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Thursday, Mar 28, 2024

TIMELINE

This month-by-month review of some of the major stories from the past year’s pages of San Fernando Valley Business Journal was compiled and summarized by contributor Ivy Weiss. JANUARY Local Growers Take Major Hit in Freeze The cold snap at the start of the year had a devastating effect in the agricultural business of the Antelope, Simi and the Conejo Valleys. The farm industry reported great losses in avocado and citrus crops as well as ornamental plants. The industry has been so hard hit that Gov. Schwarzenegger has declared a state of emergency in Ventura County. As much as 75 percent of the citrus crop in California and Arizona has been destroyed, 55 percent of that loss is to Sunkist. Some growers have lost their entire crop. Shortages and higher prices are expected. Sun Valley Brownfield Site Owner Files Chapter 11 The redevelopment of a 33-acre area that held hope for an economic boost in Sun Valley is suffering its own economic downturn with owner, Branford Partners, LLP filing for bankruptcy to stall foreclosure proceedings and allow the property to be sold. The current owners value the property at $20 million although it is estimated that only 13 of the 33 acres are developable. More Companies Leave Valley Sporting goods maker Easton Sports Inc. is moving its Valley manufacturing operations to China, eliminating as many as 250 local jobs while planning to keep its headquarters in the Valley. In another story, Big Dog Holdings Inc. laid off 85 workers as a result of its move to a North Carolina distribution center. FEBRUARY Landlords Watch Security Guards Organize Security guards in five key companies are expected to sign an agreement to be union represented. Initially, this will only affect buildings larger than 75,000 square feet. There are at least a dozen buildings in the Valley that meet that requirement. It is thought that once the initial phase of organizing the workers is complete, there will be a move to include buildings with less square footage. Tax Breaks to Begin for More Companies Firms with total annual gross receipts of less than $100,000 can apply for a new city designation that exempts them from paying 2007 business tax. Businesses that qualify must file their business tax return in a timely fashion. The new rule moves the deadline for city tax filing to before February 28. The reduction in taxes should allow businesses to reinvest in themselves. Condo Slowdown Condominium sales have started to slow in the San Fernando Valley. There are more conversions from rental to ownership as well as new construction. In some areas prices are dipping. Buyers are spending more time looking than they previously have, as there are more choices available. MARCH North Valley Enterprise Zone Expands The northeast Valley which had recently lost its Enterprise Zone entitlement was given a boost when Gov. Schwarzenegger expanded the Hollywood zone to include Pacoima as well as affluent areas such as Studio City and west Toluca Lake. An enterprise zone is designed to boost businesses in underserved or economically disadvantaged area. Companies are given up to $35,000 in employee tax credits, expense deductions, sales tax credits and reduced utility fees. Few businesses have been aware of the plan, and there has not been, until recently, a major marketing effort to spread the word. Bank of America Offers Credit Cards to Undocumented Persons Bank of America began a program that offered secured credit cards to customers without Social Security numbers. Although some standing bank customers were in direct opposition to this plan, BofA has not noticed a sharp decrease in their customer base or card membership. The program was begun as a marketing tool in hopes of bringing in new customers who will build long term relationships with the bank. APRIL CBS Studios Brings Hundreds to the Valley Six hundred new employees, working various shifts, are expected to become part of the Studio City business population. When the new facility opens there will be a definite boom for restaurants, and other service businesses in the area. The new building and studios on Radford Place will house the news departments of KCAL-TV (Channel 9) and KCBS-TV (Channel 2) which will both broadcast from that location. To help mitigate the great concern of traffic flow, CBS paid for the re-timing of three traffic signals in the area. Valley Vital Part of L.A. County’s No.1 Rating for Manufacturing Los Angeles County was rated the top manufacturing center in the nation, and the San Fernando Valley was listed as the third highest concentration of jobs in the county. The face of manufacturing in the Valley has changed sharply from line production to design and development of products. During the second quarter of 2006, the east Valley was home to over 1,600 manufacturing businesses and 44,700 jobs with a total payroll of $513 million. The west Valley had 1,055 manufacturing establishments offering 31,600 jibs and a payroll of $452 million. Mid Valley Chamber Changes its Name to Reflect Regional Approach The Mid Valley Chamber of Commerce has changed its name to the Greater San Fernando Valley Chamber of Commerce as it positions itself as a regional organization. With members from all over the Valley and beyond, the Chamber is focusing on its impact on business in general and considers itself the primary voice for Valley business interests. This puts it at odds with several other regional organizations that view themselves in the same way. Some of these other organizations have more of a membership base as they ultimately represent more businesses, and therefore provide a stronger, more united voice for advocacy. The Greater San Fernando Valley Chamber of Commerce is looking to grow its membership and draw dollars and members away from what it calls its “rivals”, the other chambers that tend to represent their own communities. MAY K-Swiss Slips as Fashion Trends Shift Westlake Village-based K-Swiss is undergoing a dip in its earnings as its touchstone product,the classic white tennis shoe,has fallen out of fashion. More flamboyant styles are taking over the marketplace. To compensate for the decline, the company is pushing its worldwide sales, and having success with that. Other strategies being introduce to make up for the short fall include clothing and retail components. Stores are strategically placed both in domestic and international marketplaces. The company also signs Anna Kournikova as its spokesperson. Local CBS Stations Utilize Most Advanced Technology As CBS moved into its new home in Studio City, it also moved forward in presenting its news and sports programming in digital. This gives the viewer a sharper more detailed picture when viewed on a high definition television set. Station employees had to undergo intense training in the new technology and at the same time were still working in the old facility in Hollywood and while readying the new one. JUNE United Airlines Restarts Flights from L.A./Palmdale Regional Airport In the nine years since United Airlines last offered flights out of Palmdale, there have been significant changes in demographics and economics in the area. The airline has made an 18 month commitment to provide service between Palmdale and San Francisco, where connecting flights to many other destinations are available. JMR Moves to Outsource Labor Force A Chatsworth-based leader in data storage has drastically reduced its workforce by two-thirds through outsourcing, a move it had long resisted. Scaled back manufacturing will still be done in Chatsworth, although the company has relocated to smaller facilities. Natrol Going Global Natrol, the Chatsworth-based manufacturer of nutritional products is now is a joint venture to distribute its products in China. An office has opened in Hong Kong to house a sales staff and regional distributors. Breaking into the Chinese market has been difficult to enter due to heavy restrictions, the most sever in Asia. The company already has an office in the United Kingdom and is looking to expand throughout Europe. The company has recently experienced a turnaround in profits JULY Airport Construction Skytrails Aviation at the Van Nuys Airport is gearing up to add 120,000 square feet of hangars and 50,000 square feet of office space to its fixed base operations. Other companies working out of the Van Nuys airfield are building new hangars and office space, as well, indicating the strength of the local aviation industry. Technicolor Layoffs Prelude to Sale of Facility Following an announcement that 600 employees in the DVD replication, packaging and distribution units will be laid-off, the industry leader is putting its Camarillo facility on the market. The company looks to lease back a portion of the property. As the DVD market is changing and maturing, Technicolor is moving into the next stage of technology, digital production and distribution. Power-One Set for More Layoffs Following a layoff of 65 workers a few months prior, Power-One a power conversion products developer is cutting back another 34 jobs. The original lay-offs were from the Chatsworth facility, and the current ones will be made from the Camarillo headquarters. The company is looking to the layoffs as part of an overall plan to trim expenses and ultimately save $20 million. Sun Valley Aerospace Firm Acquires Two More Businesses Sheffield Manufacturing, an aircraft parts manufacturing business in Sun Valley has bought Fortune Manufacturing in Chino and Hermach Machine in Torrance for more than $16 million. The hub of the business will remain in Sun Valley and will employ about 160 employees in all the facilities. The aerospace industry is booming and Sheffield bought Fortune for its work orders and Hermach for its equipment. AUGUST Countrywide Draws on $11.5 Billion Credit Line Calabasas-based Countrywide Financial Corp. drew on $11.5 billion in credit as a supplement to its funding liquidity position, the company announced. Countrywide will receive the money from 40 of the world’s largest banks, reporting that drawing on the credit line is a way for the company to address the increasing challenges in the mortgage industry and to continue to grow the franchise. New Loan Program Boost for Veterans The U.S. Small Business Administration introduces the Patriot Express Pilot Loan to speeds up the process by which veterans can receive loans to start or grow their business. Up to $500,000 is available at the lowest interest rates. Loans are available to all veterans, reservists and National Guard members and active duty service members participating in the Transition Assistance Program. Spouses of qualified veterans are also eligible. SEPTEMBER Amgen Announces Layoffs Thousand Oaks-based Amgen announced that it would cut up to 2,600 jobs, or 12 to 14 percent of its nationwide workforce, following the Centers for Medicare and Medicaid Services’ July decision that doctors would only be reimbursed for prescribing Amgen’s anemia drugs Aranesp and Epogen in certain ways. Local business leaders are sanguine about the layoffs saying it will have little effect on the Valley economy. Countrywide Slashes Workforce as Mortgage Production Plummets Countrywide Financial Corp. cut nearly 5,000 jobs in September, and funded 44.3 percent fewer mortgage loans. Over the year, mortgage funding by the Calabasas-based company fell $16.9 billion to $21.2 billion. Adjustable-rate mortgages dropped 76 percent and loans other than prime were down a whopping 92 percent. Mortgage lenders are struggling in the face of increased defaults and foreclosures in housing, especially in subprime loans. CARE Coalition Appeals Hospital Expansion Community Advocates for Responsible Expansion (CARE) has appealed the Los Angeles City Planning and Zoning Commission’s July 26 decision to allow at Providence Holy Cross Medical Center to build a 101-bed addition without completing an environmental impact report. The appeal, made initially to the City Planning Department, will likely end up in the hands of the City Council. OCTOBER IHOP Acquires Applebee’s The stockholders of Applebee’s International Inc. voted to allow the company to merge with Glendale-based IHOP Corp. Under the terms of the agreement, IHOP will acquire Applebee’s for $25.50 per share in cash, representing a total transaction value of approximately $2.1 billion. Applebee’s will operate as a wholly owned subsidiary of IHOP Corp. New Auditing Standards Pricey for Clients New federal regulations for audits will mean more work for the auditing accountants, and higher fees for their clients to pay. It is now necessary for accountants to apply stricter documentation standards. This is considered to be fall out from the Enron and Worldcom scandals. With the increased workload comes an increase in billable hours and that translate higher out-of-pocket expenses for clients. The rise in the fees could be as much as 20 percent. NOVEMBER Writers Strike The Writers Guild of America and the Alliance of Motion Picture and Television Producers could not come to terms on a new contract and a strike was authorized to being Nov. 5. Major sticking points are a requested increase the residuals writers receive from home entertainment DVD sales and new media distribution. The last writers strike in 1988 lasted five months and cost about $500 million to the region’s economy. U.S. HealthWorks Moves HQ to Valencia An operator of outpatient occupational health care clinics previously headquartered in Alpharetta, Ga., has moved its headquarters and a billing facility to Valencia. The 13,000-sq.-foot headquarters facility will employ 55 workers. A 34,000-sq.-foot regional billing office in Valencia will have 150 employees. Both facilities are leased. The company made the move, it said, because more than half of the company’s business is in California and said the consolidation of key functions and management in their largest market will enhance the company’s ability to optimize service and performance. DECEMBER CRA Opts Out of Panorama City The one-year contract with the Community Redevelopment Agency, for the Panorama City Business Assistance Program with the option for two one-year renewals will not be a part of the CRA’s budget in the coming year. The program was started to revitalize existing business areas, and offer consulting services to existing and prospective businesses. There was also funding available for financing the businesses. The Valley Economic Development Center that is administering the program will be seeking other avenues of revenue, but are not happy about seeing the momentum gained throughout the past year possible coming to halt. North Hollywood Business Improvement District Launched For the next three years, North Hollywood will have a Business Improvement district that will cover 160 properties distributed among 148 business owners. The $156,000 annual budget will be augmented by MTA contributions of $500,000 for each of the three years. The area already has the vital NoHo theater district, and the BID will help to bring more improvements, such as street cleaning efforts and security to the area that has begun to make great strides through a CRA project.

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