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labusinessjournal.com LOS ANGELES BUSINESS JOURNAL Volume 33, Number 29 THE COMMUNITY OF BUSINESSTM July 18 - 24, 2011 • $3.00 Up SPECIAL REPORT Missing Links Front REAL ESTATE QUARTERLY Stunt L.A. Sites INTERNET: Local marketers lose affiliates to sales tax law. By JAMES RUFUS KOREN Staff Reporter

It’s known as the Amazon tax, but the new Califor- nia law that requires online retailers to collect sales taxes is affecting more companies than just the Inter- net sales giant. West L.A.-based Savings.com has lost more than 50 affiliated online retailers and Santa Monica-based Latest high- SurfMyAds.com has lost 150. Gone are Amazon.com, dollar dessert? Zappos.com and Overstock.com, among others, as many Designer tarts major online retailers have cut ties to California-based by Yolanda marketing companies since the law took effect July 1. Santos. PAGE 3 “Losing 50 big guys hurts a lot,” said Loren Ben- dele, chief executive of Savings.com. “We work with thousands of online merchants … but the top 150 Construction Please see INTERNET page 43 Why a new law is raining work on fire sprinkler installers. Bad Environment PAGE 5 For Development? GOVERNMENT: Business aims RINGO H.W. CHIU/LABJ to rewrite antigrowth CEQA.

By HOWARD FINE Staff Reporter Public Creative Drive Local business groups have launched a campaign Relations to reform one of the state’s major environmental With its beachside locale, Santa Monica has long attracted businesses. But now, laws because they believe it stifles development and slows job creation. the city has become a virtual hot spot for today’s generation of Internet ventures, They want to reform the California Environmental especially those involved with social networking websites. Fast-growing Quality Act, which requires developers and govern- companies are lured to the abundant creative office space with high ceilings and ment agencies to conduct environmental reviews for major projects and explicitly gives citizens the right to exposed brick. They like to install playful amenities – such as the 1948 Cadillac file lawsuits over development. Fleetwood, above, that doubles as a couch at automotive website Edmunds.com. The business groups – including the Los Angeles, In this Real Estate Quarterly, the Business Journal explains how these tech Long Beach and Hollywood chambers of commerce, the Valley Industry and Commerce Association and companies have revved up Santa Monica’s real estate market and earned the city the Central City Association – say the law has resulted a new moniker: Silicon Beach. BEGINNING ON PAGE 19 Please see GOVERNMENT page 43 Is lobbyist Harvey Englander too well connected? PAGE 8 Supplement Maker Joins the Clubs that has been providing an energy boost of sorts for HEALTH CARE: Storefront downtown L.A. supplement maker Herbalife Ltd. MAIL TO: model pumps up Herbalife sales. The clubs have become popular with dieters who don’t want to shell out $35 or more for a month’s By RICHARD CLOUGH Staff Reporter supply of shakes but are more than willing to drop a few bucks a day – and have a chance to chat with It has become something of a ritual for many of friends. Some even have regular seats. them, arriving by 8 a.m. each day at a nondescript “People like to come here to socialize,” said Gus- building at Nordhoff Street and Sepulveda Boule- tavo Zepeda, the 54-year-old owner of the North vard in North Hills. Hills club and about 200 other locations across Dozens of women and men, most of them Latino Southern California. and residents of this working-class neighborhood, gath- Nutrition clubs, which have proved particularly er at an Herbalife-sponsored “nutrition club” on the popular in Latino communities, are reinvigorating second floor, above a smoke shop and a beauty salon. Herbalife’s global sales and providing a platform for They are there for their daily cup of tea and a the company to penetrate new markets. The adoption

weight-loss shake. Though there are no signs outside, RINGO H.W. CHIU/LABJ the club is thriving along with thousands like it. And Please see HEALTH CARE page 42 Bottoms Up: Patrons at North Hills Herbalife club.

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2 LOS ANGELES BUSINESS JOURNAL JULY 18, 2011

LOS ANGELES BUSINESS JOURNAL ®

JULY 18 - 24, 2011 VOLUME 33, NUMBER 29

RINGO H.W. CHIU/LABJ Page 3: CO’s Scott Kelsey at the Dinosaur Hall project in L.A.’s Exposition Park.

SPECIAL REPORT: REAL ESTATE QUARTERLY TECH – So many Web-based businesses a trio of tech firms...... 26-27 have clicked with Santa Monica that some CHART – Los Angeles County’s office and have nicknamed it Silicon Beach...... 19 industrial submarkets by the numbers for PHOTOS – A look at some of the amenities, the second quarter...... 28 decorations and furnishings at Edmunds’ REPORTS – Major events in Los Angeles creative space in Silicon Beach...... 24 County commercial and industrial submar- PROFILES – Santa Monica space draws in kets in the second quarter...... 29-34

LOBBYING – Avoiding conflicts of interest ON THE COVER is a family issue for Englander Knabe & HEALTH CARE – A new distribution system Allen partners who are related to a county 8 – selling single servings at clubs in storefronts supervisor and an L.A. councilman...... Columns & features 10 – has strengthened the revenue of nutritional – Media Watch , Retail & Apparel 12, Banking & Finance 13, supplement maker Herbalife. (Sidebar – News of the Week 14 Company weighs in with new line aimed at athletic consumers. Page 42) GOVERNMENT – Business groups are look- THE LIST ing to rewrite a state act they say opponents RANKINGS – The 10 largest travel agencies use to stifle development projects. in Los Angeles County, ranked by 2010 INTERNET – California’s drive to collect county gross sales...... 15 sales tax from web vendors has left affiliate The 25 largest airlines in Los Angeles County, sites in a painful state. ranked by 2010 passengers carried at L.A.- area airports...... 16 UP FRONT

RETAIL – Tart bakery Früute hopes it can INVESTMENTS & FINANCE The test of time. get a taste of the success of L.A.’s cupcake Columns & features – Econowatch 35, shops...... 3 LABJ Stock Index 36 WASTE DISPOSAL – Ex-Merrill Lynch manager enjoys the junk bonds he has formed L.A. BIZ SEEN in the trash-hauling industry...... 3 ARCHITECTURE – Dinosaur Hall is CELEBRATIONS – Photos from L.A. Exhibit A of Miracle Mile firm CO’s new business community events...... 44 focus on nonuniversity projects...... 3 Columns & features – Page 3, COMMENTARY Regional Report 4 COMMENT – The state’s simple plan to raise NEWS & ANALYSIS revenue with an Internet sales tax is quickly becoming a complicated and expensive mess, CONSTRUCTION – A state requirement for writes Charles Crumpley...... 46 new homes is showering fire sprinkler GOVERNMENT – Tim Cavanaugh thinks installers with more business...... 5 the city of L.A. is overcompensating execs at RETAIL – A prospective buyer could put a public-private agencies with plump pay higher price on the 99 Cents Only chain. . .5 packages...... 47 GOVERNMENT – Business leaders are wait- TRANSPORTATION – Gary L. Toebben ing to sign off on the city of L.A.’s latest credits Mayor Antonio Villaraigosa and some Straight talk. Sound counsel. Practical solutions. effort to ease permit processing...... 6 airport officials for giving LAX a much ENTERTAINMENT – Beverly Hills oil exec needed lift...... 47 At Snell & Wilmer, some things never change. looks to grease the wheels for a theme park in Columns & features – LABJ Forum 46, Moscow...... 7 Letter 47 www.swlaw.com Los Angeles Business Journal (ISSN 0194-2603) is published weekly. © 2011, Los Angeles Business Journal. Offices are located at 5700 Wilshire Blvd., Suite 170, Los Angeles, CA 90036. Periodicals postage paid at Los Angeles, CA and additional offices (USPS #492-930). Subscription prices: 51 issues and special issue, $99.95. For new and renewal subscriptions, call 1-800-404-5225. All other inquiries (323) 549-5225. Single copies, $3.00. Mailed copies, $5.00. Back issues, $8.00. Address and subscription inquiries to: Circulation Department, Los Angeles Business Jour- nal, 5700 Wilshire Blvd. Suite 170, Los Angeles, CA 90036. This newspaper is designed to inform decision-making executives, investors and managers on the trends, the growth and the ideas important to commerce and industry in Los Angeles County. Information in Los Angeles Business Journal is gathered from sources considered to be reliable, but the accuracy of this information cannot be guaranteed. Neither that information nor any opinion which may be expressed here constitutes a solicitation for the purchase or sale of any securities. Opinions expressed in letters to the denver | las vegas | los angeles | los cabos | orange county | phoenix | salt lake city | tucson editor and commentaries are those of the authors and not necessarily those of Los Angeles Business Journal. Member Audit Bureau of Circulations. LABJ has been adjudicated Nov. 1985 to be a newspaper of general circulation. POSTMASTER: Send address changes to Los Angeles Business Journal, PO Box 16825, North Hollywood, CA 91615. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 UP FRONT LOS ANGELES BUSINESS JOURNAL 3 Letting Career Go To Waste Ex-financial manager now rolls with trucks, trash-hauling business. A burned-out Ed Young retired from his job as a manager at Merrill Lynch when he was only 45. But after six months of golf, he was back in the financial RINGO H.W. CHIU/LABJ services industry, working in the Leg Up: Ed Young, center, with his Junk King workers. L.A. office of another financial institution – only to realize he’d work out that way.” About 60 percent of the stuff made a mistake. But the decision he made goes to recycling centers and So Young looked at sever- was a surprising one: Young the rest to landfills. He al franchise opportunities. He went with Junk King, a San already has two trucks and believed he could ultimately Carlos refuse-hauling compa- five employees, and harbors make the same money or ny that competes with the plans of expanding to seven more, and he liked the idea of likes of Vancouver, British trucks and 25 employees. getting to decide for himself Columbia’s 1-800-GOT- “I went from a six-figure, sit- what was best for clients. JUNK LLC. He opened Los behind-a-desk-in-an-air-condi- RINGO H.W. CHIU/LABJ “I wanted my indepen- Angeles County’s first Junk tioned-office, don’t-worry- Fruitful?: Owner Yolanda Santos with some tarts at Früute in West Hollywood. dence,” he said. “I’ve always King in Duarte in April. about-your-fingers job to manual believed you do the right Young charges at least $99 labor,” he said. “But I love it. I hired gun, and she’s looking reminiscent of what she did thing for people. (But) when to haul junk – everything love being out in the open air and Hoping forward to making a name as for her first client, Pinkber- you’re involved in the corpo- from carpet to furniture – I love interacting with people.” Bakery a retailer. Santos wants to turn ry. She also has started rate world, it doesn’t always from homes and businesses. – Alfred Lee her tarts into the next big developing items such as Pans Out thing in baked goods, compa- designer boxes of four or rable to the cupcake craze eight tarts that customers izes in institutional projects, master plan for the USC Health West Hollywood shop epitomized by the Sprinkles can purchase as gifts. Boning Up with a niche in architecture at Science Center campus in Boyle to challenge cupcakes Cupcakes chain. Santos is keeping her day On Business college campuses in and out- Heights, which CO planned in with its take on tarts. “You can help define what job at Ferroconcrete, and side California. As a result, the past year, and which Kelsey people want next,” she said. has been applying lessons Architectural firm took it’s been hurt by the rounds of expects will launch in the next Yolanda Santos for the Santos, 33, launched Früute she’s learning as an entre- Dinosaur Hall project state budget cuts and shrink- two or three years. past five years has designed with the help of her pastry chef preneur to her work as a as college work lagged. ing endowments. Kelsey said his clients can product packaging, brand mother and fashion designer design consultant. “Cal State and UC schools be more creatively fulfilling logos and other material for sister. She used her personal “It’s a great learning The July 16 reopening of have had much fewer dollars than designing for commer- the likes of Pinkberry and the savings for the launch. process for me to be able to Dinosaur Hall was a big event available to build new pro- cial developers, who tend to TBS TV channel through her Früute’s tarts are square see it from the clients’ per- for the Natural History Muse- jects,” said Scott Kelsey, prin- be more cost-conscious. downtown L.A. design and instead of round, they’re made spective,” she said. um of Los Angeles County. cipal at CO. “We have projects “Institutional clients tend brand firm, Ferroconcrete. with organic high-quality She acknowledged that a After all, it now has the largest that we’ve won – at UC and to have a view of the building Now, she’s using her ingredients, and come in few customers have com- dinosaur exhibit on the West Cal State – that are on hold.” as being the vehicle in which graphics and marketing talent unconventional flavors such as plained about the relatively Coast. But it also was a big day So the firm has focused on they undertake their research to build her own brand with sea salt caramel, wasabi and high $3 price, but most haven’t for the designer, CO Archi- designing more projects out- or teaching,” he said. Früute, a bakery she opened black pepper. For the less objected after she explains tects on the Miracle Mile. The side of the California public “They’re focused on creat- earlier this month in West adventurous, there’s a berry tarts are labor intensive. work for the museum in Expo- school system, such as ing the highest-quality space. Hollywood that serves bite- tart with vanilla custard filling. “Making tarts is not the sition Park is its largest muse- Dinosaur Hall, and health care In some cases, a developer size artisanal tarts at $3 a pop. She created a sleek, mod- same as making cupcakes,” um project to date. buildings and medical schools sees the investment in a short- It’s the first time she gets ern design for Früute’s pack- she said. That’s significant because in Oregon and San Francisco. er-term window.” to move beyond the role of aging, logos and store that’s – Alexa Hyland the 74-employee firm special- One of those projects is a – Jonathan Polakoff

Third Generation of Rotarian Leadership At 33, Megan Tunnell O’Rourke became the only 25 days.” spent 48 hours erecting a small retail shop out of youngest president in the 103-year history of the PAGE 3 He’s a little cagey a concrete slab and bamboo. But it was toward Rotary Club of Los Angeles when her term began about any prognostica- the end of the construction process that her July 1. CHARLES CRUMPLEY tions about the long- career experience served her well. But she comes to the job with some old term future – “Five “I was asking them, ‘Where is the sign? shoes to fill. years is hard to pre- What’s it going to say?’ O’Rourke runs two downtown L.A. compa- and her husband, Stephen, have two sons, 3 dict,” he said – but he’s and ‘How do you get nies with her father, Ben Tunnell. He served as years old and 8 months. not sanguine in the people into the store?’” president of the downtown Rotary Club in 2004- “I’m probably the first president to ever have short or medium term. Deschaine, 51, joked. 05. A generation earlier, such young children at home,” she said. “Twenty five years The store will sell her grandfather was from now, we’ll look local arts and crafts as president of the Beverly He Called It Levine back as see this as well as rent out clothing Hills Rotary. When the U.S. unemployment rate of 9.2 per- more of a cancer than a and supplies for wed- “There is a lot of cent was reported July 1, it was no surprise to cold,” Levine said. dings and other events, family history, excite- Michael Levine. He predicted 18 months ago that with all revenue going ment and honor mixed the rate would be 9 percent or higher this July. African Adventure back into the village. in this event,” she said. Back then, at the dawn of 2010, his prediction Christine Deschaine usually represents land- Deschaine Unlike Los Angeles, “It’s a big change to could have been laughed off. The economy at lords in retail lease deals around Los Angeles where it can take 18 have a young woman as that time was starting to recover from the severe County. But she just finished an extraordinary months to get permits and approvals to open a president of such an old- downturn that began in mid-2008. Many kind of build-to-suit project. business, it’s much simpler in Central Africa. O’Rourke line, venerable club.” assumed the economy would be roaring by now. A principal at Lee & Associates-L.A. North- “You don’t need to pull a permit,” she said. The downtown orga- So how did Levine, 57, a Hollywood publicist Ventura Inc., Deschaine last month helped build “That’s why we could get stuff done so quickly, nization is one of the largest Rotary clubs in the who admits he’s no economist, nail his predic- and open a small retail store in the Ugandan vil- and the local villagers need the work.” nation with about 400 members. It is called LA5 tion? He figured the economic problems had lage of Kihura. The project was part of humani- because it was the fifth Rotary chapter. It holds become so deeply embedded for so long that this tarian work she does with two organizations, Staff reporters Joel Russell and Jacquelyn Ryan lunch meetings every Friday at the California Club. would be no normal recession-and-recovery cycle. Uganda-based Bringing Hope to the Family and contributed to this column. Page 3 is compiled O’Rourke figures her home life differs greatly “If you’ve been digging a hole for 25 years,” U.S.-based Embrace Uganda. by Editor Charles Crumpley. He can be reached at from most members, who are older men. She he said, “you’re not going to be able to fill it up in She and other volunteers along with locals [email protected]. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

4 LOS ANGELES BUSINESS JOURNAL UP FRONT JULY 18, 2011

News and notes from communities across REGIONAL REPORT Los Angeles County Chicago-based executive search and financial CENTRAL AREA advisory firm, has opened an office in Santa Monica. The office, at 520 Broadway, will be run by Managing Director Colleen Hulce. DOWNTOWN LOS ANGELES

Around the Corner: Downtown L.A. law firm Palmer Lombardi & Donohue LLP has SOUTH BAY moved to 515 S. Flower St. The firm had been headquartered at 888 W. Sixth St. for six years. Managing Partner Scott Palmer said the move LONG BEACH was prompted by the expanding firm’s need for more space. On Tap: Beachwood BBQ and Brewing, a craft beer and barbecue restaurant, has opened New Capital: California Business Bank, in Long Beach. The new eatery, at 210 E. a downtown L.A.-based bank, has raised $5.1 Third St., is owned and operated by Lena and million in new capital. The bank is required Gabe Gordon, who also own Beachwood BBQ under a consent order from the Federal Deposit in Seal Beach. Insurance Corp. and California Department of Financial Institutions to raise a minimum of 5 percent and have a leverage capital level of at least 9 percent. The new capital move the Regional Report bank’s leverage capital level to more than 10 Little Tokyo: Interior of the recently opened Flying Pig Cafe at 141 S. Central Ave. To be considered for publication, Regional percent for the second quarter ended June 30. Report submissions should be e-mailed to: Networks Ltd., a Kingston Upon Thames- based provider of telecommunications ser- WESTSIDE [email protected] LITTLE TOKYO vices. Financial terms of the deal were not Business news from companies in Los Ange- disclosed. les County or nearby areas is listed on the Café Lands: The Flying Pig Food Truck WEST LOS ANGELES page. Please be sure that press releases chef and owner Joe Kim has opened the Flying specify the name of the city and the name of Pig Café in Little Tokyo. The café, at 141 S. Pet Project: VCA Antech Inc., a West the company along with the description of Central Ave., will feature the Asian and Pacific SAN FERNANDO VALLEY L.A. animal health care company, has signed a the news. Submissions are evaluated on the Rim cuisine served on Kim’s truck. $50 million cash purchase agreement for basis of company size and the significance of BrightHeart Veterinary Centers, an Armonk, the announcement. The Business Journal SHERMAN OAKS N.Y., operator of animal hospitals. On comple- tries to include as many listings as possible, HOLLYWOOD tion of the acquisition, VCA Antech will have but some may not be published due to space On the Move: GoTV Networks, a Sher- 540 animal hospital in 41 states and Canada. limitations. Dialed In: J2 Global Communications man Oaks mobile entertainment distributor, Please address all inquiries to the e-mail Inc., a Hollywood telecommunications com- has been acquired by Phunware, an Austin, address above. If you do not receive a pany, has made two European acquisitions: Texas, maker of mobile applications and SANTA MONICA response in a timely manner, Data Haven Ltd., a Dublin, Ireland, online branded content. Financial terms of the deal call (323) 549-5225, ext. 229. date backup services, and the U.K.’s Buzz were not disclosed. New Outpost: Cook Associates Inc., a

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JULY 18, 2011 NEWS&ANALYSIS LOS ANGELES BUSINESS JOURNAL 5 Basking in The Heat CONSTRUCTION: State requirement has boosted work for fire sprinkler installers.

By ALEXA HYLAND Staff Reporter said George Saadian, general manager and lead engineer at Fire Protection. “We know that new state requirement calling for fire construction will increase in single-family sprinklers in all new homes may make homes, therefore we are projecting more jobs A them more expensive, but it is raining will be coming out of that.” good fortune on some local companies. The residential fire sprinkler business at Fired up American Fire Protection Systems Inc. is on The sprinkler requirement comes from the track to double this year as a result of the fire state fire marshal and is enforced locally. sprinkler requirement, which went into effect Sprinklers were already required in many cities in January. and in areas of high fire danger. The state Simon Farahdel, the company’s chief exec- requirement makes the sprinklers mandatory utive, is projecting that American Fire’s annual throughout California – in unincorporated

revenue will increase from $4 million last year areas and cities that didn’t already have the RINGO H.W. CHIU/LABJ to $5 million. requirements. Well-Placed: American Fire’s Farahdel puts in a sprinkler at a West Hollywood home. “Our strongest revenue right now is in the In the year leading up to the requirement, housing market,” Farahdel said. “When the the state Fire Marshal’s Office held meetings requirement, American Fire’s business was quick as possible,” Farahdel said, “so the economy improves, obviously we will be a lot with homebuilders, general contractors and fire about 80 percent commercial work and 20 other trades can come in and we stay out of busier with more new home construction.” sprinkler installers. percent residential. Residential fire sprinkler their way.” American Fire, a 10-employee company at “It just took a lot of time and a lot of research systems now account for about half of the Calabasas construction contractor Titan & Fairfax Avenue and Fifth Street in L.A.’s Fair- to get it done,” said Kevin Reinertson, supervis- company’s business, and the increase is on Co. Inc. hired American Fire to install sprinklers fax District, installs fire sprinkler systems in ing deputy state fire marshal. “But these systems track to boost residential revenue from $1 at a client’s West Hollywood home that started residential and commercial buildings, includ- are a proven commodity that save lives.” million last year to $2 million this year, construction in January. Titan razed an older ing projects for such prominent L.A. develop- The Building Industry Association of South- accounting for the company’s entire annual home and replaced it with a 2,300-square-foot ers as Rick Caruso and Sonny Astani. ern California, which covers Los Angeles and growth of 25 percent. house, which is set to be finished by October. The company charges about $2 to $2.50 a Ventura counties, has been working to connect American Fire works mostly with smaller Matt Armato, president at Titan, said his client square foot for a residential fire sprinkler system homebuilders with fire sprinkler contractors homebuilders that construct two or three worried the sprinkler system could malfunction in a home. So a sprinkler installation in a 2,000- since last year in anticipation of the requirement. homes at a time, for example, because the prof- and damage the property, and was also concerned square-foot house would cost $4,000 to $5,000. Holly Schroeder, chief executive at the it margin on jobs for larger homebuilders such that the sprinklers wouldn’t look good. American Fire is just one of several L.A.- association’s local chapter, said people in the as KB Home is too low for a small business What’s more, the approval process was an area fire sprinkler installers with more business homebuilding industry are concerned that the such as American Fire, according to Farahdel. adventure. West Hollywood had to approve the as a result of the new requirement, which sprinkler mandate and other requirements are For a residential fire sprinkler project, building plans, Beverly Hills had to check the includes newly built one- and two-family driving up costs, which could result in an even American Fire starts work at the beginning of water pressure because the house is serviced homes and townhouses statewide. slower recovery of the housing market. construction. by that city, and two officials from the Los Business at Fire Protection Group Inc., on But the requirement has been good for The company maps out the location of Angeles County Fire Department had to sign Jefferson Boulevard in the West Adams district of sprinkler companies like Farahdel’s. each sprinkler head, which are concealed by a off on the sprinkler plan. Los Angeles, has increased by about 10 percent He started American Fire five years ago flat plate so they are aesthetically pleasing, Farahdel is anticipating a continuing thanks to the residential fire sprinkler requirement. after working in the fire protection business and then receives approval from the plan from increase in the residential business when new The company, which also has offices in Oakland with his cousins. Farahdel, 36, has since built building and fire officials in the jurisdiction. It home construction recovers. Also, he said, and London, outfits residential, commercial and up American Fire through referrals from gener- takes American Fire about two weeks to finish homeowners are starting to install systems in industrial buildings with fire sprinkler and alarm al contractors and clients, in addition to adver- a project from beginning to end, although the remodeled homes. systems. It charges about $1.75 to $2.25 a square tising online in trade publications such as the company has to do a final inspection with “If we are going on at this pace, we will foot for residential sprinkler systems. Blue Book Building and Construction Network. local officials after a home is built. continue to double our business for the year,” “We have seen some increase in business,” Prior to the state’s residential sprinkler “We like to be in and out of a project as Farahdel said. “And that’s just residential.” Value of 99 Cents Only Could Be on the Way Up RETAIL: Weedon & Co. in Los Angeles, said a compet- The Schiffers and Golds, who own about 33 New potential bid itive bid from Apollo, which announced its 99 Cents Only Stores (NYSE: NDN) percent of 99 Cents’ shares, include co-founder interest in 99 Cents on July 6, could drive up Commerce FRI. CLOSE, PAST 5 WKS and Chairman David Gold and his son-in-law could drive up acquisition 20.6 CEO: Eric Schiffer that offering price. 20.5 Eric Schiffer, the company’s chief executive.

price for discount chain. “I don’t believe there would be a big Employees: 12,000 20.4 The Schiffer-Gold group plans to contribute a

chance of the Leonard Green group raising Market Cap: $1.42 billion July 13: $20.25 20.3 “substantial portion” of its stock as part of the By NATALIE JARVEY Staff Reporter their bid without another party,” he said. Leonard Green deal but is not obligated to do so. P/E*: 19 20.2 “There’s a higher likelihood of a higher price 20.1 Ragan said any competitive offer that It looks like 99 Cents Only Stores could be now with another party involved.” EPS: $1.05 6/10 6/17 6/24 7/1 7/8 emerges would not get far without support worth more after all. Shareholders have spoken out in opposition to *Twelve months trailing. Source: Yahoo Finance from the Schiffer-Gold team. Potential interest from New York private- the Leonard Green offer. The company’s largest “I don’t think they’d agree to sell if they equity firm Apollo Global Management shareholder, FBR Capital Markets, which con- Apollo announced it was “officially pursu- weren’t involved. They need to get the Gold could push the price of the Commerce discount trols 5.5 percent of the shares, wrote a letter to the ing” the company after 99 Cents requested family behind them,” he said. retailer above that of a current buyout offer, board in May stating that the special committee notification of interest from potential bidders, Meanwhile, the company announced July analysts said. reviewing the offer should not accept a per-share but has not announced a formal offer or price. 14 sales revenue of $368 million for the quar- The Schiffer and Gold families that run the bid below a range of $21.75 to $23.50. Apollo did not respond to a request for ter ended July 2, up 6.3 percent from the same company, and West L.A.’s Leonard Green & The company’s shares have been trading comment. quarter last year. The company will report full Partners offered $1.34 billion – or $19.09 a about a dollar above the Leonard Green offer Brian Macauley, a portfolio manager for FBR financial results for the quarter in August. share – in March to take 99 Cents private. since it was announced, illustrating market Capital in Arlington, Va., said there are other Leonard Green and 99 Cents did not James Ragan, an analyst with Crowell belief that the company is worth more. firms believed to have interest in the company. respond to requests for comment for this article. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

6 LOS ANGELES BUSINESS JOURNAL NEWS & ANALYSIS JULY 18, 2011 Businesses Wait to Endorse New Permit Process Armbruster Delvac & Goldsmith LLP, said GOVERNMENT: New city that his clients had similar concerns. of L.A. office is latest try “In the past there’s always been a concern ‘The key is: When you get the about being told one thing that changes down the to slice through red tape. answer from this office, can you line and causes delays,” he said. “I can’t say how bank on that answer all the way it will work or not work until we see it in action.” By ALFRED LEE Staff Reporter through the process?’ Villaraigosa announced the proposal in the Department of Building and Safety offices, A new city office meant to simplify L.A.’s BEN REZNIK, surrounded by key aides and supporters, building permit process was cheered by busi- Jeffer Mangels Butler and MItchell LLP including Los Angeles Area Chamber of Com- ness leaders last week, but others in the devel- merce Chief Executive Gary Toebben and opment community who remember past fail- Central City Association Chief Executive ures were skeptical of the reform. Carol Schatz. The Development Services Case Management number of agencies handing out permits suc- authority it might have. Going through the office is optional, but it’s Office groups workers from five city departments cumbed last year to bureaucratic turf wars. “The key is: When you get the answer from designed to be especially useful for large and in one place and assigns each project a case man- Ben Reznik, an attorney at Jeffer Mangels this office, can you bank on that answer all the complex projects. Workers from the Building ager to help developers resolve conflicts. Butler and Mitchell LLP who guides devel- way through the process?” he said. “Or is and Safety, Planning, Water and Power, Trans- The plan is another effort at reform by opers through permitting, said the new office someone else later in the process going to be portation and Engineering departments have Mayor Antonio Villaraigosa, whose much could be helpful in interpreting building codes able to reverse that?” been transferred to the new office. publicized “12-to-2” campaign to reduce the and planning ordinances, but questioned what Mark Armbruster, a land-use attorney at Building and Safety General Manager Bud Ovrom said that he understands the skepticism but said it was “the most significant tangible development reform” in decades. “We have a proven track record of failure, but I can walk out my door, take 20 steps, and walk into a new office with a comprehensive system and chain of command,” he told the Business Journal.

Bureaucratic resistance Recent efforts to reform the permitting Wells Fargo Equipment Express® loan process date back to 1995, when then-Mayor Richard Riordan formed a Development Reform Committee to streamline the process, but most of the proposals went nowhere. In Get vehicle or equipment 2008, Villaraigosa picked up the baton with his ultimately failed 12-to-2 proposal. Ovrom recounted one department head who financing to use now or later refused to participate, telling him to change the name of the program to “11-to-1.” Another 0.50% off the approved rate through September 30, 2011 department head sent representatives to 12-to-2 meetings with instructions not to contribute. “A couple of the departments were passive- resistant and active-resistant. Clearly there was A Wells Fargo Equipment Express loan offers a lack of genuine commitment,” he said. Last year, city officials hired consultants to equipment and vehicle financing that meets develop a replacement plan, while less cooper- the needs of your business. Get a loan for ative department heads have been replaced, an immediate purchase, or shop confidently Ovrom said. Also, under the new plan, if agencies in the with an approved loan for planned purchases. new office can’t agree on a point, such as the width of a sidewalk next to a project, that issue Take advantage of the 0.50% rate reduction would get kicked up to a committee of assis- and other important benefits for making tant general managers – and then to the general 1 managers themselves if necessary, he said. your purchase and managing your business: Schatz, whose Central City Association pro- motes downtown business, said past failures might ƌɇɄ *)Ʉ(*0)/.Ʉ0+Ʉ/*ɄǃŽżżƇżżżɄ!*-Ʉ.$)"' Ʉ*- motivate the bureaucracy to buy in this time. multiple purchases “I believe the mayor is very invested in this now and I see no reason why it can’t be very ƌɇɄ $/$*)'ɄżƆžƁǚɄ$)/ - ./Ʉ-/ Ʉ- 0/$*)Ʉ!*- effective,” she said. “That’s a black eye the ž city will get if they don’t do what they say automatic payment they’re going to do.” Matt Karatz, managing director of the ƌɇɄ' 3$' Ʉ/ -(Ʉ*+/$*).Ʉ*!ɄžƇɄſƇɄƀƇɄƁƇɄ*-ɅƂɄ4 -. mayor’s Office of Economic and Business Pol- icy, said additional reforms will be released in ƌɇɄ$3 Ʉ-/ Ʉ) Ʉ(*)/#'4Ʉ+4( )/.Ʉ) the next couple of weeks, including technology the loan is paid in full at the end of the that allows projects to be tracked online. Those reforms are the most expensive and are esti- financing term mated to cost $20 million. Fees could help pay for that, but the city also has begun talking to foundations and other outside resources to help Talk to a banker today to apply for your loan, or call our pay, he said. Not everyone wants developments to move Equipment Finance Specialists for assistance at 1-800-416-0056. through the process faster. Dick Platkin, a former city planner and current consultant for several homeowners associations, said the reforms would make it easier for real estate speculators who develop projects and sell them off. “Development reform in all of its different components is almost entirely focused on the small minority of large projects which require complicated permits that are not consistent with the city’s building and zoning codes and 1 Equipment ExpressɄ'*)Ʉ*Ŧ -.ɄɄżƆƁżǚɄ $.*0)/Ʉ-/ Ʉ!*-Ʉ''Ʉ++'$/$*).Ʉ.0($// ɄƃƤŽƤžżŽŽɄ/#-*0"#ɄƅƤſżƤžżŽŽƆɄ*0)/Ʉ(0./Ʉ Ʉ*+ ) Ʉ adopted plans,” said Platkin, who expects legal ) Ʉ0. Ʉ2$/#$)ɄƂżɄ 4.Ʉ*!Ʉ++-*1'Ɔ challenges to the reforms. žɄNew Equipment ExpressɄ0./*( -.Ʉ- $1 ɄɄżƆžƁǚɄ-/ Ʉ $.*0)/Ʉ2# )Ʉ0/*(/$Ʉ+4( )/Ʉ$.Ʉ ./'$.# Ʉ!-*(ɄɄ ''.Ʌ-"*Ʉ0.$) ..Ʉ checking account before or at account opening. – Reporter Howard Fine contributed to this ƸɄžżŽŽɄ ''.Ʉ-"*Ʉ)&ƇɄƆƆɄ''Ʉ-$"#/.Ʉ- . -1 ƆɄ ( -Ʉ ƆɄƧƁƂƄƅżžƣżžƀżƃƨ story. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 NEWS & ANALYSIS LOS ANGELES BUSINESS JOURNAL 7 Building an L.A. Team for Russian Thrill Rides ENTERTAINMENT: consult on other projects in Moscow about a ment agencies,” Goddard said. handicapped children, a water park, a retail ‘Gene’ half-dozen times in the past, and none of the Moshkovitch, who has a Ph.D. in systems shopping street and hotels. About 80 percent of Moshkovitch banks on his projects gained government approval. engineering, first became interested in theme the 600 acres would be covered to accommo- “In a city like Moscow, you better have parks in the 1970s. date weather extremes. MIG 2000 expects 10 connections with Moscow. connections, credibility and money,” he said. “When I was a student, Russia became million to 12 million visitors per year if the “Political ties are absolutely imperative.” much more open and we saw movies with park is able to become operational in four or By JONATHAN POLAKOFF Staff Reporter Moshkovitch is banking on relationships parks,” he said. “I always thought Russia was five years. that he developed working on oil and gas pro- missing a park.” But Speigel thinks the Magic World esti- From his 12,000-square-foot home in Bev- jects. In the early 1990s, he sponsored the cre- mates are high. Other international parks, like erly Hills, Gennady “Gene” Moshkovitch has ation of a sister state relationship between Cal- Oil technologies Happy Land in Long An Province, Vietnam, been assembling a team of L.A. theme park ifornia and an oil-producing region of Western In 1978, he immigrated to Torrance to work and Euro Disney in Paris, have had trouble veterans to develop Magic World Russia on Siberia. Since then, he has continued to work in aerospace. Then in the early ’90s, when selling tickets. the outskirts of Moscow. with the Russian government agency that over- Russia opened to private enterprise, “It’s very aggressive and very ambitious,” The chief executive of Moschanko Invest- sees land use. Moshkovitch was approached Moshkovitch began licensing American oil Speigel said. “I don’t think that tourism to ment Group Inc. is hoping to build a “mini- two years ago by the land-use agency about technologies to refineries there. His three com- Moscow is at the level that would yield that Orlando” in one of the last remaining frontiers what to do with 600 acres in suburban panies that license oil technology bring in rev- level of attendance. But Moscow has devel- of the theme park industry. Moscow. That’s when he started planning the enue of roughly $300,000 a year from licenses oped in a manner that would allow it to support Moshkovitch returned to Beverly Hills last theme park. and royalties. a major modern theme park. It’s one of the few week after two months of pitching investors in “It’s different so far because Gene has been Moshkovitch’s plans for Magic World major metropolitan areas that doesn’t have Russia in hopes of raising money to launch the able to get approvals from high-level govern- include Paramount-licensed rides, a section for one.” $2.5 billion park. As chief executive of Moschanko Invest- ment Group, also known as MIG 2000, and two other companies, his main business is licensing oil technology from American companies for use in Russia. That means he’s learned the channels between Russian infra- There’s Simply More Health Care structure and government. As he tries to develop his first theme park, he’s turned to executives from L.A. design Options with Our Dual Network Offering firms and a Hollywood studio.

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Early last year, he told a local investment banking friend of his theme park plan. The friend introduced Moshkovitch to Jonathan Zilli, a former executive in the Paramount Pic- tures licensing division. Zilli, who had left Paramount to consult for retail and restaurant projects, was interested. Zilli had signed licensing deals for rides such as Star Trek: The Experience in Las Vegas, where he worked with Gary Goddard, chief executive of L.A.-based theme-park design firm Goddard Group. Zilli brought in Goddard as the lead designer for Magic World Russia. Zilli has also signed Tustin-based Pro- Fun/Management as the park’s management company. Moshkovitch and Zilli said they are in talks with Paramount Studios about licensing characters for rides. Paramount declined to comment on a potential licensing deal. After he has signed a studio that will allow use of its characters, Moshkovitch said the project will become more attractive to investors. He’s planning for the park’s initial financiers to be Russian, followed by American and other foreign investors by next summer. “Our merit is through connections, not from revenue,” he said. “Somebody has to put all of this together. That’s our expertise.” ChristianChhristian Aparicio, The project has gained some attention in the industry. HeHealthealth NetNet “There is definite momentum. They’re HHelpinge your moving with their design process,” said Dennis ememployees navigate Speigel, a consultant for theme parks and pres- thetheir plan options. ident of Cincinnati-based International Theme Park Services Inc. Speigel isn’t affiliated with the project. Health Net is a registered service mark of Health Net, Inc. © 2011 Health Net of California, Inc. All rights reserved. But Speigel said he has been approached to 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

8 LOS ANGELES BUSINESS JOURNAL NEWS & ANALYSIS JULY 18, 2011 Firm on Second-Name Basis With L.A. Lawmakers LOBBYING: Angeles County Metropolitan Transit Authori- in Sacramento, said that elected officials are special privileges. EKA represented the Amer- Partners related ty as its Washington, D.C., lobbyist. required to recuse themselves from voting on ican Chemistry Council, which opposed the to public officials say they Do these names and any potential conflicts issues if they have a direct economic interest in ban, but Knabe and the board approved it. of interest help or hinder the growth the decision. The financial interest Englander said he’s aware that it’s important avoid conflicts of interest. of EKA, which is ranked second on is limited to the income or assets of to avoid even the appearance of a conflict. Peo- the Business Journal’s list of public the politician, his or her spouse and ple have asked him to specifically lobby only By JOEL RUSSELL Staff Reporter relations firms with revenue of $6.8 any dependent children living at Don Knabe or former Councilman Grieg Smith. million? home. The situation at EKA (Mitch Englander was Smith’s chief of staff for How much name recognition is too much? Harvey Englander, who founded doesn’t meet those criteria. eight years before winning Smith’s seat when he That’s the question for lobbying firm Eng- the firm in 1980, said he doesn’t see When an EKA client needs to was termed out.) EKA refused these requests. lander Knabe & Allen. the family connections as either an advocate a position to either Don “We say, ‘No, we can’t do that,’ ” Englan- Two of the firm’s name partners have close advantage or disadvantage. Knabe or Mitch Englander, a non- der said. “It looks like influence peddling and relatives who are prominent elected politicians “The story of our firm is one of family member at the firm who has a we won’t do it.” in Los Angeles County. Partner Matt Knabe is phenomenal growth, and it wasn’t relationship with those people han- He said he spends time with his nephew at the son of Don Knabe, longtime member of the based on relationships with one or Englander dles the matter. family events, and the Knabes also see each Board of Supervisors. Managing Partner Har- two people,” he said. “There is no Englander said he has heard other for holidays, birthdays and vacations. vey Englander is uncle to Mitch Englander, advocacy going on between me and Mitch or criticism about the Knabe relationship, but he But they don’t talk about business. who became a member of the Los Angeles between Matt and Don Knabe.” pointed to a Board of Supervisors vote in At times, keeping up appearances has even City Council on July 1. In addition, Harvey Roman Porter, executive director of the November to ban plastic bags in supermarkets been painful. Englander’s son Joshua works for the Los California Fair Political Practices Commission as evidence that his firm doesn’t enjoy any “I would have loved to watch my nephew’s first day in the council,” Englander said. (The two have a father-son relationship. After Mitch Englander’s mother died, Harvey helped raise him.) “I would have loved to attend the reception afterwards. I didn’t go to either because I didn’t want even the appearance of conflict.” Englander said he was glad his children are following the family heritage through involve- ment in public policy. Englander himself has run campaigns for local politicians including Jane Harman, Laura Chick, Deane Dana and Don Knabe. His firm’s client list includes Clear Channel Outdoor, Waste Manage- ment, Coca-Cola and the Official Police Garage Association of Los Angeles. Adam Djou 1RULNR2DNODQG .KLQ9RQJ /RUD:RQJ Ann Yasuda 6XQQ\+DQ-HRQ Sr. Vice President Sr. Vice President Sr. Vice President Sr. Vice President Sr. Vice President Vice President Elizabeth Lampert, owner of Elizabeth Lampert PR near Oakland, said she has run into Ŷ%XVLQHVV Ŷ&RPPHUFLDO Ŷ+LJK1HW:RUWK Ŷ(VFURZV Ŷ&RPPHUFLDO Ŷ+HDOWKFDUH comparable situations with political families in %DQNLQJ %DQNLQJ ,QGLYLGXDOVDQG 5HFHLYHUV %DQNLQJ Ŷ5HDO(VWDWH California, Texas and Washington, D.C., and )DPLOLHV Ŷ/HJDO Ŷ&RPPHUFLDO Ŷ&RPPHUFLDO Ŷ&RPPHUFLDO ,QYHVWRUV knows that some clients are eager to sign up with 5HDO(VWDWH Ŷ1RWIRU3UR¿W 5HDO(VWDWH Ŷ&RPPHUFLDO 5HDO(VWDWH Ŷ/HJDO lobbying firms that have family connections. /HQGLQJ 5HDO(VWDWH /HQGLQJ /HQGLQJ Ŷ6HUYLFH Ŷ1RWIRU3UR¿W “Certain people think it will give them spe- /HQGLQJ Ŷ/HJDO Industries Ŷ+LJK1HW:RUWK Ŷ3ULYDWH%DQNLQJ cial access and influence,” Lampert said. “If ,QGLYLGXDOVDQG Ŷ6PDOODQG Ŷ1RWIRU3UR¿W Ŷ1RWIRU3UR¿W )DPLOLHV 0LG0DUNHW the politician is riding a wave of popularity, %XVLQHVVHV it’s good cocktail talk to say that you have a direct line to politician X.” The only drawback is if the politician gets We’ve opened Torrey Pines Bank in Los Angeles In all economic times, Torrey Pines Bank into a scandal. The negative associations can hurt the client, particularly if any conflict of now because we saw an opportunity to bring is a rock–steady resource that helps relation- interest is involved, she said. you a true community bank with capacity — and ships ﬂourish and local businesses thrive. Robert Stern, president of the nonprofit Center for Governmental Studies in Los Ange- market expertise. And with the support of Western Alliance les, said that sharing a name with a politician is an advantage for EKA. Bancorporation, a $6 billion regional “People see the name and that’s a plus,” Stern said. “It extends the family’s power. Veteran bankers who know L.A. business and take bank holding company with operations (Harvey) Englander was already a power in pride in providing highly personalized service with in Arizona, California and Nevada, it’s local politics but this heightens that power, or at least the appearance of it.” a host of innovative products, uncommon lending the kind of community bank Los Angeles Ultimate cynicism capacity and industry–leading measures of ﬁnan- businesses deserve. Judy Nadler, a former mayor of Santa Clara who serves as senior fellow of government cial strength. ethics at Santa Clara University, said the influ- NEED TO TALK ABOUT YOUR ence of family in politics could be subtle, but FINANCIAL STRENGTH* voters could judge it to be significant. BUSINESS? TALK TO US. That means EKA should pay attention to Ŷ $1.6 Billion in assets the public trust in addition to the laws. PAUL DONALDSON “It would be very difficult, if not impossi- Ŷ All capital levels exceed FDIC requirements Executive Vice President, ble, when hearing from someone who is asso- Ŷ Excess liquidity to fund business loans and Division President ciated with your uncle’s firm, to not be affect- lines of credit ed by it,” she said. 213.362.5201 Nadler said if someone took a cynical Ŷ Continued deposit and loan growth [email protected] stance, they could ask whether a nephew, for Strong asset quality, non-performing assets example, might inherit or join the family firm Ŷ in the future, therefore giving him a financial are a mere 0.83% of total assets 213.362.5200 | TORREYPINESBANK.COM interest in seeing the company succeed. “That’s the ultimate in public cynicism, but I urge people to consider the worst-case scenario because that’s often where it ends up,” she said. Stern noted that EKA has worked for years with Knabe on the county board without any apparent problems. But one scandal would bring calls for more strict regulation. “Everybody’s going to be watching them,” TORREYPINESBANK.COM Stern said, referring to EKA. “If they do something newsworthy, it’s possible rules will be adopted. And the more you have these family relationships, the more likely people will start talking about enacting rules.” 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL 9

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May require up to a $36 activation fee/line, credit approval and deposit. Up to a $200 early termination fee/line applies. Offer ends 9/10/11 or while supplies last. Taxes and service charges are excluded. No cash back. Available to corporate-liable accounts only. Requires activation at the time of purchase. Upgrade: Existing customers in good standing with service on the same device for more than 22 consecutive months currently activated on a service plan of $39.99 or higher may be eligible. See in-store rebate form or sprint.com/upgrade for details. International coverage available on CDMA (EV-DO Rev. A) and GSM/UMTS (HSPA) networks. Additional carrier fees may be required. Other Terms: Coverage is not available everywhere. The Nationwide Sprint Network reaches over 278 million people. The Sprint 4G Network reaches over 70 markets and counting, on select devices. The Sprint 3G Network reaches over 274 million people. See sprint.com for details. Offers are not available in all markets/retail locations or for all phones/networks. Pricing, offer terms, fees and features may vary for existing customers not eligible for upgrade. Other restrictions apply. See store or sprint.com for details. Android, Google and other marks are trademarks of Google Inc. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

10 LOS ANGELES BUSINESS JOURNAL NEWS & ANALYSIS JULY 18, 2011

MEDIAWATCH

MOVIE BOX OFFICE Weekend Gross Total Gross Rank Title (millions) (millions) Distributor /ŶƚĞƌŶĂƟŽŶĂůDĞĚŝĐĂůŽƌƉƐ͛ 1 Transformers $47.1 $261.1 Paramount 2 Horrible Bosses 28.3 28.3 Warner Bros. >ĞĂĚĞƌƐŚŝƉŽƵŶĐŝůĐŽŶŐƌĂƚƵůĂƚĞƐ 3 Zookeeper 20.1 20.1 Columbia Nancy Aossey 4 Cars 2 15.2 148.8 Disney WƌĞƐŝĚĞŶƚΘK ĨŽƌ 5 Bad Teacher 8.9 78.7 Columbia 6 Larry Crowne 5.9 26.2 Universal ƌĞĐĞŝǀŝŶŐƚŚĞ>ŽƐŶŐĞůĞƐƵƐŝŶĞƐƐ 7 Super 8 4.8 118.1 Paramount :ŽƵƌŶĂů2011 Leadership 8 Monte Carlo 3.8 16.1 20th Century Fox 9 Mr. Popper's Penguins 3.2 58.1 20th Century Fox Excellence Award. 10 Green Lantern 3.1 109.7 Warner Bros. Weekend ended July 10 Source: Bloomberg News PRIMETIME TV SHOWS tĞĂƌĞƉƌŽƵĚƚŽƐƵƉƉŽƌƚ Rank Program Network Rating* 1 Primetime Special Edition ABC 9.5 /ŶƚĞƌŶĂƟŽŶĂůDĞĚŝĐĂůŽƌƉƐ͛ 2 America's Got Talent (Tues., 9 p.m.) NBC 7.8 3 America's Got Talent (Wed.) NBC 7.3 ĐŽƵƌĂŐĞŽƵƐŚƵŵĂŶŝƚĂƌŝĂŶĞīŽƌƚƐ͕ 4 America's Got Talent (Tues., 8 p.m.) NBC 7.2 5 NCIS CBS 5.8 ďƌŝŶŐŝŶŐĚŝƐĂƐƚĞƌƌĞůŝĞĨĂŶĚƚƌĂŝŶŝŶŐƚŽ Week ended July 10 *Each rating point equals 1.1 million homes. ϰϬŵŝůůŝŽŶƉĞŽƉůĞŝŶϮϴĐŽƵŶƚƌŝĞƐ͕ĨƌŽŵ Source: Bloomberg News CABLE TV SHOWS ŝƚƐŚŽŵĞďĂƐĞƌŝŐŚƚŚĞƌĞŝŶ>ŽƐŶŐĞůĞƐ͘ Rank Program Network Rating* 1 HLN Local Edition HLN 3.4 2 (tie) Fairly Odd Parents Movie Nick 3.3 2 (tie) Morning Express HLN 3.3 4 Royal Pains USA 3.2 5 Headline News HLN 3.1 Week ended July 10 *Each rating point equals 1.1 million homes. Source: Bloomberg News J.J. Abrams Andrew Barth TOP SELLING ALBUMS Brook Byers Alex Cappello Rank Last Week Artist Title Label Victor Coleman Debbie Fisher 1 New Beyonce 4 Columbia 2 3 Adele 21 XL Recordings/Columbia Jonathan Glaser Andrew Hauptman 3 New Big Sean Finally Famous Def Jam Records Sabrina Kay 4 New Selena Gomez & the Scene When the Sun Hollywood Records <ĂƟĞDĐ'ƌĂƚŚ Goes Down WĂŵĞůĂDŽŚŶ sŝǀŝĂŶ^ŽƌĞŶͲDǇĞƌƐ 5 1 Jill Scott Light of the Sun Blues Babe Records/ Warner Bros Barry Porter Carol Sharer Week ended July 15 Source: Billboard.com Hans Zimmer MOVIE RENTALS - DVD/VHS Rank Last Week Title Distributor 1 New Season of the Witch 20th Century Fox 2 1 Adjustment Bureau Universal 3 2 Unknown Warner Bros. 4 New Sucker Punch Warner Bros. 5 New Beastly Sony Week ended July 3 Source: Rentrak

DVD SALES Rank Last Week Title Distributor Suggested Retail 1 New Sucker Punch Warner Bros. $28.98 2 New Season of the Witch 20th Century Fox $29.99 3 New Beastly Sony $28.95 4 4 Battle: Los Angeles Columbia $28.95 5 1 Unknown Warner Bros. $28.98 Week ended July 3 Source: Rentrak MOVIELINK DOWNLOADS Rank Title Distributor Suggested Retail 1 Source Code Summit $15.95 2 Unknown Warner Bros. $15.95 3 Adjustment Bureau Universal $15.95 4 Sucker Punch Warner Bros. $15.95 5 Hall Pass New Line $15.95 Week ended July 13 Source: Cinemanow.com

OUTTAKE OF THE WEEK

NOTHING LEFT TO SAY After being held back from release for almost a year, Sony’s talking-animal comedy “Zookeeper” stumbled out of the gate with only $20.1 million. The family-oriented, special effects-heavy film, starring Kevin James, at left, is estimated to have cost $80 million-plus.

www.InternationalMedicalCorps.org 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL 11

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12009 Community Reinvestment Act government data. 22010 Small Business Administration federal fiscal year-end data, in dollar volume. © 2011 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

12 LOS ANGELES BUSINESS JOURNAL NEWS & ANALYSIS JULY 18, 2011 NYSE Says Clothing Maker’s Changes Don’t Fit REGULATION: and T-shirts embellished with rhinestones, glit- Exchange ter and appliqués. The merchandise is set to RETAIL & warns American Apparel retail for $15 to $34. Kevin Krieser, president and chief operat- APPAREL on board requirements. ing officer at Evy, said the Fleurish Girls brand is part of the company’s plan to become a ALEXA HYLAND HE New York Stock Exchange is trying major player in the younger girls market. to keep up with American Apparel’s “It’s the first big push for our company in T board moves. the girls’ world,” Krieser said. “This brand will The downtown L.A. apparel manufacturer give us reach and hopefully we will be able to markets such as Los Angeles and New York. and retailer said last week in a regulatory filing grow up with that girl.” Joe’s Wild comes as the company has been that it received a letter from the NYSE warn- Evy has grown its business by working working to improve its product lineup after ing that the company’s audit committee and with major department stores and retailers. The slumping sales. The company last week report- board are not in compliance with the company makes clothes under eight of its own ed net income increased 41 percent to exchange’s guidelines. There are two members brands, plus licensed and private label apparel. $751,000 for the second quarter ended May on the company’s audit committee instead of a All its products are sold at major department 31, compared with the same period last year. required three, and the board makeup doesn’t stores such as Macy’s, Dillard’s and Nord- Revenue fell 5 percent to $24.7 million. meet other technical requirements, according strom, and retailers such as Forever 21. Marc Crossman, chief executive at Joe’s to the letter. Macy’s was already selling Evy’s Fleurish Jeans, said the company is anticipating that the American Apparel has until the company’s Clothing brand for juniors, which includes Joe’s Wild collection will boost sales and drive next annual meeting or July 1, whichever is fashion tops and bottoms. The department traffic at its retail stores. earlier, to regain compliance. The company store also sells Hello Kitty-branded garments “We’ve been working on improving the said in a press release last week that it intends made by Evy. product and getting more fashion-forward with to meet the exchange’s board requirements “as Coming Up Short: American Apparel ad. Corinne Moroney, vice president of busi- product,” Crossman said. “But we are not expeditiously as possible.” ness development at Evy, said Macy’s chose to going to see the fruits of that labor until future The warning came after Mark Samson and ment group led by Toronto financier Michael partner with Evy on the Fleurish Girls brand quarters.” Mark Thornton resigned as board members Serruya, which rescued the company in April based on the success of its Fleurish juniors Joe’s Jeans has also been challenged with earlier this month, replaced by accountant with a $14.2 million cash injection. The Ser- business. a declining stock price, which led Nasdaq to David Danziger and technology executive ruya group previously exercised $6 million in warn the company last month that it was in Marvin Igelman. warrants July 7, and American Apparel Chief Leaping Leopard danger of being delisted because its stock has American Apparel last week reported flat Executive Dov Charney invested $700,000 Joe’s Jeans Inc. is taking a walk on the been selling for less than $1 a share for 30 same-store sales for the second quarter, com- through a stock purchase on the same date. wild side. The Commerce premium denim consecutive trading days. The company has pared with a decline of 16 percent for the same maker is planning to launch a collection in until Dec. 5 to maintain a closing price at $1 period last year. The company has closed 24 Growing Girls September called Joe’s Wild, which includes a share for at least 10 consecutive trading stores in the past year, and has been working to Evy of California Inc. is going girly in a leopard print denim and tops. days. improve its product lineup with such merchan- big way. Joe’s Jeans will support the Joe’s Wild The company’s stock closed at 87 cents dise as designer jeans. The downtown L.A. apparel maker has debut with a major advertising campaign July 13, down 62 percent compared with June Meanwhile, American Apparel is continu- teamed up with Macy’s to launch the Fleurish that’ll feature actress Paz de la Huerta, best 2010’s 52-week high of $2.30. ing to shore up its capital position. Girls collection, which targets young girls and known for her role in HBO series “Boardwalk The company said last week in a regulatory tweens. The clothes, scheduled to hit Macy’s Empire.” Print ads are set to appear in major Staff reporter Alexa Hyland can be reached at filing that it received $1.6 million in capital shelves in the coming weeks for back-to- magazines nationwide, while billboard and [email protected] or at (323) July 12 from warrants exercised by an invest- school shopping, include bottoms, knit tops other advertising initiatives will be in major 549-5225, ext. 235.

6WXGOH\LVSOHDVHGWRDQQRXQFH

Stephen Walbridge KDVMRLQHGWKH¿UPDV EXECUTIVE VICE PRESIDENT, DIRECTOR & CO-REGIONAL MANAGER

310.444.1002 | 213.553.3842 VZDOEULGJH#VWXGOH\FRP 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 NEWS & ANALYSIS LOS ANGELES BUSINESS JOURNAL 13 Investment Officer Buys Into Running His Own Firm LAUNCH: Jeffrey Bronchick a key requirement in a March 2010 regulatory in the L.A. office. … Private National Mortgage enforcement order. BANKING & Acceptance Co. LLC, a Calabasas mortgage forms Cove Street after Under a consent order with the Federal Deposit investment firm better known as PennyMac, has Insurance Corp. and state regulators, the bank was FINANCE made a trio of hires. The company announced that former employer merges. required to raise at least $5 million and achieve a Paul Szymanski has joined as a managing direc- tier 1 leverage ratio of at least 9 percent. The new RICHARD tor in the warehouse lending group, Jim Follette is FTER his longtime employer got swal- capital will bring the bank’s ratio to 10 percent. CLOUGH now a managing director in the correspondent lowed up by a bigger fish, Jeffrey In a statement, Chief Executive Cole Min- lending group and Kim Nichols was appointed A Bronchick decided to swim out on his nick Jr. called the capital raising process “very regional sales manager for the correspondent lend- own. lengthy and difficult,” but said the new funds panies poised for growth. ing group’s western region. … First California The chief investment officer at Reed Conner would allow the bank to better serve the local Founded in 1978 as a family investment Financial Group Inc., the Westlake Village parent & Birdwell LLC announced last week the business community. office for Roy E. Disney, Shamrock launched of First California Bank, has hired Diane Dicker- launch of his equity investment firm, Cove its first private-equity fund in 2001. It has son as senior vice president. She will also assume Street Capital LLC. The firm, headquartered in Closed Fund more than $700 million under management. the newly created role of chief marketing officer. El Segundo, will focus on long-term investments Shamrock Capital Advisors LLC has … L.A.’s Preferred Bank has hired Wellington in undervalued companies, similar to the strategy closed its third private-equity fund, a $400 mil- C-Suite News Chen as senior executive vice president. of Warren Buffett’s Berkshire Hathaway Inc. lion vehicle focused on investments in the media, Morgan Stanley Private Wealth Management, “We’re a classic concentrated value manager,” entertainment and communications industries. the investment bank’s ultrahigh-net-worth invest- Staff reporter Richard Clough can be reached said Bronchick, 49, who will serve as chief invest- The firm is looking to make investments of ment arm, has hired Devon Baranski as regional at [email protected] or at (323) ment officer of the new firm. “We do deep funda- between $15 million and $75 million in com- manager for the Southwest. Baranski will be based 549-5225, ext. 251. mental research to see what good business is selling cheaply. There remains a time-tested opportunity to add value by focusing on one business at a time.” About 75 percent of the firm’s clients are ACG LOS ANGELES institutional investors and the rest are high-net- BUSINESS CONFERENCE worth individuals. 2011 Cove Street, which launched with about 35 GROWTH STRATEGIES | M&A | FINANCE clients and $400 million under management, has six employees, three of whom followed JOIN US FOR THE NATION’S PREMIER DEAL FLOW AND BUSINESS CONFERENCE Bronchick from RCB. Content-Rich Breakouts | Extraordinary Deal Flow and Networking Opportunities The moves coincided with the July 1 acquisition of SEPTEMBER 20 – 21, 2011 | BEVERLY HILTON HOTEL RCB by asset management firm MetWest Ventures GOLD SPONSORS Bingham McCutchen LLP Bronchick LLC. Bronchick said the Capital IQ management teams were Etonien supportive of his desire to launch a firm. Houlihan Lokey “We cordially negotiated my spinout,” he said. Intrepid Investment Bankers LLC Los Angeles Business Journal There’s also another benefit, Bronchick Kibel Green admitted: “I’m finally in the South Bay close PETER GUBER McGladrey Chairman and CEO, Mergers & Aquisitions to my house.” Mandalay Entertainment Group PitchBook PricewaterhouseCoopers Pair of Purchases The Deal It is one of the newest banks in town, but Royal The M&A Advisor Business Bank isn’t shy about branching out. KNX 1070 News Radio The Chinese-American bank, launched in KPMG Sheppard Mullin Richter & Hampton LLP late 2008 in downtown Los Angeles, has Thomson Reuters closed an acquisition of a small Las Vegas TSG Consumer Partners bank just weeks after announcing a separate Union Bank deal for a Ventura County institution. ARIANNA HUFFINGTON LAWRENCE H. SUMMERS CORPORATE SPONSORS JOE TORRE President and Editor-in-Chief of Director, White House National Royal Business Bank bought First Asian Economic Council for President Legendary Baseball Ernst & Young Bank, which has two branches in the Las Vegas The Hufﬁngton Post Media Group Barack Obama, 2009-2010 Manager and EVP of GreenbergTraurig Major League Baseball area, for an undisclosed sum. The deal boosted O’Melveny & Myers LLP Royal Business Bank’s assets to $360 million. Wells Fargo Capital Finance The institution announced last month that it CORPORATE EXECUTIVE & would also purchase Ventura County Business BUSINESS OWNER TRACK Bank. The deal, which is subject to regulatory NEW USC Marshall School of Business BDO and shareholder approval, will increase the com- CONFERENCE Duff and Phelps bined bank’s assets to $410 million. The acquisi- SESSIONS NACD – Southern California Chapter tion is expected to close in the third quarter. SAP Business by Design HENRIK FISKER HARRY MARKOPOLOS KEVIN FREIBERG IN 2011 SPECIAL EVENT SPONSORS Co-founder, CEO and Madoff Best Selling Author Capital Achievement Executive Design Director, Whistleblower and Entrepreneur CapitalSphere It took more than a year, but California Fisker Automotive Crowe Horwath Business Bank has finally raised some much D.A. Davidson & Co. needed capital. DLC “EARLY BIRD” REGISTRATION THROUGH JULY 31ST! FocalPoint Partners The downtown L.A. bank said last week NEW TRACKS FOR 2011! GE Capital that it has raised just over $5 million, fulfilling Gemini Partners Greif & Co. WOMEN’S FORUM Manatt, Phelps & Phillips, LLP List Updates Sheppard Mullin Richter & Hampton LLP SEPTEMBER 20 TSG Consumer Partners The Los Angeles Business Journal is compil- TUESDAY, | 11 A.M. TO 1:00 P.M. VACO ing information for the following lists: SILVER SPONSORS • Women Owned Businesses CORPORATE EXECUTIVE Crowe Horwath • New Auto Dealers Grant Thornton BUSINESS OWNER TRACK Jeffer Mangels Butler & Mitchell LLP • Largest Construction Projects AND PNC To determine whether your company qualifies, SEPTEMBER 21 Robert Half WEDNESDAY, | 10 A.M. TO 12:00 P.M. SingerLewak please send the company name, address, contact U.S. Bank Asset Based Finance person's name and telephone number to dnus- WOMEN’S FORUM SPONSORS [email protected]. Subsequent to Presented by Pepperdine Private Capital Markets Project publication of a List, if your company moves, NAWBO-LA changes its name, replaces its top local executive, SUPPORTING SPONSORS or gets a new phone number, please submit those Kaye Scholer changes on company letterhead to the above Moelis Capital Partners address before Nov. 15 so they can be incorpo- Register at www.acglaconference.com rated into the year-end Book of Lists. No revi- sions of data used to determine rankings will be considered for republication in the Book of Lists. Sponsorship Opportunities: Mina Trujillo 310.444.9065 | Email: [email protected] 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

14 LOS ANGELES BUSINESS JOURNAL NEWS & ANALYSIS JULY 18, 2011

Last week’s major news from labusinessjournal.com NEWS OF THE WEEK and other sources

The Boss: Oprah Winfrey becomes OWN chief exec. Launchpad: SpaceX rocket. Investment: Amgen has licensed Micromet’s antibodies.

THE BOSS: Oprah Win- that could be worth almost $1 vice centers, is buying a pri- the equivalent of an entire Church, Va. is expected to be facture its Shallow Water frey will take over as chief billion. The Thousand Oaks vately held Houston maker of commercial airplane full of ready for employees by the end Combat Submersible as a executive of OWN: Oprah biotech giant, which is inter- high-end steel and alloy pipe, passengers, crew, luggage and of the month. Employees, many replacement for the Navy’s Winfrey Network. The L.A. ested in the antibodies as tube and bar products, and fuel. The Delta IV Heavy, the of whom already have moved Seal Delivery Vehicle. The cable channel co-owned by treatments for solid tumors, precision tools. The deal nation’s largest unmanned from Los Angeles to temporary contract is potentially worth Winfrey and Discovery has agreed to pay Micromet includes certain affiliates of rocket and made by Boeing- office space in the Washington, up to $383 million if all Communications Inc., has $14.3 million upfront, then Continental, which had unau- Lockheed Martin joint ven- D.C. area, are expected to be options are exercised. The faltered in the ratings since reimburse Micromet for dited combined net sales of ture United Launch phased into the new office in Thousand Oaks company’s launching in January. She research and development about $196 million for the Alliance, can lift a maximum the coming weeks. About half Teledyne Brown Engineer- ended her hit syndicated TV costs. On top of potential roy- six months ended June 30. payload of about 50,000 of the 300 corporate employees ing Inc. division developed a talk show filmed in Chicago alties, Micromet could get Financial terms were not dis- pounds into low Earth orbit. who will be in the headquarters full-scale interior mockup of in May, and Winfrey is now more than $487 million in closed. are expected to be new hires. the submersible under a con- free to concentrate on her lat- payments if the drugs hit NEW BUSINESS: VCA The company still working out tract awarded last October. It est media venture on the development milestones, get LAUNCHPAD: Space Antech Inc. will buy a group who will make the move from also was selected to provide West Coast. Winfrey also regulatory approval and reach Exploration Technologies of North Carolina animal Los Angeles. long-range gliders the Navy will serve as chief creative certain sales targets. Corp. has broken ground on a hospitals and a marketing will use to gather oceano- officer as the network pre- launch site at Vandenberg Air communications company ONLINE: Internet Brands graphic data for naval pares her new talk show, ACQUISITION: Reliance Force Base for the Falcon that serves veterinary prac- Inc. of El Segundo has maneuvers. That contract “Oprah’s Next Chapter,” to Steel & Aluminum Co. has Heavy, the world’s largest tices. The L.A. veterinary acquired two websites from will be worth more than $53 debut on OWN in January. agreed to acquire Continen- rocket. The Hawthorne com- clinic and laboratory chain eHarmony, a Pasadena com- million if all options are tal Alloys & Services Inc., mercial spaceflight company, Monday said that it will pay pany known for its match- exercised. INVESTMENT: Amgen which makes products for the known as SpaceX, expects the $146 million for nine-hospital making site. Weddingbee.com Inc. has licensed three experi- oil and gas industry. The site to be operational late next MediMedia Animal Health is an online blog focused on PARTNERSHIP: Wed- mental cancer antibodies from L.A. company, which is con- year. The Falcon Heavy will LLC of Yardley, Pa., and the wedding industry, brides bush Inc. has purchased a Rockville, Md., drug develop- sidered North America’s be capable of carrying more $50 million for Charlotte- and wedding planning, and partnership interest in Van er Micromet Inc. in a deal largest operator of metal ser- than 117,000 pounds to orbit, based BrightHeart Veteri- JustMommies.com is an Hulzen Asset nary Centers. MediMedia’s online community for mothers Management, and is form- Vetstreet provides online and mothers-to-be. Internet ing a strategic partnership labusinessjournal.com communications, professional Brands said the buy bolsters with the Folsom asset man- The best source for up to the minute local, national and education, and marketing its list of women-focused ager. The L.A.-based finan- worldwide business news. solutions for veterinarians, sites. Terms of the deal were cial services and investment including educational and e- not disclosed. company said Jackson-based FREE MORNING UPDATE commerce web sites. Van Hulzen’s flagship prod- IN DEFENSE: A Tele- uct invests in high-quality, Prepared by the editors of the Los Angeles Business Journal and sent to you by e-mail every business day. Sign up now at MOVING DAY: Northrop dyne Technologies Inc. sub- dividend-paying companies www.labusinessjournal.com Grumman Corp.’s new corpo- sidiary has been awarded a to add income and lower rate headquarters in Falls contract to design and manu- portfolio volatility.

Advertising Feature

Hirings, promotions and special People on the Move accomplishments in local business

MARKETING COMMUNICATIONS PROFESSIONAL STAFFING ENVIRONMENTAL SERVICES Veteran art director and designer Alon TrueBridge Resources, a national AEI Consultants, a national Burgin recently joined The Phelps professional staffing company, has industry leader in environmental Group (www.thephelpsgroup.com), named Luetrell Toler as Director of and engineering services, relocated an integrated marketing agency. its West Coast Staffing Operations its Hermosa Beach office in order Burgin has more than nine years’ in its newly opened Santa Monica to meet the growing demands for experience in concept development, office. Luetrell joins TrueBridge due diligence services in the region. execution, illustration, design, online Resources with more than a decade Southern California operations are user experience, website design and of recruiting experience across now located at 5933 W. Century project management for a range of multiple sectors, including technology, Blvd., Suite 360 in Los Angeles, in Burgin clients — including Honda, Land Rover, Toler finance, accounting, sales, middle AEI Consultants addition to an Irvine location. Rubio’s Fresh Mexican Grill and Toshiba Laptops. He will be management, and senior level management positions. working on a variety of accounts, including Public Storage.

Contact Rosz Murray at 323.549.5225 [email protected] 6,109 3,503 2,027 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page 1,959 1,647 JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL 15

X NEXT WEEK TRAVEL AGENCIES The Largest Public Companies THE LIST Ranked by 2010 L.A. County gross sales in Los Angeles County

X EXECUTIVE SUMMARY X THE TRENDS X THE PACESETTER

HE 10 largest travel agencies RAVELSTORE Inc. tops the list of the headquartered in Los Angeles More Money largest travel agencies with $272 mil- T County generated a total of $1.08 Travel-related spending by overnight visitors to Los Angeles County. T lion in Los Angeles County revenue billion in local sales last year. That’s up for 2009. The company held on to the top spot $15 24 percent from $866 million reported after reporting a $65 million increase in local for 2009. revenue last year. Every firm listed reported increased 14 TravelStore is based in Los Angeles and is (in billions) revenue from 2009 to 2010. L.A.-based employee owned. The agency was founded in TravelStore Inc. edged out Protravel 13 1975 by Wido Schaefer, who turned over own- International and Altour by generating ership to his employees in 2005. He remains $272 million in local sales. Each of 12 one of the company’s largest stakeholders and those three firms reported sales increases continues to serve as chief executive. of at least $50 million from 2009 to 11 “Year over year we are up 30 percent,” 2010. Schaefer said. “We’ve had good organic Schaefer 10 Travel agencies have faced fierce 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 growth, but have had a hard time finding competition from web-based air travel acquisitions as smaller agencies continue to close their doors.” and cruise booking sites. The compa- Source: CIC Research Inc. He said that about half of the increase in business has come from nies that remain in business specialize new business while the other half comes from existing clients who have in custom services such as group travel increased their travel expenditures, although the company has yet to return or African safaris. Others have grown Who’s Visiting to prerecession levels. because they are independent, family- Origins of domestic overnight visitors to Los Angeles by percentage. One area that has seen growth is business travel to Asia. owned operations that have loyal cus- Bay Area Schaefer noted that both American Airlines and United Airlines have tomer bases. San Diego added daily nonstop flights from Los Angeles to Shanghai within the past Revenue at Montrose Travel, a fam- two months and flights are filling up. Sacramento/Stockton/Modesto ily-owned firm, grew by 9 percent from “The airlines are expanding internationally because there is such intense $116 million in 2009 to $125 million Phoenix competition in the domestic market from low-budget carriers,” said Schae- last year. New York fer. The agencies listed employ more Seattle For vacation travelers, Mexico has suffered because of safety concerns. than 1,250 travel agents in 24 local Las Vegas Destinations like Cancun and Cabo San Lucas are losing visitors to Hawaii offices. Fresno/Visalia and Puerto Rico. Travel to San Diego has also benefited. – David Nusbaum Philadelphia “Sometimes we forget that we live in a major tourist destination – South- 02 4681012 ern California,” he said. – David Nusbaum Source: LA Inc.

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X NEXT WEEK AIRLINES The Largest Public Companies THE LIST Ranked by 2010 passengers carried at L.A.-area airports in Los Angeles County

X EXECUTIVE SUMMARY X THE TRENDS X THE PACESETTER

AST year’s air travel through local airports increased OR the eighth consecu- for the first time in four years. Overall passenger Seat Check tive year, Southwest L count jumped from 68.9 million in 2009 to 71.3 mil- Annual passenger arrivals and departures at LAX. F Airlines topped the list lion in 2010. Figures combine passenger arrivals and depar- of the busiest airlines servic- tures at Los Angeles International Airport, Ontario Airport, 65 ing the L.A. area. The Dallas- (in millions) Bob Hope Airport in Burbank and Long Beach Airport. based regional airline carried Delta Air Lines had the largest increase in passengers 62 12.4 million passengers at locally as a result of the completion of a merger with local airports last year, down Southwest Airlines Northwest Airlines that was first announced in 2008. 59 139,000 passengers from Starting last year, all of Northwest’s flights were incorpo- 2009. Its market share fell 1 percent to 17 percent. rated into Delta’s schedule. 56 Los Angeles International is Southwest’s eighth busiest The Atlanta-based airline reported a 2.5 million airport by daily departures. Southwest books 114 daily non- increase in passengers, although the vast majority of that 53 stop flights from LAX to 21 cities with connecting flights to rise came from Northwest, which carried 2.7 million pas- 47 cities. The airline started operating at the airport in 1982 50 and now employs 480 people there. It carried 6.9 million sengers locally in 2009. 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Mexicana Airlines, one of the busiest foreign carriers passengers through LAX last year, roughly the same as the locally, ceased operations last August after bankruptcy. It Source: Los Angeles World Airports prior year. carried 1.1 million passengers in 2009 and was on pace to Southwest also books 48 daily nonstop flights from carry a similar number last year until closing. The airline Tick Tock Burbank’s Bob Hope Airport to five cities: Las Vegas, was sold to a group of investors that plans to restart it, but The percentage of on-time arrivals at LAX. Oakland, Phoenix, Sacramento and San Jose. The airline those plans have not yet gotten off the ground. carried 2.95 million passengers at Bob Hope last year, Two airports reported increased passenger volume last 85% down slightly from 2009. It started services in Burbank in year. LAX counted 59.1 million passengers last year, a 2.6 1990 and now has 162 employees there. It is the largest million increase from 2009. Long Beach Airport reported airline serving that airport. 2.97 million passengers last year, approximately 61,000 80 Ontario Airport, the smallest of the three local airports more than it handled in 2009. The airport has nearly 80 it serves, accounted for 2.55 million Southwest passengers percent of its commercial traffic on JetBlue Airways. last year. It has 40 daily nonstop flights to seven cities Meanwhile, traffic at Bob Hope Airport in Burbank 75 from Ontario and has 141 workers there. fell from 4.59 million in 2009 to 4.46 million last year, a 3 Southwest does not operate any flights from Long percent decline. Beach Airport. Companywide, Southwest operates more than 3,400 daily Ontario Airport handled 4.8 million passengers last 70 year, about 78,000 fewer than in 2009. 2004 2005 2006 2007 2008 2009 2010 2011* flights and employs nearly 35,000 people. It carried 88 million Overall, the 25 largest airlines account for 90 percent passengers last year. The publicly traded airline reported net of all commercial air traffic at local airports. *Through May. Source: Bureau of Transportation Statistics income of $550 million and $12.1 billion in revenue last year. – David Nusbaum – David Nusbaum

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JULY 18, 2011 THE LIST LOS ANGELES BUSINESS JOURNAL 17

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SEMINAR SMART STRATEGIES TO KEEP YOUR BUSINESS GROWING

Hear local industry leaders discuss how best to plan and forecast during uncertain economic times Thursday, July 21, 2011 7:30 a.m. – 9:30 a.m. Millennium Biltmore Hotel, Emerald Ballroom 506 S. Grand Ave., Los Angeles, CA 90071 Cost: $45/ticket (includes Economic Forecast, Panel Discussion & Breakfast) James Stratmann Perry Wong Jim Brill Erin Griffi n Mark R. Szczepaniak Moderator Economist Panelist Panelist Panelist To register online, please visit Regional Manager Senior Economist Chief Financial Offi cer Chief Information Offi cer Chief Financial Offi cer http://www.labusinessjournal.com/bizevents/ Oracle City National Bank On Assignment, Inc. Screen Actors Guild Prospect Mortgage LLC Email: [email protected] Phone: 323.549.5225 Sponsored By: 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

18 LOS ANGELES BUSINESS JOURNAL DATA BANK JULY 18, 2011

CONVENTIONS How to Become a Bankruptcy Specialist Night Golf Classic CALENDAR Sponsor: Beverly Hills Bar Association Sponsor: Greater San Fernando Valley Noon Chamber of Commerce • California Gift Show Monday, July 18 Lawry’s 4 p.m. July 22-25 Braemar Country Club Business Mixer 100 N. La Cienega Blvd., Beverly Hills (800) 526-2784 Sponsor: Long Beach Area Chamber of Commerce $125 4001 Reseda Blvd., Tarzana 5:30 p.m. (310) 601-2423 $75 (818) 989-0300 • Adultcon Bliss 525 July 29-31 525 E. Broadway, Long Beach L.A.’s Largest Mixer (310) 859-6900 $10 (RSVP required) Sponsor: Chambers and other business Networking at Night (562) 436-1251 organizations Sponsor: Greater San Fernando Valley 5 p.m. Chamber of Commerce • BrideWorld Expo Tuesday, July 19 Shrine Auditorium 5 p.m. July 30-31 Braemar Country Club Startup Do’s and Don’ts 700 W. 32nd St., downtown Los Angeles (800) 600-7080 $20 4001 Reseda Blvd., Tarzana Sponsor: VEDC $15 (or free with Night Golf Classic) (323) 650-2688 4 p.m. (818) 989-0300 • Modern Living Expo 5121 Van Nuys Blvd., Van Nuys Aug. 6-7 $10 Resume Revamp (626) 274-9666 (818) 907-9922 Sponsor: Beverly Hills-Century City Legal Secretaries Wednesday Aug. 3 Association Internet Marketing and Business Development IRAs and Pensions 6:15 p.m. For Next Generation Businesses • West Coast Expo Sponsor: Dynamics Capital Crowne Plaza Hotel Sponsor: Los Angeles Business Executives Forum Aug. 12-14 7 p.m. 1150 S. Beverly Drive, Los Angeles 6 p.m. (323) 905-1306 Luxe Hotel $35 Wolfgang's Steakhouse 11461 Sunset Blvd., Brentwood (310) 228-3700 445 N. Canon Drive, Beverly Hills Exxxotica Expo $59 Free • Aug. 26-28 (310) 927-4386 (310) 281-3917 Wednesday, July 27 (215) 462-8800 Wednesday, July 20 Network Connection Breakfast Thursday, Aug. 4 Sponsor: Greater San Fernando Valley Chamber of Senior Clean Air Fair Midyear Economic Forecast Is Your Retirement Plan Protected? • Commerce Sept. 15 Sponsor: Los Angeles County Economic Sponsor: Beverly Hills Chamber of Commerce Development Corp. 7:15 a.m. (909) 396-2221 Braemar Country Club 8 a.m. 7 a.m. Sunrise Assisted Living Marriott Los Angeles Downtown 4001 Reseda Blvd., Tarzana 201 N. Crescent Drive, Beverly Hills Wizard World Comic Con 333 S. Figueroa St., Los Angeles $35 • $10 $140 (818) 989-0300 Sept. 24-25 (213) 236-4812 (310) 248-1000 (646) 380-2475 After Hours Mixer Business to Business Breakfast Business at Sunset Mixer Sponsor: Alhambra Chamber of Commerce Fall Home and Garden Show Sponsor: Alhambra Chamber of Commerce • Sponsor: Santa Monica Chamber of Commerce 5 p.m. Sept. 30 5:30 p.m. Noon Holmes Body Shop (800) 999-5400 Tiato Market Garden Cafe Almansor Court 1130 E. Main St., Alhambra 700 S. Almansor St., Alhambra 2700 Colorado Ave., Santa Monica $15 $25 $5 Ultimate Women’s Expo (626) 282-8481 • (310) 393-9825 (626) 282-8481 Oct. 1-2 (866) 618-3434 Thursday, July 21 Tuesday, Aug. 2 To be considered for publication, Calendar listings should be submitted at least three weeks in advance Business Luncheon Government Contracting Green Festival L.A. Sponsor: Federal Technology Center of the event. Listings can be submitted by e-mail to • Sponsor: Sherman Oaks Chamber of Commerce Oct. 29-30 9 a.m. [email protected] or by mail to: 11:30 a.m. (800) 584-7336 Café Bizou Long Beach Area Chamber of Commerce Los Angeles Business Journal 14016 Ventura Blvd., Sherman Oaks One World Trade Center, Suite 206 Calendar $45 Free 5700 Wilshire Blvd. #170 (818) 906-1951 (866) 382-7822 Los Angeles, CA 90036 L.A. Convention Center, (213) 741-1151, ext. 5340

Doc# SV11-17361-AA Debts: $508,932 283 E. Holt Blvd. Doc# SV11-17458-AA BANKRUPTCIES File-Date: 06/15/11 Doc# LA11-36076-EC Pomona 91767 File-Date: 06/17/11 Alan W. Forsley File-Date: 06/16/11 Chapter: 7 Michael H. Colmenares Double A Logistics 310-284-7350 Stewart H. Lim Assets: N/A 310-851-8072 AKA: Double A Transportation Inc. 949-653-6603 Debts: N/A (Trucking broker) Cobe Chemical Co Inc. Doc# LA11-36187-BR Tatiana Khan 10406 McClemont Ave. (Manufacturing) Sids Seafood Restaurant Inc. File-Date: 06/17/11 DBA: Chateau Allegre Tujunga 91042 8616 Slauson Ave. (Restaurant) Pro-per. 815 N. La Cienega Blvd. Chapter: 7 Pico Rivera 90660 5227 Santa Anita Ave. (Antique store) Chapter: 11 Assets: $0 Temple City 91780 Pacesetter Fabrics LLC West Hollywood 90069 Assets: $1,980,385 Debts: $280,105 Chapter: 7 (Textile company) Chapter: 11 Debts: $7,188,656 Doc# LA11-35829-PC Assets: $0 5500 Union Pacific Ave. Assets: N/A File-Date: 06/15/11 Doc# LA11-36002-BB Debts: $532,371 City of Commerce 90022 Debts: N/A Nazareth V. Jansezian File-Date: 06/16/11 Doc# LA11-36078-BR Doc# LA11-36527-PC 626-240-0640 Helen R. Frazer Chapter: 11 562-653-3703 File-Date: 06/16/11 Assets: N/A File-Date: 06/20/11 Vineyard at Serra Retreat LLC Stewart H. Lim Debts: N/A Carlo O. Reyes (Real estate) Fantastic Real Estate Development LLC 949-653-6603 Doc# LA11-36330-ER 818-883-8838 3414 Serra Road (Business type N/A) File-Date: 06/17/11 Malibu 90265 1612 W. Glenoaks Blvd. S & B Premier Investments LLC Brian L. Davidoff Synergy 2002 R.E.I. Inc. Chapter: 11 Glendale 91201 (Business type N/A) 310-286-1700 (Business type N/A) Assets: N/A Chapter: 7 3701 Royal Meadow Road 3758 Parkview Drive Debts: N/A Assets: $3,000,000 Sherman Oaks 91403 Arely Del Carmen Escobar Lakewood 90712 Doc# SV11-17323-VK Debts: $3,357,570 Chapter: 11 DBA: Aly’s Restaurant Chapter: 11 File-Date: 06/15/11 Doc# LA11-35964-PC Assets: N/A (Restaurant) Assets: N/A David W. Meadows File-Date: 06/16/11 Debts: N/A 12537 Chanute St. Debts: N/A 310-557-8490 Asbet Issakhanian Doc# SV11-17408-MT Pacoima 91331 Doc# LA11-36567-BB 818-247-6671 File-Date: 06/16/11 Chapter: 7 File-Date: 06/20/11 Ellenview Hills Investments Raymond H. Aver Assets: $284,540 Giovanni Orantes (Investment) GJ Melinda Inc. 310-571-3511 Debts: $311,536 888-619-8222 18375 Ventura Blvd, Suite #423 (Sewing shop) Tarzana 91356 5227 Santa Anita Ave. A.C.E. Group Inc. Chapter: 7 Temple City 91780 Beverly Glen Auto Body Bankruptcy information is supplied by Timely Info of Los Angeles, Jack Vaughn (323) 664-4423. Assets: N/A Chapter: 7 (Business type N/A) Chapter 7: a “straight” liquidation bankruptcy involving an appointed trustee to sell all assets by Debts: N/A Assets: $0 auction or other means to pay creditors and trustee fees. 14315 Ventura Blvd. Doc# SV11-17324-VK Debts: $494,500 Chapter 11: a process which allows a business to gain temporary relief from paying debt in order to Sherman Oaks 91423 File-Date: 06/15/11 Doc# LA11-36074-BR attempt a successful reorganization. The debtor remains in control of the business during the bank- Lynne Romano File-Date: 06/16/11 Chapter: 7 ruptcy and the business continues to function. 626-552-0270 Stewart H. Lim Assets: N/A Chapter 13: a bankruptcy plan available to individuals whose “income is sufficiently stable and reg- 949-653-6603 Debts: N/A ular to enable such individual to make payments under a plan.” The debtor makes payments to a Epic Cycles Inc. Doc# SV11-17409-VK trustee who disburses the funds to creditors. (Bicycle shop) Inter Apparel Co Inc. File-Date: 06/16/11 Involuntary bankruptcy: the debtor is forced into bankruptcy by secured creditors whose claims 120 N. Topanga Canyon Blvd., #115 (Business type N/A) Varand Gourjian total at least $220,000. Involuntary bankruptcy may be filed under Chapter 7 or 11. Topanga 90290 5227 Santa Anita Ave. 818-956-0100 AKA: also known as FKA: formerly known as Chapter: 7 Temple City 91780 DBA: doing business as FAW: formerly associated with Assets: $0 Chapter: 7 Nexgen Investments Inc. FDBA: formerly doing business as Debts: $90,237 Assets: $0 (Business type N/A) 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

SPECIAL REPORT LOS ANGELES BUSINESS JOURNAL • JULY 18, 2011 REAL ESTATE QUARTERLY

‘When your (company’s name is) based on the idea of skipping work, it has to be fun, like a playground.’ JON RUPPEL, Hooky Chief Executive

RINGO H.W. CHIU/LABJ

HEN startup Hooky Interactive Inc. outgrew its 4,000-square- foot Marina del Rey loft after only a year, the online marketing firm searched the Westside for three months for new digs befit- ting its creative bent. It didn’t have to look far. In Full In January, it moved four miles away into 10,500 square feet in Bergamot Station, a converted train depot in Santa Mon- Wica popular with a new breed of creative tech companies. And it’s easy to see why. Hooky’s office is replete with high exposed ceilings, a wooden gym floor where employees play games, and, if that weren’t enough, room for a tire swing where employees can channel their inner child. “When your (company’s name is) based on the idea of skipping work, it has to be fun, like a playground,” said Hooky Chief Executive Jon Ruppel. “Getting a spot in Bergamot Station was Swing kind of a dream come true.” Welcome to the latest tech hot spot: a city that has long been known for its beachside locale and hip shopping districts – as well as politics so liberal that it’s been derided as the People’s Republic of Santa Monica. There’s a new tech boom under way in The city is earning a wholly different nickname as startups like Hooky, and social network- Santa Monica, where creative offices are ing and other tech firms vie for the city’s sunlit offices and creative campuses. in high demand and the city has earned That new nickname? Silicon Beach. a new nickname: Silicon Beach. What started with only a handful of tech companies during the last decade has turned into a veritable flood over the past year. Companies such as video game developer Riot Games Inc.,

By JACQUELYN RYAN Staff Reporter Please see page 20

Also in this Photo Essay: Three firms and Countywide Second quarter section: Edmunds.com has their Santa commercial real leasing, sales trendsetting offices. Monica offices. estate data. by market PAGE 24 PAGE 26 PAGE 28 PAGE 29 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

20 LOS ANGELES BUSINESS JOURNAL JULY 18, 2011

SPECIAL REPORT REAL ESTATE QUARTERLY

side’s 17.5 million square feet of creative Continued from page 19 space, and local brokerage Industry Partners estimates its vacancy rate was just 5 percent in e-commerce site BeachMint and online the second quarter. That’s less than half the 13 employee rewards firm BetterWorks have all percent vacancy rate for creative space in the opened offices recently. second quarter last year. In fact, as detailed in this Real Estate Quarter- “It’s amazing to see the 180 degree differ- ly, Santa Monica was the only Los Angeles ence,” said Randy Starr, chief executive of County submarket in the second quarter to post a brokerage Starrpoint Commercial Partners, vacancy rate below 10 percent as 210,000 square who represented BeachMint in its lease of feet of space was taken off the market – about 14,000 square feet last month on Fifth Street. half of all office space absorbed countywide. The demand has sharply pushed up Class A Industry cluster average asking rents to $4.63 a square foot, 25 Santa Monica has long been popular with cents higher than the first quarter. But what’s the hip tech crowd and the reasons are obvi- particularly in demand is cheaper creative ous: popular amenities such as the beach and office space – such as former industrial build- the Third Street Promenade combined with ings with high ceilings, big windows, large quality restaurants and accessible public trans- rooms and exposed brick walls – where rents portation are hard to match elsewhere. Compa- RINGO H.W. CHIU/LABJ can run for half as much. nies also like the desirable executive neighbor- Early Arrival: Vokle co-founder Robert Kiraz at the firm’s Santa Monica office. Santa Monica has about half of the West- hoods and the proximity to UCLA, which pro- duces a bevy of eager young engineers and programmers. It’s those kinds of attractions that brought Yahoo Inc. to Santa Monica in 2005. The web portal was the first major Silicon Valley tech firm to open a corporate office in Los Angeles. Like the Silicon Valley firms that have followed it, the company also wanted to be close the entertainment industry to strike content deals. Among Hollywood companies with major operations in Santa Monica is Dream- Works Studios. When News Corp. and NBC Universal founded online TV and movie streaming service Hulu LLC in 2007, its offices were strategically located in north Santa Monica’s Media District. To a certain extent, the current companies are playing follow the leader, but that only partly explains what’s going on. Ruppel and friend David Hays, both with advertising backgrounds, started Hooky Inter- active in 2008 in a small Marina del Rey loft on a short-term lease. The company offers consulting and production services to companies seeking to develop sophisticated online ad campaigns. Within six months of its founding, Hooky had signed Fortune 500 clients, including Burbank’s Walt Disney Co. The company grew quickly, expanding from two to 13 employees in two years. Earlier this year, the pair signed a five-year lease at Bergamot Station at a rate they would only say was below market rent. They also received a $50,000 tenant improvement allowance that was used for a new kitchen, work stations and carpeting. But that wasn’t the main attraction. “We made a lot of our decision on the cool factor and that wow moment upon walking into the space. We knew we wanted a large space that would help us grow and were looking for natural light and great proximity to restaurants,” Ruppel said. “The cultural hub of Santa Monica (also) seemed like a perfect fit. It’s interesting to be sad- dled up with these types of organizations like ours. There’s an excitement and synergy,” he added. Talk to others in the industry and they repeat what Dekeratry and Ruppel say: a big attraction of Santa Monica is the tech milieu that has developed. Employees from different companies can easily interact over face-to-face lunches, or bump into each other at local bars and clubs after work. “The culture has taken on a turn for the better,” said Ruppel. “People feel free to explore other artistic things outside of our business. It’s a good place to talk and communicate.” Santa Monica, meanwhile, is doing what it can to promote itself, including offering fiberoptic Internet connections that provide bandwidth unparalleled by private companies. “Whether you’re tech or creative arts and you need to move huge amounts of information all over the world, and do it consistently, we offer that capability now,” said City Man- ager Rod Gould. “It will help us compete with other megacities in the world and other regions

Please see page 22 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL 21

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22 LOS ANGELES BUSINESS JOURNAL JULY 18, 2011

SPECIAL REPORT REAL ESTATE QUARTERLY

2 6T H Beachside Cluster 1 6 4T 7 E UC H . Tech firms have located in Santa Monica over the last several years. Here is a selection of a dozen D LID LV 9 prominent and recent arrivals. LIN B E. V LVD. 8 10 C IRE A CLOVERFIELD O H A B MICHIGAN LN N Y ADDRESS FIRM(S) SQ. FT. MOVED IN ILS A E. . W NICA V RIZO O DW LVD 11 A M OA O A PICO B 1. 1333 Second St. Demand Media Inc. 28,000 Mid-2007 NTA BR RAD A S 10 OLO 2. 1337 Third St. BetterWorks 4,200 January 2011 C AVE. SANTA MONICA 3. 409 Santa Monica Blvd. DocStoc 6,900 December 2010 Santa Monica MPIC Municipal Airport OLY 4. 1411 Fifth St. BeachMint 14,000 June 2011 PEARL OCEAN PARK BLVD. 5. 506 Santa Monica Blvd. Vokle Inc. 1,150 January 2011

6. 2400 Broadway Yahoo! Inc. 300,000 2005 6T 4 OCEAN AVE. TH H 5 Riot Games 88,000 May 2011 1 5T ARIZONA AVE.H eHarmony 60,000 Late 2010 MAIN WILSHIRE BLVD. 2 3 7. 1620 26th St. Edmunds.com Inc. 95,000 Oct. 2006 1 3 R 4 8. 1601 Cloverfield Blvd. Cornerstone OnDemand Inc. 30,000 2007 D O 2 C N Venice E A D 9. 2415 Michigan Ave. Hooky Interactive Inc. 10,500 January 2011 N A V 10. 1620 Euclid St. Vevo 9,000 2009 E. PACIFIC OCEAN ROSE SANTA MONICA BLVD. 11. 3100-3420 Ocean Park Blvd. Activision Blizzard Inc. 195,000 1996 12 BROADWAY PACIFIC 12. 340 Main St. Google Inc. 100,000 Within year 1/2 mile

of creative space, the company was forced to Continued from page 20 explore Venice. Google ended up leasing 100,000 square in the world where tech is.” feet in the Frank Gehry-designed Binoculars The free market is fostering its own attrac- Building on Main Street in January. The deal, tive environment for startups. Downtown valued at roughly $42 million, will bring all its Santa Monica has seen the popping up of “co- 300 local employees to Venice when it moves working” spaces, where lone entrepreneurs, later this year. The action has had a ripple startups or freelancers can rent space. effect on the market. Early last year, computer programmers Brokers said it’s no coincidence that after Cameron Kashani Rasouli and Avesta Rasouli Google announced its lease, the vacancy rate opened a shared office space called CoLoft for in Venice began to drop. creative tenants. They also hold startup work- “Google is such a big name and people shops and networking events. The couple is have a tendency to follow trends: If Google is negotiating to double their 3,200-square-foot going there, then we should go there, because space by the end of the year. Google knows what the heck they are doing,” “We were sick and tired of working alone said Denise Fast, a ReMax Realtor in Venice. and believed if you put entrepreneurs around Price and space are not the only reason that each other more amazing things happen,” some companies are choosing to look outside Kashani Rasouli said. “We really want to be a of Santa Monica. Venice is home to hip Abbot RINGO H.W. CHIU/LABJ steppingstone on people’s path to success.” Yahoo Center: Santa Monica complex is home to numerous tech companies. Kinney Boulevard, whose boutiques and Today, CoLoft has 100 members, who pay restaurants have made it a desirable address for between $35 and $550 a month. It fostered tech companies. social media streamlining service Mingly and Mobile app creator CheckPoints, mobile geo-location-based social networking site Use- ‘Even if they get sold at some ‘Effectively, it’s 1996 all over video messaging service Mogreet Inc. and Hipster.com, both of which moved out to their point in the development again with tremendous interactive media agency Almer/Blank have own offices in the past year. stage, in many cases the shareholder value creation moved onto or near the boulevard in the last year or two. Venture funding company that is buying them ... It’s like the first movies; “Abbott Kinney is the melting pot that gets Something else also has spurred the is buying the expertise of the they were silent and then these smart startup people excited about living growth: investor interest. team that’s in place and so one day they were in a place and working there, too,” said Todd Though venture capital funding is still they fund additional growth in introduced to sound and it Dipaola, co-founder of CheckPoints, which slow, county companies received $201 million has about 4,000 square feet on the street. in the first quarter, according to a survey by this marketplace.’ started this new boom.’ One thing that could alter the dynamic is New York-based consulting firm PwC. And DAVE TOOMEY, CresaPartners LOU KERNER, WedBush the traditional Achilles’ heel of the L.A. econ- those with some web component grabbed omy. Once a company becomes big and suc- much of the bounty as investors sought out the cessful, it can get bought by a larger out-of- next Facebook Inc. or Groupon Inc. according to CoStar Group data, the average and the scene started to form around the town firm, which often means the local opera- In Santa Monica, style-matching e-com- monthly rent per square foot at Yahoo Center Santa Monica space and more companies tion is moved. merce site BeachMint received $28.6 million is a pricey $4.21. started coming around.” It’s not just a theoretical concern with this in the first quarter from angel and other “Tech companies are definitely attractive Vokle started in a 500-square-foot office latest wave of tech companies, however. Hulu investors. Online video conferencing service tenants to have. A lot of them are financially and moved into a larger 1,150-square-foot unit is actively being shopped around by its corpo- Vokle Inc. has received $1.26 million from sound but also have growth expectations,” said within its 506 Santa Monica Blvd. building rate investors. But broker Dave Toomey, a Pasadena’s Tech Coast Angels. Brendan McCracken, vice president of leasing this year. Dekeratry would not disclose the principal at CresaPartners who has placed “Effectively, it’s 1996 all over again with for Equity Office. lease rate, but said it’s significantly lower than several tech tenants in the market, has a differ- tremendous shareholder value creation,” said Lou Vokle, which doesn’t lease from Equity Class A space. ent take on the matter. Kerner, an analyst with L.A. boutique investment Office, is an example of a funded company “Even if they get sold at some point in the bank WedBush. in full growth mode. The founders devel- Traveling to Venice development stage, in many cases the compa- “I’m calling it ‘The Second Internet.’ It’s the oped an online video-conferencing website, But no matter how attractive the market, ny that is buying them is buying the expertise social Internet. It changes everything. It’s like the and were early arrivals in the city. companies can’t move where there’s no space. of the team that’s in place and so they fund first movies; they were silent and then one day “In mid-2008, right before everything went And there are quickly becoming fewer avail- additional growth in this marketplace,” he said. they were introduced to sound and it started this down financially speaking, we were working able creative offices with the square footage Meanwhile, companies that were looking new boom,” he said. out of my apartment here in Santa Monica and necessary for expanding companies. for Santa Monica space are eyeing the space One of Santa Monica’s largest landlords is there wasn’t really a tech scene in L.A.,” said “They’re just fighting for space left and Google will be vacating. Starr said he has Equity Office Properties, which owns 2.7 mil- Edward Dekeratry who co-founded the compa- right. Nobody wants to leave this area and already taken a handful of potential tenants lion square feet in the city, including the office ny with partner Robert Kiraz. we’re running out of space,” said Starrpoint on a tour. park at Broadway and 26th Street where Yahoo “Eventually we started looking for space broker Starr. “By the end of the year, it’ll be the lowest moved and is now called Yahoo Center. and funding and ended up choosing a space It’s pushing the companies to look farther vacancy rate Santa Monica has seen in 20 Tech companies comprise 50 percent of above (vegetarian restaurant) Real Food south. Consider Google Inc. The search engine years. I’m literally at where I have a larger Equity Office’s new and expanded leases city- Daily,” he said. “The only reason is we liked giant has been in Santa Monica since 2003, demand of more tenants looking for space than wide so far this year. Equity Office would not the building; exposed brick, hardwood and wanted to consolidate its offices around is actually available,” Starr said. “It’s definite- disclose if that demand has raised rents, but floors, nothing corporate. We moved there the city. As it sought out 100,000 square feet ly the Internet frenzy again.” 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL 23

501 North Orange Glendale

Carlton Plaza 20750 Ventura Boulevard Woodland Hills

5950 Canoga Avenue Woodland Hills

100 Corporate Pointe Culver City

500 North Central, Glendale

Things are looking up in 2011!!

Over 85,000 square feet of leases completed in 2011.

For leasing information on these buildings, or any of our Southern California properties, please contact Beth Sydow at (562) 436-4000.

Please visit our website at www.BantryHoldings.com Shoreline Square 301 E. Ocean Boulevard Long Beach 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

24 LOS ANGELES BUSINESS JOURNAL JULY 18, 2011

SPECIAL REPORT REAL ESTATE QUARTERLY

The EDMUNDS INC. office sets a high standard for work space in Santa Monica’s growing tech cluster. The company, which 1. A red bench in the lobby imprinted with the date of operates consumer auto websites, the company’s founding. moved into the spacious 1620 2. Rows of hanging monito 26th St. office in October 2006. one of the work spaces kee Its intent was to build a colorful employees connected. and playful environment that would encourage creativity. 1

Space RacePhotos by RINGO H.W. CHIU

6 5

6. Company-wide meetings are held in the “Great Room,” which has comfy couches and a 60-foot coffee bar.

7. A 1948 Cadillac Fleetwood doubles as a couch, adding a touch of whimsy to the work area.

8. A game room on the top floor – with ping pong tables and traditional arcade games – lets employees blow off steam.

9. Color and murals add warmth to what otherwise would be plain walls. 7 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL 25

y is

ors in ep

3. An open floor plan gives employees opportunity for communication and interaction.

4. A central staircase adorned with colorful geometric patterns connects the office’s three floors.

5. The elevator bank keeps the mood playful with the outline of a car painted along the wall.

9 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

26 LOS ANGELES BUSINESS JOURNAL JULY 18, 2011

SPECIAL REPORT REAL ESTATE QUARTERLY Web Startup Music Video Already Sees Firm in Tune Bigger Future With Office

TARTUP BetterWorks is a perfect exam- HEN Rio Caraeff went looking for an Sple of the kind of company causing such W office to house his new music video flux in the Santa Monica office market. company, Vevo, in 2009, he wanted a space The company, which has created an online that would help inspire creativity. system through which businesses can reward The office he found, off Euclid Street in Santa their employees, set up shop in January in an Monica, is not only aesthetically stunning, but it office overlooking the Third Street Prome- also has a creative history. Built in 1922, the nade. But co-founder Paige Craig already is space was once occupied by midcentury modern

looking for a new space. RINGO CHIU/LABJ furniture designers Charles and Ray Eames. In the next two months, he plans on hiring A Better Place: CEO Paige Craig relaxes in BetterWorks’ unconventional office. “It really gives the space a heritage and his- up to 50 more employees and expects the tory rooted in functional utilitarian design,” 4,200-square-foot office won’t be big enough. the rent, the trio contributed to the company’s improvement allowance to alter the space. said Caraeff, Vevo’s chief executive. “Outside “We have a lot more to get done. We need beer budget. But when BetterWorks grew to This time, Craig is looking for an office with it looks like a non- new offices and a much bigger space now,” nine employees in January, Craig decided to up to 15,000 square feet that he can renovate descript, generic said Craig, the company’s chief executive. lease an office of his own. to fit his needs. Vevo space, but when BetterWorks, which launched “It’s really good for startups Those renovations could include creating a Online music video you get inside it has in March, already has promi- to have the flexibility to start separate area for his sales team and more con- distribution a lot of light, beau- nent customers, including without having a big lease ference rooms. He also wants to create a nap tiful skylights and online video site Hulu, which BetterWorks over their heads,” he said. room for employees who work long hours Lease: 9,000 square exposed wood.” spend anywhere from $50 to Developer of an online rewards “Once you hit that point that and install a shower for people who exercise feet The centerpiece $400 per employee each system for employees you’re a real company, it’s during their breaks. Location: Euclid of the 9,000-square- month to give them access to time that you find your own Craig, who has been a vocal supporter of Street, Santa Monica foot creative office benefits such as discount gym Location: Third Street space.” creating the “Silicon Beach” identity for space, which fea- memberships, spa sessions or Promenade, Santa Monica BetterWorks’ space com- L.A.’s Westside tech community, plans on tures unfinished restaurant deals. Lease: 4,200 square feet with fortably holds the compa- staying in downtown Santa Monica. Having flooring and an exposed ceiling, is a coy pond It’s a concept that has no tenant improvement ny’s 31 employees. But the tech neighbors nearby is important to him. surrounded by glass that extends up to a small taken off since Craig co- allowance company recently expanded “If you go to San Francisco or New York, cutout in the building’s roof. founded BetterWorks in the into San Francisco and there’s a very dense concentration of tech com- The building’s broker, Industry Partners, offices of another Santa Moni- expects to start offering its panies. The biggest problem we have is that if would not disclose the terms of the lease but ca tech company, Burstly, just one block employee rewards packages in New York by tech people set up in Glendale or downtown, we said creative office space like Vevo’s in Santa down the Promenade. the end of the summer. That means Craig is don’t have a community,” he said. “We want to Monica can range widely in cost, from $1.43 Craig and his two co-founders shared looking to more than double his staff. have a community so we can go to dinner, meet to $4.61 a square foot. three small rooms in Burstly’s office, about It took Craig about six weeks to find his up for drinks and help each other out.” Vevo’s neighbors on the street include enter- 450 square feet total. Instead of pitching in on current office, and the company had no tenant – Natalie Jarvey tainment companies, including J.J. Abrams’ pro-

OVER THE LAST 12 MONTHS... HUNT BARNETT TOTAL TRANSACTION SIZE COMPLETED Principal 3.1 MILLION SF TOTAL TRANSACTION VALUE NEGOTIATED PETER BEST $1.1 BILLION Principal TOTAL TRANSACTIONS COMPLETED 295 RICK BUCKKLLEYE Principal

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JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL 27

SPECIAL REPORT REAL ESTATE QUARTERLY Game Developer Logs In to Santa Monica IOT Games has been hiring employees Rso quickly that it has gone through four offices in the last five years. Now, the online game developer’s most recent move has brought it to Santa Monica for the first time. The company moved into an 88,000- square-foot space at the Yahoo Center in May, making it one of the largest tenants in a business park that includes Yahoo Inc. and eHarmony Inc. Riot most recently operated out of Culver City, but Brandon Beck, the company’s co- founder and chief executive, said he decided to move to a neighborhood known as Riot Games RINGO CHIU/LABJ Silicon Beach in Creative Space: A shaded nook at Vevo. Video game part because a Santa developer Monica address duction company Bad Robot, and businesses could help lure new that handle car repairs. It’s a far cry from the cor- Lease: 88,000 employees. porate offices where Vevo got its start. square feet at $3.50 “We want to Caraeff helped found the company in 2009 a square foot attract the best and at Universal Music Group as a way to stream- Location: Yahoo brightest talent in line the distribution of music videos across the Center, Santa the industry,” he Internet. After working out of Universal said. “In order to do Monica RINGO CHIU/LABJ Music’s office in a Santa Monica corporate park that, we need to Room to Grow: Riot co-founder Brandon Beck in the company’s spacious lobby. off Colorado Boulevard, Caraeff went looking offer a fantastic envi- for a new location in Santa Monica. ronment. It’s good to be in a great part of the sections, but the company’s largest depart- gamers play. “We wanted to be near our parent compa- city from a recruiting standpoint.” ment is made up of engineers and developers Being part of the Yahoo Center also has its ny,” Caraeff said. Not that Riot needs much help hiring. who create content for “League of Legends,” perks, including a full gym, restaurants and Today, Vevo has 125 employees and works At the beginning of last year, the company the company’s free-to-play online game. The common areas. with multiple music labels to distribute videos to had just 75 employees. It now has more game draws millions of players and competes Beck said he was drawn to the building YouTube and other websites and sell advertising than 300 in Los Angeles and an office in with other popular online titles such as because of its open floor plan with few closed around them. And since the company works Dublin, Ireland. “World of Warcraft.” offices or conference rooms. closely with advertisers, Caraeff has moved to In fact, Riot has expanded so fast that The company’s new first-floor office has “The Yahoo Center, in particular, has New York, where he runs the company. Beck had to nearly double the size of the an open, almost loftlike feel. The company very large floor plans so we could have a big Vevo now has offices in London, Chicago, company’s five-year lease for 47,000 square has also completed some renovations, build- wide-open office,” he said. “The space is Detroit and San Francisco, but Los Angeles, feet before even moving in. Represented by ing movable walls out of white boards and really tailored to the way we operate, with with 25 employees, is the second largest UGL Equis, Riot was able to grab the space installing large screens throughout the office wide-open floor plans that facilitate a lot of behind New York. for $3.50 a square foot. to allow Riot employees to have conference communication.” – Natalie Jarvey Riot has been hiring staff for most of its calls and to monitor “League of Legends” as – Natalie Jarvey

proudly announces an acquisition in Southern California:

329 N. Durfee Ave., Unincorporated Los Angeles County Thanks to John Privett, Jeff Stephens and Cameron Merrill of CB Richard Ellis

28 LOS ANGELES BUSINESS JOURNAL JULY 18, 2011

SPECIAL REPORT REAL ESTATE QUARTERLY

Los Angeles County Office Market, 2nd Quarter 2011 Vacancy Rate Under Net Absorption (square ft.)1 Class A Asking Rent 2 Total Vacant Space 2nd Qtr. 1st Qtr. 2nd Qtr. Construction 2nd Qtr. 1st Qtr. 2nd Qtr. 2nd Qtr. 1st Qtr. 2nd Qtr. Market/Submarket Inventory (square ft.) 2011 2011 2010 (square ft.) 2011 2011 2010 2011 2011 2010 Downtown L.A. 32,159,551 4,955,784 15.4% 15.0% 15.7% 0 (131,145) 323,407 (500,620) $3.12 $3.13 $3.14 Wilshire Center 8,217,777 1,517,789 18.5% 17.9% 16.3% 0 (47,077) (45,040) (125,592) $1.99 $1.99 $1.99 Miracle/Park Mile 5,945,287 930,472 15.7% 16.1% 18.8% 0 25,747 45,827 (164,987) $2.60 $2.59 $2.61 Wilshire Corridor 14,163,064 2,448,261 17.3% 17.1% 17.4% 0 (21,330) 787 (290,579) $2.51 $2.50 $2.52 San Gabriel Valley 13,773,745 1,393,907 10.1% 9.8% 9.6% 0 (41,774) 89,374 152,724 $2.41 $2.42 $2.41 Burbank 6,188,739 962,879 15.6% 15.6% 17.3% 0 1,544 130,145 29,448 $3.30 $3.36 $3.41 Glendale 6,323,992 1,458,540 23.1% 23.1% 21.8% 0 4,895 30,112 (175,770) $2.59 $2.59 $2.76 Pasadena 6,960,833 1,268,201 18.2% 17.8% 18.4% 0 (30,585) 17,115 (172,712) $2.60 $2.51 $2.57 Tri-Cities 19,473,564 3,689,620 18.9% 18.8% 19.2% 0 (24,146) 177,372 (319,034) $2.73 $2.72 $2.90 Hollywood/WeHo 4,015,796 538,090 13.4% 13.9% 14.6% 400,000 19,287 (25,459) (21,348) $3.92 $3.84 $3.62 Beverly Hills 6,351,734 875,502 13.8% 14.9% 14.3% 0 68,872 (10,133) 62,833 $3.64 $3.68 $3.84 Brentwood 3,431,241 540,335 15.7% 15.1% 15.2% 0 (23,928) (37,107) (33,500) $3.37 $3.43 $3.51 Century City 10,328,379 1,555,933 15.1% 15.5% 13.1% 0 44,946 3,893 (69,838) $4.26 $4.52 $4.51 Marina/Culver City 6,965,355 1,931,601 27.7% 29.5% 24.5% 0 124,309 (60,517) 145,843 $2.70 $2.66 $2.62 Santa Monica 8,245,341 789,792 9.6% 12.1% 14.1% 0 210,121 (55,273) 14,309 $4.63 $4.38 $4.16 West Los Angeles 5,864,543 663,649 11.3% 11.1% 9.8% 27,000 (12,347) 19,317 44,217 $2.91 $2.92 $2.99 Westwood 3,112,243 580,260 18.6% 18.3% 20.4% 0 (10,106) 48,894 (26,694) $4.03 $4.02 $4.00 Westside 44,298,836 6,937,072 15.7% 16.6% 15.4% 27,000 401,867 (90,926) 137,170 $3.69 $3.76 $3.76 Santa Clarita Valley 2,757,811 627,551 22.8% 23.4% 25.1% 99,000 18,180 13,113 29,244 $2.52 $2.54 $2.55 Central Valley 7,921,552 1,034,927 13.1% 13.3% 14.6% 0 18,485 (31,477) (170,375) $2.26 $2.28 $2.36 Conejo Valley* 7,686,983 1,413,677 18.4% 18.6% 18.3% 0 12,601 (99,074) 18,890 $2.27 $2.25 $2.47 East Valley 3,116,213 464,115 14.9% 16.0% 15.0% 0 34,439 (13,094) (27,694) $2.63 $2.64 $2.92 West Valley 9,741,187 2,088,983 21.4% 23.5% 24.2% 0 203,748 8,724 (138,195) $2.30 $2.30 $2.32 San Fernando Valley 28,465,935 5,001,702 17.6% 18.5% 19.0% 0 269,273 (134,921) (317,374) $2.31 $2.30 $2.42 190th Street Corridor 3,332,597 644,929 19.4% 19.3% 16.1% 0 (1,184) (40,179) 63,001 $2.23 $2.23 $2.23 Carson 939,299 124,899 13.3% 13.9% 19.4% 0 5,900 (21,126) (93,835) $2.25 $2.25 $1.80 El Seg./Beach Cities 10,612,218 1,553,735 14.6% 16.8% 13.8% 0 (15,134) (175,073) (6,067) $2.53 $2.53 $2.59 LAX/Century Blvd. 4,048,491 1,417,519 35.0% 33.3% 33.8% 0 (69,359) (76,819) (3,387) $1.51 $1.51 $1.50 Long Beach Downtown 4,070,026 699,212 17.2% 16.3% 15.0% 0 (35,646) (33,714) (10,203) $2.52 $2.52 $2.52 Long Beach Suburban 4,856,256 912,316 18.8% 18.8% 17.9% 0 2,862 (33,551) 38,110 $1.85 $1.85 $2.40 Torrance Central 3,115,537 492,350 15.8% 16.4% 15.9% 0 18,337 (6,896) (16,479) $2.43 $2.43 $2.44 South Bay 30,974,424 5,844,960 18.9% 19.3% 17.8% 0 (94,224) (387,358) (28,860) $2.19 $2.19 $2.24 Los Angeles Total 190,082,726 31,436,947 16.5% 16.9% 16.6% 526,000 395,988 (34,611) (1,158,677) $2.92 $2.95 $3.01

Downtown: MPG Office Trust Inc. sold its 565,000- West Hollywood: The Mondrian Los Angeles was Beverly Hills: Google Inc. signed an 11-year lease to square-foot office tower at 550 S. Hope St. to LBA acquired for $137 million by Pebblebrook Hotel Trust open an office at 331 Foothill Road that will house Realty LLC of Irvine for $158 million. of Bethesda, Md. from Mondrian Holdings LLC. YouTube staffers. The deal is valued at $6.3 million. Los Angeles County Industrial Market, 2nd Quarter 2011

Total Vacant Vacancy Rate Under Sold & Leased (square ft.) Asking Rent 3 Inventory Space 2nd Qtr. 1st Qtr. 2nd Qtr. Construction 2nd Qtr. 1st Qtr. 2nd Qtr. 2nd Qtr. 1st Qtr. 2nd Qtr. Market (square ft.) (square ft.) 2011 2011 2010 (square ft.) 2011 2011 2010 2011 2011 2010 Central L.A. 298,566,989 6,611,498 2.2% 2.1% 2.4% 0 1,987,972 2,100,382 2,014,199 $0.42 $0.40 $0.38 Mid-Cities 111,188,024 4,540,760 4.1% 3.6% 5.0% 106,110 1,228,420 1,797,054 2,661,677 $0.44 $0.43 $0.43 North Los Angeles* 190,089,027 6,617,442 3.5% 3.8% 3.6% 126,519 913,294 1,131,459 1,071,602 $0.52 $0.51 $0.55 San Gabriel Valley 182,981,694 6,332,553 3.5% 3.5% 3.8% 0 1,184,828 1,739,837 1,927,148 $0.46 $0.44 $0.42 South Bay 219,857,807 6,576,491 3.0% 3.1% 2.8% 0 2,448,210 3,351,406 3,803,767 $0.53 $0.52 $0.52 Los Angeles Total 1,002,683,541 30,678,744 3.1% 3.1% 3.3% 232,629 7,762,724 10,120,138 11,478,393 $0.47 $0.46 $0.45

1 Net Absorption is the change in occupied space for a given period of time, excluding sublet space and renewals. Due to the transfer of owner/occupied space to competitively leasable space and/or the delivery of new construction in the market, discrepancies may occur in the relation between vacancy rates and net absorption. 2 Average monthly, per-square-foot full-service-gross rents. 3 Average monthly, per-square-foot triple-net rents. * Portions are in Ventura County Source: Grubb & Ellis Co. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL 29

SPECIAL REPORT REAL ESTATE QUARTERLY L.A. County in Limbo as Pace of Recovery Slows

By RICHARD CLOUGH Staff Reporter Hollywood, too, is trending positively, with as few companies are looking to expand, said LLP, which dissolved and abandoned 100,000 its vacancy rate falling from 13.9 percent to Matthew Sullivan, managing director of Lee & square feet of space at its Southern California OU know the state of the office market in 13.4 percent, and its asking rent rising nearly a Associates. As a result, companies are merely outpost. It also didn’t help when Bank of YLos Angeles County is iffy when one of dime to $3.92. moving from one building to another, with lit- America Corp., a major downtown tenant, the hottest areas is the San Fernando Valley. Tronson, who specializes in the Hollywood tle positive effect on the overall vacancy rate – downsized by 50,000 square feet when renew- But with transactions such as Majestic submarket, noted that the relative strength of “musical chairs for tenants,” as Sullivan put it. ing a lease in its namesake building. Investments’ purchase of a the entertainment and new-media “Job formation and job growth is directly Steve Solomon, managing director with Jones 274,000-square-foot office industries is keeping Holly- correlated to demand on office,” he said. “I Lang LaSalle Inc., said there is one part of the complex and Health Net Cali- L.A. COUNTY wood’s office market bubbling. don’t expect (a recovery) anytime soon. I think market that is going strong: investment purchas- fornia’s 334,000-square-foot Two of the area’s largest office we’re in the new normal.” es. On the heels of a $300 million sale in January lease, the Valley was besting several areas on buildings – Sunset Media Tower and 6922 The sluggishness can be seen in some tradi- of the Fox Interactive Media office in Playa the Westside by midyear. Hollywood Blvd. – are in escrow. tionally strong submarkets. In downtown Los Vista, Tishman Speyer is looking to unload its To be sure, the countywide vacancy rate “The moons are aligning for Hollywood to Angeles, for instance, the vacancy rate rose nearby Campus at Playa Vista project. fell during the second quarter. But with high become a very, very strong office market,” he said. from 15 percent to 15.4 percent as the market Solomon said it could fetch a pretty penny. unemployment and lingering economic con- The pace of recovery countywide, however, gave back 131,000 square feet. “‘A’ properties are selling for close to all- cerns, the market has yielded only a few large has many brokers uneasy. The area was hurt by some major defec- time (highs),” he said. “There’s been a lot of The unemployment rate remains elevated tions, including Chicago law firm Howery cash and debt available for the trophy assets.”

Building value.

San Fernando Valley: Market leader. Creating ﬁnancial opportunity.

L.A. County Office Vacancy Rates 20%

0 234123412 ’09 ’10 ’11

deals and many submarkets remain in a state of limbo, brokers said. Indeed, while many professionals believe the market has already hit bottom, the recovery is, at best, very sluggish. “What I see is sort of a tepid improvement in the office market,” said John Tronson, a principal with Ramsey-Shilling Commercial Real Estate Services Inc. “It’s certainly trend- As a top 20 national CPA ﬁrm, Reznick Group provides ing toward getting better, (but) you’re going to Today’s commercial accounting, tax and business advisory services to a diverse see a very slow and gradual increase in momentum in the office market.” real estate industry group of institutional real estate clients. We help them The county vacancy rate dipped to 16.5 develop effective ﬁnancial strategies to capitalize on percent in the second quarter from 16.9 percent offers a unique set today’s evolving global real estate market. as the market absorbed 396,000 square feet of Grubb & space, according to data provided by By providing insights on transaction structuring, audit and Ellis Co. It was the second time in the past of challenges. And three quarters that the vacancy rate fell, but it is tax issues, troubled asset management and more, Reznick roughly flat from a year ago. opportunities. Group brings added value to the commercial real estate Reflecting the mixed bag of news, Class A industry – today, and for the future. asking rents fell 3 cents to $2.92. The weakness extended to the industrial market, which gave back space for the first To learn more about Reznick Group and our services for time in three quarters. The vacancy rate was the commercial real estate industry, visit: unchanged in the second quarter at 3.1 percent, www.reznickgroup.com/commercialrealestate but nearly 563,000 square feet of space was dumped back on the market. In some areas, however, the news was decid- edly more positive. Santa Monica’s office vacancy rate plummeted and asking rents surged amid an influx of tech and new-media firms (see article page 19), while the San Fernando and Santa Clarita valleys each saw their vacancy rates dip by more than a half-percentage point. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

30 LOS ANGELES BUSINESS JOURNAL JULY 18, 2011

SPECIAL REPORT REAL ESTATE QUARTERLY Downsized Lease Renewal, Firm’s Closure Drive Up Vacancy Rate

HE downtown L.A. office market was Tshaken by a few large departures during DOWNTOWN L.A. Main Events the second quarter that plunged the market back into negative territory. OFFICE MARKET AT A GLANCE Overall, 131,000 square feet more space INVENTORY ...... 32.2 million square feet 101 was put on the market than was taken up in UNDER CONSTRUCTION ...... 0 new or renewed leases, according to Grubb & CLASS A ASKING RENTS ...... $3.12 WILSHIRE BLVD. Ellis Co. That’s a reversal from the first quar- Chinatown FIGUEROA ter, when nearly three times that much was Net Absorption Vacancy Rate Central 10 absorbed. 000s of square feet percent City West Central The vacancy rate reflected the change, ris- 300 25 110 Business Central ing nearly a half-point to 15.4 percent. 200 20 District City East Hitting the market hard was the sudden dis- 100 15 solution in March of Washington, D.C., law 0 E.6th firm Howery LLP, which had slightly more 10 South Park -100

than 100,000 square feet at MPG Office Trust A 5 Inc. -200 -7.2 10 ’s 550 S. Hope St. tower. 1 mile ED “They just walked away from that space,” -300 0 5 said John McAniff, managing director in the 234123412 234123412 downtown L.A. office of Jones Lang LaSalle ’09 ’10 ’11 ’09 ’10 ’11 ALAM Inc. “All that space hit the market early in the owner in downtown. The firm is about to second quarter and it had a huge impact.” emerge from bankruptcy under a new owner- Another major chunk of space came on the Zurich Financial Services Ltd., vacated ship team, led by major investors Global Asset market as a result of a huge lease renewal that 50,000 square feet of space at another MPG BofA: Signed lease at namesake tower. Capital LLC of Palo Alto and Mount Kellett Bank of America signed at its namesake 333 building at 801 S. Brand Ave. in Glendale. Capital Management LLP of New York. The S. Hope St. tower. While sources estimate that McAniff said he expects the market to Bank of America signed a 10-year lease company is expected to put several downtown the 10-year lease for 173,000 square feet remain soft for several more quarters. Besides renewal with Brookfield Properties Manage- industrial properties on the market starting in should be worth more than $75 million for the general trend of professional firms down- ment for 173,000 square feet at Bank of Ameri- the third quarter. owner Brookfield Properties Management, sizing, there are multiple properties in MPG’s ca Plaza at 333 S. Hope St. Downtown com- As part of its portfolio restructuring, MPG it is still 50,000 square feet smaller than the huge downtown office portfolio tied up in loan mercial real estate sources said the deal was Office Trust Inc., the largest office landlord past lease. restructurings, hampering the landlord’s ability worth somewhere around $75 million, making it downtown, sold its 565,000-square-foot Class The deal continues a trend over the last two to sign new leases or renewals. by far the largest downtown office lease in A office tower at 555 S. Hope St. to LBA Realty years of major downtown firms downsizing, Once those properties complete their recent quarters. Bank of America originally had LLC of Irvine for $158 million. which has been the major headwind that has restructurings, McAniff said he expects MPG 225,000 square feet in the tower, so the deal Lockton Insurance Brokers renewed its lease offset new lease signings. will have more flexibility in negotiating leas- put around 50,000 square feet on two floors in May at Brookfield Properties Management’s In the second quarter, the largest new es. While that will drive up transaction vol- back on the market. 725 S. Figueroa St. office tower. The eight-year downtown deal was done by Zurich North ume, it will likely put downward pressure on In June, a federal bankruptcy court judge lease for 72,000 square feet on three floors is America, which inked a 10-year, 44,000- lease rates. ordered Richard Meruelo and John Maddux valued at roughly $19.5 million. The Kansas square-foot lease at MPG Office Trust’s 777 S. – Howard Fine removed from management of Meruelo Mad- City, Mo.-based insurance brokerage has Figueroa St. property for an estimated $16 mil- dux Properties Inc., once the largest property reserved the option to expand to a fourth floor. lion. The firm, a unit of Swiss insurance giant

Westside’s Strength Spills Over Into Hollywood, West Hollywood

S Westside office vacancies declined – Aand leasing rates rose – in the second Main Events quarter, the Hollywood and West Hollywood HOLLYWOOD markets saw a bump of their own. OFFICE MARKET AT A GLANCE Tenants seeking good quality but cheaper INVENTORY ...... 4.02 million square feet 101 lease deals helped the combined markets UNDER CONSTRUCTION . . . .400,000 square feet absorb 19,287 square feet, dropping the vacan- CLASS A ASKING RENTS ...... $3.92 HOLLYWOOD BLVD. cy rate a half-point to 13.4 percent, according to Grubb & Ellis Co. SUNSET BLVD. Net Absorption Vacancy Rate West Hollywood Advertising agencies, Internet media com- 000s of square feet percent Hollywood panies and others that considered Santa Moni- 120 20 SANTA MONICA BLVD. ca as a destination in slower times are now 80 VINE thinking twice and either moving or staying 16 40 put in Hollywood and West Hollywood, bro- 12 kers said. 0 MELROSE AVE.

8 Hollywood: KCET-TV sold its studios. AVE. FAIRFAX “While demand is still light, we are starting -40 4 Sunset Media Tower, which hosts the head- to see vacancy rates coming down in parts of -80 HIGHLAND AVE.

CRESCENT HEIGHTS BLVD. BEVERLY BLVD. the Westside and that should improve numbers -120 0 quarters of Frederick’s of Hollywood, reality 1/2 mile for secondary markets such as Hollywood and 234123412 234123412 show production company Magical Elves and West Hollywood,” said Rick Buckley, princi- ’09 ’10 ’11 ’09 ’10 ’11 an office of AC Nielsen is expected to be sold pal at L.A. Realty Partners. “There is tradi- for $76.5 million. The buyer is Kilroy Realty tionally a six- to 12-month lag from the prime Corp. Current owner USA Sunset Media Man- square-foot building is at the corner of Melrose markets to West Hollywood and Hollywood.” isn’t as strong as the developers expect, they agement bought the 321,000-square-foot Avenue and San Vicente Boulevard. United Tal- The strengthening of the Hollywood area will have to lower their rental rates. We’ll see building at 6255 W. Sunset Blvd. at Vine Street ent Agency and television production company helped landlords boost Class A rents 8 cents to who has the stronger constitution,” he said. for $82.5 million in 2005. Endemol USA Inc. are reportedly among those $3.92 a square foot. Part of the growth also Meanwhile, the Church of Scientology, KCET-TV, the largest independent public interested in leasing space. Cushman & Wake- was attributed to the rental rates proposed at which has its West Coast headquarters in Hol- broadcasting channel in the U.S., sold its 4.5- field Inc. is the leasing agent for developer Red Building, the final phase of the Pacific lywood, continues to be an active real estate acre property at 4401 W. Sunset Blvd. to the Cohen Brothers Realty Corp. Design Center in West Hollywood. player in the market. Church of Scientology. Terms of the deal were The Mondrian Los Angeles was purchased The building, which is under construction The church bought the headquarters and not disclosed by either the broker for the church, for $137 million by Pebblebrook Hotel Trust of and is expected to come on line by the end of studios of KCET-TV at 4401 W. Sunset Blvd. Binswanger/Realty Advisory Group, or CB Bethesda, Md. from Mondrian Holdings LLC. the year, is being preleased at an asking rate of for an undisclosed price. The church plans to Richard Ellis Group Inc., which represented The 237-room hotel at 8440 Sunset Blvd. will $5 a square foot by developer Charles Cohen. use the studios to produce religious program- KCET. The station had dropped PBS program- continue to be operated by Morgans Hotel “With the Red Building, it’s going to be ming. The public television station is moving ming in October 2010 to save almost $7 million Group. Opened in 1996 by famed hotelier Ian very interesting to see if the rental rates are to Burbank. in programming fees. It is moving into the Pointe Schrager, the hotel continues to attract celebri- going to be met by the market. We’ll see if the – Deniz Koray office complex in Burbank’s Media District, ties and Hollywood stars. market appetite for space is strong enough to where its facilities will be modern but smaller. On April 19, Operation USA, an L.A.-based support rental rates that are between $4.50 and The final phase of the Pacific Design Center, international relief charity, signed a five-year lease $5.00 per square foot,” said Anthony Gatti, known as the Red Building, is under construc- for 2,560 square feet at 7421 Beverly Blvd., for managing director at Jones Lang LaSalle. tion and preleasing to tenants. The 400,000- $1.95 per square foot. It plans to move in July 15. However, “if the market appetite for space 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL 31

SPECIAL REPORT REAL ESTATE QUARTERLY Surging Santa Monica Spurs Interest in Marina del Rey, Culver City

HE Westside office market exploded last T quarter as tenants took more space than WESTSIDE anywhere else in Los Angeles County, largely Main Events OFFICE MARKET AT A GLANCE driven by a new tech boom in Santa Monica Santa Monica: and its environs. INVENTORY ...... 44.3 million square feet Hulu signed for The commercial office market absorbed UNDER CONSTRUCTION . . . . .27,000 square feet an additional some 401,000 square feet, according to Grubb CLASS A ASKING RENTS ...... $3.69 11,000 square & Ellis Co., with more than half of it taken up feet at 12200 in the beachside city that is the preferred loca- Net Absorption Vacancy Rate W. Olympic tion for a new generation of tech companies. 000s of square feet percent Blvd. 1200000 (See article page 21.) 400 20 Hulu, an increasingly popular online TV 800000 show and movie streaming site, is a perfect 200 15 example. It has been in Santa Monica for sev- West 400000 eral years and need more space. It stayed put 0 10 Hollywood and took an additional 11,000 square feet at its Crispin Porter & Bogusky leased new corporate 2 miles 405 1200000 -200 5 Beverly 0 12200 W. Olympic Blvd. location. offices at the old Sony Music Entertainment Com- Westwood Hills Brentwood “There’s pent-up demand,” said Loralie -400 0 plex at 2100-2110 Colorado Ave. in Santa Monica. Century -400000 800000 Ogden, vice president of CB Richard Ellis 234123412 234123412 The Miami-based advertising company, known for 2 City ’09 ’10 ’11 ’09 ’10 ’11 Group Inc.’s Century City office. “What’s its “I’m a PC” commercials, signed for 38,000 -800000 400000 fueling the Santa Monica market is the tech square feet in a deal valued at $17.5 million. 10 companies, bottom line. There’re a lot of star- Beachbody LLC, which makes the P90X in- Culver 0 tups going there. That and it just hasn’t ever quarter when the region gave back nearly home fitness and weight-loss program, signed an SANTASanta MONICA Monica BLVD. City lost its appeal.” 91,000 square feet. Eager landlords helped out, 11-year lease renewal for nearly 37,000 square -400000 In fact, demand was so strong that some dropping asking rents across the board with the feet at 3300 Exposition Blvd. in Santa Monica. Venice BLVD. CIENEGA LA PICO BLVD. companies either can’t find space or are being exception of Santa Monica and Westwood. Google Inc. signed a lease at 331 Foothill -800000 priced out of Santa Monica, benefiting nearby “You’re still taking about 6.9 million Road in Beverly Hills’ Entertainment Business Marina 1 communities, such as Marina del Rey and Cul- square feet that are vacant and it’s just enough District to open an office that will also house del Rey ver City, which surprisingly absorbed 124,000 to make landlords very competitive in a very YouTube staffers. The 13,465-square-foot, 11- square feet of space. choppy economy. In fact, if rental rates were to year deal is valued at $6.3 million. company, founded by Regal Entertainment Consider the Mill, a production company in rise in this market, it would bring velocity to a Golden West Properties paid $26.7 million for Group and AMC Entertainment Group Inc., Santa Monica’s Euclid Street corridor that had halt,” said Mike Catalano, executive vice pres- the Wilshire Beverly Hills Medical Center in one signed a seven-year lease for 18,000 square expanded to capacity in its building. It wanted ident at Studley Inc.’s West L.A. office. of the Westside’s priciest office sales. The nearly feet valued at $2.5 million. to remain but there wasn’t enough room so it Asking rates fell 7 cents to $3.69 from 50,000-square-foot building at 9001 Wilshire Builder’s Bank bought a Malibu condo com- signed a lease for 22,000 square feet at Black- the previous quarter. An exception to the Blvd., owned by Iraj and Paula Ziatabari, was plex for $14 million out of receivership. The welder, a 170,000-square-foot creative office positive news was Brentwood, which gave nearly 80 percent occupied at the time of sale. Chicago bank had bankrolled the eight-unit, complex in Culver City. back nearly 24,000 square feet and saw its Open Road Films announced it would open 25,000-square-foot project that broke ground in The net result: The vacancy rate plunged vacancy rate rise more than a half-point to headquarters at 12301 Wilshire Blvd. in West- 2006, but developer Carbon Beach Partners fell nearly a full point across the Westside to 15.7 15.7 percent. wood. The film production and distribution into default during construction. percent – a dramatic turnaround from the first – Jacquelyn Ryan

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32 LOS ANGELES BUSINESS JOURNAL JULY 18, 2011

SPECIAL REPORT REAL ESTATE QUARTERLY Miracle Mile Picks Up Tenants Entertainment Businesses Boost As Koreatown Suffers Exodus Burbank and Market Optimism

BOUT all you need to know about the NTERTAINMENT companies moving into AWilshire Corridor in the second quarter is EBurbank helped the Tri-Cities market just TRI-CITIES this: Koreatown lost tenants and the Miracle WILSHIRE CORRIDOR about hold its own in the second quarter, rais- Mile gained them – a dynamic that reflected OFFICE MARKET AT A GLANCE ing optimism for the rest of the year. OFFICE MARKET AT A GLANCE the soft commercial real estate market. INVENTORY ...... 14.2 million square feet Vacancies inched up one-tenth of a point to INVENTORY ...... 19.5 million square feet With asking rents falling across Los Angeles UNDER CONSTRUCTION ...... 0 18.9 percent in the market, but that was still a UNDER CONSTRUCTION ...... 0 County, the historically cheap Koreatown neigh- CLASS A ASKING RENTS ...... $2.51 lower than the second quarter of 2010, when the CLASS A ASKING RENTS ...... $2.73 borhood was less of an attraction to tenants who rate topped 19 percent, according to Grubb & could get nicer digs elsewhere at attractive rents. Net Absorption Vacancy Rate Ellis Co. Asking rents rose a penny to $2.73. Net Absorption Vacancy Rate 000s of square feet percent Such as in the Miracle Mile. John McAniff, managing director at Jones 000s of square feet percent 100 +.79 20 “The Miracle Mile has become a mature Lang LaSalle’s downtown L.A. office, said 200 20 market over the past six or seven years,” said that several leases in Burbank’s Media Dis- 150 0 15 Brad Feld, partner at Madison Partners. trict indicate that entertainment firms are get- 100 +1.87 +1.7 15 50 “Most of the major buildings over 200,000 -100 10 ting more comfortable with making deals. square feet have been purchased by institu- A prime example is what happened at the 0 10 -50 -200 5 tional ownerships and renovated into world- Pointe, a 14-story office building next to NBC -100 5 class projects. There are now buildings in the studios at 2900 Alameda Ave. in Burbank. -150 -300 0 Miracle Mile who pull from a regional base. The 445,000-square-foot project was complet- -200 0 234123412 234123412 Companies that could have offices in Holly- ed in 2009 by M. David Paul Ventures but 234123412 234123412 ’09 ’10 ’11 ’09 ’10 ’11 wood, Century City or downtown are looking has sat largely vacant until this quarter. Then, ’09 ’10 ’11 ’09 ’10 ’11 at the Miracle Mile.” suddenly, successive deals were announced. The deals weren’t necessarily large in the Public station KCET-TV sold its Holly- neighborhood, but there were enough to Meanwhile, 47,077 square feet was vacat- wood studios and announced it was leasing director at Charles Dunn Co. in Sherman absorb 25,747 square feet of space and drive ed in Wilshire Center and Koreatown, increas- 55,000 square feet of office and studio space. Oaks, said Glendale is by far the softest of the down the Miracle Mile-Park Mile vacancy ing the submarket’s vacancy rate more than a In addition, Warner Bros. Entertainment three markets. However, sales have picked up rate nearly a half-point to 15.7 percent, , half-point to 18.5 percent. moved its comic book studio DC Entertain- throughout the Tri-Cities. according to Grubb & Ellis Co. If there was any consolation, Gatti doesn’t ment into 35,000 square feet in a 10-year lease “There’s decent traffic in sales and it look Still, Anthony Gatti, a managing director expect the Wilshire Center market to get valued at roughly $16 million. better this year than last year,” she said. at Jones Lang LaSalle, said the bounty wasn’t much softer, noting that most firms that “These deals are demonstrative that the In one notable sale, California Credit Union being distributed evenly, with the best build- moved there years ago to shelter themselves Burbank market is seeing an increase in leas- repurchased its headquarters building at 701 N. ings doing better than others. from sky-high lease rates during the boom ing velocity,” McAniff said. Brand Blvd. for about $34.4 million. In 2006, the “Wilshire Courtyard may be full, but there have already left for downtown. Glendale, which had the third highest thrift sold the Glendale building to Maguire Prop- are some other office buildings with vacan- “Now, I don’t think that is going to happen office vacancy rate in Los Angeles County at erties Inc., now called MPG Office Trust. cies. Besides Brentwood, the Miracle Mile is again, at least to that scale, because most of 23.1 percent, actually absorbed 4,895 square In Pasadena, McAniff said larger tenants the softest market on the Westside,” he noted. the tenants need to be there,” he said. feet. However, the market continued to strug- were shrinking their leased space during the quar- Even so, there was enough demand for Indeed, landlords held the line on asking gle as financial and insurance firms, its histor- ter, creating opportunities for smaller professional landlords to feel they had more leverage, rents, already among the county’s lowest, at ical strength, continued to pull back. For firms to move into high-quality buildings. prompting them to raise average asking rents $1.99 a square foot. example, Farmers Insurance stayed in the However, the net result of the shrinkage one penny to $2.60 per square foot. – Deniz Koray city at a new location, 655 N. Central Ave., was that 30,505 square feet were put back on but downsized by 9,000 square feet. the market, according to Grubb & Ellis. Stacy Vierheilig-Fraser, senior managing – Joel Russell MAIN EVENTS The Hollywood Reporter spent the last few has been a tenant since 2008, renewed for weeks of June moving into the 5700 Wilshire seven more years and increased its space by MAIN EVENTS 2,100 square feet. The firm now occupies Blvd. building at Wilshire Courtyard on Miracle Swick Family Trust in La Canada Flintridge low-income counseling provider that declared 7,069 square feet of offices in the building. Mile. The trade paper and several sister publi- acquired a 21,640-square-foot office building bankruptcy this year. Didi Hirsch Community Milan Capital Management bought a 57 cations are taking 27,000 square feet in a 10- at 217 E. Alameda Ave. in Burbank for $3.25 Mental Health Center, a non-profit based in percent stake in the View Wilshire Tower year lease valued at $12.5 million. The publica- million. The seller was Aziz Molai, owner of Culver City that runs 10 clinics in Southern Apartments from Federal Street Holdings LLC tion moved from 5055 Wilshire Blvd., where it Molai Insurance, which no longer has offices California, purchased the 30,000-square-foot for $22 million. The 13-story apartment com- shared a larger space with Billboard, Adweek in the building. building for $5 million. The new owner runs a plex at 3460 W. Seventh St. was constructed in and Backstage. Farmers Insurance signed a five-year lease to clinic in the building. 1965 and contains 168 units. It was only 25 John Carrabino Management, which repre- occupy 25,000 square feet at 655 N. Central Ave. in Engineering firm Parsons Corp. sold its percent occupied at the time of the purchase. sents Renee Zellweger, Jamie-Lynn Sigler, Glendale. The company is downsizing from 34,000 Pasadena headquarters for $320 million to Josh Duhamel and Angie Harmon, among oth- square feet at 701 N. Brand Ave. in Glendale. Morgan Stanley Real Estate Investing and ers, renewed 1,200 square feet of office space California Credit Union repurchased its Lincoln Property Co. The transaction involved for another year at 5900 Wilshire Blvd., accord- headquarters building at 701 N. Brand Blvd. in three buildings totaling 950,000 square feet at ing to landlord Ratkovich Co. The building also Glendale for about $34.4 million. The eight- 100 W. Walnut St. Parsons, which signed a is known as the Variety Building since it con- story structure contains 138,000 square feet. 15-year lease back with the new owners, said tains the headquarters of the entertainment The credit union occupies three floors in addi- the sale will generate capital. trade magazine. tion to a retail branch on the ground floor. In Cogent Communications leased 48,000 In other leases at the Variety Building, inde- 2006, California Credit sold the building to square feet at 2947 Bradley St. in Pasadena. The pendent entertainment attorneys Elena Murav- MPG Office Trust for $45 million. space will be used almost entirely for computers ina and Carl Buchberg signed a two-year lease A medical office building at 1540 E. Col- and data storage. The building was formerly for 1,600 square feet. Abrams Garfinkel Mar- orado Blvd. in Glendale was sold by the attor- occupied by Internet service provider EarthLink golis Bergson LLP, a full-service law firm that neys for Verdugo Mental Health Center, a

HOLLYWOOD BLVD. 101 210 Burbank 2 MELROSE AVE. 134 Pasadena 210 5 Glendale

VERMONT AVE.

WILSHIRE BLVD. WESTERN AVE. 110 Miracle Mile Park Mile Wilshire 10 Center

LA CIENEGA BLVD. 10 1 mile LOS ANGELES 10 5 miles Variety Building: Space leased. Burbank: Leases signed at the Pointe. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL 33

SPECIAL REPORT REAL ESTATE QUARTERLY Small Deals Make Little Impression on Stratospheric Vacancy Rate

HERE were faint signs of life in the Santa TClarita Valley in the second quarter, but Main Events the market was hardly robust. SANTA CLARITA Roughly 18,000 square feet of space was VALLEY Valencia: absorbed, lowering the vacancy rate by more OFFICE MARKET AT A GLANCE Space was than a half-point. But it still stood at a sky-high leased at INVENTORY ...... 2.76 million square feet Tourney Pointe, 22.8 percent, according to Grubb & Ellis Co. UNDER CONSTRUCTION . . . . .99,000 square feet a recently Kevin Fenenbock, a senior vice president at CLASS A ASKING RENTS ...... $2.52 Colliers International, said a number of small renovated deals and lease renewals had only a small 220,000-square- Net Absorption Vacancy Rate foot building. effect on the overall market. 000s of square feet percent “There’s really not a major industry type 150 40 out here that’s in growth mode right now,” he said. “Most of the moves that we’re seeing are 100 30 pretty lateral. They’re not downsizing but 50 they’re not growing.” +1.2 20 Lancaster 0 10 miles Asking rents in the valley – a hotbed for 10 home builders such as KB Homes and Centex -50 Palmdale before the housing bust – weakened, falling 2 -100 0 cents to $2.52 since the beginning of the year. 234123412 234123412 Qiagen, a biotech company headquartered in 5 “There’s basically no change,” said Ryan ’09 ’10 ’11 ’09 ’10 ’11 Venlo, Netherlands, renewed its lease on a 14 House, vice president at Jones Lang LaSalle. 30,000-square-foot office at 27220 Turnberry Santa Clarita “The market has not improved nor has it Lane in Valencia. 126 declined any further.” Instead, brokers are looking to a 117,000- A legal practice is leasing a 4,000-square- The most notable activity came from build- square-foot building at 26877 Tourney Road in foot office in the Tourney Pointe building at ing owners looking to offload some of their Valencia to help bring the rate down. The 27200 Tourney Road in Valencia. The 36-month 118 210 2 properties. American Assets Trust Inc. building is completely vacant and has been on lease is for $2.05 per square foot. The 220,000- recently put the Valencia Corporate Center up the market since the beginning of the year. square-foot Tourney Pointe, which is owned by 405 Arden Realty, was built in 1985 and recently 101 for sale. The Valencia Oaks Office Building is House said he expects the property to sell to 134 also up for sale after owner CWCapital Asset an owner that will occupy the majority of the renovated. LOS ANGELES Management defaulted on its payment. building. But until that sale comes through, he A mortgage broker has leased a 1,000- This is the first time multitenant office doesn’t expect much change. square-foot office at 25115 Avenue Stanford in Assets has not listed an asking price for the buildings have been on the market in about “Next quarter, I don’t see anything that will the Valencia Park Executive Center owned by center, which is adorned with marble and gran- three years, Fenenbock said. Sales of the indicate that the market will decline any fur- Koll Co. The 24-month lease is for at $1.65 per ite exteriors and slate tile lobby floors. 44,000-square-foot Valencia Oaks, listed for ther,” House said. “But vacancy isn’t likely to square foot. CWCapital Asset Management LLC has put $7.25 million, and the 194,000-square-foot change a whole bunch.” American Assets Trust Inc. has put the Valencia Oaks Office Building at 23822 Valencia Valencia Corporate Center, which doesn’t – Natalie Jarvey Valencia Corporate Center on the market. The Blvd. up for sale. The 44,000-square-foot prop- have a listing price, will help other landlords 194,000-square-foot complex on Avenue Stan- erty is priced at $7.25 million, or about $165 a value their buildings. ford is a three-story, multitenant Class A office square foot. The three-story building features But since both properties have tenants, their project more than 80 percent leased. American private balcony spaces and large windows. sales will not affect Santa Clarita’s vacancies.

Valley Heats Up as Companies Come Over the Hill for Lower Rents

HE numbers in the San Fernando Valley Ttell a good story. SAN FERNANDO Main Events The vacancy rate dropped nearly a full percentage point during the second quarter to 17.6 VALLEY percent as the market absorbed nearly 270,000 OFFICE MARKET AT A GLANCE square feet, according to Grubb & Ellis Co. INVENTORY ...... 28.5 million square feet But Trevor Belden, principal at Lee & UNDER CONSTRUCTION ...... 0 Associates in Sherman Oaks, said he doesn’t CLASS A ASKING RENTS ...... $2.31 need statistics to tell him what he already knows: The market is heating up both for sales Net Absorption Vacancy Rate and leases. 000s of square feet percent “What we’re seeing in the second quarter is 300 20 a lot more tenants, and larger tenants, in the 200 15 market,” Belden said. “I can count up to 10 100 sizable tenants looking for space just in the Warner Center: Health Net California leased at 21271 Burbank Blvd. East Valley alone.” 0 10 -100 Space hunters include entertainment, finan- 5 Sherman Plaza office complex in Van Nuys cial and technology companies. -200 sold for $49.5 million. The transaction included The reason for this activity? -300 0 two adjacent Class A buildings: a five-story mid- 5 Rents in desirable markets such as Santa 234123412 234123412 rise at 15400 Sherman Way and a four-story at Monica and Hollywood – already close to or ’09 ’10 ’11 ’09 ’10 ’11 15350 Sherman Way. Together, they comprise exceeding $4 a square foot – have started to 274,000 square feet on 6.8 acres. Majestic 118 Mission Hills rise, making the valley relatively economical. Investments in Calabasas bought the property Chatsworth Savings can be in the 30 percent to 50 percent Diego (405) Freeway. The area was a hotbed of from Embarcadero Capital Partners in Belmont. Northridge range if parking and other amenities are mortgage and other real estate-related companies The building was on the market for 11 months. Van Nuys included in the calculations, Belden said. during the housing boom, but has yet to make a Red Bull Distribution Co. leased 48,000 170 Stacy Vierheilig-Fraser, senior managing full recovery. Average asking rents in the Cen- square feet of office and warehouse space near Calabasas Encino N. Hollywood director at Charles Dunn Co. in Sherman tral and West Valley were 37 cents and 30 cents the Van Nuys Airport. The five-year deal at 7700 101 Woodland Universal Hills Oaks, said the strongest office market in the lower, respectively, than in the East Valley, Airport Business Park Way is worth about $1.9 City Valley submarket is Studio City, precisely where they stood at $2.63 per square foot. million. The Austrian energy drink giant, which has 10 miles 405 101 because of its quick route over the hill to Holly- Belden expects the higher rents on the other its U.S. headquarters in Santa Monica, also leased wood. Adjacent neighborhoods in the East Val- side of the mountain will cause the Valley space in Victorville during the quarter as part of its ley such as North Hollywood and Toluca Lake numbers to rise in coming quarters. plan to expand its regional warehouse facilities. also are in high demand by entertainment firms. “I would sign the longest lease you can Health Net California leased two buildings with feet at 3330 Cahuenga Blvd. West in Studio “I’m doing a lot of short production deals because I don’t think rates will remain this low 334,000 square feet at Hines Warner Center in City. The 10-year lease has a total value of for 18 months or less with reality TV compa- for long,” he said. Woodland Hills. The buildings, at 21281 and about $9.4 million. nies and feature films,” she said. “Landlords – Joel Russell 21271 Burbank Blvd., each has five floors of Class A medical office building at 12626 Riverside don’t want to spend money on tenant improve- A space. Financial details were not disclosed. Drive in Valley Village sold for $6 million. The ments because these tenants aren’t long.” DG FastChannel, a digital ad production 29,000-square-foot building was purchased by Vierheilig-Fraser said demand for office company in Irving, Texas, leased 28,000 square Valley Village Medical Center. space decreases on the west side of the San 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

34 LOS ANGELES BUSINESS JOURNAL JULY 18, 2011

SPECIAL REPORT REAL ESTATE QUARTERLY Economic Worries, Japanese Disasters Slow Sales and Leasing Activity

CONOMIC jitters and the Japanese disasters Estruck the San Gabriel Valley in the sec- SAN GABRIEL Main Events ond quarter – where they had the effect of qui- eting the largely industrial market. VALLEY Sales and leasing dropped by one-third to INDUSTRIAL MARKET AT A GLANCE 1.18 million square feet as cautious business INVENTORY ...... 183 million square feet owners held back in making major decisions as UNDER CONSTRUCTION ...... 0 the recovery sputtered. ASKING RENTS ...... 46 cents “I think last year we had companies rebuilding inventory. My suspicions are that Sales & Leases Vacancy Rate inventory has been rebuilt and now they are millions of square feet percent waiting to see if demand is going to pick up,” 2.5 6 said Jim Center, a senior vice president with Grubb & Ellis Co. 2.0 4 And in a valley where many businesses are 1.5 City of Industry: 19161 E. Walnut Drive North. trade related, not helping was a disruption in 1.0 the supply chain caused by the March earth- 2 JP Original Corp., the maker of women’s quake and tsunami in Japan, he said. .5 shoe brands Anne Michelle and Bamboo, Altadena bought a 131,000-square-foot warehouse from The slowdown was reflected in the net 0 0 Monrovia absorption rate. The market gave back 114,759 234123412 234123412 Unilever in the City of Industry for $9 million. 210 square feet, though it wasn’t enough to raise ’09 ’10 ’11 ’09 ’10 ’11 The 19161 E. Walnut Drive North warehouse is the vacancy rate, which remained at 3.5 per- next to its existing facility and will allow the Alhambra cent, according to Grubb & Ellis. However, shoemaker to consolidate several smaller ware- El Monte West Covina it’s the first time the valley’s vacancy rate a flurry of sales over the past 12 months, even houses it had leased throughout the city over Monterey 10 Park hasn’t fallen since the fourth quarter of 2009. as demand remained strong for good product. the past year and a half. The building had been Diamond Rents in the region continue to be low, “Enough buildings have traded over the on the market for about a year. 60 Bar 19 City of though they climbed to 46 cents from 44 cents past few quarters that it’s sucked up a large The U.S. Marshals Service is taking over two 605 Industry in the first quarter. Center said the small amount of supply. Now, you go on a tour of Monterey Park buildings for a regional headquar- 710 5 miles increase is likely a distortion that resulted from four buildings with a guy and three are off the ters and training facility. The federal General Ser- 57 little activity. market,” Keane said. vices Administration in April signed a 10-year “The fewer transactions you have, the easi- “If you don’t have to sell right now, why lease valued at $20 million for 1938 and 1968 er it is to skew the numbers upwards or down- would you? Prices are climbing, but there not Saturn St. The buildings, with a combined in April purchased a 156,000-square-foot ware- wards,” he said. taking a sharp turn upwards. Owners think 44,000 square feet, will become headquarters of house complex at 341-345 N. Baldwin Park Dennis Keane, a senior associate with Lee their properties are still worth X, when in fact the Pacific Southwest Regional Fugitive Task- Blvd. in the City of Industry for $8.2 million. The & Associates, said landlords are keeping rents they’re worth Y,” he said. force, which includes local, state and federal law facility will house the company’s western distri- steady and offering concessions to keep ten- – James Rufus Koren enforcement agencies in California and Nevada. bution center, as well as corporate offices, ants in place. “Landlords with an existing ten- The lease will allow the Marshals Service to con- design studios and a showroom. Exxel is mov- ant and a lease expiring, they will bend over solidate several offices, including one on the sec- ing to Industry from a smaller leased facility in backward to keep that tenant. Nobody wants ond floor of the Los Angeles Federal Building. Irwindale. Exxel makes sleeping bags, tents and vacancy,” he said. Outdoor gear manufacturer Exxel Outdoors other outdoor equipment. The building sales market also calmed after Market Gives Back Space After First Quarter’s Absorption FTER a strong start to the year, sales and Aleasing activity slowed in the South Bay’s industrial market during the second quarter. SOUTH BAY/ Carson: The change, which mimicked the sputtering MID-CITIES A warehouse economic recovery, was striking. The market being built at gave back 70,344 square feet after absorbing INDUSTRIAL MARKETS AT A GLANCE 2255 E. 220th 530,557 square feet in the first quarter, accord- INVENTORY ...... 331 million square feet St. was entirely ing to Grubb & Ellis Co. UNDER CONSTRUCTION . . . .106,110 square feet leased by a logistics “There was a lot of positive thinking going ASKING RENTS (MID-CITIES) ...... 44 cents company. on in the first part of 2011,” said Jim Biondi, a ASKING RENTS (SOUTH BAY) ...... 53 cents senior vice president at Grubb & Ellis. “That positive feeling had worn thin by the second South Bay quarter.” Along with a lack of demand caused by a Sales & Leases Vacancy Rate sluggish economy, brokers said the lack of millions of square feet percent activity is thanks to a dearth of quality industri- 4.0 8 60 Ceva Logistics, a unit of London-based Ceva 10 al properties. “When there is someone in the Pico 3.0 6 market, there’s not a lot of choice,” said Eric Group Plc, renewed its lease for a 305,000- 110 5 Rivera Bell Knirk, vice president of Fremont Associates in square-foot warehouse at 1900 S. Western Ave. 405 2.0 4 in Torrance and signed a new lease for a LAX Torrance. Downey 285,000-square-foot warehouse at 18120 Bishop Norwalk Companies want Class A warehousing facili- 1.0 2 ties with modern docks, and both Knirk and St. in Carson. Both are five-year deals. El Segundo Paramount Cerritos Biondi said there aren’t enough in the South Bay. 0 0 Ozburn-Hessey Logistics LLC leased a Car- “For Class A, I would venture to guess the 234123412 234123412 son warehouse that is still under construction. Torrance 710 ’09 ’10 ’11 ’09 ’10 ’11 The 224,600-square-foot building, in the Wat- Redondo vacancy factor is less than 1 percent because of 5 miles such a low inventory,” Biondi said. son Corporate Center at 2255 E. 220th St., Beach Chuck Berger, a Grubb & Ellis senior asso- should be finished by year’s end. The 64- 1 Mid-Cities month lease with Watson Land Co. is valued Rancho Palos Long ciate who focuses on the Mid-Cities area, said Verdes San Beach Class A buildings are largely taken too but at $9 million. OHL leases other facilities in the Pedro Sales & Leases Vacancy Rate area and is expanding its South Bay presence. there has been slowdown in sales and leasing millions of square feet percent AZ West, a container freight and logistics of Class B and C spaces. “There hasn’t been a 3.0 8 company with offices in Compton, leased a than half of the two-story building in the Conti- trickle-down effect yet,” he said. 2.5 The vacancy rate in Mid-Cities climbed by 6 302,400-square-foot warehouse in Carson, nental Park complex. Financial terms were not half a percent to 4.1 percent – the first time 2.0 also in the Watson Corporate Center. The com- released. CBRE will vacate its 15,000-square- vacancy rates there rose since the end of 2009. 1.5 4 pany is relocating from another facility. The foot office at 990 W. 190th St. in Torrance. In both markets, asking rents rose slightly – 1.0 72-month lease is valued at $11 million. Label manufacturer Achem Industry Ameri- 2 Mid-Cities by 2 cents and South Bay by a cent .5 CB Richard Ellis Group Inc. bumped up its ca Inc. purchased a 128,000-square-foot lease at 2221 Rosecrans Blvd. in El Segundo warehouse and distribution center for $10.6 – but landlords remain willing to deal. 0 0 “If a landlord has a tenant in a building and 234123412 234123412 from 12,000 square feet to 30,000 square feet million. The warehouse, at 13226 Alondra the lease is coming up, they are cutting their ’09 ’10 ’11 ’09 ’10 ’11 as it consolidates its two South Bay offices. Blvd. in Cerritos, was sold in May by Oltmans rents and dropping their prices,” Knirk said. With the new lease, CBRE will occupy more Constrution Co. – James Rufus Koren

3500000 3000000 2500000 2000000 1500000 1000000 500000 0

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JULY 18, 2011 INVESTMENTS & FINANCE LOS ANGELES BUSINESS JOURNAL 35

ECONOWATCH L.A.COUNTY EVENT

%± from GENERAL INDICATORS Latest Previous previous Year %± from period period period ago year ago Employment (000’s) (May)1 ...... 4,284.8 4,322.8 -0.9% 4,261.2 +0.6% Unemployment (000’s) (May)1...... 577 575.7 +0.2% 590.5 -2.3% Film Production Days (2nd qtr.)2 ...... 11,260 11,604 -3.0% 11,134 +1.1% Bankruptcies Chapter 7 (Apr.)...... 3,609 4,043 -10.7% 3,680 -1.9% Is your CFO Chapter 11 (Apr.) ...... 57 47 +21.3% 38 +50.0%

Trade3 Exports (mils.) (Apr.) ...... $10,397.0 $10,451.0 -0.5% $8,694.7 +19.6% Imports (mils.) (Apr.)...... $26,441.8 $25,606.8 +3.3% $18,880.3 +40.0% one of the best in Air cargo4 LAX (May) ...... 155.3 155.1 +0.1% 168.3 -7.7% Burbank (May) ...... 7.4 7.3 +1.4% 7.7 -3.9% Container volume5 (000’s) Long Beach (Apr.) ...... 531.1 412.2 +28.8% 485.1 +9.5% Los Angeles? Los Angeles (Apr.) ...... 617.3 600.8 +2.7% 595.3 +3.7% Los Angeles CPI (May) ...... 233.4 233.3 0.0% 226.4 +3.1%

%± from REAL ESTATE Latest Previous previous Year %± from The CFO of the Year Awards are presented to period period period ago year ago financial professionals in Los Angeles for their Construction lending (mils.) (May) ...... $160.5 $121.9 +31.7% $111.1 +44.5% Property acquisition lending (mils.)6 (May) ...... $1,729.1 $1,698.8 +1.8% $2,226.5 -22.3% outstanding performance as corporate financial Refinance lending (mils.) (May)7 ...... $3,139.8 $3,716.4 -15.5% $3,290.7 -4.6% stewards. The winners will be announced at an Foreclosures Number (May) ...... 2,487 2,309 +7.7% 2,942 -15.5% awards luncheon in September. Value (mils.) (May) ...... $691.7 $604.4 +14.4% $914.8 -24.4% Building contracts (mils.) Residential (May) ...... $162.6 $160.2 +1.5% 153.9 +5.7% Nonresidential (May) ...... $103.1 $218.8 -52.9% 755.4 -86.4% Nomination Deadline: Building permits (mils.) Residential (May) ...... $405.6 $235.9 +71.9% $184.2 +120.2% Friday, July 29, 2011 Nonresidential (May) ...... $274.0 $243.4 +12.6% $196.4 +39.5% Housing start permits (May) ...... 1,574 515 +205.6% 325 +384.3% Home sales (June)8 ...... 3,867 4,641 +4.2% 5,710 -15.0% Award Categories: Home prices (000’s) (June) ...... $340 $340 0.0% $350 -2.9% • Private Company Condo sales (June)8 ...... 1,564 1,785 +9.5% 2,156 -9.3% • Public Company Condo prices (000’s) (June) ...... $285 $297 -4.0% $305 -6.6% Apartments (1st qtr.) • Government/Public Sector Gross occupancy ...... 93.9% 93.8% +0.1% 93.6% +0.3% • Nonprofit Avg. sq. ft. rent ...... $1.93 $1.86 +3.8% $1.90 +1.6% Avg. monthly rent ...... $1,637 $1,609 +1.7% $1,590 +3.0%

Office vacancy rates (2nd qtr.) For more information or to nominate, please visit Downtown Los Angeles ...... 15.4% 15.0% +2.7% 15.7% -1.9% www.labusinessjournal.com/bizevents San Fernando Valley ...... 17.6% 18.5% -4.9% 19.0% -7.4% West L.A...... 15.7% 16.6% -5.4% 15.4% +1.9% or contact Marissa De La Cruz at South Bay ...... 18.9% 19.3% -2.1% 17.8% +6.2% [email protected] Countywide ...... 16.5% 16.9 -2.4% 16.6% -0.6%

Industrial vacancy rates (2nd qtr.) Downtown/Central ...... 2.2% 2.1% +4.8% 2.4% -8.3% South Bay ...... 3.0% 3.1% -3.2% 2.8% +7.1% PRESENTING SPONSORS: San Gabriel Valley ...... 3.5% 3.5% 0.0% 3.8% -7.9%

%± from TOURISM Latest Previous previous Year %± from month month month ago year ago Hotel occupancy rate (Apr.) ...... 73.9% 75.9% -2.6% 70.1% +5.4% Room rate (Apr.)...... $149.6 $152.4 -1.8% $142.1 +5.3% Passengers LAX (000’s) (Apr.) ...... 5,476.2 5,028.1 +8.9% 4,956.6 +10.5% PLATINUM SPONSORS: GOLD SPONSORS: Burbank Airport (000’s) (Apr.) ...... 355.7 353.8 +0.5% 375.3 -5.2% Community Bank Moss Adams LLP FOOTNOTES 1. Not seasonally adjusted. 5. 20-foot equivalent unit. Wedbush Bank 2. Music, television, film and commercials quarterly. 6. Apartment and residential combined 3. Through Los Angeles Customs District. 7. Includes refinancings, second mortgages and equity mortgages 4. In thousands of tons. 8. Adjusted for selling days. For sponsorship information, call your BOLDFACE INDICATES UPDATED FIGURES account representative at 323.549.5225 Sources: California State Employment Development Department (employment figures); FilmL.A. Inc. (film permits); U.S. Bankruptcy Court, Central District of Calif., Los Angeles (bankruptcies); Census.gov (exports, imports); City of Los Angeles Airport Department (LAX passenger traffic and air cargo); Burbank-Glendale-Pasadena Airport Authority (Burbank passenger traffic and air cargo); Bureau of Labor Statistics, Los Angeles (Los Angeles consumer price index); Office of Economic Research at California State University, HomeData (home sales, home prices, condo sales, condo prices); F.W. Dodge Division, McGraw-Hill (building contracts); Construction Industry Research Board (housing start permits, building permits); M/PF Research Inc. (apartments); Grubb & Ellis (office and industrial vacancy rates); PKF Consulting (hotel occupancy rate, room rate). 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

36 LOS ANGELES BUSINESS JOURNAL INVESTMENTS & FINANCE JULY 18, 2011

THE LABJ STOCK INDEX TRACKING LOS ANGELES AREA COMPANIES

WEEKLY TOP GAINERS WEEKLY TOP LOSERS

American Apparel Inc. Response Genetics Inc. Ixia Santa Fe Financial Corp.* $2.0 $3.5 $20 $25 July 13, 2010 $1.65 July 13, 2011 $1.13 July 29, 2010 3.0 20 $11.75 1.5 15

2.5 15

1.0 10 2.0 10 July 11, 2011 July 13, 2010 July 13, 2010 July 13, 2011 $14.75 $2.71 July 13, 2011 $10.18 $2.85 $9.67 0.5 1.5 5 5 7/10 9/10 11/10 1/11 3/11 5/11 7/11 7/10 9/10 11/10 1/11 3/11 5/11 7/11 7/10 9/10 11/10 1/11 3/11 5/11 7/11 7/10 9/10 11/10 1/11 3/11 5/11 7/11 * First trade July 29, 2010; Last trade July 11

TOP TEN LOCAL GAINERS BY PERCENTAGE (with closing prices at least $1) TOP TEN LOCAL LOSERS BY PERCENTAGE (with opening prices at least $1) July 13 July 6 Price 1-Wk 52-Wk July 13 July 6 Price 1-Wk 52-Wk Company Close Close Change % Chg. % Chg. Company Close Close Change % Chg. % Chg. American Apparel Inc...... $1.13 $0.93 $0.20 21.5% -31.5% Ixia ...... $10.18 $13.00 -$2.82 -21.7% 5.3% Response Genetics Inc...... 2.85 2.37 0.48 20.2% 5.2% Santa Fe Financial Corp.* ...... 14.75 18.00 -3.25 -18.1% 22.9% MPG Office Trust Inc...... 3.56 3.13 0.43 13.7% 17.1% CyberDefender Corp...... 1.11 1.32 -0.21 -15.9% -70.0% Farmer Bros Co...... 9.78 8.67 1.11 12.8% -35.7% NCAL Bancorp ...... 8.00 9.00 -1.00 -11.1% -21.6% Trio Tech International ...... 3.71 3.30 0.41 12.4% -7.3% UTi Worldwide Inc...... 17.96 19.75 -1.79 -9.1% 31.6% Big 5 Sporting Goods Corp...... 8.87 8.23 0.64 7.8% -30.6% Taitron Components Inc...... 1.11 1.21 -0.10 -8.3% 4.7% Ever-Glory International Group Inc...... 2.15 2.00 0.15 7.5% -29.5% Salem Communications Corp...... 3.37 3.66 -0.29 -7.9% 14.6% Preferred Bank ...... 7.60 7.15 0.45 6.3% -22.4% CB Richard Ellis Group Inc...... 23.49 25.46 -1.97 -7.7% 67.5% Obagi Medical Products Inc...... 10.63 10.05 0.58 5.8% -10.0% NetSol Technologies Inc...... 1.61 1.74 -0.13 -7.5% 94.0% Ducommun Inc...... 22.23 21.10 1.13 5.4% 25.6% Sport Chalet Inc...... 2.05 2.21 -0.16 -7.2% -26.8% * Last trade July 11

MARKET DIARY MARKET INDEXES Concerns about Europe’s debt crisis and uncertainty over U.S. budget talks held the stock markets down during the week July 13 July 6 Point 1-Wk 52-Wk ended July 13. The S&P 500 fell 1.6 percent, the most of the major indexes. The LABJ Index declined 1.5 percent. Ixia, a Index Close Close Change % Chg. % Chg. network equipment manufacturer in Calabasas, was the biggest local loser after the company trimmed its second quarter Dow Jones Industrial ...... 12,491.61 12,626.02 -134.41 -1.1% 20.5% earnings outlook and was downgraded by an analyst. Shares fell almost 22 percent to $10.18. Troubled downtown clothing company American Apparel Inc. was the top gainer after reporting a rise in annual same-store sales. Shares climbed NASDAQ ...... 2,796.92 2,834.02 -37.10 -1.3% 24.7% more than 21 percent to $1.13. MPG Office Trust Inc., a real estate investment firm in downtown Los Angeles, benefited S&P 500 ...... 1,317.72 1,339.22 -21.50 -1.6% 20.3% from an analyst upgrade after taking steps to sell non-core assets. Shares rose nearly 14 percent to $3.56. LABJ Index ...... 126.91 128.81 -1.90 -1.5% 10.5%

MARKET SUMMARY DIVIDEND YIELD MOST ACTIVE STOCKS VOLUME WEEKLY SUMMARY Company Dividend Yield Dividend Weekly Close Walt Disney Co...... 10,910,969 Advances ...... 61 Scope Industries ...... 30.7% $66.00 $211.00 Activision Blizzard Inc...... 6,413,597 Declines ...... 101 Stamps.com Inc...... 14.4% $2.00 $13.88 DirecTV ...... 5,087,829 Unchanged ...... 18 Anworth Mortgage Asset Corp...... 13.0% $0.95 $7.31 KB Home ...... 5,028,184 New Highs ...... 14 PennyMac Mortgage Investment Trust ...... 9.7% $1.61 $16.65 Amgen Inc...... 4,681,558 New Lows ...... 7 BreitBurn Energy Partners LP ...... 8.1% $1.60 $19.70

LABJ INDEX

LABJ Index, 52 weeks LABJ Index v. S&P 500, 5 days LABJ Index v. S&P 500, 52 weeks 150 1.5% 25%

1.0 July 13, 2011 SP 500 20 126.91 LABJ Index SP 500 0.5 LABJ Index 15 0.0 120 10 -0.5

5 -1.0

-1.5 0

90 -2.0 -5 J A S O N D J F M A M J J 7/7 7/8 7/11 7/12 7/13 J A S O N D J F M A M J J

Note: The LABJ Stock Index includes all companies on the opposite page and is weighted by market cap.

For more information please contact: Data provided by Bloomberg, a source considered to be reliable. However, the information in this feature may not be complete James Hillman, Managing Director (213) 553-9748 and cannot be guaranteed. The information provided in this feature does not constitute the provision of investment advice. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 INVESTMENTS & FINANCE LOS ANGELES BUSINESS JOURNAL 37

THE LABJ STOCK INDEX TRACKING LOS ANGELES AREA COMPANIES TOP GAINERS TOP LOSERS Company July 13 1-Wk YTD 52-Wk P.E. Mkt. Cap Company July 13 1-Wk YTD 52-Wk P.E. Mkt. Cap Name Ticker Close % Chg % Chg % Chg Ratio (millions) Name Ticker Close % Chg % Chg % Chg Ratio (millions)

AEROSPACE/DEFENSE Molina Healthcare Inc. MOH $27.61 -0.9% 48.7% 46.0% 19.2 $1,266.1 Aerovironment Inc. (H) AVAV $35.29 0.2% 31.5% 47.0% 30.4 $778.4 RadNet Inc. RDNT 4.31 -4.0% 52.8% 113.4% NA 160.8 AML Communications Inc. AMLJ 2.49 0.0% 85.8% 84.4% 22.6 26.7 VCA Antech Inc. WOOF 21.85 0.7% -6.2% -11.3% 16.8 1,888.3 Ducommun Inc. DCO 22.23 5.4% 2.1% 25.6% 14.3 234.2 INSURANCE Flamemaster Corp. FAME 4.30 0.0% -12.2% 10.3% 9.2 5.4 Mercury General Corp. MCY 39.13 -2.0% -9.0% -10.1% 20.0 2,145.0 Northrop Grumman Corp. NOC 66.50 -5.0% 13.2% 32.7% 10.2 18,429.6 Unico American Corp. UNAM 10.06 -0.6% 10.1% 13.0% 18.3 53.7 Teledyne Technologies Inc. TDY 50.11 -1.4% 14.0% 27.6% 15.4 1,840.4 INTERNET APPAREL Bidz.com Inc. BIDZ 0.97 -2.0% -20.0% -27.1% NA 18.8 American Apparel Inc. APP 1.13 21.5% -31.9% -31.5% NA 93.5 Boingo Wireless Inc. WIFI 9.43 0.7% NA NA NA 312.2 Cherokee Inc. CHKE 16.92 -0.7% -10.0% -9.1% 18.4 143.9 CrowdGather Inc. (L) CRWG 0.60 -11.8% -61.8% -43.4% NA 34.2 Guess? Inc. GES 40.70 -6.6% -14.0% 23.0% 13.6 3,768.5 J2 Global Communications Inc. JCOM 28.79 0.1% -0.6% 24.0% 13.5 1,323.9 Hot Topic Inc. (H) HOTT 7.71 3.9% 22.6% 40.2% 128.5 345.0 ReachLocal Inc. RLOC 19.85 -5.6% -0.3% 57.5% NA 579.4 Joe's Jeans Inc. JOEZ 0.87 8.4% -44.2% -60.9% 28.9 56.2 Spark Networks Inc. LOV 3.46 1.8% 16.5% 7.1% 26.6 71.2 K-Swiss Inc. KSWS 11.38 3.8% -8.7% -2.8% NA 402.6 Stamps.com Inc. STMP 13.88 2.6% 4.8% 56.1% 25.7 199.0 People's Liberation Inc. PPLB 0.11 0.0% 0.0% 0.0% NA 4.0 United Online Inc. UNTD 6.24 -0.3% -5.5% 3.1% 9.9 553.1 Skechers U.S.A. Inc. SKX 14.58 1.2% -27.1% -59.6% 7.8 725.9 ValueClick Inc. VCLK 17.50 1.2% 9.2% 53.5% 16.5 1,376.9 True Religion Apparel Inc. TRLG 29.88 2.8% 34.2% 21.3% 15.8 770.2 MANUFACTURING AUTOMOTIVE/PLASTICS/METALS Avery Dennison Corp. AVY 38.33 -0.3% -9.5% 9.6% 12.7 4,096.5 Motorcar Parts of America Inc. MPAA 15.38 0.5% 17.9% 141.1% 14.8 191.3 BioSolar Inc. BSRC 0.13 7.2% 39.6% -16.3% NA 21.6 Reliance Steel & Aluminum Co. RS 48.67 -0.4% -4.8% 31.9% 15.0 3,641.5 Cereplast Inc. CERP 4.78 -0.3% 15.5% 47.1% NA 75.3 Superior Industries International Inc. SUP 22.21 0.2% 4.7% 57.9% 11.0 599.0 Dole Food Co Inc. DOLE 13.73 -0.4% 1.6% 24.3% NA 1,216.2 US Auto Parts Network Inc. PRTS 7.85 3.3% -6.5% 28.9% 78.5 239.8 Ever-Glory International Group Inc. EVK 2.15 7.5% 1.9% -29.5% 4.0 31.7 BIOMEDICAL/PHARMACEUTICAL Farmer Bros Co. FARM 9.78 12.8% -45.1% -35.7% NA 158.5 Amgen Inc. AMGN 56.61 -1.9% 3.1% 7.3% 11.9 52,632.0 Jakks Pacific Inc. JAKK 18.26 -2.7% 0.2% 25.2% 18.1 496.8 Arrowhead Research Corp. ARWR 0.55 7.8% -38.5% -53.0% NA 39.5 Mattel Inc. MAT 27.03 -2.2% 6.3% 17.4% 15.0 9,395.3 CytRx Corp. CYTR 0.75 2.8% -25.7% 4.2% NA 81.9 OSI Systems Inc. (H) OSIS 43.93 1.2% 20.8% 60.6% 27.0 836.9 Iris International Inc. IRIS 10.36 3.2% 1.3% 4.6% 67.3 184.4 Overhill Farms Inc. OFI 5.38 -3.1% -6.6% -4.6% 16.3 85.1 MannKind Corp. MNKD 3.77 0.7% -53.2% -42.3% NA 492.7 Reed's Inc. REED 1.99 -0.5% -1.0% 0.0% NA 21.5 Obagi Medical Products Inc. OMPI 10.63 5.8% -8.0% -10.0% 15.4 196.7 Virco Manufacturing VIRC 2.70 -3.6% 2.3% 7.1% NA 38.4 Oxis International Inc. OXIS 0.09 -5.6% -41.4% -22.7% NA 16.3 MEDIA/LEISURE/ENTERTAINMENT Physicians Formula Holdings Inc. FACE 3.88 -1.3% 3.2% 9.0% 194.0 52.7 Crown Media Holdings Inc. CRWN 1.85 -2.6% -29.4% 1.6% 18.5 665.4 Response Genetics Inc. RGDX 2.85 20.2% 14.9% 5.2% NA 52.3 Daily Journal Corp. DJCO 72.08 0.1% 0.1% -4.9% 12.6 99.5 Staar Surgical Co. STAA 5.43 0.6% -11.0% -13.1% NA 193.0 Demand Media Inc. (L) DMD 12.20 -6.1% NA NA NA 1,015.1 COMPUTERS/PERIPHERALS/ELECTRONICS Derycz Scientific Inc. DYSC 2.95 -6.1% 11.3% 189.2% NA 49.6 Aura Systems Inc. AUSI 0.70 4.3% -6.7% -9.1% NA 43.1 DirecTV (H) DTV 52.83 1.8% 32.3% 44.7% 19.4 40,562.1 International Rectifier Corp. IRF 26.55 -5.9% -10.6% 31.0% 14.0 1,852.1 DreamWorks Animation SKG Inc. DWA 21.16 5.2% -28.2% -32.4% 4.3 1,786.7 Ixia XXIA 10.18 -21.7% -39.3% 5.3% 42.4 699.4 DTS Inc. DTSI 39.80 -2.4% -18.9% 15.8% 41.5 692.6 MRV Communications Inc. MRVC 1.35 -0.7% -24.6% 3.8% 19.3 212.6 Entravision Communications Corp. EVC 2.01 1.5% -21.8% -8.2% 40.2 171.7 PC Mall Inc. MALL 8.00 0.3% 5.7% 124.1% 11.8 99.2 Image Entertainment Inc. DISK 0.16 -5.9% 14.3% -15.8% NA 40.9 Power-One Inc. PWER 7.52 -3.1% -26.3% -16.3% 6.2 779.3 Lions Gate Entertainment Corp. LGF 6.81 1.5% 4.6% 4.3% NA 933.0 Qualstar Corp. QBAK 1.81 0.0% 7.1% 5.8% NA 22.2 Live Nation Entertainment Inc. (H) LYV 11.70 1.7% 2.5% 3.8% NA 2,127.8 Semtech Corp. SMTC 26.05 -6.5% 15.1% 47.4% 19.9 1,702.9 NeuMedia Inc. (H) MNDL 0.69 40.8% 137.9% 97.1% NA 25.0 Taitron Components Inc. TAIT 1.11 -8.3% -29.7% 4.7% NA 6.1 Point.360 PTSX 0.61 -1.6% -30.7% -63.3% NA 6.6 Trio Tech International TRT 3.71 12.4% -11.0% -7.3% 16.1 12.3 Provision Holding Inc. PVHO 0.04 -16.0% -30.0% -47.5% NA 1.9 Vitesse Semiconductor Corp. VTSS 3.89 -3.5% -7.2% -29.3% 3.8 95.1 Reading International Inc. RDI 4.18 -6.9% -17.2% 4.6% NA 100.3 CONSTRUCTION/ENGINEERING RealD Inc. RLD 19.78 -6.9% -23.7% NA NA 1,071.4 Aecom Technology Corp. ACM 26.49 -4.5% -5.3% 8.8% 12.6 3,157.5 Salem Communications Corp. SALM 3.37 -7.9% 6.3% 14.6% 30.6 81.7 Ameron International Corp. (H) AMN 85.24 0.0% 11.6% 42.7% 100.3 773.1 Sports Club Inc. SCYL 0.25 0.0% 0.0% -19.4% NA 5.4 Jacobs Engineering Group Inc. JEC 41.58 -3.6% -9.3% 7.6% 16.8 5,272.8 Stratus Media Group Inc. SMDI 0.55 -29.5% -14.1% -23.6% NA 35.3 KB Home KBH 9.55 -0.8% -29.2% -17.0% NA 735.4 Tix Corp. TIXC 1.86 -1.1% 50.0% 89.8% 46.5 57.9 Ryland Group Inc. RYL 16.32 -2.2% -4.2% -7.0% NA 724.2 Walt Disney Co. DIS 39.56 0.0% 5.5% 14.8% 17.3 74,774.5 Tetra Tech Inc. TTEK 22.50 -2.2% -10.2% 14.6% 17.0 1,402.7 MISC. SERVICES Tutor Perini Corp. TPC 17.94 -4.5% -16.2% 2.6% 9.7 845.4 Air Lease Corp. AL 24.56 -1.8% NA NA NA 2,461.4 ENERGY/UTILITIES Cadiz Inc. CDZI 10.92 -6.3% -12.2% -15.0% NA 151.0 American States Water Co. AWR 35.40 0.8% 2.7% 1.5% 17.0 660.6 Electro Rent Corp. (H) ELRC 17.10 -2.5% 5.8% 34.0% 20.4 410.1 BNK Petroleum Inc. BNKPF 4.48 -4.4% 30.6% 163.5% NA NA Enova Systems Inc. ENA 0.85 0.0% -33.7% -19.0% NA 26.8 BreitBurn Energy Partners LP BBEP 19.70 -0.3% -2.2% 29.0% 41.9 1,163.1 Korn/Ferry International KFY 22.66 -2.3% -1.9% 53.4% 17.4 1,066.9 Capstone Turbine Corp. CPST 1.50 -4.5% 56.3% 51.5% NA 389.0 National Technical Systems Inc. NTSC 6.32 -5.7% -21.7% -22.4% 63.2 64.8 Edison International EIX 38.52 -0.7% -0.2% 16.3% 11.7 12,550.3 NetSol Technologies Inc. NTWK 1.61 -7.5% -13.9% 94.0% 8.9 89.1 Occidental Petroleum Corp. OXY 102.97 -2.7% 5.0% 25.1% 16.4 83,701.7 On Assignment Inc. ASGN 10.09 -4.7% 23.8% 94.8% 72.1 373.0 U.S. China Mining Group Inc. SGZH 3.00 -4.8% -52.8% -40.0% 3.2 56.7 Rentech Inc. RTK 1.03 -5.5% -15.6% 2.0% NA 229.5 FINANCIAL SERVICES Scope Industries SCPJ 211.00 0.0% 63.6% 63.6% 65.3 210.7 1st Century Bancshares Inc. FCTY 3.60 1.4% -12.2% 5.9% NA 33.5 UTi Worldwide Inc. UTIW 17.96 -9.1% -15.3% 31.6% 25.7 1,843.6 American Business Bank AMBZ 23.50 0.0% 5.5% 14.9% 11.4 102.7 REAL ESTATE Anworth Mortgage Asset Corp. ANH 7.31 -5.3% 4.4% 1.8% 8.6 925.0 Alexandria Real Estate Equities Inc. ARE 80.43 -0.7% 9.8% 19.6% 26.8 4,967.6 Bank of Santa Clarita BSCA 7.55 0.0% 8.6% 16.2% 37.8 16.6 CB Richard Ellis Group Inc. CBG 23.49 -7.7% 14.7% 67.5% 30.5 7,634.0 Beach Business Bank BBBC 6.00 0.0% 20.0% 14.3% NA 24.3 Douglas Emmett Inc. DEI 19.74 -3.9% 18.9% 31.6% NA 2,456.1 Broadway Financial Corp. BYFC 2.23 1.4% -8.2% -7.1% NA 3.9 HCP Inc. HCP 37.52 -0.4% 2.0% 9.3% 34.7 15,234.1 California United Bank CUNB 12.25 0.0% -0.8% 11.4% NA 60.5 Hudson Pacific Properties Inc. HPP 15.70 -1.0% 4.3% -6.3% NA 526.9 Cathay General Bancorp CATY 16.45 -2.0% -1.5% 38.0% 24.6 1,293.5 Intergroup Corp. INTG 25.45 1.8% 17.8% 66.9% 6.6 61.0 Center Financial Corp. CLFC 6.36 -3.5% -16.1% 17.6% 14.1 253.8 Kennedy-Wilson Holdings Inc. (H) KW 12.35 0.9% 23.6% 25.3% NA 555.5 City National Corp. CYN 54.26 -1.2% -11.6% -2.8% 19.0 2,885.5 Kilroy Realty Corp. KRC 39.55 -2.4% 8.4% 27.9% 263.7 2,312.0 Colony Financial Inc. CLNY 18.09 -2.3% -9.6% 4.2% 12.4 592.2 LTC Properties Inc. LTC 27.96 -2.1% -0.4% 14.0% 25.2 848.2 East West Bancorp Inc. EWBC 20.06 -1.6% 2.6% 11.8% 16.2 2,983.3 Macerich Co. (H) MAC 53.84 -2.8% 13.7% 34.6% 199.4 7,047.6 Farmers & Merchants Bank FMBL 4260.00 -0.9% 7.3% 4.6% 10.1 557.8 Meruelo Maddux Properties Inc. MMPIQ 0.48 -6.3% 70.7% 150.3% NA 42.1 First California Financial Group Inc. FCAL 3.87 5.2% 38.2% 48.3% NA 110.0 MPG Office Trust Inc. MPG 3.56 13.7% 29.5% 17.1% NA 174.6 General Finance Corp. GFN 3.02 0.7% 52.5% 147.5% NA 66.5 Pacific Office Properties Trust Inc. (L) PCE 2.00 0.0% -52.0% -60.4% NA 38.7 Great American Group Inc. GAMR 0.31 3.3% -36.7% -75.2% NA 9.5 Portsmouth Square Inc. PRSI 25.00 0.0% 8.7% 6.4% 6.6 18.4 Green Dot Corp. GDOT 33.79 -4.1% -40.4% NA 35.2 1,415.0 PS Business Parks Inc. PSB 57.19 0.8% 2.6% -2.1% 32.3 1,413.4 Hanmi Financial Corp. HAFC 1.19 -1.7% 3.5% -13.8% NA 180.0 Public Storage (H) PSA 118.27 0.1% 16.6% 23.9% 41.8 21,171.6 Kaiser Federal Financial Group Inc. KFFG 12.28 -1.0% 6.0% -2.4% 14.0 117.4 Santa Fe Financial Corp. SFEF 14.75 -18.1% 11.7% 22.9% 163.9 18.3 Malaga Financial Corp. MLGF 14.90 0.7% -2.3% -8.6% 8.2 86.4 Thomas Properties Group Inc. TPGI 3.45 4.9% -18.2% -1.1% NA 175.6 Manhattan Bancorp (L) MNHN 3.80 -5.0% -26.2% -20.0% NA 15.2 RESTAURANTS/RETAIL/GROCERY 99 Cents Only Stores NDN 20.25 -0.2% 27.0% 25.6% 18.9 1,426.3 Mission Valley Bancorp MVLY 4.00 0.0% 6.7% -5.9% NA 18.0 Arden Group Inc. ARDNA 92.94 -1.0% 12.7% 3.8% 15.8 285.4 Nara Bancorp Inc. NARA 8.16 -3.3% -17.2% 2.0% NA 310.1 Big 5 Sporting Goods Corp. BGFV 8.87 7.8% -41.9% -30.6% 9.7 195.0 NCAL Bancorp (L) NCAL 8.00 -11.1% -20.0% -21.6% NA 18.9 Cheesecake Factory Inc. (H) CAKE 33.42 0.8% 9.0% 29.1% 22.9 1,930.0 Pacific Commerce Bank PFCI 3.25 0.0% 8.3% -11.0% NA 7.9 DineEquity Inc. DIN 54.42 0.9% 10.2% 65.9% 32.6 1,008.1 PacWest Bancorp PACW 20.35 -1.9% -4.8% -1.8% 226.1 721.6 Grill Concepts Inc. GLLC 0.30 -21.1% 3.4% -14.3% NA 2.6 PennyMac Mortgage Investment Trust PMT 16.65 -1.4% -8.3% 1.5% 9.7 462.3 Jerry's Famous Deli Inc. DELI 1.50 0.0% -57.1% -52.4% 4.8 7.0 Preferred Bank (L) PFBCD 7.60 6.3% -13.6% -22.4% NA 100.2 Sport Chalet Inc. SPCHB 2.05 -7.2% -45.2% -26.8% NA 27.2 Saehan Bancorp SAEB 0.25 0.0% -35.9% -52.8% NA 47.3 SOFTWARE SearchMedia Holdings Ltd. IDI 1.92 -1.0% -38.3% -27.8% NA 40.0 Activision Blizzard Inc. ATVI 11.90 -0.5% -4.3% 4.3% 19.5 13,615.6 Wilshire Bancorp Inc. WIBC 3.25 2.2% -57.3% -54.7% NA 214.0 Cornerstone OnDemand Inc. CSOD 18.93 2.9% NA NA NA 899.9 HEALTH CARE CyberDefender Corp. (L) CYDE 1.11 -15.9% -63.7% -70.0% NA 31.2 Health Net Inc. HNT 31.03 -4.2% 13.7% 23.5% 12.7 2,808.0 Guidance Software Inc. GUID 8.21 -2.3% 14.2% 54.9% NA 207.8 Herbalife Ltd. (H) HLF 58.50 -1.0% 71.1% 140.9% 22.4 6,975.4 Peerless Systems Corp. (H) PRLS 3.55 -2.7% 12.7% 25.0% 18.7 12.3 Imaging3 Inc. IMGG 0.08 1.8% -45.4% -75.4% NA 31.8 Simulations Plus Inc. SLP 2.99 1.4% 11.2% 18.7% 19.9 46.1 IPC The Hospitalist Co Inc. IPCM 49.84 3.2% 27.8% 93.0% 31.5 815.8 THQ Inc. THQI 3.40 0.0% -43.9% -28.9% NA 232.3

NOTES ON STOCK TABLES (H) Stock hit new 52-week high (L) Stock hit new 52-week low (S) Stock split during week 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

38 LOS ANGELES BUSINESS JOURNAL JULY 18, 2011 Investment Properties For Sale COMMERCIAL INDUSTRIAL

2 FOR SALE/Owner-User Opportunity 101 W. 3rd Dodger 5 26025 Mureau Road WILSHIRE Stadium FOR SALE Calabasas, CA GENERAL INDUSTRIAL SITE • ± 46,321 RSF BLVD. • Lot Size: ± 117,176 SF 10 • Parking: 3.7/1,000 /RSF

LOS ANGELES COUNTY VENTURA COUNTY FIGUEROA FLOWER Contact: Robert D. Erickson Marc Spellman Santa 10 818.444.4944 818.223.4392

Clarita ALAMEDA [email protected] [email protected] 60 110

Simi 118 RETAIL FOR SALE 2 • Owner Will Carry 31,900 SF, MULTI-TENANT Valley Northridge NNN RETAIL INVESTMENT Burbank • Warehouse & Garages Plus 1,500 170 SF Ofﬁ ce-.49 Acres Agoura 5 Hills 1 101 • Located Near 710 Fwy & Port of Hollywood Pasadena 210 Calabasas Glendale Long Beach 405 Alhambra 10 West Covina Linda Martinez LOS ANGELES Pomona 1 Santa 888-895-7535 Ext 216 Monica Montebello Malibu Ferguson: # 1 heating and plumbing distributor in the world Venice Culver City Whittier Goodwill: New 10-year lease with 3% annual increases LOS ANGELES COUNTY Marina Del Rey Lynwood 5 California Patio: One of the largest outdoor furnishings retailer in So CA ORANGE COUNTY Signalized Intersection Location BEAT THE BANK TO El Segundo 2 Blocks from The River Entertainment Center Hawthorne 11,500 SF INDUSTRIAL Manhattan Beach 72014-72060 Highway 111, Rancho Mirage, CA 5 miles Hermosa Beach Torrance Contact: William B. Asher Redondo Beach Anaheim Carson 949.585.7684 • [email protected] DRE License #01318078 Long 3 Beach Rancho Palos Huntington Santa Ana Verdes LONG Beach BEACH San Clemente Irvine LEGEND LOS ANGELES HARBOR HARBOR Need more information Office Costa Mesa on advertising your Residential • Corner of Oregon & Anaheim Just East of 710 Fwy Investment Property? Commercial • 2 Story With Ofﬁ ce Space, Call Rosz Murray Industrial Show Room & Work Area 323.549.5225 ext. 215 Land Steve Warshauer 888-895-7535 Ext. 225 Stevewarshauer2firstteam.com

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COMMERICAL PROPERTY FOR LEASE Bank Site - LA’s Premier Address Available Space: 3,200 sqft.+++ (signalized corner) LOWERED TO 750K Term Length: 3-10 years (negotiable) ADDRESS: 22905 S Vermont Ave, Torrance CA Lease Type: Bank branch site Rate Type: NNN Also - ofﬁ ce/retail from 3.50 Available: Immediately Available Space: 15,500 sqft Supermarket Building ++ 10,000 sqft available Contact: Arun Bhumitra, Armitra Properties Term Length: 20 year Rate Type: NNN Email: [email protected] Phone: (310) 994-7400 Useage: Supermarket, Drug Store, Automotive Super Store, Etc. Lots of Potential ADDRESS: 23211 Hawthorne Blvd., Torrance, CA Originally 15 Million - property can now be purchased for 9.5 Million! Available: Immediately Contact: Patsy Palos 310-532-2111 ext 3039 Email: [email protected]

DOWNTOWN BEST ADDRESS Showcase your property in the • The ideal space for your law fi rm • Full fl oor law fi rm w/ sublease space available 9/1/11. LEASING GUIDE section of the • Group of offi ces in fully furnished • Access to 5 conf rms, kitchens, small lib., Los Angeles Business Journal. high-end build out. sec’l bays, new phone system etc, additional services available Fiber Optic or T-1 Call Rosz Murray • 323.549.5225 ext. 215 Contact Carol: (213) 617-5248 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL 39 BUSINESS MARKETPLACE ENTERTAINMENT AIRCRAFT CHARTER

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40 LOS ANGELES BUSINESS JOURNAL JULY 18, 2011 BUSINESS MARKETPLACE REAL ESTATE SERVICES FINANCIAL SERVICES

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See www.rocwines.com.au for full details and send your order request to [email protected]. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL 41 BUSINESS MARKETPLACE LEGAL SERVICES CAREER SERVICES

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Fictitious Name Statement File No. (2011062214) The following company is doing business as Gibson Construction, 3000 31st Street, Suite G, Santa Monica, CA 90405. This business is being conducted Need a legal specialist? by Gordon S. Gibson, Inc, 3000 31st Street, Suite G, Santa Monica, CA 90405. This statement was filed with the County Clerk of Los Angeles on July 12, 2011. Published on, 7-18-11, 7-25-11, 8-1-11, and 8-8-11. Notice - this fictitious To advertise your boutique law ﬁ rm with highly business name statement expires on, July 12, 2016. A new fictitious business L.A. Law Guide name statement must be filed prior July12 2016, The filing of this statement specialized law practices in the , does not itself authorize the use in this state of a fictitious business name in contact Rosz Murray at 323.549.5225 violation of the rights of another under federal, state, or common law (see section 14400 ET SEQ, business and professional code). 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

42 LOS ANGELES BUSINESS JOURNAL JULY 18, 2011

‘You have more customers and lower price points, (so) you do get a more consistent model. That’s where you’re seeing as much growth as anywhere else.’ SCOTT VAN WINKLE, Canaccord Genuity Inc. Health Care: Club Sales Fatten Up Diet Shake Maker clubs are not perceived as retail stores,” said Continued from page 1 President Des Walsh. “It’s a private club. The essence of our business is the one-to-one rela- of the model also marks a dramatic strategic tionship with the customer.” shift for the multilevel marketing company, Indeed, Herbalife is trying to incorporate which for decades had relied on independent the clubs into its traditional marketing model, distributors to peddle weight-loss products and which involves turning buyers and users of its nutritional supplements in bulk to friends and product into future distributors. neighbors. “The context of daily consumption really Herbalife is now encouraging distributors focuses on the idea that our future distributors to open clubs, which accounted for about one- come from current customers,” Walsh said. third of the company’s $2.7 billion annual revenue last year and, executives hope, as much Global growth as two-thirds in coming years. In China, a potentially lucrative market, tight “They changed the way distributors go to restrictions prevented Herbalife from using its market,” said Scott Van Winkle, an analyst at traditional distribution model, so the company Canaccord Genuity Inc. in Boston who follows opened a handful of company-owned stores. Herbalife’s stock. “You have more customers Nutrition clubs have become the leading dis- and lower price points, (so) you do get a more tribution model in that country, resulting in 41 consistent model. That’s where you’re seeing percent revenue growth there in the first quarter. as much growth as anywhere else.” Executives said the clubs have been popular in Herbalife recently reported record first quar- China in part because people there are not as ter earnings and raised its profit forecast for the comfortable inviting strangers into their homes year. This month, share value hit $60.99, the and would rather meet at a retail location. highest level since the company went public in The clubs are boosting sales elsewhere 2004, when adjusted for a recent stock split. across the globe where obesity is a growing Shares closed July 14 at $57.97. problem. In the first quarter, revenue in Mexi- co was up 45 percent, Brazil jumped 52 per- Management shakeup cent and South Korea rose 74 percent. It’s not as if the company hasn’t been “They are growing really in every region of RINGO H.W. CHIU/LABJ growing. Clubgoing: Gustavo Zepeda with Herbalife products at his North Hills club. the world in double digits, particularly in the Far Herbalife has flourished since Walt Dis- East,” said Timothy Ramey, an analyst with ney Co. executive Michael Johnson was hired In 2003, hoping to boost sales, one of But after a few years, Zepeda was invited D.A. Davidson & Co. in Lake Oswego, Ore. in 2003 to shake things up at the company, Herbalife’s independent distributors in Mexico back by a friend to see the growing popularity Net sales in India, meanwhile, surged 165 which was founded in 1980 by the late Mark set aside space in his home where prospective of the clubs, which often had 30 or more daily percent from last year. That market is becom- Hughes, who sold weight-loss shakes out of customers could come, buy a single serving of customers. ing more important for the company, which his car’s trunk. shake and consume it in a social setting. Thus, “I got excited,” he said. analysts said had previously been unable to Johnson, now chief executive, has sought to the nutrition center model was born. The com- Born in Mexico, Zepeda opened his first penetrate with higher-cost bulk sales. put the company’s unflattering past behind it, pany initially resisted changing a distribution nutrition club in Compton in 2008. After a lit- Shareholders are benefitting from the including lawsuits that alleged Herbalife’s model that had been successful. As a result, the tle more than a year, business had more than growth. In the first quarter, the company report- multilevel marketing model was little more clubs took a while to catch on. doubled. ed a profit of $88 million – a 69 percent year- than a pyramid scheme. “It wasn’t significant enough to even start According to Herbalife, there are 70,000 over-year increase – on revenue of $795 mil- Under Johnson, the company settled a talking about until … three or four years ago,” nutrition clubs in at least 60 markets world- lion. The company, among the most profitable class-action lawsuit, tightened marketing prac- said John San Marco, an analyst with Philadel- wide, about half of which are in Mexico. The in Los Angeles County due to its lean distribu- tices and expanded its lines to include fitness phia’s Janney Montgomery Scott LLC. United States counts some 11,000 clubs. tion structure, said it will use its free cash to and skin-care products. This month, it intro- Indeed, when Zepeda, who started as a dis- Herbalife now provides training and sup- boost the dividend and buy back shares. duced a performance nutrition line called tributor for Herbalife in 1992, went to port for distributors who are interested in set- Despite shares having nearly doubled in Herbalife24. (See sidebar page 42.) Guadalajara when the clubs were first being ting up clubs in their homes or renting space in price over the past six months, when adjusted Johnson, who had run international opera- launched to see them for himself, he was ini- strip malls. The distributors are given wide lat- for a two-for-one split in May, analysts believe tions for the Burbank entertainment behemoth, tially unimpressed. itude in how they operate, but they are respon- there is a lot of life left in the stock. also spearheaded a major global expansion, “One tea, one shake for a couple dollars? sible for startup costs and any storefront leases. Ramey, who rates Herbalife’s stock a and raised Herbalife’s visibility by signing I thought this is not big, serious business,” However, the clubs are not open to the gen- “buy,” said the recent stellar performance does sponsorship deals with the Los Angeles he said. eral public and barred from advertising or hav- not appear to be a mere bump. Galaxy soccer club and other teams. While the By comparison, a month’s supply of the ing storefront signage – even though Herbalife “They’re headed in a direction that is very strategies proved beneficial, arguably the com- company’s most popular product, Formula 1 executives have compared the daily consump- aligned with what consumers are looking pany’s most significant shift came about Nutritional Shake Mix, can cost $35 or more tion model to Starbucks shops. for,” he said. “There’s a lot of runway ahead almost by accident. depending on the distributor. “It’s very important to us that our nutrition of them.” Herbalife Looks to Compete in Athletic Market UTRITION clubs, which are oriented toward supplements were popular, most were formu- Herbalife tapped into the L.A. competi- joined Herbalife, which based one product in Ndieters, may have become Herbalife lated for pudgy middle-age men and women tive-sports community to develop the line. the line, Prolong, on their formulation. Ltd.’s leading growth driver. But the company – not hard-training athletes. Two cyclists that Johnson met at an event “It’s been quite an adventure,” said Heiss, hasn’t abandoned another key element of its “If they are wearing Herbalife on their more than two years ago actually became part now Herbalife’s director for sports and fit- model: sports sponsorships and nutrition. chest, Herbalife products ought to be of the Herbalife24 development team. ness, who has been traveling around the The downtown L.A.-based company has going into their bodies,” said Johnson, a Johnson said plans for a sports nutrition world with Weaver and Johnson to market invested heavily in getting its name on team competitive amateur cyclist. “What I line were still largely in his head when he the products to the company’s sponsored uniforms – from the Los Angeles Galaxy wanted to do is create a full line of spe- reached the top of the annual Piuma Hill teams and individual athletes. and FC Barcelona soccer clubs to India’s cialized products for professional athletes Climb Challenge in Malibu and found two Analyst Per Ostlund at New York-based Saina Nehwal, the world’s No. 3 ranked that our distributors could also sell to the men distributing samples of their proprietary Jefferies & Co. believes that Herbalife24 can badminton player. normal weekend warriors.” sports endurance drink. It was filled with bring in customers who never would have But getting elite athletes to consume The line comprises seven shakes, drinks replenishing electrolytes and energy-sustain- considered the company’s products. Herbalife products has been another matter. and supplements for consumption before, ing carbohydrates. “It may never become as large as weight That challenge lead to this month’s launch of during and after training and competition. The drink had been formulated by one of the loss, but sports nutrition should become a a line of performance nutrition shakes and Individual products start at $30 for a month’s men, John Heiss, a UCLA biochemical doctoral good business for them once distributors get supplements called Herbalife24. supply. The company has committed to hav- candidate; the other, Heiss’ college roommate excited about the products and start selling Chief Executive Michael Johnson admits ing every batch independently tested for Casey Weaver, was running sales and market- them to the school team coaches and personal that trainers have complained that while banned substances that could lead to an ath- ing. The duo hoped eventually to build a suc- trainers they know in their circle,” he said. many of the company’s energy and nutrition lete being suspended from competition. cessful company, but they ditched that idea and – Deborah Crowe 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL 43 Internet: L.A. Marketers Lose Out-of-State Links Sears site, enter the coupon code that knocks “nexus” in California – anything from a corpo- debut sometime in the next three weeks, has Continued from page 1 off 15 percent and the price falls to $118.99. rate headquarters to a small storefront – already agreements in place with several merchants Sears will pay Savings.com a commission had to collect and pay state sales tax for online and that only a few canceled agreements online retailers make up a huge percentage of for the sale. Commissions generally range sales made to Californians. Bookseller Barnes because of the new law. sales.” from 4 percent to 8 percent, though they can be & Noble, for instance, has to collect sales taxes Because the site focuses on lingerie, which is Savings.com and SurfMyAds are affiliate as low as 1 percent or as high as 40 percent. for online purchases by California residents sold mostly by department stores and other mer- marketing companies. They plug products “Come to our site to find the best deal, go to because it has stores in the state. The new law chants that have stores in California, Caldwell from online merchants and, in turn, get a cut of the merchant and buy something with that deal, changed the game by saying that the tax is trig- said the new law hasn’t been much of an issue. the sales when customers buy. then the merchants pay us based on a percent- gered by not just brick-and-mortar locations, “There are a lot of merchants that were already Under the new law, signed by Gov. Jerry age of the sale,” said Savings.com’s Bendele. but working with affiliates in California. collecting tax and remitting it to the state of Califor- Brown in June, an out-of-state merchant’s rela- As a result, losing their agreements with Proponents of the law say it’s a matter of nia,” she said. tionship with an affiliate marketer in California dozens of big merchants will mean pain for fairness and that it will take away some of the There are also merchants and marketing would obligate that merchant to collect Cali- affiliate marketers. advantage online retailers have over brick-and- companies that might look to a different type fornia sales taxes. That has Alexis Caldwell, director mortar merchants. of online marketing to get around the new law. spurred many online retailers of affiliates and partner mar- Amazon has announced that it will seek a Savings.com and SurfMyAds are paid on to cut ties with their affiliate LABJ POLL keting for SurfMyAds, referendum to overturn the law, a move sup- what’s called a cost-per-acquisition basis, mean- marketers in the state to avoid How would you vote on wouldn’t put a figure on what ported by local affiliate marketers. ing they are only paid when a purchase is made. collecting taxes. the Internet sales tax? the loss of merchants will Caldwell of SurfMyAds said the law won’t Other online marketers are paid on a cost-per- Amazon announced in June labusinessjournal.com mean for the company, but force out-of-state retailers to collect taxes. click basis, meaning they are paid simply for dri- that it would end its agreements she described it as “definitely Retailers will simply end their affiliate agree- ving traffic to a merchant’s site. with about 10,000 California significant.” ments, hurting the affiliates but leaving the state That type of marketing isn’t affected by the affiliates, and that got a good deal of attention. A spokeswoman for Savings.com said the with no additional revenue. new law, which could make it attractive to However, hundreds of other retailers, including company is still analyzing the impact but an early “As far as (retailers) changing their policies marketers and retailers, Caldwell said. vacuum-cleaner maker Dyson, jewelry merchant estimate is a loss of between 10 percent and 20 to collect taxes on California purchases, that’s “Especially as this comes up not just in Cal- Blue Nile and outdoor outfitter Cabela’s, also have percent of the company’s revenue. Savings.com not happening,” she said. “Really, as affiliates, ifornia but in other states, we’re going to see ended their affiliate agreements in California. employs 90 workers, up from 40 a year ago. we are being victimized and our businesses are merchant partners and some affiliate networks Affiliate marketers make their money by “We’re still analyzing the impact to figure being jeopardized for no additional revenue for offer this as an alternative,” she said. getting customers to buy from their partner out what our options are,” Bendele said. “We the state.” But Bendele of Savings.com said he has merchants, often by offering special deals. were a fast-growing company in Los Angeles. Though Amazon and other major online brought up cost-per-click marketing to online mer- For instance, go to Sears.com and you can … We’ve been doubling in size almost every merchants are pulling out of their affiliate chants and they weren’t interested. They assume find a pair of black wingtips from Savile Row year. This is going to significantly hit our busi- agreements in California, Caldwell said cost-per-click will be the next target of Sacramento. on sale for $139.99. Go to Savings.com, ness. All my competitors not based in Califor- SurfMyAds will continue with its launch of an “Some merchants say they can’t be near though, and you’ll find a coupon for discounts nia don’t have to worry about this.” affiliate marketing site. working with any site working in California,” he on men’s shoes at Sears. Click-through to the Companies with a physical presence or She said SexyLingerie.com, which will said. “They won’t do (cost-per-click) either.” Government: Groups Look to Curb CEQA Impacts ty to file challenges to projects, especially in Continued from page 1 cases where the underlying motive is not pro- tecting the environment. in such lengthy delays that developers are They point to numerous instances where often forced to pull the plug on their projects. business competitors challenged projects. In “CEQA has become an instrument that one well-known case, Glendale Galleria owner people who oppose projects use on a regular General Growth Properties filed a challenge basis,” said Gary Toebben, chief executive of to the EIR for developer Rick Caruso’s project the Los Angeles Area Chamber of Commerce. across the street, the Americana at Brand shop- “The delays either force the developer to ping mall, a move that ultimately proved futile. acquiesce and make payouts, driving up the The Service Employees International Union cost of housing or commercial space, or to cited CEQA in a 2007 lawsuit that SEIU and walk away from the project entirely.” neighborhood groups filed seeking to overturn Toebben said that CEQA delays are one Los Angeles City Council approval of expansion reason why the L.A. region and the state as a plans for Providence Holy Cross Medical Center whole have been unable to climb out of the in Mission Hills. SEIU at the time was recession and the unemployment rate stands at embroiled in an organizing campaign of hospital about 12 percent. Other local business leaders workers at Providence Holy Cross hospitals. The added that CEQA delays were a factor in Cali- Delayed Opportunity: Emerson College rendering, inset, and Sunset Boulevard site. lawsuit was settled in 2009, though construction fornia having fewer “shovel-ready projects” was halted for six months later that year while a eligible to receive federal stimulus dollars in mental impact reports had grown into massive doc- Edlen Development Co. LLC, had run out of new environmental study was completed. 2009 and early 2010 than many other states. uments taking months to prepare, often exceeding a money and lost the property to the bank even “It is in cases like these where CEQA has “We need to find a way to take project pro- thousand pages. In 1993, the state Legislature though it had won the CEQA battle. been grotesquely misused,” said Carol Schatz, posers through CEQA as quickly as possible – enacted some reforms, most notably reducing the “The CEQA lawsuit slowed down the project chief executive of the Central City Association. without skipping any steps – so that they can number of environmental impact reports required and then the bottom fell out of the market,” said CEQA supporters said that while such put shovels in the ground,” Toebben said. for major multiphase developments. Leron Gubler, president of the Hollywood cham- cases do occur, judges usually toss them out. But local homeowner associations and envi- But those reforms had little effect and the law ber. “So the window closed and 400 construction “The frivolous lawsuits don’t succeed,” ronmental groups oppose making any substantial has remained a problem for developers and busi- jobs and 100 permanent jobs are now on hold.” said David Pettit, senior attorney with the changes to the act. They say it’s an essential tool ness groups seeking to speed up project approvals. Also, a CEQA lawsuit has held up construc- Santa Monica office of the Natural Resources to protect communities against the impacts of “CEQA was created to be a shield to protect tion of a college campus in the area. Emerson Defense Council. overdevelopment and that the reports prepared or the environment,” said Stuart Waldman, chief College, a Boston-based school specializing in Pettit said the NRDC might support some paid for by developers often try to downplay the executive of VICA. “But it has become a hammer film, theater and communications, wants to minor procedural changes to CEQA, but the environmental and traffic impacts of projects. for those who want to stop all development.” build a campus at Sunset Boulevard and Gordon group opposes any changes that would make it “Very often the environmental impact reports Among the changes VICA has proposed: Street. Last week, a Superior Court judge issued more difficult to bring lawsuits against projects. minimize the impact of a project to the greatest making the bar higher for those seeking to use a tentative ruling dismissing the lawsuit. Prospects for sweeping reforms to CEQA degree possible,” said Sandy Brown, president CEQA as a method to file legal challenges dimmed last month after the collapse of state of the Westwood Holmby Property Owners against projects. Reform bills budget negotiations between Democrats and Association. “The ability to file a challenge Earlier this year, the Hollywood Chamber of The Hollywood chamber is backing a bill Republicans. CEQA reform was one of the under CEQA is the only tool we have to hold the Commerce launched a campaign to reform the by state Sen. Curren Price, D-Los Angeles, bargaining chips Republicans placed on the developer and public officials accountable.” act, citing six major projects proposed over the that would limit the ability of judges to grant table in exchange for tax extensions. Gov. last five years in Hollywood that were delayed extensions in CEQA lawsuits. Jerry Brown rejected the Republican demands History of conflict or halted because of CEQA, resulting in the Another bill would exempt developers of and the talks collapsed; the Democrats then CEQA was enacted in 1970 with the aim of delay or loss of up to 6,000 potential jobs. urban infill projects – like Gerding Edlen’s passed a budget without Republican support. forcing elected officials to consider environ- Among the projects: the 23-story Sunset- Sunset-Gordon project – from having to file Yet business groups still hold out hope for mental impacts of proposed development and Gordon development, first proposed in 2006, environmental impact reports. some significant CEQA reform. They note that infrastructure projects, and minimize those to replace a vacant Old Spaghetti Factory The measures backed by local business Brown himself solicited their input. impacts before granting approvals. Developers restaurant. Opponents filed a CEQA lawsuit; groups are among nearly 30 bills that are in the “I’m optimistic that we’ll get something out chafed under the requirements. after two and a half years, the state Supreme state Legislature that have been introduced of all these bills,” Gubler said. “Even some By the early 1980s, a cottage industry of con- Court rejected the lawsuit in January. But by with the goal of reforming CEQA. change will help speed up these stalled devel- sultants had sprung up and the required environ- that time, the development team, Gerding Business groups also want to limit the abili- opment projects.” 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

44 LOS ANGELES BUSINESS JOURNAL JULY 18, 2011

L.A. BIZ SEEN Los Angeles business events

1 1. From left, Kerry Michael War- ren, Discover Your Voice Foundation president; Brian Darling, NSBN LLP account manager; Pegine Grayson, Whittier Trust Co. vice president; Fauna Hodel, Celebrity Society Magazine ad executive; Mimi Makabi, Celebrity Society Magazine editor in chief; Kenneth Scurlock, NBSN LLP partner; at the Beverly Hills Chamber of Commerce June 1 Business Excellence and Instillation Gala at the Beverly Hilton.

2. From left, Rick Feldman, National Association of Television Program Executives CEO; Tom Forman, RelativityReal CEO; and Army Lt. Col. John Clearwater at NATPE’s Pitchcon on June 9 at the Hollywood Roosevelt Hotel. For- man accepted Pitchcon’s Innovator Award for “Coming Home,” a Rela- tivityReal reality show about military 2 3 veterans returning to their families.

3. Attendees of Pitchcon’s “What’s Next for YouTube?” conference at the Hollywood Roosevelt Hotel on June 10.

4. From left, Al Jerome, KCET CEO, and chef Thomas Keller at the KCET Uncorked beneﬁ t June 12 at Keller’s Bouchon Bistro Beverly Hills. The beneﬁ t was held to raise funds for future KCET programming.

5. From left, Dana Hobart, Henni- gan Dorman LLP partner; Caroline Walters, Hennigan Dorman associate; Robert Mockler, Hennigan Dorman partner; retired California Supreme Court Justice Carlos R. Moreno; and Michael Flood, Los 4 5 Angeles Regional Food Bank CEO; at the Los Angeles County Bar Association’s June 9 Food From the Bar awards reception at the association’s downtown L.A. ofﬁ ce. Hen- nigan Dorman came in ﬁ rst place for most food and money raised per number of volunteers participating.

6. From left, student Kenu Sacul; student Crystal Herrera; Joan A. Payden, Payden & Rygel CEO; student Aryana Russell; student Jose Magana; and student Joseph Ramon; at a Payden & Rygel and California Council on Economic Edu- cation luncheon at Payden & Rygel’s downtown L.A. ofﬁ ce. The students, all from Narbonne High School, were honored for winning CCEE’s Califor- nia State MoneywiseTeen contest. 6 7 The students were required to make videos on economic concepts.

7. Attendees at the Business Journal’s June 29 Non-Proﬁ t and Corporate Citizenship Awards at the Millennium Biltmore Hotel in downtown Los Angeles.

L.A. Biz Seen publishes photographs of business-related events in Los Angeles, including parties, awards dinners, benefits and other celebrations. Please e-mail photographs to [email protected] with “photographs” in the subject line. Please include contact information. Compiled by Tom Hicks 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 INDEX LOS ANGELES BUSINESS JOURNAL 45

‘Making tarts is ‘You don’t need ‘We want to attract not the same as to pull a permit.’ the best and making cupcakes.’ CHRISTINE brightest talent YOLANDA SANTOS, DESCHAINE, in the industry.’ Früute, Lee & Associates-L.A. BRANDON BECK, on the price of her treats, North-Ventura Inc., Riot Games, on new PAGE 3 on building in Uganda, HQ’s appeal, PAGE 3 PAGE 27

PEOPLE Cohen, Charles ...... 30 Heiss, John ...... 42 Molai, Aziz ...... 32 Schiffer, Eric ...... 5 Craig, Paige ...... 26 Henchman, Joseph ...... 46 Moroney, Corinne ...... 12 Schroeder, Holly ...... 5 Crossman, Marc ...... 12 Hulce, Colleen ...... 4 Moshkovitch, Gennady Gene ...... 7 Serruya, Michael ...... 12 A D I N Shilton, Victoria ...... 47 Armato, Matt ...... 5 Danziger, David ...... 12 Igelman, Marvin ...... 12 Nadler, Judy ...... 8 Smith, Grieg ...... 8 Armbruster, Mark ...... 6 Dekeratry, Edward ...... 19/20 Solomon, Steve ...... 29 J Nichols, Kim ...... 13 Astani, Sonny ...... 5 Deschaine, Christine ...... 3 Speigel, Dennis ...... 7 Johnson, Michael ...... 1/42 O Dickerson, Diane ...... 13 Starr, Randy ...... 19/20 B Ogden, Loralie ...... 31 Dipaola, Todd ...... 19/20 K Stern, Robert ...... 8 Baranski, Devon ...... 13 O'Rourke, Megan Tunnell ...... 3 Beck, Brandon ...... 27 Dorger, Mitch ...... 46 Karatz, Matt ...... 6 Stoarms, Joan ...... 5 Kashani Rasouli, Cameron ...... 19/20 Ovrom, Bud ...... 6 Sullivan, Matthew ...... 29 Belden, Trevor ...... 33 E Keane, Dennis ...... 34 P Szymanski, Paul ...... 13 Bendele, Loren ...... 1/43 Englander, Harvey ...... 8 Keller, Ken ...... 46 Palmer, Scott ...... 4 Berger, Chuck ...... 34 Englander, Joshua ...... 8 T Kelsey, Scott ...... 3 Pettit, David ...... 1/43 Berman, Lee Jay ...... 46 Englander, Mitchell ...... 8 Thorton, Mark ...... 12 Biondi, Jim ...... 34 Kerner, Lou ...... 19/20 Platkin, Dick ...... 6 Toebben, Gary ...... 1/43, 6, 47 Bronchick, Jeffrey ...... 13 F Kim, Joe ...... 4 Porter, Roman ...... 8 Toomey, Dave ...... 19/20 Brown, Jerry ...... 1/43 Farahdel, Simon ...... 5 Kiraz, Robert ...... 19/20 Price, Curren ...... 1/43 Tronson, John ...... 29 Fast, Denise ...... 19/20 Knabe, Don ...... 8 Brown, Sandy ...... 1/43 R Tunnell, Benjamin ...... 3 Feld, Brad ...... 32 Knabe, Matthew ...... 8 Buckley, Rick ...... 30 Ragan, James ...... 5 Follette, Jim ...... 13 Knirk, Eric ...... 34 V Buffett, Warren ...... 13 Ramey, Timothy ...... 1/42 Friedman, Barry ...... 46 Krieser, Kevin ...... 12 Van Winkle, Scott ...... 1/42 C Rasouli, Avesta ...... 19/20 Vierheilig-Fraser, Stacy ...... 32, 33 Caldwell, Alexis ...... 1/43 G L Reinertson, Kevin ...... 5 Villaraigosa, Antonio ...... 6, 47 Caraeff, Rio ...... 26/27 Gatti, Anthony ...... 30, 32 Lampert, Elizabeth ...... 8 Reznik, Ben ...... 6 W Cardone, Grant ...... 46 Goddard, Gary ...... 7 Levine, Michael ...... 3 Riordan, Richard ...... 6 Waldman, Stuart ...... 1/43 Caruso, Rick ...... 5 Gold, David ...... 5 Liberman, Mark ...... 47 Ruppel, Jon ...... 19/20 Gordon, Gabe ...... 4 Lindsey, Gina Marie ...... 47 Walsh, Des ...... 1/42 Catalano, Mike ...... 31 S Gordon, Lena ...... 4 Weaver, Casey ...... 42 Cavanaugh, Tim ...... 47 M Saadian, George ...... 5 Gould, Rod ...... 19/20 Winfrey, Oprah ...... 14 Center, Jim ...... 34 Macauley, Brian ...... 5 Samson, Mark ...... 12 Gubler, Leron ...... 1/43 Channing, Bruce ...... 47 McAniff, John ...... 30, 32 San Marco, John ...... 1/42 Z Charney, Dov ...... 12 H McCracken, Brendan ...... 19/20 Santos, Yolanda ...... 3 Zepeda, Gustavo ...... 1/42 Chen, Wellington ...... 13 Hays, David ...... 19/20 Minnick Jr., Cole ...... 13 Schatz, Carol ...... 1/43, 6 Zilli, Jonathan ...... 7

COMPANIES, Community Television of GoTV Networks ...... 4 Madison Partners ...... 32 Service Employees Southern California ...... 32 Grant Cardone Sales Training ...... 46 Majestic Investments ...... 29, 33 ASSOCIATIONS, ETC. International Union ...... 1/43 Continental Alloys & Services Inc...... 14 Groupon Inc...... 19/20 Mediation Alliance Inc...... 46 Shamrock Capital Advisors LLC ...... 13 Cook Associates Inc...... 4 Grubb & Ellis Co...... 29-34 MediMedia Animal Health LLC ...... 14 Sony Music Entertainment Inc...... 26/27 CoStar Group Inc...... 19/20 H MetWest Ventures LLC ...... 13 Space Exploration 1 - 9 Cove Street Capital LLC ...... 13 Health Net of California Inc...... 29, 33 Micromet Inc...... 14 Technologies Corp...... 14 99 Cents Only Stores Inc...... 5 CresaPartners ...... 19/20 Herbalife Ltd...... 1/42 Mingly ...... 19/20 Sprinkles Cupcakes Inc...... 3 Crowell Weedon & Co...... 5 A Hines Warner Center LP ...... 33 Mogreet Inc...... 19/20 Star Business Consulting Inc...... 46 Abu Dhabi Media Co...... 26/27 D Hollywood Chamber of Commerce . . .1/43 Molai Insurance & Bus Service ...... 32 Starrpoint Commercial Partners . . . .19/20 Almer/Blank ...... 19/20 D.A. Davidson & Co...... 1/42 Hollywood Records Inc...... 26/27 Morgan Stanley ...... 32 Studley Inc...... 31 Amazon.com Inc...... 1/43 Data Haven Ltd...... 4 Hooky Interactive Inc...... 19/20 Moschanko Investment Group Inc...... 7 SurfMyAds.com ...... 1/43 American Apparel Inc...... 12 DG FastChannel Inc...... 33 Hulu LLC ...... 19/20, 26 MPG Office Trust Inc...... 30, 32 Swick Family Trust ...... 32 American Chemistry Council ...... 8 Did Hirsch Community I N T American Fire Protection Systems Inc. . . . .5 Mental Health Center ...... 32 Nasdaq ...... 12 Industry Partners Inc...... 26/27 Tax Foundation ...... 46 Amgen Inc...... 14 Dillard's Inc...... 12 Natural Resources Defense Council . . .1/43 Internet Brands Inc...... 14 Tech Coast Angels ...... 19/20 Apollo Global Management LLC ...... 5 Discovery Communications Inc...... 14 NBC Universal Inc...... 32 Teledyne Brown Engineering Inc...... 14 Armbruster Delvac and Goldsmith LLP . . . .6 Dorger Executive Consulting ...... 46 J New York Stock Exchange ...... 12 J2 Global Communications Inc...... 4 Teledyne Technologies Inc...... 14 B E Nordstrom Inc...... 12 Janney Montgomery Scott LLC ...... 1/42 The Mill ...... 31 Bad Robot Productions Inc...... 26/27 EarthLink Inc...... 32 Northrop Grumman Corp...... 14 Jeffer Mangels Tishman Speyer ...... 29 Bank of America Corp...... 29, 30 Edmunds Inc...... 24/25 Butler and Mitchell LLP ...... 6 O Titan & Co. Inc...... 5 BeachMint ...... 19/20 eHarmony Inc...... 14, 27 Joe's Jeans Inc...... 12 Official Police Garage Turner Broadcasting System Inc...... 3 Elizabeth Lampert PR ...... 8 Beachwood BBQ and Brewing ...... 4 Joe's Wild ...... 12 Association of Los Angeles ...... 8 Embarcadero Capital Partners ...... 33 U Berkshire Hathaway Inc...... 13 Jones Lang LaSalle Inc...... 29, 30, 32 Old Spaghetti Factory ...... 1/43 BetterWorks Inc...... 19/20, 26 Emerson College ...... 1/43 OWN: Oprah Winfrey Network ...... 14 UGL Equis Corp...... 27 BrightHeart Veterinary Centers ...... 4, 14 EMI Group Ltd...... 26/27 K Universal Music Group Inc...... 26/27 Brookfield Properties Englander Knabe & Allen ...... 8 KCET-TV ...... 30 P UseHipster.com ...... 19/20 Management Inc...... 30 Equity Office Properties ...... 19/20 Palmer Lombardi & Donohue LLP ...... 4 L V BTI Appraisal ...... 3 Evy of California Inc...... 12 Parsons Corp...... 32 L.A. Realty Partners ...... 30 Valley Industry and BTI Business Broker ...... 3 Phunware ...... 4 F LA Inc...... 47 Commerce Association ...... 1/43 Building Industry Assocoiation Pinkberry Inc...... 3 Facebook Inc...... 19/20 Lee & Associates ...... 29, 33, 34 Preferred Bank ...... 13 Valley Village Medical Center ...... 33 of Southern California ...... 5 Farmers Insurance ...... 32 Lee & Associates-L.A. Burstly Inc...... 26 Private National Mortgage Van Hulzen Asset Management ...... 14 FBR Capital Markets Corp...... 5 North-Ventura Inc...... 3 Acceptance Co. LLC ...... 13 VCA Antech Inc...... 4, 14 Buzz Networks Ltd...... 4 Leonard Green & Partners LP ...... 5 Federal Deposit Insurance Corp...... 13 ProFun/Management ...... 7 Ventura County Business Bank ...... 13 Ferroconcrete ...... 3 Lincoln Property Co...... 32 C Providence Holy Cross Vevo LLC ...... 26/27 Fire Protection Group Inc...... 5 Long Beach Area California Business Bank ...... 4, 13 Medical Center ...... 1/43 Vokle Inc...... 19/20 California Club ...... 3 First Asian Bank ...... 13 Chamber of Commerce ...... 1/43 California Credit Union ...... 32 First California Financial Group Inc. . . . .13 Los Angeles Area R W California Fair Political Fleurish Clothing ...... 12 Chamber of Commerce ...... 1/43, 6, 47 Ramsey-Shilling Commercial Walt Disney Co...... 1/42, 19/20 Practices Commission ...... 8 Fleurish Girls ...... 12 Los Angeles City Council ...... 8 Real Estate Services Inc...... 29 Warner Bros. Entertainment Inc...... 32 Canaccord Genuity Inc...... 1/42 Flying Pig Café ...... 4 Los Angeles County Reason ...... 47 Waste Management Inc...... 8 CB Richard Ellis Group Inc...... 31 Forever 21 Inc...... 12 Board of Supervisors ...... 8 Red Bull Distribution Co...... 33 Wedbush Inc...... 14, 19/20 Center for Governmental Studies ...... 8 Fremont Associates ...... 34 Los Angeles County Fire Department . . . . .5 Reed Conner & Birdwell LLC ...... 13 Wedbush Securities Inc...... 5 Central City Association ...... 1/43, 6 Friedman Enriquez & Carlson LLP . . . . .46 Los Angeles County Reliance Steel & Aluminum Co...... 14 Westwood Holmby Charles Dunn Co...... 32, 33 Fruute ...... 3 Metropolitan Transit Authority ...... 8 ReMax ...... 19/20 Property Owners Association ...... 1/43 Los Angeles Department Riot Games Inc...... 19/20, 27 CheckPoints ...... 19/20 G of Building and Safety ...... 6 Rotary Club of Los Angeles ...... 3 Y Clear Channel Outdoor Holdings Inc...... 8 General Growth Properties ...... 1/43 Los Angeles Galaxy ...... 1/42 Royal Business Bank ...... 13 Yahoo Inc...... 27 CO Architects ...... 3 Gerding Edlen Coca-Cola Co...... 8 Developmoent Co. LLC ...... 1/43 M S Z Cogent Communications Group Inc. . . . .32 Goddard Group ...... 7 M. David Paul Ventures ...... 32 Santa Clara University ...... 8 Zurich Financial Services Ltd...... 30 CoLoft ...... 19/20 Google Inc...... 19/20 Macy's Inc...... 12 Savings.com ...... 1/43 Zurich North America ...... 30

These indexes list the people, businesses, associations, organizations, schools, etc., that are named in this week's issue. The numbers refer to the page on which the name is found. Numbers with slashes refer to pages on which lengthier articles are located that contain the name. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

46 LOS ANGELES BUSINESS JOURNAL COMMENTARY JULY 18, 2011 LOS ANGELES BUSINESS JOURNAL ® Clicked Off Over Internet Taxes 5700 WILSHIRE BLVD., SUITE 170, LOS ANGELES, CA 90036 HE California Legislature’s decision a few analyst who has studied the Internet sales tax for the should. After all, by escaping the burden of adding (323) 549-5225 FAX 549-5255 weeks ago to make Internet retailers collect Tax Foundation, a Washington think tank that sales taxes, Internet sellers enjoy a nearly 10 per- www.labusinessjournal.com sales taxes may have seemed a simple and describes itself as nonpartisan and independent, but cent price advantage if you include all the sales T PUBLISHER & CEO straightforward way to raise $200 million or more in tilts conservative. “They may well raise nothing.” levies in high-tax areas such as Los Angeles. MATTHEW A. TOLEDO tax revenue. But it’s already become a This could be dismissed as But Internet sellers have a fairness argument of [email protected] | ext. 207 contentious mess that promises to get unfounded predictioneering, except their own. It goes like this: Sales taxes are used to expensive for the state. that Henchman does offer up a few help support state and local infrastructure and gov- EDITOR CHARLES CRUMPLEY Oh, and one other thing: The state Petri dishes in which the Internet sales ernment services that retail shops need – sewers, [email protected] | ext. 208 may get little or no additional tax rev- tax has been cultured. roads, fire and police protection, etc. Since out-of- DESIGN DIRECTOR enue from it. North Carolina and Rhode Island, state Internet retailers don’t use those local ameni- ROBERT LANDRY [email protected] | ext. 243 Why? Because it’s easy for out-of- for example, have seen no windfall ties (except for roads to deliver their goods), why MANAGING EDITOR state online retailers to sidestep the sales from their Internet sales taxes. In fact, should their customers pay those taxes? LAURENCE DARMIENTO tax. All they have to do is end their so- one affiliate trade group believes Another issue: Brick-and-mortar retailers generally [email protected] | ext. 200 called affiliate relationships. Those are Rhode Island has seen less tax revenue assess sales tax rates that are pinpointed to the store’s DEPUTY MANAGING EDITOR STEVE SILKIN the in-state companies or even individu- because of the loss of affiliate income. location. That’s simple. But Internet sellers are expect- [email protected] | ext. 229 als who get a commission when a visi- COMMENT And Illinois, at least anecdotally, ed to pay where each customer is located. That’s com- NEWSDESK EDITOR TOM HICKS tor to their website clicks on an out-of- has seen an outflow of Internet-related plicated, and can get to be a mess when you consider [email protected] | ext. 223 state retailer’s link and buys something. businesses after that state passed an that some products carry different tax rates in some tax CHARLES REPORTERS Without those in-state affiliates, most Internet sales tax. districts. What’s more, there are about 8,000 different RICHARD CLOUGH online retailers have no official, legal CRUMPLEY This doesn’t portend well for Califor- sales tax districts in the United States, and they aren’t [email protected] | ext. 251 DEBORAH CROWE presence in the state, and therefore nia. It may fail to realize much new at all contiguous with ZIP codes. [email protected] | ext. 232 aren’t obligated to collect sales taxes for the state. income from the law. And it may rack up expenses. Internet sellers say that merely figuring a cus- HOWARD FINE In the past couple of weeks, affiliate relationships Amazon.com has vowed to qualify a referendum that tomer’s sales tax rate is a burden that’s vastly greater [email protected] | ext. 227 ALEXA HYLAND have been dropping faster than European sovereign would let voters decide whether to keep the tax. And than a retail shop’s, and that makes it unfair for them. [email protected] | ext. 235 debt ratings. (See the article on page 1 for more.) there may be legal challenges to the law. How much Before the Internet sales tax issue goes on too NATALIE JARVEY Think about that for a moment. That means the do you suppose all of that may cost the state? long and gets too expensive for California, the state [email protected] | ext. 230 JAMES RUFUS KOREN affiliates – who are in-state folks – will lose com- Indeed, what began as a simple way to raise tax would do well to suspend the whole idea and come [email protected] | ext. 225 missions. That’s a loss of income, which could revenue may become a messy net loss. up with a better plan. ALFRED LEE result in a loss of income taxes for the state. [email protected] | ext. 221 JONATHAN POLAKOFF “I guarantee you they won’t raise $200 million,” • • • Charles Crumpley is editor of the [email protected] | ext. 239 said Joseph Henchman of California’s goal of rais- When it comes to Internet sales taxes, in-state Business Journal. He can be reached at JOEL RUSSELL ing money from the Internet sales tax. He’s a policy retailers use the fairness argument. And they [email protected]. [email protected] | ext. 237 JACQUELYN RYAN [email protected] | ext. 228 REPORTING INTERN LABJ FORUM DENIZ KORAY [email protected] | ext. 263 VISITING FELLOW HEEJIN PARK Does your company [email protected] | ext. 241 Sticking Bill Baldwin of HartmanBaldwin Design Build has rewarded reward longtime CHIEF EDITORIAL PHOTOGRAPHER two employees with trucks upon their 20-year anniversaries workers? RINGO H.W. CHIU with the Claremont firm. So the Business Journal asks: [email protected] | ext. 256 RESEARCH DIRECTOR DAVID NUSBAUM Around [email protected] | ext. 236

VICE PRESIDENT OF ADVERTISING LEE JAY BERMAN Tournament of Roses, we did reward long-term KEN KELLER JOSH SCHIMMELS [email protected] | ext. 218 President employees, but not in a huge way. Three small ways Chief Executive ASSOCIATE SALES MANAGER Mediation Alliance Inc. we helped reward them: We did not cap pay for a Star Business Consulting Inc. DARRIN SENNOTT Yes, I reward long-term particular job level, meaning long-term employees I have worked as a consultant for more than 40 [email protected] | ext. 220 ADVERTISING ACCOUNT employees as much as ever, if can enjoy pay increases for as long as they hold their companies in fields such as accounting, law, finance, MANAGERS not more so because as a solo position. For employees over 10 years, we allowed entertainment, and health care, and I can tell you that JESSICA ANNAS mediator, I have a small, inti- them to convert sick leave to vacation time. We tried most of them do reward longtime workers. These [email protected] | ext. 240 NAZ BAYAZIT mate office with just two to promote from within if at all possible. folks are very grateful for their employees’ hard [email protected] | ext. 253 employees. I try to surprise work and want to continue to keep them happy. BILL MOIR them with little bonuses and GRANT CARDONE [email protected] | ext. 216 ROSZ MURRAY perks from time to time: I have Chief Executive BARRY FRIEDMAN [email protected] | ext. 215 flown them on vacations, given Grant Cardone Sales Training Managing Partner JIM SLATER Berman them small cash bonuses after Yes, as generously as ever, maybe more so. In Friedman Enriquez & Carlson LLP [email protected] | ext. 209 a particularly challenging couple of weeks, etc., fact the tenure in all my companies is on average Almost all the employees at our law firm are long- SPECIAL EVENTS/ ADVERTISING COORDINATOR which I couple with a message of appreciation. six-plus years. We did that with no retirement term workers, and we treat them royally. We haven’t MARISSA DE LA CRUZ plans or 401(k)s of any kind in place. During the increased perks, but we have stretched to make sure that [email protected] | ext. 213 MITCH DORGER contraction, we didn’t let any of our people go. I we can keep all of our employees. We value them very PRODUCTION ARTISTS SALLY FOSTER Principal believe that goes a long way to attracting and much, and we want to make sure we do everything [email protected] | ext. 212 Dorger Executive Consulting keeping talented people. within reason to make sure their lives are comfortable. PATTY TSAI-CHU When I was chief executive of the Pasadena [email protected] | ext. 242 CIRCULATION DIRECTOR MICHAEL LEVINE [email protected] | ext. 247

Los Angeles Business Journal Poll CUSTOMER SERVICE LE MILLHAUSER Does your company reward longtime [email protected] | ext. 245 workers? ZAINABU BRYANT Used to, but not [email protected] | ext. 244 much now. CONTROLLER Never NANCY SCHWARTZ has, to [email protected] | ext. 202 speak of. ACCOUNTS RECEIVABLE 29% SPECIALIST PATRICIA A. BENSON [email protected] | ext. 231

34% 11% ASSISTANTS TO THE PUBLISHER BETH THERIAC [email protected] | ext. 249 PAUL KNEZEVIC 26% [email protected] | ext. 203

Yes, as RECEPTIONIST generously ERIN SCHAUER Yes, but less as ever, [email protected] | ext. 270 generously as maybe before. more so.

CITY BUSINESS JOURNALS Online results for week ended July 13 NETWORK 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

JULY 18, 2011 COMMENTARY LOS ANGELES BUSINESS JOURNAL 47 L.A.’s Public-Private Paydays Chief of city’s tourism non-profit takes home more than some recently scandalized public servants. Getting the Word Out: By TIM CAVANAUGH Website of LA Inc., a non-profit that LTHOUGH excessive public-employee salaries are get- works to ‘advance the ting a lot of attention these days, many ostensibly pri- prosperity of L.A.’s A vate officials – including an L.A. tourism bureau boss visitor economy and who makes almost $500,000 a year – are paid mostly or entirely the livelihoods that from public money. Public-private compensation packages can depend on it.’ be even higher than the pay of public employees that has been the focus of taxpayer outrage. Consider one example: LA Inc. is a non-profit that functions as the city of L.A.’s convention and visitors bureau. The company is organized as a 501(c)(6). In its tax filing, LA Inc. describes its main function as “Advance the prosperity of L.A.’s visitor economy and the livelihoods that depend on it.” LA Inc.’s budget in 2009 was $19.4 million. About $15.6 million of that came directly from the public: $10.4 million of it came from a portion of the city’s 14 percent hotel room tax and $5.2 million from Los Angeles World Airports. An additional $1.3 million came from membership fees and $2.4 million from business activity, including advertising in LA Inc.’s visitors guide. But the largest portion – more than 80 percent – comes from public funds. If you want to know what happens to all those taxes and fees that run up your airport and hotel bills, this is one example. LA Inc.’s budget will soon be going up even more thanks to a recently approved additional 1.5 percent hotel tax. Mark Liberman, LA Inc.’s president and chief executive, said the new dedicated tax could double the organization’s budget. The difference is that there has not been nearly as much Los Angeles is already the center of the American entertain- Where does all that money go? More than 40 percent of it attention paid to the lavish compensation of officials in public- ment industry, which provides more free advertising for the goes to pay staffers. Salaries, pensions, benefits and other com- private partnerships like LA Inc. Nor is this information as easy area than any quasigovernmental entity could ever hope to pensation make up $8.6 million of the organization’s spending. to organize in the kind of databases that are being put together match. It’s pretty widely understood, in the United States and All of LA Inc.’s executives make well over $100,000 a year in for teachers, city managers and other public employees around abroad, that Malibu has beautiful beaches and Rodeo Drive total compensation. the country. But taxpayers are still funding these outrageous offers a unique upscale shopping experience. I do not remember pay packages. a time when I did not know the word “Hollywood.” What could Lack of attention What are they getting for this investment of public money? LA Inc. possibly be offering in the way of tourism-boosting that CEO Liberman pulls down $488,000 a year. This is well LA Inc. spends about $7 million a year on “advertising and pro- would justify its cost? above the pay scale for many public officials who have been motion.” The justification for this spending is that tourism is a Here’s an idea to bring tourists back to the City of Angels. lambasted for their featherbedding. Recently, an Orange County major portion of Los Angeles County’s economy. How about not imposing massive hotel taxes and airport fees in grand jury study of compensation brought considerable condem- Now, Liberman might be very good at his job. But it is the first place? If you want more people to come here, you can nation and unwanted attention to some of that county’s most absurd, especially in a recession that has seen L.A.’s gross start by making the trip less expensive. highly paid city managers. Yet the highest paid of these, Laguna municipal product drop 3.4 percent (according to the Bureau of Hills City Manager Bruce Channing, is “only” pulling down Economic Analysis), to spend public money to advertise Los Tim Cavanaugh is a columnist at Reason magazine $378,000, which is still $110,000 a year less than Liberman. Angeles as a tourist destination. and Reason.com.

Teamwork Is Getting LAX Off the Ground LETTER ‘I am still in shock’ By GARY L. TOEBBEN for her job. Then, he did something else that is hard for mayors Re: The item in Page 3 column of June 6 issue headlined to do, he allowed the talented team of people he had selected to “Plastic Surgeon Operates – With Hunting Spear”: HE new Tom Bradley International Terminal was a go to work without interruption. source of pride for Los Angeles as we welcomed the In Los Angeles, it is easy for politics to trump economics, but I am a longtime subscriber and could not believe you T world to the 1984 Olympics. That was 27 years ago – that has not been the case with the improvements under way. The would write such a disgusting story. First of all, who cares enough time for 1 billion passengers to fly in and out of Los economics were clear. LAX needed new gates to handle the next about this guy and secondly, it was so incredibly offensive I Angeles International Airport. Time also extracted a major toll generation of airplanes that are taller and have a wider wingspan. am still in shock and so is my husband. on LAX’s facilities, so did delays caused by lawsuits and a lack The airport needed a new baggage-handling system to meet the Talk about bad press. Who would ever want this butcher of commitment by elected officials. Some observers were con- new security requirements since 9/11. It also needed better restau- to operate on them? Do you seriously believe that any of vinced that the politics of Los Angeles would doom the airport rants and stores to accommodate travelers who were spending your readers want to hear about the shoes he made for him- to third-world status forever. more time in the airport due to the need to arrive earlier. And as self and the belt and wallet he gave his parents? was obvious to all, the entire airport, from restrooms to elevators Shame on you! and hallways, needed a huge dose of tender, loving care. Then, (Villaraigosa) did something else Some of these improvements will be immediately obvious to Victoria Shilton passengers, but many others will not. As with any organization, Pacific Palisades that is hard for mayors to do, he it is often what is happening behind the scenes that makes allowed the talented team of people everything work smoothly. he had selected to go to work The $4 billion in improvements will not complete the job, but it without interruption. is a great start. Furthermore, this progress should inspire confidence How to reach us in the airport board and Lindsey as they tackle other challenging LETTERS: Please keep your letters less than 150 goals like bringing rail service to the airport and creating a north words. Include your name, address and daytime phone runway configuration that is safe and efficient for the next genera- number on all submissions. We reserve the right to edit But thanks to a constant drumbeat by the business communi- tion of aircraft that will be flying passengers around the world. letters for brevity and taste. ty, the leadership of Mayor Antonio Villaraigosa, the commit- LAX should be the heartbeat of the Southern California E-mail: [email protected] ment of the Los Angeles World Airport board of commission- economy. It should symbolize the dynamics of our economy ers, and the professional knowledge and persistence of LAWA and be a beacon for visitors from around the world. Join the Los GUEST OPINIONS: Op-ed pieces must be 700 to Executive Director Gina Marie Lindsey, LAX is undergoing $4 Angeles Area Chamber of Commerce in saying thank you to 800 words and on topics about the L.A. business billion worth of improvements, and is poised to regain its repu- the mayor, the airport board, and Lindsey and her staff for tack- community. Please submit op-ed ideas to tation for service and efficiency in aviation. ling these important improvements that our community had [email protected]. Villaraigosa’s leadership was key. He initiated a settlement been unable to address for too long. CIRCULATION: If you didn’t receive your paper, of a lawsuit by neighbors that had been holding up progress for would like to start a subscription or are interested in back years. He appointed outstanding citizens to the airport board of Gary L. Toebben is president and chief executive of the Los issues, please call (323) 549-5225 and ask for circulation. commissioners and personally selected Lindsey as the candidate Angeles Area Chamber of Commerce. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

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7 DOWNLOAD INSTRUCTION ON iPAD Click here to read instructions on downloading PDF on iPad 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | EDITORIAL LINK TO WEBSITE Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁ ngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

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1 HEADLINES: Touching headlines leads you directly to the labj.com article. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | PAGE JUMPS Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁ ngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

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2 PAGE JUMPS: Touch jump tags leads you to and from the jump page 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | ADVERTISING LINKS Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁ ngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

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3 ADVERTISING LINKS: Touch hyperlinks leads you directly to the website 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | TABLE OF CONTENTS PAGE Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁ ngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

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4 TABLE OF CONTENT: Touch table of content teaser will jump directly to the page of the story. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | NAVIGATION TOOLBAR Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁ ngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

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5 NAVIGATION TOOLBAR: Touch navigation button to go to speciﬁ c page indicated. iPad Only 'Thumbnails, LABJ User Guide, Front Page and Table of Contents will appear on iPad. Computer The entire navigation toolbar for computers will appear for expanded navigation options. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | THUMBNAILS Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁ ngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

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41 42 43 44 45 46 47 48 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | DOWNLOAD INSTRUCTION FOR PC/MAC Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

We recommend you read the very brief CBJ Digital Edition User Guide which you can download right now at:

http://www.cbjonline.com/a3sdbj/resources/Digital-Edition-InstructionsONLINE.pdf

The User Guide will help you get the most out of the many enhancements incorporated into the Digital Edition.

To read the Digital Edition on either your PC/MAC please follow the instructions below;

To Download: 1. Click on the below listed URL: www.labj.com/digital 2. Click on the edition you wish to download (the editions for each paper are represented by an icon which appears on the Web page you access with the browser). 3. Wait as the selected edition is downloaded into your browser. Download progress will vary from different browsers. 4. The downloaded edition will appear in your browser

Reading Instructions (start here if you have already downloaded the Digital Edition into your browser)

1. Save the Los Angeles Business Journal Digital Edition in an easily accessible folder on your computer. We suggest creating a Digital Edition folder in your Documents Folder where you can save each issue of the Digital Edition. 2. Go do the folder with the Digital Edition, locate the Digital Edition icon and the Digital Edition will open in Adobe Reader. If you don’t have a copy of Adobe Reader on your computer, go to www.labj.com/digital and download a free copy of Adobe Reader. 3. As the Digital Edition opens inside Adobe Reader you will be asked to allow the Digital Edition to open in the full screen mode. 4. You will note a series of buttons across the top of the page of the Digital Editions. The buttons provide the following commands:

Previous Page, 2-Page Spread, 1-Page View, Thumbnails, User Guide, Front Page, Table of Contents, Zoom-in, Zoom-out, Next Page

There are addition links embedded in the Digital Edition (and described in the User Guide) which are intended to enhance your reading experience.

Note: the Digital Edition can also be read on Android, Apple, Blackberry and Windows smart phones and on Kindle and Nook digital reading devices. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Contents Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | DOWNLOAD INSTRUCTION FOR iPAD Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

We recommend you read the very brief CBJ Digital Edition User Guide which you can download right now at:

http://www.cbjonline.com/a3sdbj/resources/Digital-Edition-InstructionsONLINE.pdf

The User Guide will help you get the most out of the many enhancements incorporated into the Digital Edition.

To read the Digital Edition on either your iPad please follow the instructions below;

To Download: 1. Click on the below listed URL: www.labj.com/digital 2. Click on the edition you wish to download (the editions for each paper are represented by an icon which appears on the Web page you access with the browser). 3. Wait as the selected edition is downloaded into your browser. Download progress is marked by a blue thermometer indicator in the URL bar of the browser. 4. The downloaded edition will appear in your browser

Reading Instructions (start here if you have already downloaded the Digital Edition into your browser) 1. To read the Digital Edition you must move the Edition from your browser to a digital reader. 2. Move the downloaded edition into the iBooks digital reader (iBooks is a standard app delivered on all iPads. The app is available free on in the Apple app store should you need to download a copy of the app) by tapping in the center of the page until you see the "open in" button appear in the upper right-hand corner of the page. 3. Tap on the "open in" button. A list of apps will appear. Select iBooks. After a delay of a few moments, the digital edition will appear on a bookshelf in the iBooks app. 4. Tap on the image of the digital edition shown on the bookshelf and the edition will open in iBooks. 5. Use the tools at the top of each page of the digital edition in combination with the built in tools in iBooks to read and navigate the edition. 6. You will note a series of buttons across the top of the page of the Digital Editions. The buttons provide the following commands:

Thumbnails, User Guide, Front Page, Table of Contents

7. Enjoy reading your weekly digital edition of the Los Angeles Business Journal 8. Please give us feedback by sending me an email at: [email protected]

Note: the Digital Edition can also be read on Android, Apple, Blackberry and Windows smart phones and on Kindle and Nook digital reading devices.