The year 2007 may go down as one full of extremes for business. It started out with an unusual cold snap that harmed the orange, avocado and ornamental flower crops and ended with destructive wildfires fueled by high winds in Santa Clarita and Malibu. A strike by grocery store workers was averted but a walkout by film and television writers began in November, just as the new television season began to falter. The strike is expected to cost the Los Angeles economy into the hundreds of millions of dollars. A horrific multi-vehicle wreck in October on the I-5 Golden State Freeway near Santa Clarita demonstrated the importance of the road system as a month-long closure of truck lanes in the Newhall Pass shut down the main transportation link between the southern and northern portions of the state. But the year wasn’t all about destruction. New mixed-use retail and residential projects were announced for North Hollywood NoHo Art Wave near the Red Line station and Universal City Studio@Lankershim that followed the proposal for Universal Village, a 3,000-unit complex on the eastern portion of the back lot. NBC moving its studio complex out of Burbank altered the look of that city’s media district and took away a big draw in tapings of the “Tonight Show with Jay Leno.” In Glendale, construction continued on the American at Brand, the new shopping and condo project from Rick Caruso, developer of The Grove and other upscale destinations in the region. An opening is anticipated for next year. With a new master plan in place for Van Nuys Airport, jet charter and management firms based there started construction on or announced plans for new facilities. But if anything can characterize the year in the valley region business sector it is that forces internal and external, inside and outside resulted in layoffs. From Camarillo where Technicolor let people go in its DVD replication and packaging unit to Thousand Oaks and the Amgen campus to Burbank where WMC Mortgage fired 400 workers just as the sub-prime lending crisis began to heat up, cutting the workforce was this that and the other. No Valley-based company took as big a hit in its employee numbers than Calabasas-based Countrywide Financial, one of the nation’s largest mortgage lenders. The company announced cuts of 20 percent of its workforce, the silver lining being that not many of those positions were based in the Valley. Countrywide has the added onus of an “informal” probe by the feds into $130 million in stock sold by CEO Angelo Mozilo in the first six months of the year. In addition, the state attorney generals in California and Illinois opened investigations into Countrywide’s lending practices and the role they played in the mortgage crisis. If layoffs were Act 1 of the sub-prime lending meltdown than Act II is the effect it had on home prices and new construction. Home sales in Los Angeles County fell in November by 46 percent and by 42 percent in Ventura County when compared with the previous year. The median price in L.A. County dropped to $499,000, according to DataQuick Information Systems The full impact remains unknown as the mortgage industry struggles to recover and difficulties work their way to realtors and into the construction industry. It’s the same situation the entertainment industry faces the longer film and television writers don’t have a contract with the Alliance of Motion Picture and Television Producers. The strike impacts not only the writers without work but below-the-line production staff and the industry’s vendors and suppliers scattered throughout the region. The Los Angeles City Council called on the studios to return to the bargaining table to settle the dispute that began Nov. 5 The strike affects 15,000 workers directly in the entertainment industry and has resulted in the loss of more than $120 million in salaries and $240 million in other spending, according to the Los Angeles Economic Development Corp.
