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Friday, Mar 29, 2024

Heraclitus in the Valley

Ever heard the old saying “you can’t step in the same river twice?” Probably, and for good reason. It’s been around for two millennia and is attributed to the pre-Socratic Greek philosopher Heraclitus – and goes to something fundamental: Life never stands still. I was reminded of it as I reviewed the business stories that have broken over the past two weeks in the greater San Fernando Valley. They proved yet again how dynamic the local economy is, even though it may not get the national press of the Westside and its “Silicon Beach” cluster of tech, entertainment and media startups. Can anyone watch what’s going on in Glendale with DreamWorks Animation SKG and not wonder what Jeffrey Katzenberg’s days are like? First, he engineers a deal to sell the studio’s beautiful campus for $185 million and lease it back on attractive terms from Atlanta’s SunTrust Banks. That put some badly needed cash in the studio’s coffers – only to have the bank put it back on the market for a flip. One broker we spoke to said the deal was probably all worked out in advance, but nevertheless it happened with dizzying speed. The bottom line: The studio’s finances are improved and the Valley will get some new institutional real estate player with a very substantial investment in the area. Now, travel up the 101 to Thousand Oaks and there’s another company undergoing profound change. Amgen Inc. was a stable company for years that relied on a handful of groundbreaking biotech drugs it developed, such as Epogen for anemia and Neupogen, which reduces the chance of infection in cancer patients on chemotherapy. But now its patents are expiring and the FDA has given the green light for companies to manufacture “biosimilar” drugs. They are called biosimilar because unlike generic competitors to traditional brand name drugs, no two biotech-manufactured substances are exactly alike. Suddenly, Amgen needs to be leaner and more competitive. That’s what prompted the company to spend $10.4 billion in 2013 to buy Onyx Pharmaceuticals, so it could get its Kyprolis treatment for multiple myeloma blood cancer. It’s also the reason Amgen announced plans the other week to close down Onyx’s headquarters and lay off 300 of its employees. And don’t forget last year Amgen started laying off 15 percent of its workforce and began consolidating on its sprawling campus. I imagine it’s a bit uncomfortable for many workers at Amgen these days as they show up for work. Then there are the hard-to-keep-up-with changes in the West Valley shopping scene, where for months Westfield Group has been building its Village at Topanga outdoor mall between its existing Westfield Topanga and Westfield Promenade Malls. The Village at Topanga will be the Century City firm’s answer to Rick Caruso’s two wildly successful upscale outdoor malls: the Americana at Brand in Glendale and The Grove in the Fairfax District. Westfield’s concept may not be original but it should be first class. Amid all that construction noise suddenly word came that Macy’s was vacating two stores at the Promenade while Sears was closing its store at the Topanga mall. Both national retailers have been hit hard by the move to online shopping. Westfield swooped in and bought the property at the closing anchors, and just announced it plans to build an entertainment complex at the Sears site that will complement the Village at Topanga. Again, you need a scorecard to keep up with the Valley’s retail scene but the ultimate outcome will be a powerhouse conglomeration of shopping destinations in Woodland Hills. OK. So that’s three big stories. And what haven’t I mentioned? How about the whirlwind of comings and goings on the corporate scene. A story that broke as the paper was going to press last week was a $389 million offer for Vitesse Semiconductor Corp. in Camarillo by rival Microsemi Corp. in Aliso Viejo. The deal should close in June, and the greater Valley will again lose another corporate headquarters. But hey, wait. There was the announcement by California Resources Corp., the spinoff from Occidental Petroleum Corp., that it is moving its headquarters to Chatsworth from Westwood. The company has a portfolio of oil-and-gas assets that Occidental didn’t want when it moved to Houston last year to focus on its Texas holdings. Reports were that Long Beach and Bakersfield were also vying for the headquarters location – but Chatsworth won out. Heraclitus said you don’t step in the same river twice. With California Resources, I like to think of Bill Clinton’s spin on it. That would be his campaign theme on the way to his first term in the presidency: Change is good.

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