2002: Year In Review Winners and Losers The brightest star of 2002 in the story of the San Fernando Valley’s economy had to go to the residential real estate market which, with both median sale prices and interest rates at levels not seen in decades, helped insulate the business community and the region from some of the aches and pains ailing the rest of the country. But in other news IPOs were stalled, jobs were slashed, top executives left office in shame and predictions of an economic turnaround by mid-year never materialized. The Business Journal’s editorial staff took a look back at the year’s headlines and offers a snapshot of the people and events that had the biggest impact on business in the Valley. January On the Dole: The jobless rate in the San Fernando Valley climbed on news that unemployment benefits would increase with the new year. Pacoima led the Valley with an unemployment rate of 20 percent. “You know what they say: last on, first off.” Laid-off warehouse worker La Shawn Daniels Bringing Down the House: Homestore.com Inc. Chairman and CEO Stuart Wolff resigned less than a week after the largest Internet lister of homes for sale announced it had overstated revenue by as much as $95 million in the first nine months of 2001. Bluelight Special: Kmart Corp. filed for Chapter 11 protection and announced it was closing its Fallbrook Mall store. The move had a silver lining: Kohl’s eventually took over the space, bringing in a stronger retailer for mall operator General Growth Properties. February To the Rescue: The city of San Fernando and the Valley Economic Development Center put together a deal to save 50-year-old OH Boy! Corp. from going under. Looking Good: Digital Insight Corp. planned an additional stock offering to raise $100 million to buy out competitors and strengthen its position in the Internet banking marketplace. The stock offering was eventually canceled. Bunny Hop: Playboy Enterprises Inc. subsidiary Playboy Television broke ground on a $25 million digital TV studio near Glendale. March Movin’ On Up: Valley Community Clinic worked out a deal to move into its own building in North Hollywood after obtaining $5.5 million in federal and local funding. “You just don’t get non-profits coming in for money to buy a building.” Brent Wiblin, vice president of Mellon First Bank, Encino Not in My Backyard: Agoura Hills voters approved Prop. H, blocking retail developments over 60,000 square feet and, in the process, nixing plans by Selleck Development Group to build a Home Depot-anchored shopping center. April Tax Attack: The Valley Industry and Commerce Association, led by newly installed president Fred Gaines, announced its “ax the tax” campaign, aimed at pushing the city to do away with the gross receipts tax, which garners roughly $300 million for the city annually. This Just In: After nearly six years, Larry J. Calemine, executive officer of the Los Angeles Formation Commission, finally handed over his report to commission board members, clearing the way for an historic vote to put the issue of a Valley breakup on the ballot. Wait ‘Til Next Year: Citing market conditions, entrepreneur and biomed pioneer Alfred E. Mann delayed until at least early 2003 plans for an initial public offering for his biotech conglomerate MannKind Corp. Fire Sale: Financially strapped Panavision sold $200 million in notes to stay afloat and service its massive $300 million debt. May Branding a Breakup: High-powered public relations firm Goddard Claussen, Porter Novelli took the secession challenge and agreed to represent Valley VOTE in its election campaign for Valley cityhood. “I think it’s a win-win for both Valley residents and those who will be in Los Angeles once the new city is formed.” Ben Goddard June Grounded: Los Angeles World Airports dropped the ball on a long-stalled plan for master development at the Van Nuys Airport, canceling plans for a joint meeting with the city planning commission where the two were to approve a draft proposal. “A plan is now up in the air and someone has to get off their duff and do something.” Former L.A. Planning Commissioner Bob Scott Out of Business: The Woodland Hills offices of Arthur Andersen LLP were shuttered as a result of the accounting firm’s conviction on charges of destroying evidence in the Enron Corp. investigation. Nearly 70 workers were either laid off or went to work for other firms. “Shredding documents is not something that is part of our culture.” Former Andersen partner Anthony E. Radaich Power Play: All 450 Granada Hills Community Hospital nurses, doctors, food service and janitorial workers voted to join the Service Employees International Union, making the facility the fifth in the Valley to join the union. The Big Buy Out: Woodland Hills-based Syncor International Inc. agreed to be acquired by Ohio-based Cardinal Health Inc. for $867 million. Growing Pains: Westfield America filed plans for a 600,000-square-foot expansion at Westfield Shoppingtown Topanga, extending lease availability to 1.65 million square feet. July Leave Me Outta This: State Sen. Richard Alarcon officially declined to run for mayor of the proposed new Valley city, taking the wind out of the sails of secessionists who’d hoped the senator’s campaign would bring clout to their cause. “I just think we are going to have a lot of controversy in the new city under this form of elected leadership. There will be infighting and deep rifts.” State Sen. Richard Alarcon Fixer Upper: Agoura Hills city officials approved an $80 million mixed-use project with residential and office space, clearing the way for repairing and expanding the Kanan Road interchange of the Ventura Freeway. Funding came from developer J.H. Snyder Co., the city and the MTA. August Home Sweet Home: The median price of a single-family home in the San Fernando Valley hit a record high of $334,000 in June, according to reports released this month. Interest rates dipped in August to 6.4 percent, sparking bidding wars and insulating the local economy from recession woes. Drive This: Miller Automotive Group, a $400 million dealership with six Los Angeles locations, agreed to be acquired by Houston-based Group 1 Automotive Inc. The sale included Honda, Nissan and Infiniti dealerships in Van Nuys and represented the first foray by the Fortune 500 company into Southern California. Can You Hear Me Now? Camarillo-based Power-One Inc. laid off 24 percent of its 2,600-employee workforce in response to a three-year slump in the telecom sector that showed no signs of abating. “Twelve months ago people were anticipating this would last 12 months. No one anticipated this.” Andrew Huang, CIBC World Markets Corp. telecom analyst That’s All, Folks: After 40 years on the New York Stock Exchange, Panavision Inc. was delisted when it failed to meet minimum capitalization requirements. When closed down, Panavision’s stock was trading at $1.25 a share. I’m a Big Bank Now: Union Bank acquired Valencia Bank & Trust, before the deal the largest community bank in the Santa Clarita Valley. “We feel we’re in the right place at the right time and in an area where housing is still booming and retail space is being built.” John M. Reardon, president and CEO of Valencia Bank & Trust Uh, We’re Outta Here Too: Goddard Claussen, Porter Novelli dumped the Valley secession campaign two months before election day, leaving proponents of a breakup to rely on a less expensive, strictly grassroots effort. Rumor had it their price was simply too high. “Gerry Gunster (Goddard’s point man for the Measure F Campaign) is reported to have left the Valley and says he’s never coming back.” Laurette Healey, co-founder, Valley Independence Committee Count Us In: Despite a lackluster campaign and signs that the movement was failing to take hold in the Valley, the Valley Industry & Commerce Association membership agreed to endorse Measure F. October The Big Diss-Off: Mayor James Hahn canceled an annual VICA forecast appearance, becoming the first mayor in 10 years to snub the event and forego one last opportunity to speak to Valley business leaders before the Nov. 5 vote on secession. “I just think it’s kind of strange that he hasn’t offered to send someone else.” Fred Gaines, VICA chairman So Much for the Little Guys: Cushman & Wakefield dismissed most of its brokers assigned to the Woodland Hills office, reflecting the firm’s shift away from local business to national accounts. Still in a Slump: Indicating the technology sector did not come close to a turnaround in 2002, Vitesse Semiconductor stock dove to 62 cents a share, having traded at more than $100 a share in early 2000. November Breaking Up Is Hard to Do: Measure F, the secession initiative, was defeated at the polls by resounding margins: Citywide, 67 percent said they preferred to stick together; only 51 percent of Valley voters supported a breakup. Never Say Never: United Online Inc. reported its first quarterly profit ($1.5 million, up from a net loss of $2.7 million a year earlier) since its founding as NetZero Inc. in 1997. While You Were Out: Shares of Digital Insight Corp. fell 49 percent in two months after it realized competitors had picked off clients the Internet banking firm neglected during its high-growth days. Dale Walker resigned as president and COO. December One More Try: Syncor International Corp. founder and Chairman Monty Fu resigned from the board, forfeited $2.1 million in expected severance pay and $2 million in stock to pay a fine, all to get the acquisition of Syncor by Cardinal Health back on track. The deal, once worth $867 million, lost $90 million in value and the company’s overseas markets were embroiled in bribery allegations. Frogs and Other Fairy Tales: The Ventura County Board of Commissioners voted to approve an environmental report on the Ahmanson Ranch development before a new slow-growth commissioner comes on board in January. The decades-old plans for Ahmanson will not be sent back to the drawing board once newly elected commissioner Linda Parks takes office Jan. 6. In Memoriam Louise Marquez, long-time manager of the Panorama Mall, died in March at the age 50, after a battle with lung cancer. She is credited with turning the mall into a real centerpiece of the community.
