’ to ‘temporary assignment.'” It also helps that the company is in sync with the rest of the business world. As the concept of cradle-to-grave employment evaporates, companies that have downsized are turning to temporary staffing when there is a burst of work. An average of more than 2.4 million temps are employed daily at U.S. companies more than double the average daily temp employment in 1991, according to the National Association of Temporary and Staffing Services, the largest trade association for the industry. And much of the growth in temporary placement is coming in the technical and professional industry segments. When Buelter arrived at On Assignment in 1989 from Kelly Services, he left behind a $50 million (annual revenues) Kelly division he had built called Assisted Living, which placed temporary health care workers in home care settings. Upon arriving at On Assignment, his task was to bring profitability to a company that had wandered from its initial scientist-for-hire concept into other pursuits, such as consulting and executive recruiting. Buelter came up with the “account manager concept,” which experts credit with enabling the firm to make such high-quality matches that one in five of their temporary placements end up as permanent hires. Under that approach, account managers are hired and trained to serve as a liaison between scientists and employers. The account manager is responsible for searching out talented scientists-for-hire as well as drumming up business from companies interested in hiring such scientists on a temporary basis. The account managers themselves are actually scientists who were pulled from the field, then given the human resource skills that allow them to make placements in one of 85 On Assignments branches in 50 markets around the country, Buelter said. Their inside knowledge of the tasks that need doing whether it’s research assistants to wash glasses for $10 an hour or a scientist brought in at $1,000 a day for advanced research is what allows the company to make “the quality assignment … and the higher margins,” he said. Because of the skill its employees possess, its profit margins can be as high as 70 percent more than the average for all temporary workers. For example, On Assignment charges $20 an hour for a lab support worker, and pays such workers $12. Carole Cargile, human resources administrator for the Neocrin Co., an Irvine research and development company in the diabetes field, had six On Assignment research assistants working through the end of February on a “critical project” and plans to convert five of them to permanent positions. “We have gotten r & #233;sum & #233;s from other agencies, but it seems that On Assignment’s people are much more qualified and have the background we need,” said Cargile, who has been hiring On Assignment temps for four years. On Assignment does outperform Kelly Services in a number of markets, concedes Rolf Kleiner, vice president of Kelly Scientific Resources, based in Troy, Mich. “We encounter them more in second-tier cities, and we are in much bigger companies than they tend to be. … Five or six other scientific staffing companies compete with us, and we encounter them with about the same frequency,” he said. Buelter counters that Kelly “doesn’t compete at all with us, because they are much more in the commodity business.” While Kelly Services is known as a commodity temporary-help provider, its 16 scientific staffing units mirror On Assignment’s specific approach. Each unit is run by scientists and is “highly focused” on the technical market, Kleiner said. On Assignment’s Lab Support division brings in about three-quarters of the company’s overall revenues each year. A second division provides temps who are trained in credit, collection and medical billing to financial services and health care industries. A third division places skilled science professionals in environmental jobs. The third division was established when On Assignment acquired EnviroStaff, a Minneapolis-based company, in March of last year through a stock-swap deal valued at about $6.2 million. Analyst Picchi said he thinks the stock has languished it has been trading recently for about $34 a share because it has escaped the attention of the big brokerage firms. That could soon change. In a January research report on the company, Picchi calls On Assignment’s “business model its greatest strength” and writes that the company “meets five of the sixth criteria that we believe define all true growth stocks.” Picchi said his only concern for the company is how it will invest the cash it has on hand. On Assignment’s trafficking in skills placement is not a capital-intensive business. With no debt and about $15 million in cash on hand, the company seems well positioned to expand. Of the future, Buelter would only hint that the company is “thinking globally” and has plans to extend its temporary placement skills into other professions. “We are going to do some very significant things. We probably will have to add new specialties, and we are looking into new niches,” Buelter said. “That is the most highly guarded trade secret I have.” — 30 —

VALLEY/PERSFI/30 INCHES/1stjc/mark2nd It’s wise to save at least 10 percent of your pretax income so you can adequately provide for your retirement and meet other financial goals. To get started, here are 20 ways to boost your savings and increase the return on your savings. 1) Pare down your debt. Unless you can find an investment with an after-tax return that’s higher than what you’re paying on your debt, reducing your debt is the first step toward smart saving. 2) Track your spending. If you don’t know where your money goes, try monitoring your spending for a few months. Then look for ways to cut back spending and increase your savings. 3) Pay yourself first. As long as your debts are under control, set aside a pre-determined amount in a savings plan each month before you make big-ticket purchases. 4) Make it automatic. Authorize your bank to transfer a set amount each month from your checking account to a savings account, mutual fund or another investment vehicle. 5) Maximize your 401(k) contribution. Remember that every dollar you invest in this qualified retirement plan reduces your gross income by the same amount. 6) Save the small stuff. Rather than cashing small checks you receive for dividend payments, insurance reimbursement, birthday gifts and the like, deposit them in your savings account. 7) Bank “extra” checks. If you get paid biweekly, two months out of the year you’ll get three instead of the usual two paychecks. Save those two checks and you’ll boost your savings significantly. 8) Revise your W-4 form. If you received a large tax refund last year, reduce your withholding for 1997. You’ll get a bigger paycheck and you can save or invest the extra cash so that you, not Uncle Sam, earn interest on your money. 9) Save your raise. Resolve to save the extra money you get in your paycheck after receiving a raise. Do the same with bonuses and you’ll really come out ahead. 10) Make it painless. If your adjustable rate mortgage adjusts downward, plan to save not spend your monthly windfall. 11) Reach for higher yields. To compete with money market mutual funds, some banks offer penalty- free Certificates of Deposit (CDs). But watch out for hidden charges. 12) Put found money away. If you’re earning more than the Social Security withholding cap on payroll taxes, your Social Security deduction will stop before year-end. Take the portion of your salary that you previously turned over to the government and put it toward your personal retirement savings. 13) Switch credit cards. With a credit card that charges less interest, you can pay off the balance faster and free up money for saving. 14) Open a “think twice” account. Every time you decide not to buy something, write a check for the amount you would have paid for the item and deposit it into a separate account. Before long, you’ll forget what you gave up and have a tidy sum to invest. 15) Pay down your mortgage. Send an extra $50 or more with your monthly mortgage payment to pay off your mortgage earlier and save thousands on interest. 16) Make the most of emergency funds. Don’t keep all of your emergency funds (typically three to six months worth of living expenses) in a low-yielding savings account. Put a portion of it in higher-yielding liquid investments, such as short-term CDs or money market mutual funds. 17) Use a discount broker or buy direct. Unless you need professional advice, consider buying and selling stocks and bonds through a discount broker. You can also cut costs by buying stock directly from a company. 18) Consider investing in municipal bonds. Any interest earned on these bonds is free of federal and sometimes state income tax. That feature can boost the yield on your investment significantly. 19) Refinance your mortgage. Consider looking into refinancing if the interest rate on your existing mortgage is two or more points higher than today’s rates. Then invest the money you save on your monthly payment. 20) Commit to planning. Keep more of your money when you take advantage of opportunities and make tax planning a year-round event. Helping your children Whether you’re helping your children finance their college education, buy their first home, or just build their savings, there are some tax-smart ways to give them assistance. Here are some strategies for sharing the wealth. – Make large gifts of cash If you’ve had a good year financially, you might consider parting with some of your hard-earned assets in exchange for a lower tax bill. The easiest way to make a gift is to set up a custodial account under the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act. You and your spouse can each give up to $10,000 a year to each of your children without paying federal gift tax. – Become your college student’s landlord If you have a student in college, you may be able to turn non-deductible apartment rents into valuable tax advantages by buying a house or condo for your child to live in while he or she is away at school. If you don’t already have a second home, you can treat the college town house as a second home and deduct mortgage interest and property taxes, while giving your child a free place to live. – Put your kids on the payroll. If you have your own business either full or part time you can reap a double tax benefit when you hire your children. First, their wages are considered earned income, which is taxed at the child’s low tax rate, regardless of age. Second, the wages you pay the children for work they perform are deductible as a business expense. Mel Poteshman is president of Los Angeles-based Poteshman Consulting International & Co.

cuc/14″/mike1st/mark2nd DAN TURNER Staff Reporter CUC International Inc. completed its acquisition of Glendale-based Knowledge Adventure Inc. last month, furthering its unusual efforts to branch into the software business. Knowledge Adventure, an educational software firm best known for its “Jump-Start” series for toddlers, is the second hot L.A.-area software firm acquired by the East Coast marketing firm in the past year. The other is Torrance-based Davidson & Associates, which surprised Wall Street analysts Jan. 21 when its co-founders Jan and Bob Davidson unexpectedly resigned from their management roles. They will continue to serve on CUC’s board of directors. Following last month’s acquisition, Knowledge Adventure will operate under the umbrella of the recently formed CUC Software unit, which includes Davidson & Associates, Irvine-based Blizzard Entertainment and Bellvue, Wash.-based Sierra On-Line Inc. CUC’s foray into the software business has yet to pay off for the Stamford, Conn.-based company, which last February announced the deal to purchase Davidson in a stock swap valued at around $1 billion. All told, CUC has spent more than $2 billion building up its software division. The $86 million purchase of Knowledge Adventure was first announced in early November and it closed Feb. 3. Analysts remain skeptical about the recent software acquisitions by CUC, whose core business is selling memberships to various discount clubs. “There are some synergies involved between these companies and CUC’s other operations, but those are pretty weak synergies to justify spending $2 billion,” said Craig Bibb, a high-growth stock analyst with PaineWebber. Investors seem to share Bibb’s concerns. CUC’s stock has never recovered since the Davidson purchase. Before that deal was announced in February 1996, CUC stock was trading at $37.50 a share; it began dropping steadily after that, trading below $20 in March and April. It has rallied somewhat since then and was trading at around $24 last week. CUC’s Hamilton said the company’s new software operations will help it fulfull its original goal of selling membership services through the personal computer. Software developers at the four companies are now being used to create a CUC Web site called NetMarket, which is scheduled to debut in June. In addition, Hamilton said, the various software products created by Davidson, Knowledge Adventure, Blizzard and Sierra will be sold through CUC’s special distribution channels, in addition to retail stores. For example, CUC is putting together a school fundraising program through which children sell educational software products, and a portion of the proceeds goes to their schools. But according to Bibb, the real reason behind CUC’s recent acquisitions has to do with the extreme fragmentation of the software market. CUC management thinks it can reduce overhead by consolidating distribution, back office, customer service and other functions for several different companies, and eventually generate big profits. He said it’s too early to tell whether the strategy will be a success.

PORTER/28inches/with map, photo /1stjc/mark2nd DANIEL TAUB Staff Reporter PORTER RANCH Welcome to the ’90s better late than never. That’s the message developers of the new Porter Ranch project are trying to get across as they prepare to scale back commercial development for this 1,100-acre master-planned community. Originally, the idea was to build a 2-million-square-foot commercial complex with office buildings, retail stores, a hotel complex and a movie theater. Now, developers want to build just 660,000-square-feet of commercial space with none of the office development once envisioned and with reduced public improvements. “We’re moving forward on a smaller scale,” said Richard Mahan, spokesman for Porter Ranch Development Co., a partnership of Shapell Industries Inc. and Liberty Building Co., both based in Beverly Hills. “This isn’t the ’80s, but there’s still a real need out there for a center of this type for the people up there,” Mahan said. Developers say that the newly planned 660,000-square-foot Porter Ranch Towne Center which will likely include restaurants, a bookstore, a hardware store, a coffee house and an upscale supermarket will be a much-needed addition to an under-served area. But local homeowners say that the new version of the shopping center is just a way to avoid making promised improvements to the area, to build a less attractive shopping center than pledged, and to sneak less desirable, big-box stores like Wal-Mart and Home Depot into the community. “This is not pretty. This is a huge parking lot with stores at the back of it,” said Walter N. Prince, chairman of the planning and land use committee for PRIDE, a Porter Ranch homeowners group. The scaled-back plan, approved by the Los Angeles Planning Commission in late January, is expected to reach the City Council by the end of March. Developers say that a groundbreaking on the center likely would come within 60 days of council approval and construction would take 18 months. The shopping center planned for an empty site on Rinaldi Avenue between Corbin Street and Winnetka Avenue is designed to include more than 3,000 parking spaces and more than 50 stores and restaurants. Porter Ranch Development estimates that over 600 retail, service and professional jobs will be created by the center. Although no leases have been signed, Mahan said that developers are looking to attract stores like Barnes & Noble, Starbucks and a Gelson’s or Pavilions supermarket. Mahan said that because the current plan allows for large-square-footage stores, some homeowners figure that the company will build a Home Depot or a Wal-Mart. “A lot of people immediately assume there could be only one type of retail operator,” Mahan said, adding that an upscale supermarket like Gelson’s could occupy 90,000 to 100,000 square feet similar to the size of a big-box store. Mahan added that the shopping center is sorely needed in the largely residential Porter Ranch area. “Right now there’s only one little shopping center available to all the homes up there,” he said. But Prince whose group PRIDE was once known as “Porter Ranch Is Developed Enough” said that Porter Ranch Development’s plan is broad enough to allow for big-box stores and there is no guarantee the company won’t build them. “I’m sure they’re going to grab any guy who walks down the street, and that’s the big-box stores that can’t go in any place else in the Valley,” Prince said. Prince also said that when Porter Ranch Development scaled back the size of the development, they did away with the road and sewer improvements that were a part of the 1990 plan. “Just reducing (the size of the center) doesn’t solve all the ancillary problems,” he said. Despite concerns of Prince and other local homeowners, representatives of City Councilman Hal Bernson, whose district includes Porter Ranch, said that they have received only a handful of complaints. “Primarily, it’s been a misunderstanding. When we explain to them that it is a reduction, not a new project, most of them are satisfied,” said Greig Smith, chief deputy for Bernson. While Porter Ranch Development plans to down-size the commercial project, the developers still plan to build the original complement of 3,395 homes. An office complex, a hotel or a movie theater all pieces of the 1990 plan for the area could come later in an area adjacent to Porter Ranch Towne Center and the planned homes. “It doesn’t preclude that from being developed in one of the other commercial areas,” Mahan said. “If there’s a market for a hotel, we’ll build a hotel. If there’s a market for a regional theater, we’ll build a theater.” Porter Ranch was originally developed in the 1960s, and now consists of about 2,000 homes. Under a master plan approved by the Los Angeles City Council, the company plans to build an additional 2,195 single family homes and 1,200 multi-family homes over the next 20 years. Housing development, however, has been stalled for the past six years by the prolonged real estate recession, which hit the San Fernando Valley especially hard. The developer’s request for a reduction in the commercial component was the first sign in years of the company’s willingness to build. Mel Wilson, president of Mel Wilson & Associates, a division of Coldwell Banker, said that the development is one sign that the real estate market in Porter Ranch is picking up. Wilson explained that he has seen homes in the Porter Ranch area selling for more money and with more buyers showing interest. “It shows me that there is a high demand to live in the Porter Ranch area, and people really want to be there,” he said. Aside from any future homes in the area, Wilson said the building of the Porter Ranch Towne Center would at least be good news for the area’s existing residents. “Porter Ranch is a fairly affluent neighborhood, but for one to shop, you have to go down to the Northridge Fashion Center or into Granada Hills,” he said.

SCHOOL/8inches/1stjc/mark2nd LISA STEEN PROCTOR Staff Reporter The West Valley Occupational Center is trying to fix a common concern of San Fernando Valley businesses lack of qualified workers. The center which is part of the L.A. Unified School District is asking area businesses to provide input on what type of instruction they want to see at the school, said Joan Schulman, director of the schools career center. The Woodland Hills campus in return is asking businesses to develop mentor or apprentice programs, she said. “We are concerned about meeting with businesses to discuss each other’s needs so that there is a constant dialogue between the center and Valley businesses,” Schulman said. To this end, the school is working with the Valley Economic Alliance a coalition of the Valley Industry and Commerce Association, various chambers of commerce and the Economic Development Center (a non-profit created to help small businesses) to develop the alliance’s work force preparedness program, said Joe Lucente, who chairs VICA’s education committee and sits on the alliance’s board of directors. VICA’s member-companies receive information about the school’s curriculum in order for them to consider possible training partnerships. If a need exists for a specific type of training, the school will either adapt its current curriculum or add a new program, said Joe Tijerina, the school’s prinicipal. “We do have limited funds, but whenever possible we try to accommodate an industry’s request,” said Tijerina. As an example, the school plans to begin a program on July 1 with General Motors that trains high school students in automotive mechanics, he said.

magic/19inches/w/art/mark2nd JOE BEL BRUNO Staff Reporter A year ago, Six Flags Magic Mountain was betting on its new “Superman: The Escape” ride to keep its summer season in the green. But instead the Valencia-based theme park got something else green kryptonite. Technical problems kept Superman grounded during the crucial summer months costing the park untold losses in admissions and aborting an advertising blitz tied to the thrill ride. Now, officials say Superman is in the telephone booth and preparing to make its maiden flight. “We’re going to have a spring opening, and that means a lot to us,” said Palmer Moody, a spokesman for Six Flags, a unit of Time Warner Inc. “We expect, finally, this ride will mean a big boom to our attendance and revenues this summer.” The opening of Superman comes at a time when competition among local parks has become intense. Los Angeles County’s two amusement parks Universal Studios Tour and Magic Mountain have been battling it out each summer season for tourist dollars. Universal Studio’s attendance last year hit about 5.4 million visitors, up from 4.7 million in 1995, according to Amusement Magazine, which tracks theme park attendance records around the nation. The increase was attributed to the opening its new attraction Jurassic Park. Meanwhile, Magic Mountain which had no new attractions in 1995 and 1996 had about 3.4 million visitors each year. In the business of amusement parks, a new attraction can increase attendance by more than 10 percent. That’s a lesson that Universal Studios and Disneyland learned last year. At Universal, the Jurassic Park ride proved a hit despite some operational problems. The park announced that its summer attendance in 1996 was up 35 percent over the previous year, to 2.5 million. “We sympathize with Magic Mountain, that’s a tough position to be in,” said Eliot Sekuler, a spokesman for Universal. “New attractions help revitalize our parks and form the basis to our approach for all of our marketing outreaches. The ride will still bring in people for several years to come, so it’s not just the summer.” Disneyland took a different marketing approach. Instead of touting a new attraction, it promoted one it was putting out of commission the Main Street Electrical Light Parade. A Disneyland spokesman said attendance records during the 1996 season easily beat out the year before, when the theme park was promoting the new Indiana Jones ride. “The way theme parks keep people coming back is by coming up with a new ride each summer,” said Ray Braun, a senior vice president at Economics Research Associates, a West Los Angeles company that advises amusement park executives. The Superman ride is touted as one of the world’s first 100-mph thrill rides. Riders are strapped into one of six cars linked together, which are propelled by large magnets that pass over electromagnetic elements placed along the tracks. The passengers speed along a flat stretch of track, reaching a top speed of 100 mph before shooting up a 415-foot-high tower. At the top, the cars drop back down giving riders a momentary sense of weightlessness. Braun said that, in a way, Magic Mountain might be in luck this summer: It will be the only local amusement park coming out with a major new attraction. “Maybe the buzz from last year created even more anticipation,” Braun said. “Superman will have a lot of attention when it opens they’ve had people waiting a long time to take a ride.” Six Flags will not release how much it spent on marketing efforts to promote Superman, or its estimated dollar losses. Whatever they were, industry analysts believe the park is now positioned to make them up. “It has now become the most famous un-ride in the world,” said Tim O’Brien, an editor with Nashville-based Amusement Business magazine. “They’ve built up a lot of anticipation for this ride a lot more publicity that is going to erupt when it opens.” “This ride is going to blow the doors off the place,” he said.

dailynews/11″/1stjc/mark2nd DAN TURNER Staff Reporter The Daily News of Los Angeles has agreed to contribute $500,000 to the Economic Alliance of the San Fernando Valley, the largest private donation ever received by the group. The alliance was created in the wake of the 1994 Northridge earthquake to rebuild the Valley economy and improve its image. “The Valley really is Daily News territory. They’re very interested in its economic future,” said attorney David Fleming, chairman of the Economic Alliance. The group launched a fundraising drive in December with a target of $7.5 million. The $500,000 contribution from the Daily News will be paid at a rate of $100,000 a year for the next four years; the first installment was paid last month. The Economic Alliance helps Valley companies obtain business loans, sponsors training classes and promotes the Valley to business leaders. Fleming said he personally solicited the contribution from Daily News Publisher Larry Beasley, who did not return calls for comment. The newspaper did announce its donation in a prominent, front-page story on Jan. 17, several days after inquiries were initially made by the Business Journal. The $500,000 donation took some media watchers by surprise, given the company’s severe cost cutting in recent years and a still-precarious financial outlook. “They’re very, very cheap,” said attorney Ellen Greenstone of the Pasadena firm Rothner, Segall, Bahan & Greenstone, which represents the National Labor Relations Board in a years-long complaint against the paper. “I don’t know whether that comes from a position of financial hardship or not.” The NLRB contends that the Daily News owes its employees $1.2 million in back pay and interest because the paper suspended merit pay raises in 1989 after its editorial employees certified a local branch of the Newspaper Guild. The board contends the suspension of raises amounted to punishment for unionizing a violation of federal law. Merit raises were reinstated in 1991 after a collective bargaining agreement was signed with the Newspaper Guild. A decision by an administrative law judge to uphold the NLRB’s complaint was under appeal by the Daily News before the U.S. Supreme Court until last month, when the high court declined to review the case. A hearing is set for April 7 to determine the exact amount the Daily News will have to pay its employees. Attorney Thomas Burke, managing partner of the downtown L.A. office of Brobeck, Phleger & Harrison LLP which represents the Daily News, said the NLRB’s $1.2 million estimate is way off. According to the Daily News’ calculations, it owes its employees less than half that sum, he said.

Big refinance An affiliate of local development firm Johnston Group has secured a $25 million refinance mortgage from Nomura Asset Capital Corp.’s real estate lending division for the 320,000-square-foot Malibu Canyon Business Park and Corporate Center in Calabasas. Johnston completed the business park in two phases in 1986 and 1990. Tenants include a variety of high-tech, insurance, health care and other service operations. The Nomura loan carries a 15-year term and a 30-year amortization schedule. Chase Securities Inc. and Dwyer-Curlett Inc. assisted in negotiating the transaction which closed in just three weeks.

Ezralow/SFVFeb/24 inches1stjc BRAD BERTON Staff Reporter Developer Marshall Ezralow has figured out a way to rent apartments in parts of the Valley that still face double-digit vacancy rates from the Northridge earthquake. Just drop the price. Ezralow says the units are renting for $100 to $150 less than comparable apartments nearby. His price structure is part of the Los Angeles Redevelopment Corp., a joint effort of Ezralow and St. Louis-based redeveloper McCormick Baron & Associates to purchase and renovate Valley apartment communities damaged in the January 1994 Northridge earthquake. The developers earn key income tax credits by reserving all 500 of the units built or under construction for low- to moderate-income residents. The below-market rent levels are set with participation of the City of Los Angeles’ Housing Department, and the federal government helps residents pay their rents based on family income levels. Residents must meet specified income requirements to qualify. The programs allow L.A. Redevelopment to offer one-bedroom units for about $520 monthly, two-bedrooms for about $625 and three-bedroom apartments for about $715. “We are able to deliver new apartments, which are relatively luxurious compared to the competition, at rents that typically run $100 to $150 below nearby ‘market-rate’ apartments,” Ezralow said. The new and renovated units include appliances and features not typically offered in competing market-rate developments. The partners initially expected to utilize government programs aimed at creating projects combining both “market-rate” units and “below-market” apartments reserved for lower-income renters, Ezralow said. But demand for the affordable units has been overwhelming, the developer added. L.A. Redevelopment’s projects are located in some of the Valley communities hit particularly hard by the Northridge earthquake primarily Northridge, Reseda and Canoga Park. Demand for the affordable units is so strong that completed projects typically have been entirely leased within a week of opening, noted Cristina Agra-Hughes, L.A. Redevelopment’s president. “There’s almost no turnover, and there’s always a waiting list of 50 to 60 (qualified prospective) tenants at each project,” she said. Dan Zander, a partner in the Sperry Van Ness investment property brokerage who specializes in Northridge area apartments, said he’s not surprised that L.A. Redevelopment’s units leased so quickly. “The Northridge area is still struggling with an overall apartment vacancy rate of about 12 percent, but a lot of the renovated and rebuilt properties are only about 2 percent vacant,” Zander noted. The L.A. Redevelopment developers typically receive tax credits for 15 years. The renovated and rebuilt units remain under the moderate-income restrictions for 40 years. Developing and administering affordable housing projects can be tricky, company officials say. “You absolutely need a sophisticated organization and staff that can oversee the entire operation identifying prospective projects, gaining government approvals, securing the financing, performing the physical construction, screening prospective tenants and managing the properties,” said Gary Freedman, a senior Ezralow Co. principal. Once the development team identifies a redevelopment or renovation project and performs extensive physical inspections and other such “due diligence” analysis, it works closely with the Housing Department to prepare plans and set rent levels, Agra-Hughes noted. Then each project competes for the federal tax credits, which the State of California allocates on a point system weighted in favor of distressed neighborhoods, large family-sized units and affordability, Agra-Hughes continued.

newhall ranch/r.e. report/d.taub/mike1st/mark2nd DANIEL TAUB Staff Reporter SANTA CLARITA It would be the largest master-planned community in the history of Los Angeles County, encompassing 19 square miles in an area north of the San Fernando Valley. It would be home to nearly 70,000 residents. About 19,300 people would work in its business park and at its retail stores and other businesses. But the planned community of Newhall Ranch which is envisioned by Newhall Land and Farming Co. to follow in the footsteps of nearby Valencia is facing opposition from environmentalists and Santa Clarita city officials, who say it would put too much stress on an area with limited resources. The Valencia-based developer is holding public hearings through mid-February on the recently released draft environmental impact report for the Newhall Ranch community, which would be adjacent to Valencia between the Golden State (5) Freeway and the Ventura County line near Six Flags Magic Mountain. Newhall Land officials hope the master-planned community will evolve into another Valencia, the thriving planned community that the company began developing in the mid-1960s and that is still experiencing growth. “We have a good reputation and a lot of experience to draw on as to how to build a new community,” said Marlee Lauffer, a Newhall spokeswoman. Newhall Ranch which is expected to include more than 25,000 apartments, townhouses and upscale houses has been designed to include 274 acres of community parks, 60 acres of neighborhood parks, a community lake offering fishing and boating, an 18-hole golf course, a 200-acre business park and more than 50 miles of pedestrian, equestrian and bicycle trails. A high school, a middle school, five elementary schools, three fire stations, a public library, a water reclamation plant, an electric substation and 30 miles of new roads are also a part of the plan. Newhall Ranch’s businesses and residences will be distributed among five “villages” Riverwood, Oak Valley, Portero Valley, Long Canyon and the Mesas. Each village has been designed to create a “small town” feeling and each will have its own movie theater, shops and meeting places. Over the last few months, the project’s draft EIR has been circulated and a series of public hearings has begun. Although Newhall Land has been successful with its other Santa Clarita developments, Newhall Ranch faces significant opposition from environmentalists and other community members, including an official declaration of non-support from the Santa Clarita City Council. While the Newhall Ranch site is outside Santa Clarita city limits in unincorporated L.A. County, the proposed community would put an extra strain on limited street, sewer, educational and recreational resources within the city, council members said. Project opponents speaking before the L.A. County Regional Planning Commission have argued that Newhall Ranch would produce enough traffic to clog local roads and Interstate 5 the Santa Clarita Valley’s primary link to the San Fernando Valley, downtown L.A., the Westside and other points to the south. Local school officials also have spoken out against the current Newhall Ranch plan. Although Newhall Ranch would have its own schools, William S. Hart Union High School District officials as well as other local school district officials have criticized the plan for underprojecting population growth and future burdens on local schools. Other issues that have been raised include whether Newhall Land should pay for building a Metrolink rail line through Newhall Ranch, whether the amount of water available in the Santa Clarita Valley could support a new influx of residents, and concern that the company’s campaign contributions to state and county legislators could unduly influence the approval process. After completion of public hearings, Newhall Land will prepare and release by April or May a final EIR and responses to public concerns. That also is the time at which the developer hopes to win approval from L.A. County’s Regional Planning Commission, which is currently reviewing the Newhall Ranch plan. The plan must then go to the L.A. County Board of Supervisors for final approval before construction can begin. “We expect to start development of Newhall Ranch somewhere around the year 2000,” Lauffer said. The community would then be built over a period of about 25 years, but its first residents would likely move in about a year after development began, she said. Jim Lindvall, an associate vice president with commercial real estate brokerage Grubb & Ellis Co., said Newhall Land has an opportunity to do something with its new development that it failed to do with Valencia build houses that attract executives. “It’s been a nice bedroom community, but it doesn’t have a lot of the higher-end executive housing,” he said. Lindvall said that building spacious houses with access to golf courses and other amenities will eventually attract large companies and other support businesses to the area. “If you can get the CEO to move out there,” he said, “you can get his company to move out there somewhere down the road.”