btl/feb3/22″.sfvbj Politicians reborn Is there life after term limits? Apparently so if you’ve got friends in high places and are willing to take a pay cut. Former California Assemblywoman Paula Boland (R-Granada Hills) who in November lost a state Senate bid after being ousted by term limits has been appointed by Gov. Pete Wilson to the California Narcotic Addict Evaluation Authority, a parole board for drug abusers convicted of felonies. The leader of the Valley secession movement will earn $38,094 a year in her new job quite a bit less than the $75,600 she pulled in each year as a legislator. Meanwhile, former Assemblyman Richard Katz, who led the Democrats in the state’s lower house before being forced out in 1996 by term limits, was named to the California Medical Commission, the state agency that negotiates Medi-Cal contracts with hospitals. Appointing Katz was new Assembly Speaker Cruz Bustamante. Unlike Boland, Katz will not have to suffer a pay cut in his new gig. He’ll earn $75,600 a year the same salary he got as a lawmaker. Ready for takeoff The ultimate in jet-setting status symbols the new $35 million Gulfstream V corporate jet was scheduled to be trotted out at Van Nuys Airport last week. Why was Van Nuys given a higher priority than the airport in mogul-laden Burbank? Perhaps Gulfstream higher-ups thought it was more important to show off the high-flying Gulfstream V to a key current customer none other than publishing mogul Bob Petersen. Petersen Aviation, which operates at the Van Nuys Airport, is said to own a couple of Gulfstream’s previous models and handles a couple of other Gulfstream jets for clients. Not to mention that Van Nuys’ runway is 8,000 feet long 2,000 feet longer than Burbank’s and thus better able to accommodate the latest in flight technology. The new “G-5” seats up to eight passengers (plus crew of four), can fly at altitudes of up to 51,000 feet and has a range of 6,500 nautical miles. Flying southwest out of Van Nuys, that would put you down in Auckland, New Zealand. Vatican mystery Who ever heard of a Roman named Father Doyle? Officials at Burbank-based 1928 Inc. have. Two years ago, 1928, a jewelry manufacturer, was in negotiations with the Vatican to produce a new line of jewelry based on art and artifacts from the Vatican’s vast libraries. The Vatican’s business manager is named Father Doyle, and he wanted a guarantee against royalties. He was a good negotiator, according to 1928 officials. Is Doyle a New Yorker serving time in Rome? Or from Dublin? Or maybe even a prot & #233;g & #233; of our own Cardinal Roger Mahony? “No, he was an Italian,” insists David Sukonik, vice president at 1928. “He is just one of those rarities a man of the cloth with good business sense.” That explains it. Comedy gets ugly There’s trouble on the set at Universal City-based DreamWorks Television, where an ugly spat between actor Arsenio Hall and the executive producer of Hall’s soon-to-debut show reportedly led to the latter’s exit from the project. Hall’s show, which doesn’t yet have a title, is scheduled to appear in the 9:30 p.m. slot Wednesday on ABC. But the departure of executive producer David Rosenthal, who is best known as creator of the hit show “Ellen,” could delay the series’ debut. According to industry trade paper Daily Variety, Hall and Rosenthal got into an argument on the set over the show’s writing and direction. “Hall is said to have made some unflattering remarks about Rosenthal’s anatomy and told him to go write some jokes,” Variety reported. Bargain bagels Studio City-based Jerry’s Famous Deli has thrown its dough into the escalating L.A.-area bagel. But with huge banners in front of each of its restaurants advertising “BAGEL WAR. All varieties 18 cents each,” the deli chain has chosen to distinguish its bagels on the basis of price, not taste. Jerry’s questions all the hype surrounding the round starch. “It’s just flour and water,” said Guy Starkman, director of operations. “We don’t need to charge 60 cents for a bagel it doesn’t really cost that much to make a bagel.”

real brief/SFVFeb/bb/4+ inches/mike1st/mark2nd The Warner Center Plaza III highrise in Woodland Hills, which has sat almost entirely vacant since its 1991 completion, has landed a tenant for nearly 10 percent of its office space. Financial Indemnity Co., a “non-standard” (i.e., high-risk) automobile insurance specialist, has signed a 10-year, $14 million lease for 55,000 of the tower’s 591,000 square feet. That brings the tower’s occupancy rate up to just under 30 percent. Financial Indemnity will relocate its corporate headquarters across the San Fernando Valley from the increasingly pricey Burbank Media District to the less costly Warner Center insurance haven in Woodland Hills. Financial Indemnity is currently located in the Disney Channel building, 3800 W. Alameda Ave. in Burbank. The company has committed to the never-occupied 17th and 18th floors within the Plaza III tower at 21650 Oxnard St. in Woodland Hills, said CB Commercial Real Estate Group’s Andy Fishburn, who oversees leasing at the Warner Center Plaza highrise complex and adjacent Warner Center Business Park. Fishburn and CB’s Bob Pearson and Tony Acerra represented property owner AH Warner Center Properties LLC in the lease negotiations. Grubb & Ellis Co.’s Maury Gentile and Jim Lindvall negotiated the relocation lease on Financial Indemnity’s behalf. Brad Berton

SFLIST/jb/mike1st/mark2nd JOE BEL BRUNO Staff Reporter The one common thread connecting most of the San Fernando Valley’s top accounting firms is that they cater to the fast-growing entertainment industry. In this issue’s List, the five top-ranked firms cited entertainment among their industry specialties. At the top is Miller Kaplan & Co., with Grobstein Horwath & Co. in the No. 2 spot. “There is certainly a tie-in between the accounting and the Valley entertainment industry,” said George Nadel Rivin, a partner with Miller Kaplan. “You can’t help but be responsive to the industries located in your own backyard and no industry has had the tremendous growth in this region like the entertainment industry.” Miller Kaplan currently provides accounting services to 1,200 television and radio stations in more than 100 markets around the nation. The firm handles everything from full-service to monthly accounts. Rivin said the 55-year-old firm has now fully bounced back from the recession, and expects this growth to continue over the next three years. Miller Kaplan has hired several new associates during the past few months, with plans to recruit more from local colleges. “This firm has grown from a small local firm into the largest firm in the Valley by treating every client as if they are our only client,” Rivin said. “That’s how we plan to continue our growth.” Accounting firms are ranked on the List by the number of accounting professionals they employ in the San Fernando Valley. Miller Kaplan employs 88, while Grobstein has 86. The No. 3-ranked firm is Kellogg & Andelson Accounting. The Sherman Oaks-based firm also cited entertainment among its industry specialties, and employs 63 accounting professionals in the Valley. William Wall, Kellogg’s chief financial officer, said most of the firm’s new clients are in the entertainment industry. But, it has also experienced growth by adding clients from non-entertainment industries that have been riding on the entertainment industry’s coattails. During the past year, for example, Kellogg has picked up several new real estate clients. All of them have been busy leasing commercial space to entertainment companies moving into or expanding in the area. “It’s all interconnected,” Wall said. “The Burbank-Glendale area seems to be doing really well in both of those industries, and that’s good news for us.” He said Kellogg has also grown by representing privately owned nursing facilities throughout the state. Other firms making the List include No. 4-ranked American Express Tax and Business Services, a subsidiary of American Express Co.’s travel services corporation. That firm has added 15 accounting professionals to its Valley operation since last year, bringing its total to 60. In a recent interview, Les Shapiro, a managing director with American Express, attributed the firm’s growth to a large number of acquisitions in 1996. “The Woodland Hills office alone had five CPA firm acquisitions,” he said. The top four Valley firms are also among the 20 largest in Los Angeles County. Those four firms are the 10th, 11th, 13th and 14th largest accounting firms in L.A. County.

SFVREbriefs/bb/8 inches/1stjc/mark2nd Optical device manufacturer Century Precision Optics has agreed to expand and relocate its headquarters to 21,332 square feet of commercial space at 11049 Magnolia Blvd. in North Hollywood. Motion picture industry specialist Century Precision, which publicly held Tinsley Laboratories acquired last year, signed a seven-year lease with property owner 11049 Magnolia Boulevard Investments for space formerly occupied by the State of California. Daum Commercial Real Estate Services represented the tenant in the lease negotiations, while John Alle Co. represented the landlord. No financial details of the transaction were disclosed. Following extensive tenant improvements, about 20 employees will be employed at the “concrete block” building in connection with the planned first-quarter 1997 relocation. Century Precision Optics is currently located nearby at 10713 Burbank Blvd., also in North Hollywood.

minimed/dy/19″/1stjc/mark2nd DOUGLAS YOUNG Staff Reporter This has been a rough stretch for most of L.A.’s publicly traded biomed firms but not MiniMed Technologies. Thanks to recent advances in the treatment of severe diabetes, the five-year-old Sylmar company has become an industry leader that commands 80 percent of the U.S. market for external insulin pumps. The pumps, about the size a pager, are worn on the belt, feeding a continuous supply of insulin into the wearer’s body. They are more convenient than the twice-daily insulin injections traditionally used to treat severe diabetes. The company’s pioneering technology and strong performance have won strong praise on Wall Street, where its stock rose 148 percent last year. Most other publicly-traded biomedical firms in L.A. County took a beating. MiniMed is the fourth company for biomed entrepreneur Alfred Mann. The research for the company’s current pumps began at Mann’s last venture, Pacesetter. Other biomed firms were competing with MiniMed to develop similar pumps when his firm launched its first products, according to Mann. “When we came out with our pumps, there were 34 companies trying to do it,” said Mann. That included pharmaceutical giants Eli Lilly & Co. and Baxter International, which both tried and failed at developing the process. Indeed, MiniMed’s only remaining competitor is Disetronic Holding AG, a Swiss company that controls the remaining 20 percent of the U.S. market for external insulin pumps. Wall Street is enamored in part because MiniMed has a way of outperforming analysts’ earnings expectations, said Melissa Wilmoth, an analyst at Smith Barney. “When you have that kind of track record, you’ll be awarded a premium for your stock,” she said. The company is expected to report net income for the year ended Dec. 31 of between $4 million and $4.5 million (36 cents and 39 cents per share), compared with $1.8 million (17 cents) for 1995. Revenue is expected to be between $55 million and $60 million vs. $45.1 million in 1995. Investors also are bullish on MiniMed because of the vast untapped market in the United States, Wilmoth said. She estimated that the company currently has a penetration of only 3 percent to 4 percent among the 800,000 to 1 million people in the United States who require external forms of insulin to treat their diabetes. “There’s a huge potential market, and a couple of studies show reduced complications if you use a pump,” Wilmoth said. In many cases, she added, doctors do not recommend external insulin pumps to their patients either because they aren’t aware of the benefits or they are simply unfamiliar with the devices. To remedy that, MiniMed conducts seminars in major U.S. cities each quarter to educate doctors especially primary care physicians. It also entered into a marketing alliance with German company Boehringer Mannheim, which manufactures strip and meter devices for diabetics to measure their glucose levels. Boehringer Mannheim will advertise MiniMed pumps in its newsletter for diabetics as part of the alliance, while MiniMed will include coupons for Boehringer Mannheim’s products with its pumps. “The marketing campaign is very unstructured now, but we hope it will become more structured over time,” Wilmoth said. Future success inevitably hinges on going beyond insulin pumps. The company has already developed a new glucose sensor that is currently on sale in Europe and could be available to U.S. consumers by sometime in 1998, according to Mann. Unlike existing sensors, which require diabetics to prick their fingers and place a blood drop on a strip and into a meter to get glucose level readings, MiniMed’s new sensors are inserted under the skin for extended periods of time and read glucose levels continuously. When levels become dangerously high or low, an alarm is sounded so the diabetic can take action immediately. “Their sensors could revolutionize the way diabetes is treated because they would obviate the need for conventional strips and meters,” Wilmoth said. MiniMed also is working on ways to combine its pump and sensor technology to create a completely prosthetic pump, which would be implanted in the bodies of diabetics and allow them to live essentially normal lives free of constant injections and testing of their blood sugar levels. Mann said development of the prosthetic system’s component parts is virtually finished, and now it will take a couple of years to integrate the parts into a complete system. He estimated a final product could reach the market as early as the year 2000.

SMALLBIZ.COL/20inches/1stjc/mark2nd Business owners frequently approach me for a loan when what they really need is an equity investor. I’m the chief credit officer for a loan fund. The biggest difference between debt and equity is that debt has a specific term for repayment, an interest rate and a specified repayment schedule frequently level monthly payments, as in a mortgage, for example. Equity investments are typically structured as a means of sharing in profit (or lack thereof) and don’t limit the upside (or the downside) of what the return can be. Bankers offer debt, not equity. Here are some examples of when you want to consider obtaining equity. – If you cannot see how a loan can be immediately repaid, but you’re sure that future profits will be there if the debt service can just be put off for a year or so. – If you’re launching an untested product or entering an untested market, or doing both, you don’t want to be saddled with a very certain debt. – If your company needs patient capital to meet day-to-day needs for receivables, inventory and payroll; then debt won’t work unless profits can replace it very quickly. Chances are you really need an equity investment of permanent working capital. – If you need outside expertise in marketing, management or product development to realize your company’s potential then an equity investor that has a voice on your board may be the answer. Most business owners have an allergy to the whole notion of seeking equity investments. They believe the following myths about obtaining investment dollars: Myth No. 1: You have to give up controlling ownership to obtain debt. This isn’t true; lots of deals are done without signing 51 percent of the stock to equity investors, each deal’s different and it depends on the size of the new investment in relationship to a company’s existing net worth (including any subordinated officer’s debt). Myth No. 2: The cost of obtaining equity is too high. In fact, it’s coming down all the time. Not every deal requires a ton of legal work or underwriting. Some joint ventures can be structured cheaply and quickly and involve little more than an agreement. Myth No. 3: You must be publicly traded if want equity dollars. This depends on the investor. Yes, public pension funds have to have a degree of liquidity to their investments, but does a wealthy retired businessman looking for a long term, high yielding investment? Not necessarily. Private placements can work fine for him. Myth No. 4: You have to report all your company’s income if outsiders take an equity piece. This is not a myth, actually it’s completely true. The laws regarding fraud and misrepresentation apply. If you’re dishonest with the IRS, don’t take on investors. It will only multiply you chances of getting caught. Once the myths are dispelled, small companies can better understand the importance of the equity option especially for a business located in the San Fernando Valley. In many cases debt no longer addresses a company’s needs for expansion capital because: – Companies lack debt repayment ability on a historic basis due to their need to borrow large amounts of debt after the 1994 Northridge earthquake. – Real estate equity has been destroyed by declining real estate values leaving insufficient collateral for new lending. – In a low-inflation, stable-interest-rate environment, debt financing doesn’t make sense because financing costs can’t be passed along. – The balance sheets of small companies are already too highly leveraged when contrasted to those of publicly traded companies able to attract private investment dollars. At some point the banks just say no. These reasons, along with a long sustained bull market in equities and a liberalization of securities laws to permit greater access to equity by small companies, all point to a new direction for small business financing in the future. New investment instruments and the number of new ways of structuring equity deals for smaller companies have exploded since the l980’s. Limited liability corporations, changes in Securities and Exchange Commission Private Placement Rules, Small Corporations Offering Registers tell part of the story. Changes in securities laws, both nationally and at the state level, are partially responsible for this; but I think it’s more a function of supply and demand in the market. Lots of capital is seeking highly yielding investments now that interest rates are below 10 percent. That’s hard to find in an overvalued stock market. The explosion of baby boom investment dollars will only further serve to fuel this demand. Smaller companies will be the future for investors seeking higher yield. This segment of the economy can put capital to good use to create new jobs and income if it opens itself up to the possibilities and uses for equity dollars. Small companies must also find the right help in obtaining it. That’s the subject for my next article. Bruce Dobb is the credit officer with the Valley Economic Development Council’s Revolving Loan Fund.

Van Nuys/SFVFeb/26 inches/1stjc/mark2nd BRAD BERTON Staff Reporter Depending on one’s perspective, the latest Van Nuys Civic Center makeover plan is too complicated to attract a private developer, too small to help clean up the neighborhood or a well-conceived plan that could kick-start revitalization. The City of Los Angeles began soliciting interest from private development teams in late January for a 200,000-square-foot Valley “City Hall” office building within the Van Nuys Civic Center district at which various city, county, state and federal agencies would consolidate. But the city won’t know until early March just how many developers are serious about becoming the city’s partner in the project despite efforts to scale down earlier plans and make the public-private partnership more private-sector-friendly. “These competitions cost lots of money and require lots of effort,” said prominent local office developer Jerry Snyder of Miracle Mile-based J.H. Snyder Co. “The Van Nuys neighborhood is fine for development, but it’s much easier to go out and buy property on our own,” Snyder added. However, the leader of a key local homeowners association said the plan doesn’t do enough to eradicate blight. “It’s a good start and a good idea, it’s part of what that particular area needs. But the problem is that it doesn’t go far enough because it only addresses the Civic Center and only one site there,” said Don Schultz, president of the Van Nuys Homeowners Association. The city “should make a concentrated effort to clean up the whole stretch of Van Nuys Boulevard” from Vanowen Street south to the railroad tracks just north of Oxnard Street, he said. “It looks horrible; that’s what is keeping businesses away,” Schultz said. For decades the Van Nuys area was a major commercial strip in the San Fernando Valley, but the proliferation of malls and the rise of other shopping districts has contributed to the area’s decline. Los Angeles City Councilman Marvin Braude, who represents the area, said the new civic building is needed as a first step in revitalizing the area. “I consider it the most important and badly needed project in the San Fernando Valley,” Braude said. “It is the essence the heart of the Valley. It is the distribution place for serving the Valley. It is the symbolic center of the Valley.” The city’s top real estate official said the Civic Center project reflects the Riordan administration’s efforts to facilitate a private-sector approach to L.A.’s facilities programs. “We’re trying to privatize the development process to the maximum extent possible to get the most benefit from private participation,” said Dan Rosenfeld, the Department of General Services’ Assistant General Manager for Asset Management. Rosenfeld also stressed that the city is prepared to offer loans of up to $75,000 to cover a development team’s pre-development costs if for some reason the project doesn’t go ahead. Claire Bartels, the department’s point person on the project, noted that more than 60 parties had requested copies of the “request for qualifications” the first week after they became available Jan. 21. Notable building firms include Dinwiddie Construction Co., Caruso Affiliated Holdings, Kajima Development Corp., Pankow Cos., Voit Cos., Keller Construction, Goldrich & Kest and Koll Group. “The response has been very favorable,” Bartels commented. In replacing the old, earthquake-damaged existing structure in the Van Nuys Civic Center district, the city expects to lease a 2-plus-acre site to a private development team for 20 to 30 years and lease back much of the office space, Rosenfeld explained. The private development team would oversee design, financing, construction and marketing of the facility, which would include shops, outdoor dining/ entertainment areas and a parking structure. Thus, Rosenfeld and his colleagues among the city’s facilities and development staffers are expecting more interest from developers in the current project than came with a more complex building plan the city floated about five years ago. That’s because the earlier “request for proposals” became so loaded down with requirements such as child care facilities and affordable housing contributions that there was no interest, according to one consultant involved in the previous RFP distribution. “The government will always be at least somewhat bureaucratic,” Rosenfeld conceded. But under the city’s revised approach, “it’s really not much more bureaucratic than doing a build-to-suit for an Amgen or a DreamWorks,” he added. The revised project is also scaled down from a more ambitious program that Braude, who is retiring this year, had proposed two years ago. That Civic Center makeover was to include a civic auditorium, movie theaters, a mix of new offices and retail development even a gateway bell tower. But his council colleagues nixed the bulk of that plan, leaving the government office building and much-needed parking structure as the primary components of the current rendition. The planned new building, adjacent to the existing eight-story, 1932-vintage building on Sylvan Street near Van Nuys Boulevard, is to house city employees now stationed at various sites around the San Fernando Valley and even some to be relocated from downtown L.A., Rosenfeld added. His department began sending out requests for qualifications to interested parties on Jan. 21. Completed qualification packages are due back to the General Services Department’s Asset Management Division March 3. At public hearings on Braude’s more extensive previous redevelopment proposal, several Van Nuys businesspeople and homeowners, including Schultz, had questioned whether the city could attract a private developer without first implementing programs aimed at revitalizing downtown Van Nuys’ blighted primary thoroughfare: Van Nuys Boulevard. But others had supported the proposal as a key potential catalyst to further redevelopment in the neighborhood. The council representative “has the inherent responsibility to make (Van Nuys Boulevard) what it used to be, the heart of Van Nuys” with bustling legitimate retail business rather than “illegal signage and street vendors,” Schultz said. But he added that developers are more likely to respond to the current proposal. Previous development proposals “were too broad and large and that is what was distracting developers.” The scaled-down plan should make it easier to “attract a developer that won’t think (the project) is too overwhelming.” Developer Snyder said last week that he’s not interested in competing for a public contract with other private development teams. “I just don’t like reading scripts for parts any more. There’s an enormous amount of design work involved, and there’s the endless meeting with bureaucrats,” he said.

persfi/sfvbj/17″/mike1st/mark2nd MEL POTESHMAN Would you accept a new job for which you have no prior experience? That’s exactly what many people find themselves doing as the executor of a friend’s or family member’s estate. The executor of an estate the person responsible for carrying out the terms of a will has numerous financial, legal and tax responsibilities and must possess good organizational and interpersonal skills as well as some financial know-how. The best way to prepare for such a job is by finding out in advance what is expected of you. One of the executor’s primary jobs is “probating the will.” This process entails filing the will at a local surrogate court so that it becomes part of the public records. There’s no deadline for probating the will, but it cannot be done earlier than 10 days after the estator’s death. The next step is the “marshalling” of assets. This task involves an accounting or inventory of the assets of the deceased and can require quite a bit of sleuthing. In addition to looking at prior income tax returns and other sources for assets, the executor may end up searching through closets, dresser drawers and shoe boxes to locate bank books, savings bonds, and even stock certificates, unless the deceased had previously indicated where such documents are located. The duties of the executor during this phase of the probate process can range from listing one or two bank accounts to compiling portfolios and contacting brokers and agencies all over the country in order to locate assets. It also involves the collection of outstanding income or money owed, including amounts owed from employers, Social Security and insurance companies. If the search for assets is too difficult or time consuming, help is available. Financial services companies, brokerages, and some financial planning agencies can, for a fee, locate the decedent’s assets. Costs incurred for these and other expenses associated with probating the will or marshalling assets are typically reimbursed by the estate. Once the assets are located, the executor may need to liquidate some of them to pay off the deceased’s debts and to make distributions to heirs. Liquidating the property can involve selling stocks, bonds, or real estate, as well as exercising options on securities. When it comes to collectibles like jewelry, artwork and real estate, appraisals need to be obtained to be sure the property is valued accurately. One of the most tedious of the executor’s responsibilities is identifying and paying off creditors. It involves notifying potential creditors who may have a bona fide claim against the estate of the deceased. While some creditors may barrage executors with bills, others may be difficult to locate. If the executor is unsure of all the people to be contacted, the executor can satisfy the obligation to notify creditors by publishing a notice in a local newspaper regarding the claims against the estate. To pay off creditors and liquidate assets in accordance with the terms of the will, you’ll need a checking account for the estate. All money should be funneled through the account so that bills and beneficiaries can be paid. The executor will need to file a final income tax return for the deceased. What’s more, if the estate is valued at more than $600,000, the executor must also file a federal estate tax return, generally within nine months of death and pay any estate taxes that are due. Finally, the executor is responsible for distributing property to the beneficiaries named in the will. All disbursements to beneficiaries, as well as those to the Probate Court, must be carefully documented. As an executor, you can be called on to submit reports and accounting of your actions to the Probate Court. Executors of complex or large estates may want to obtain assistance from CPAs or attorneys when handling the tax, financial and legal matters associated with managing the estate. Mel Poteshman is a certified public accountant and president of Poteshman Consulting International & Co., a West Los Angeles-based business consulting firm.

gm biomed/health care/mike1st/mark2nd DANIEL TAUB Staff Reporter VAN NUYS As early as March, construction could begin on a biomedical complex being planned for the site of a razed General Motors auto plant here. Although negotiations with potential biomed tenants are still pending, local officials say there is a good chance that some of the seven companies that have expressed an interest in the facility could move in within a year. Three local universities with students studying biomedicine also have expressed an interest in occupying space in the industrial back side of the proposed facility, said John Slifko, special assistant for technology policy to Rep. Howard L. Berman, D-Panorama City. The front side of the 68-acre site, located off Van Nuys Boulevard where the GM auto plant once stood, is being developed by Selleck Properties and Voit Cos. as a retail center with a movie theater. The 37-acre industrial back side is expected to include a section dedicated to biomedicine. “Most of the companies are willing to move into the facility now. It’s a matter of how long it is until the site is up and running and ready,” Slifko said. Slifko declined to identify the companies, saying he does not want to jeopardize negotiations on their relocations. The developers are planning to build a biomedical incubator, in which small start-up firms, researchers and university students would share space and resources to rapidly commercialize new technologies. UCLA, USC and Caltech all have expressed interest in being a part of the incubator, Slifko said. UCLA wants to launch a graduate program in biomedicine this year. But not everyone in the biomedical community is optimistic about the GM site’s prospects for success. David G. Anast, publisher of the Costa Mesa-based Biomedical Market Newsletter, said that while development of biomedical parks and incubators is positive, he remains skeptical about what kind of growth such developments bring. “The question in situations like this is whether it constitutes just shifting companies around, or actually creating new jobs. And that remains to be seen both in this case and in other cases on drawing boards across the country,” Anast said. Some potential participants in the biomedical park also say that their involvement is dependent on things outside of the control of the park’s developers or local government officials. For example, UCLA’s involvement could be dependent on whether its biomedical graduate program which would offer master’s degrees and doctorates in biomedicine receives approval for the next academic year. “When we’ve got approval, we hopefully will officially do something about it,” said John Mackenzie, associate dean at UCLA’s school of engineering and applied sciences. The GM site’s developers want to use biomedicine as a draw for the industrial park’s two other industries advanced materials development and information technology, both of which have ties to the biomed industry. Barney Smith, vice president of development for Century City-based Wou & Partners Inc., a development firm that is working on the facility, said that he has seen a lot of interest from biomedical companies, but that financial assistance might be needed to convince them to move into the park. “We’re looking for funds from public sources to help companies move in there,” Smith said, adding that publicity about the project from government officials would be helpful. “The biggest challenge is to generate the interest among the scientific community to locate facilities there,” he said. One possible source of both funding and publicity is Mayor Richard Riordan’s office, Smith said. Gary Mendoza, Riordan’s deputy mayor for economic development, said that he has met with both Berman’s office and representatives of City Councilman Richard Alarcon, whose district includes the GM site. “I think there is an opportunity to capitalize on the biomedical research done in this region. If we can pull it together, it has great potential,” Mendoza said. As far as economic incentives for companies go, Mendoza said one possible funding source is from a federal Economic Development Administration grant, which could provide construction money for biomedical companies. But Mendoza also said that money for the project could come from elsewhere within the city government if the mayor’s office decides that the project is economically viable. “If it makes sense, we might be willing to put some seed money into that,” he said. Outside of economic incentives, one draw for many of the companies is the facility’s close proximity to a new Metrolink station, the San Diego Freeway (405) and the Ventura Freeway (101). “The nice thing about it is that it’s centrally located near transportation corridors,” Smith said. Slifko pointed out that the site also is located near several well-known research facilities, including UCLA, USC, Caltech, UC Santa Barbara, Jet Propulsion Labs and Cedars-Sinai Medical Center. “Other parts of the country would just be exuberant that a high tech park could be so near so many prestigious research institutions,” Slifko said.

realestate/kanter/19inches/1stjc/mark2nd LARRY KANTER Staff Reporter After a number of lackluster years, industrial real estate development is on the rebound. With rapidly expanding entertainment companies gobbling up nearly every bit of available space in the East Valley, demand for high-quality industrial sites is reaching levels not seen since the late 1980s. In response, developers have begun embarking upon a number of build-to-suit, and even some speculative, developments not just in ultra-hot Burbank and Glendale, but in other regions of the San Fernando Valley, as well. “It’s back,” said an enthusiastic Barbara Emmons, vice president in the Glendale office of CB Commercial Real Estate Group Inc. “There is a lot more tenant activity than there are buildings.” That activity can be seen in tightening industrial vacancy rates. In the fourth quarter of 1996, the rate dipped to 6.8 percent, down from 10 percent for the like period last year, according to Grubb & Ellis Co. The shrinking supply of modern, industrial facilities has sparked a number of new developments, including the Valley’s first speculative industrial project in recent memory the Flower Street Business Park in Burbank. The five-acre development currently under construction at the former Andrew Jergens soap manufacturing plant near Verdugo Road and Olive Avenue consists of five buildings, each in the 13,000-to-15,000-square-foot range. Two of those buildings are in escrow with a pair of entertainment companies, said Mike Daven, an industrial properties broker in the Sherman Oaks office of Grubb & Ellis. The project’s second phase, meanwhile, will feature a 50,000-square-foot build-to-suit facility for “a major telecommunications company,” which Daven declined to name. It’s not just Burbank that’s seeing new development. Mounting demand in the East Valley is spilling over into neighboring locales. An example of that is a speculative development in Pacoima scheduled to break ground next month. The development consists of two buildings one 25,000 square feet and the other 38,000 square feet – in Pacoima’s enterprise zone. They are likely to be snapped up by warehousing, distribution or entertainment companies, said Chris Sullivan, vice president of Daum Commercial Real Estate Services in Woodland Hills, which is handling the project’s leasing and sales. “There’s a lot of pent-up demand for that kind of space,” said Sullivan. A number of factors besides the voracious appetites of entertainment firms are driving the new developments. For one, developers had been converting industrial properties into offices in response to an earlier demand for office space. That has helped create a serious shortage of industrial facilities, according to Daven. At the same time, much of the Valley’s existing industrial stock consists of 10,000- to 20,000-square-foot buildings built in the 1960s and 1970s that have substandard parking, loading and other facilities. “Today’s tenant wants newer construction,” Daven said. The shortage of large, modern facilities is prompting developments such as the Cascade Business Park, which broke ground in Sylmar last November. Located near the junction of the 5 and 210 freeways on land that has never before been used for industrial purposes, the 88-acre business park is zoned for both industrial and commercial use and is surrounded by an 18-hole, championship golf course. Frito-Lay Inc. has purchased 8.65 acres for a warehousing and distribution center. And several other deals are pending, according to Emmons, of CB Commercial. Also contributing to new industrial development is the region’s mounting economic recovery. “Developers are getting the courage to start getting into the speculative market,” said Ross Thomas, a partner with Delphi Business Properties in Van Nuys. “The banks also are getting more comfortable.” The growing prominence of Wall Street money and REITs also is paving the way for new development, real estate sources said. “It’s a very different market than it was a year ago,” said Thomas.