Los Angeles Economic, Social, and Demographic Data

[Westsidelife]

Delta adding two Hawaii flights from LAX

By Pacific Business News
Los Angeles Business from bizjournals
October 23, 2007

Delta Air Lines will add two new daily flights to Hawaii from Los Angeles starting next year.

The flights to Lihue and Kona begin on June 5, the Atlanta-based airline said in a news release on Tuesday.

The additional flights bring to five the number of nonstop flights Delta (NYSE: DAL) operates from Los Angeles to the islands.

"The addition of flights to Lihue and Kona marks another step in Delta's efforts to establish the world's broadest network of destinations for our customers," said Glen Hauenstein, Delta's executive vice president-network planning and revenue management.

The announcement comes two months after Delta dropped a direct flight between its Cincinnati hub and Honolulu. Delta also offers direct flights to Hawaii from Atlanta and Salt Lake City.

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Source: Los Angeles Business from bizjournals

[Westsidelife]

Jacobs gets FAA deal worth up to $58M

Los Angeles Business from bizjournals
October 23, 2007

Jacobs Engineering Group Inc. on Tuesday received a contract worth up to $58 million from the Federal Aviation Administration.

Under the deal, Jacobs will provide architect and engineering support services for both updating and maintaining design packages and other facility evaluations at the FAA's Terminal Program Operations facilities.

The indefinite delivery contract has a two-year base period of performance, plus option years. If all options are exercised, the period of performance may extend through September 24, 2012.

Also, Jacobs announced it will release its fourth quarter results before the market opens on November 6.

Pasadena's Jacobs provides technical, professional, and construction services. The company has more than 49,000 employees worldwide.

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Source: Los Angeles Business from bizjournals

[Westsidelife]

L.A. Port Plans Massive Marine Facility

By RICHARD CLOUGH
Los Angeles Business Journal Staff
October 18, 2007

The Port of Los Angeles is rolling out preliminary plans today to build a massive marine research facility that officials hope will stimulate economic activity and help revitalize the San Pedro community.

Geraldine Knatz, executive director of the port, has been working behind the scenes for nearly two years to generate support for the project, which would be built on a 28-acre patch of land currently serving as a petrol chemical terminal.

The site, adjacent to downtown San Pedro, is a key battleground in the port’s waterfront development efforts and planners expect the high-level research facility to be a catalyst for the area’s economic resurgence.

“We have this vision of a premier research institution that attracts people from around the world,” Knatz said. “We’re talking about bringing a new industry to San Pedro and new jobs. These are good, high-paying jobs that would be a boost to the San Pedro economy.”

Knatz is expected to unveil the concept for the project, called City Dock No. 1, at tonight’s Los Angeles Harbor Commission meeting. Part of the impetus to move forward with the project, she said, came last week when the Annenberg Foundation said it will commit $50,000 in grant money to begin planning the facility.

The proposed research facility would include academic laboratories, government research facilities and real estate for future maritime-related businesses – what planners are calling a “business incubator.” Ideally, Knatz said, the facility would become a global leader in the study of climate change and sea level rise.

It is too early, she said, to estimate the cost or timeline of the project.
The move comes after the port announced in August it was terminating the lease of New Orleans-based liquid bulk operator Westway Terminal Co. Inc., which has occupied the site since 1996, as part of a larger effort to make the San Pedro waterfront more community-friendly. The port bought out the remaining 18 years of Westway’s contract for $17 million.

The terminal is zoned for commercial activities and local business leaders envision an economic rebirth in San Pedro built, in part, around this new research institute.

“This is the kind of thing that over the long term can lead to an economic wealth cycle for the community,” said Herb Zimmer, chairman of the San Pedro Chamber of Commerce committee to promote waterfront economic development. “It breeds ideas and innovations and things that are going to become the basis of the new economy.”

Zimmer, owner of PriorityOne Printing, Copying & Graphics in downtown San Pedro, opened his shop 28 years ago and said he has seen the local economy deteriorate as years of neglect and the decline of the once-thriving fishing industry have eliminated many jobs from the blue-collar community.

“I want to see the ports replace the jobs that we lost during the ’70s,” he said.
The port is currently in the middle of multi-year San Pedro waterfront improvement project, which includes the construction of a cruise ship promenade and the development of new parks and walkways. In all, the redevelopment efforts span 400 acres.

As part of those efforts, the port evicted Westway from its Main Channel terminal, which Knatz said was viewed as a hazardous area by the community.
The port already has a marine research facility known as the Southern California Marine Institute, which is a partnership of eight California State University schools, as well as USC and Occidental College. But with its cramped facilities hidden within Terminal Island, the institute has welcomed the idea of expanding its laboratory space and moving to a more attractive location along the Main Channel, which has almost 500,000 square feet of warehouse space and nearly 5,000 feet of wharf.

Knatz said the institute may relocate to the proposed research facility, but that has not yet been determined.

This project is already almost two years in the making for Knatz. She first had the idea to push for a marine research facility a little before she took over as executive director in January of 2006. The notion stagnated until this summer, when the Westway agreement changed the landscape. At that point, she said, her ideas seemed to become more viable.

Though she said she “wasn’t really out hunting” for financial support, she received word last week that the Annenberg Foundation, a Radnor, Pa.-based philanthropic institution, would give a $50,000 grant to help move the project along.

“It helped spur a recent flurry of activity,” she said.

The port will likely lose future revenue by dedicating an entire terminal to research and related pursuits – a sacrifice the port seems willing to make.
“We recognize that it’s not going to make us the kind of money as if it was a container terminal, and that is not part of this plan,” she said.

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Source: Los Angeles Business Journal

[Westsidelife]

Virgin America starts L.A. service

By Jeff Clabaugh, Washington Business Journal
Los Angeles Business from bizjournals
October 24, 2007

Virgin America, which began flights from Dulles International Airport to San Francisco last month, now has Washington to Los Angeles flights.

The start-up airline Wednesday began twice-daily service from Dulles to Los Angeles International Airport. Virgin America began operations in August, with flights from San Francisco, Los Angeles and New York.

The San Francisco area-based airline, founded and funded in part by British billionaire Richard Branson plans to serve as many as 10 cities within its first year of operation and up to 30 cities within five years.

Virgin America's Dulles to Los Angeles flights starts with coach fares as low as $139 each way and first class fares as low as $499 each way.

Virgin America operates a fleet of new Airbus A320 jets, and has 31 planes on order currently. It says it plans to hire more than 1,000 new employees a year.

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Source: Los Angeles Business from bizjournals

[Westsidelife]

CSC gets Navy deal worth up to $430M

Los Angeles Business from bizjournals
October 25, 2007

Computer Sciences Corp. has been given a contract worth up to $430 million to provide range support services to the U.S. Naval Air Warfare Center, Aircraft Division, in Patuxent River, Md.

The contract has a one-year base period, two one-year year options and two performance-based award terms

CSC will provide technical support services, such as program management, logistics, training and simulation. CSC will provide on-site management, technical and administrative personnel to conduct analytical studies, engineering and software programming for hardware.

El Segundo's CSC (NYSE: CSC) is an information technology company.

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Source: Los Angeles Business from bizjournals

[Westsidelife]

United to add daily flight from Baltimore to LAX

By Scott Dance, Baltimore Business Journal
Los Angeles Business from bizjournals
October 26, 2007

United Airlines has added a third daily nonstop flight from Baltimore to Los Angeles for the winter season.

The flight will leave Baltimore/Washington International Thurgood Marshall Airport at 9:15 a.m. each day to arrive at Los Angeles International Airport at 12:07 p.m. The new flight is part of the airline's winter schedule change, BWI spokesman Jonathan Dean said Friday.

The announcement comes three weeks after Southwest Airlines (NYSE: LUV), the airport's dominant carrier, removed its two daily flights between Baltimore and Los Angeles from its schedule.

United ranks third at the airport in passengers carried, with a 6 percent share in August. The airline ranks sixth in daily departures, with 16.

Southwest has 184 daily departures and carried 54 percent of airport passengers in August.

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Source: Los Angeles Business from bizjournals

[Westsidelife]

OSI gets $14M order

Los Angeles Business from bizjournals
October 29, 2007

OSI Systems Inc.'s optoelectronics and manufacturing division has received a $14 million order from EDO Corp. that will manufacture devices for the Department of Defense.

The phase 3 order is for sub-assemblies for EDO's "CREW 2.1" vehicle-mounted electronic jammer systems eventually delivered to the DoD. The contract follows the previously received phase 1 and 2 contracts from EDO worth $5 million and $22.1 million, respectively.

Hawthorne-based OSI Systems (NASDAQ: OSIS) designs and manufactures electronic systems and components for critical applications in markets including homeland security, healthcare, defense and aerospace.

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Source: Los Angeles Business from bizjournals

[Westsidelife]

Northrop to Bid for Coast Guard Contract

By ALLEN P. ROBERTS Jr.
October 29, 2007

Northrop Grumman Corp., said Monday that it plans to lead a team that will compete to design a digital communication system for the Coast Guard.

The system, to be called the Nationwide Automatic Identification System, will continually transmit and receive voiceless exchange of vessel data, including identity, position, speed, course and destination, Northrop said in a statement. The potential value of the contract wasn't disclosed.

Northrop said the system will improve vessel and port safety by supplying information for collision avoidance. It will also help to secure coastlines by the detection, identification, and classification of vessels hundreds of miles offshore the Coast Guard's Web site said.

The Northrop team includes Allied Technology Group Inc., CACI International Inc., and Washington Group International Inc.

Shares in the Los Angeles-based defense and government contractor rose 1.1 percent to $82.85 in afternoon trading Monday on the New York Stock Exchange. Shares in Northrop have gained 24 percent so far this year.

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Source: Los Angeles Business Journal

[Westsidelife]

Asia Major

Even as local garment manufacturing stagnates, the Korean apparel market in L.A. has grown into a thriving, $5 billion industry.

By BOOYEON LEE
Los Angeles Business Journal Staff
October 29, 2007

Sixteen years ago, when Yoon Huk Kim set up shop in a corner of the Los Angeles fashion district downtown and started selling inexpensive women’s knits and skirts, he was one of about 200 Korean wholesalers in the area.

Today, there are about 1,000 Korean wholesalers in the Los Angeles fashion district, most of whose narrow storefronts sell trendy women’s clothing produced in their factories nearby.

Indeed, the Korean-owned portion of the 80-block fashion district is a booming submarket doing about $5 billion in annual sales, according to the Korean Apparel Manufacturers Associations. That little-known section represents about a quarter of the entire Los Angeles fashion industry, which some believe has overtaken New York as the nation’s top fashion manufacturing hub.

What’s more, the Korean apparel industry has been faring better than most other L.A. fashion manufacturers losing work to China, because it has managed to keep more of its jobs here. In fact, new wholesale centers are popping up around the Korean apparel industry to accommodate hundreds of new stores.

The Korean wholesale section has managed to thrive mainly because the stores do business differently than the mainstream fashion district nearby.

At show rooms in the non-Korean fashion district, in and near the 1.8 million-square-foot California Market Center (which is owned by Korean-born developer David Lee), customers tend to put in orders for mostly high-end designer-brand clothing. Then they wait for the apparel to be assembled and delivered.

But the clientele of the Korean manufacturers tend to be owners of independent boutiques and retail chains who are attracted to the cash-and-carry aspect. They buy pre-designed samples that typically are stacked up in the back room. That way, a buyer can walk out with a black plastic bag stuffed with, say, 10 orders of a dress she spotted only a few minutes before.

Moreover, the Korean manufacturers display samples that change styles every two weeks, instead of the 10-week cycle that dominates the mainstream fashion industry – another plus for the buyers of boutiques, who want to be up on the very latest in fashion.

Being latest in fashion has not always been a strong suit for Korean wholesalers. In 1991, when Kim first opened his store to sell to swap mart buyers, his only focus was to keep the prices as low as possible.

“Now, we’re more about staying competitive with the latest designs,” said Kim, whose clientele has expanded to mostly South American buyers who make weekly trips to the downtown garment district.

Of course, that quick fashion turnover causes fierce competition between local Korean business owners. Only days after a popular frock hits one storefront, the same or a very similar design may pop up in multiple windows, all vying to be purchased by the same customers.

Low prices are another attraction. The Korean merchants may sell a dress for $2.50 – provided the buyer takes multiple copies. The mainstream wholesale locations in the fashion district, such as the New Mart and the California Mart, typically sell dresses for several times that amount. Of course, they also tend to sell much higher-priced exclusive apparel as well.

Constant expansion

The generally thriving Korean manufacturing industry is an anomaly because apparel manufacturing employment has seen decline.

As of September, there were 57,900 workers in apparel manufacturing in the county compared to 60,100 a year ago, according to the Los Angeles Economic Development Corp. The number of workers in the wholesale apparel industry in Los Angeles has decreased to 18,800 this year from 19,200 a year ago.

The Korean submarket is not broken out separately, but it’s clear there’s a building boom there. Around the San Pedro Mart, which has a high concentration of Korean entrepreneurs, at least five large-scale construction projects are going up including a 650,000-square foot commercial condominium project at the corner of San Pedro and 14th Place called the Los Angeles Fashion Center or L.A. Face. It will include 196 wholesale showrooms, and about 80 percent of the units have been sold, predominantly to Korean American business owners.

“The area is full and there is constant expansion,” said Bobby Hines, an international trade specialist downtown with the U.S. Department of Commerce who works closely with the Korean apparel industry in Los Angeles.

The Korean section of the fashion district, roughly 24 blocks, is one of the areas of downtown known for foot traffic, where merchandisers dart in and out of stores with clipboards in hand.

Nearly all of the wholesalers in the district have their own manufacturing factories scattered from downtown to Vernon, City of Commerce, and even Orange County. An additional 1,000 just operate factories without accompanying showrooms.

The retail area packed with buildings painted orange, blue and green is anchored by the San Pedro Mart, which was built by Korean manufacturers tired of being harassed by landlords who insisted on collecting what’s called “key money,” or a flat sum paid just to move in. For most wholesalers, this illegal practice amounted to a $100,000 cash payment every time the lease was renewed, said Hailey Huh, executive director of the Korean Apparel Manufacturers Association.

Unfortunately, she said, many Korean landlords who bought sections of San Pedro Mart still hold to the practice of collecting the money under the table.

Most of the wholesale stores have factories nearby, like Finesse Apparel Inc.

The company president Jung Han operates both the factory on Stanford Avenue and the wholesale showroom in San Pedro Mart. Han, who operated about a dozen retailers before entering the manufacturing business 12 years ago, said what he calls the “temperament of the Korean people” jives well with his line of business.

“We generally have fast hands and adapt really quickly to changing situations. Our production line has to be reassembled every time a new design goes out and once it does, within days, 20 other wholesalers are selling the same style,” Han said. “It’s competitive and physically taxing. Being immigrants, we were also more willing to take risks and do the kind of dirty work others may have been afraid to take on.”

One of the district’s most successful retailers is Forever 21, a $1 billion company, which has been in the news because of numerous lawsuits filed against it for alleged copyright violations. (See sidebar.)

Humble beginnings

The Korean section originated near Santee Alley in the late 1970s from a handful of rag jobbers. They bought left-over textiles and fashioned them into simple dresses and sold them to swap marts.

Huh said the area took off mainly because of South Korea’s thriving textile industry and the tight network of Korean-owned sewing factories, manufacturers and retailers. She said that in the mid-1980s, manufacturers would regularly load a plane with textiles in Seoul and fly them to Los Angeles where they were assembled.

At that time, about 2,000 local trim and sewing factories that contracted with perhaps a couple dozen manufacturers were operated by Koreans as were hundreds of retailers.

“What resulted is an ecosystem that allowed for a huge growth spurt in the industry. The entire production line – from textile, trim, sewing to fabric printers – they are all owned by Koreans,” said Huh of the Korean manufacturers association.

By the late 1980s, the number of Korean-owned manufacturers swelled from a couple dozen to a couple hundred, thanks to the arrival of Korean manufacturers from South America, where they had long operated textile mills and wholesale shops. Many brought South American customers with them. As a result, the district today has a Korean-South American vibe to it.

Kim, the owner of Ire Fashion in San Pedro Mart, grew up working in his father’s clothing mill in Sao Paolo, Brazil. He worked as a sewing contractor in New York’s garment district before opening his first manufacturing business on Maple Avenue in 1991.

“That was a very profitable time,” said Kim, whose customers are mostly store owners from Brazil and Venezuela. “But now, most of my customers go straight to China because they know it’s cheaper there.”

China threat

In fact, the Korean manufacturers, like most other manufacturers, are seeing an increasing number of buyers seeking lower prices flying over them and going to China. That has forced the Korean manufacturers to source out some of the work to China in order to bring down their own prices.

Kim, for example, used to produce all the clothes he sells from his factory, but not anymore. About 30 percent of the wholesale goods sold in the Korean apparel district now come from China.

Moreover, stringent labor laws and random sweeps of sewing factories by the state’s Labor Commission have created another challenge for Korean manufacturers. One law gives the right of seamsters in a sewing factory to demand overdue wages not only from the factory owner, but also the manufacturers who put the finishing touches on the garb.

However, the one thing that may help the Korean district is the speedy creation of fashionable items – one of the aspects that helped it grow in the first place.

Jack Kyser, chief economist at the L.A. Economic Development Corp., said he is optimistic about the Korean apparel district. The nature of the industry, which demands quick turnaround and specialized production, may keep more manufacturing from heading off shore, he said.

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Source: Los Angeles Business Journal

[Westsidelife]

Bullish on downtown L.A.'s office market

Vacancy rates are falling and rents are rising, giving cause for continued optimism among landlords.

By Roger Vincent, Los Angeles Times Staff Writer
October 29, 2007

Even as the trendy loft and condo market cools a bit in downtown Los Angeles, the glass-and-steel skyscrapers are filling up and street life is picking up after dark.

Los Angeles architect Peter Devereaux is bringing his 150-employee firm to the heart of the city's financial district. "We felt that now -- and more so going into the future -- that it would be to the advantage of our employees to be located downtown," he said.

"It has all the amenities, like fitness centers, restaurants and entertainment."

There's no better indicator of commercial revival than the City National Plaza office complex, which for years stood as a mostly empty symbol of the challenges faced by downtown. Its profile looked impressive, but there were many vacant offices in the shiny towers. Now the complex is mostly full.

Downtown had languished since the early 1990s, when the region suffered a steep recession. Developers anticipating an office boom had built millions of square feet before the crash, and the city's business district was left with a glut that only now shows signs of abating.

"Imagine every fourth floor was empty," said broker Carl Muhlstein of Cushman & Wakefield. "We had a 25% vacancy factor."

Today the numbers that commercial developers watch are encouraging them. Downtown vacancy rates are dropping and rents are heading upward, new statistics show. Landlords say they are bullish unless a swift downturn in the economy is ahead.

As the office market tightens across much of Los Angeles County, according to recent statistics, some of the biggest downtown landlords are raising rents -- something almost unheard of three years ago.

The county's office market has been evolving in landlords' favor for the last two years, said Muhlstein of Cushman & Wakefield, the brokerage that compiled the statistics. "Increases in rent during the last five years have greatly outstripped inflation," he said.

For years, rents in vacancy-plagued downtown lagged behind those in other popular office markets such as Century City, Santa Monica and Burbank. That may be about to change, in part because City National Plaza is no longer dragging down the market.

Like a python that swallowed a pig, downtown has been trying to digest the two-tower complex since 2003, when Thomas Properties Group bought the landmark property occupying a city block on Flower Street across from the Central Library.

It had been one of the finest properties in the city for many years after it was completed in 1973 and became the headquarters of Arco, the petroleum company now owned by British oil giant BP. But it was maintained so poorly by its previous owners that it was no longer considered in competition with downtown's good-quality buildings.

When Thomas Properties took over, the complex was close to 80% unoccupied, said Kent Handleman, a senior vice president at the Los Angeles company. Thomas Properties spent about $185 million to improve the neglected plaza and set out to snag tenants from every direction.

"We had to be very competitive," Handleman said, which meant other downtown landlords couldn't raise their rates much if they didn't want their tenants to jump ship.

Now City National is mostly leased and the price war is over, Handleman said. "We used to be used as leverage against other landlords."

With little more than the plush former Arco executive offices left to lease, Thomas Properties is raising rents and downtown's two largest office landlords are among those following suit.

Rents downtown will go up 4% to 5% by the end of the year, predicted Bill Flaherty, a senior vice president at Maguire Properties, which owns the most downtown office space.

"Downtown was a bargain for so many years," Flaherty said. "Now the Westside and other markets have had such rent increases that downtown is being pulled along with the strength of the overall L.A. County market."

Average monthly office rents are $2.81 per square foot, up noticeably from $2.48 a year ago but still well below the $5 average in Westwood and Santa Monica, according to Cushman & Wakefield.

Consequently, "downtown is enjoying an influx of Westside tenants," broker Muhlstein said.

Engineering firm Psomas will be heading there from West Los Angeles in December.

Investment banking firm Bear, Stearns & Co. recently opened a downtown office to complement its Century City branch.

Many other leases, however, reflect expansions of downtown local businesses or moves of a few blocks from one building to another.

"A lot of people on the Westside think downtown is dangerous, but here everything is new," Handleman said, citing the $2.5-billion L.A. Live entertainment and hotel complex being built next to Staples Center and the recently opened Ralphs supermarket.

The 7,100-seat Nokia Theatre opened at L.A. Live recently, and construction is set to begin in December on the $2-billion Grand Avenue mixed-use development on Bunker Hill.

Doubts remain among some urban planners over whether these huge venues can actually help the surrounding sections of downtown grow and thrive, though. Many patrons simply drive in to see a concert and then drive out again, not stopping to participate in the night life of downtown.

Nevertheless, the construction boom that has added thousands of apartments and condominiums in the last few years is also changing the atmosphere by attracting more foot traffic and small businesses, observers said.

"It's been an amazing transformation," said attorney Mark Baute, who has had an office downtown since 1986 and recently signed another lease. "There is more going on."

Condo sales have "been a little weaker" in recent months and some developers have brought their prices down or offered incentives such as discounted closing fees, said agent Kerry Marsico of Coldwell Banker. "But overall, prices are strong," he said, and foreign buyers and wealthy individuals in particular are still very active.

Real estate broker Jonathan Larsen of Transwestern Commercial Services said he represented several Westside companies that were considering relocating downtown and estimated that a business that rented 50,000 square feet could save $1 million a year by doing so.

"But I'm still skeptical that the market is tightening the way big landlords think it is," Larsen said. With downtown vacancy more than 15%, there are still a lot of offices to choose from, especially for smaller tenants, and much of the leasing still involves tenants moving from one downtown building to another.

"When somebody gets arrogant," he said of landlords, "we look elsewhere."

Downtown's second-largest office landlord, Brookfield Properties, insists that the momentum is in owners' favor. "This was the busiest summer any of us have ever experienced," said Tony Manos, head of Southern California operations.

Among the tenants negotiating deals now are firms with leases that don't expire until 2009. "Their advisors are sensing that rates are going to be very different in '09 than they are today," Manos said.

If the current trend does continue, Maguire Properties may break ground on the first new high-rise office tower downtown since 1992.

The real estate investment trust's announcement last year that it was planning a building on Figueroa Street was greeted with skepticism, but Flaherty insisted the project was on track.

"We continue to work on it as a very real project," he said. "If the market stays on course, we could break ground within two years."

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Source: Los Angeles Times

[Westsidelife]

Law Firms, Banks Give Downtown Its High-Wage Title

By HOWARD FINE
Los Angeles Business Journal Staff
October 29, 2007

Move over Beverly Hills.

The land of moguls, mansions and luxury retail was edged out by two Los Angeles ZIP codes for the county’s highest annual average wage, according to figures just released by the U.S. Census Bureau.

The top honors for ZIP codes with at least 1,000 employees went to Los Angeles 90071 – also known as the downtown Financial District – with an average annual wage of $116,758 in 2005, the most recent year tracked by the feds. The tiny horizontal slice of downtown is home to the county’s largest law firms and regional bank headquarters. With partners at many of the major law firms pulling down more than $1 million each, it’s no wonder the 90071 figure is so high.

“There’s a lot of money being earned in a very small space downtown,” said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp., which compiled the ZIP code rankings from the raw U.S. Census data for the most detailed picture yet of county wage trends.

Right behind downtown at $115,030 was 90067, the ZIP code exclusively reserved for Century City, which also boasts prominent law and financial offices, especially those serving the entertainment industry. Century City is also home to Northrop Grumman Corp., Fox Group’s West Coast operations, AIG/SunAmerica Corp., Univision Communications Ltd. and Herbalife Ltd.

Beverly Hills 90212 (Wilshire Boulevard and points south) came in third at $103,050. The fabled Beverly Hills 90210, which includes many of the city’s mansions and the “Golden Triangle” retail district, ranked considerably lower with an average wage of $60,970.

“What people don’t remember is that there are a lot of retail jobs in Beverly Hills, and while they may pay better than retail jobs elsewhere, they are still retail wages,” said George Huang, the LAEDC economist who compiled the rankings.

No doubt dragging down the 90210 average was the significant number of employees serving as live-in help, a phenomenon that played out to an even greater extent in the mostly residential city of San Marino, where the average wage was a mere $36,438.

If it’s any consolation, Beverly Hills still ranked highest overall in terms of average wages, posting a figure of $69,671 in 2005. Virtually tied for the number two spot were the cities of Culver City and Santa Monica, at about $62,500. The average wage for all of the City of Los Angeles was $44,069, but that also includes communities like Pacoima and South Los Angeles.

While these and other low-income areas – like Compton and Maywood – were towards the low end of the wage scale, they weren’t at the bottom of the ZIP code data. That title fell to Northridge 91330, home to California State University Northridge, which posted an average wage of just $13,351, less than a 40-hour-a-week minimum-wage job. “At the university, there are no doubt a lot of students with part-time jobs,” Huang said.

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Source: Los Angeles Business Journal

[Westsidelife]

Affluent Asians set up house in downtown L.A.

By Kemp Powers
October 28, 2007

LOS ANGELES (Reuters) - Architect Christopher Pak understands what upwardly mobile Koreans want and that's why his latest project, a 22-story residential tower, has no apartments on the fourth and fourteenth floors.

The number 4 sounds like the word "death" in Korean, Pak says. So in his building the fourth level will be for parking and the residential floors will skip the fourteenth.

Pleasing Korean clients is a key part of keeping the downtown and near downtown Los Angeles property market hot, in stark contrast to the chilly sales in most of Southern California in the wake of the subprime lending crisis.

Koreans and other affluent Asians are joining the ranks of young loft dwellers who have fueled a resurgence of downtown Los Angeles as a place to live, not just work.

"Koreans have a natural affinity to downtown," said Pak, a Korean American who is also a partner in the $160 million development, due to be completed in 2008.

Koreans, he said, believe urban cores as having better quality of life than rural or suburban areas, an idea counterintuitive to many in this sprawling city of 3.8 million with few high rises.

The near-downtown neighborhood of Koreatown had already been undergoing a major rehabilitation from its days of devastation in the 1992 race riots.

Today the neighborhood is completely different, bustling with activity day and night and increasingly awash in wealth.

After the Korean government relaxed overseas investment limits in 2006, individuals and real estate firms have descended on the Los Angeles market, home to the largest Korean community in the world outside of Korea.

PARK FIFTH GOING QUICKLY

While Koreatown was an obvious first destination, this affluent group has rapidly expanded into the dynamic downtown market down the street.

More than 7,000 new residential units have opened in downtown Los Angeles since 1999, with another 7,500 under construction and several larger projects close to breaking ground, according to the downtown Los Angeles Business Improvement District. The BID estimates the population will double from the current 29,000 to 58,000 by 2009.

Almost 25 percent of downtown's residents are Asian.

"The subprime meltdown has not affected our downtown market," said Robert Cipolloni, a real estate consultant at Windermere Properties who also moved downtown in 2006. "Yes, there's a glut with all of the new condos being built, but at the pace that people are moving into downtown L.A., that glut is going to be eaten up."

The anticipated growth has recently sparked some eye-opening projects. The largest is Park Fifth, a 890-foot (270-metre), $1 billion high-rise condominium that will house 726 residential units ranging in price from $400,000 to $5 million.

The building, to be completed in 2010, has been in presales for just over two months and 50 percent of the units have been sold, according to developers.

Cipolloni recalled a gathering hosted by a Korean agent that resulted in 40 people each putting down $10,000 deposits to reserve units in Park Fifth.

A RELATIVE BARGAIN

Money appears not to be an issue, especially compared with prices back home.

In a 2007 cost of living survey from Mercer Human Resource Consulting, Asian cities were three of the top five most expensive in the world, with Seoul in third place, followed by Tokyo and Hong Kong. Los Angeles was a relative bargain in 42nd place.

"We definitely have a large Asian element," said Richard Marr, Park Fifth's project manager, who says he can't say for certain how many of Park Fifth's presales are Asian buyers. "If you go to Seoul, Shanghai, Singapore, there's a certain prestige in living in taller buildings on the higher floors."

Korea's largest real estate development company, Shin Young, is buying a parcel of downtown land for a 334-unit condominium building.

The company is already building a 40-story condo skyscraper in the heart of Koreatown. However, its downtown building won't contain the accoutrements to appeal to Korean buyers. It's an investment property for American buyers, the company said.

Koreans aren't the first Asian community to invest heavily in downtown Los Angeles. In the 1980s, Japanese companies were on a tear to acquire downtown real estate.

"When the Nikkei was booming, the Japanese bought into trophy Los Angeles properties at prices that were too high," said Stuart Gabriel, director of UCLA's Richard S. Ziman Center for Real Estate. "The regional downturn of the 1990s crushed them."

Despite the new arrivals, including the area's first supermarket, downtown remains the home of the country's largest skid row and parts are deserted after dark. That's why Gabriel strikes a cautionary note about the downtown housing rush.

"If I were the developer of (Park Fifth), I'd be concerned about the timing of that play," said Gabriel. "You don't want to repeat the mistakes of Miami and San Diego."

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Source: Reuters

[Westsidelife]

Jacobs gets trio of new deals

Los Angeles Business from bizjournals
October 30, 2007

Jacobs Engineering Group Inc. received three contracts on Tuesday -- one from the Texas Army National Guard, one from the Port of Tacoma in Washington and one from GlaxoSmithKline.

Texas Army National Guard
Under the deal, Jacobs will provide architectural and engineering design services for a new Armed Forces Reserve Center and Joint Vehicle Maintenance Facility in El Paso. The complex will provide facilities for the Guard, including a controlled waste handling facility, ground support equipment, open storage, office and personnel support areas.

Terms of the deal were not disclosed.

Port of Tacoma
Jacobs will provide general engineering services to develop marine terminals along the Blair/Hylebos Peninsula at the port. The services will include open-order roadway, railway, and infrastructure engineering services as part of the development.

The value of the contract was not disclosed, but, Jacobs' design contract is based upon the time and expense to support approximately $300 million in roadway, railroad, and infrastructure work.

GSK
Under the deal, Jacobs will provide engineering, procurement, and construction management services to GlaxoSmithKline for a new Tier III data center to be constructed in the eastern United States.

Terms of the contract were not disclosed.

Pasadena's Jacobs provides technical, professional, and construction service, and has more than 49,000 employees worldwide.

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Source: Los Angeles Business from bizjournals

[Westsidelife]

Northrop pushing hard for new radar business

By Andrea Shalal-Esa
October 30, 2007

LINTHICUM, Md., Oct 30 (Reuters) - Northrop Grumman Corp (NOC.N: Quote, Profile, Research) on Tuesday opened a new $14 million facility for testing radars, saying it would give the company an edge in competing for new large-scale military sensors.

The five-story, 16,000-square-foot (1,500-sq-meter) complex boasts the world's largest antenna scanner, allowing Northrop to test a broad array of even the biggest sensors indoors.

Northrop said it would help the company better compete to build big radars for the Navy's next-generation warship, called CG-X; a joint Air Force-Marine Corps program for a new long-range radar system; and upcoming competitions for new airborne radar systems on U.S. and foreign fighter planes.

"It really does help to continue to position Northrop Grumman and the electronic systems portion of Northrop Grumman at the leading edge," Chief Executive Ron Sugar told reporters at a formal opening of the complex near Baltimore.

He declined to estimate the value of the potential contracts for Northrop, the No. 3 Pentagon supplier, but said there was a "solid business case" behind the new facility.

James Pitts, president of the company's electronic systems sector, said the facility positions Northrop "extremely well." His sector alone reported about 16 percent growth in new orders and acquisitions in the first nine months of 2007, pointing to solid sales growth in 2008, he said, giving no exact figures.

Boeing Co (BA.N: Quote, Profile, Research) is expected to pick Northrop or Raytheon Co (RTN.N: Quote, Profile, Research) this week to upgrade radars on its F-15 fighter jets, which could provide another big boost for the sector.

Raytheon has traditionally supplied radars for Boeing F-15 and F-18 jets, while Northrop builds radars for Lockheed Martin Corp's (LMT.N: Quote, Profile, Research) F-22 and F-35 Joint Strike Fighter jets, so a Northrop win would be a significant upset.

Sugar gave no specific forecast for 2008 sales, but said he was very pleased with third-quarter results, which came despite the lingering "horrific" impact of 2005's Hurricane Katrina, which caused $1 billion of damage to Northrop shipyards.

"We had a tremendous quarter," Sugar said, citing a significant increase in future bookings. "For several years we had some flattening of the growth in electronics, but we're pretty confident that the electronics business, as well as the rest of the company, is going to be in a good uptick here."

He told Reuters in a brief interview later that the impact of Katrina on Northrop alone was equivalent to the overall destruction caused by this month's wildfires in California.

"The last year or two our growth hasn't been what we wanted it to be, and .... yet we're putting that behind us," he said, noting Northrop had a record backlog of $64 billion in orders.

Pitts said the drive to win new radar orders was "all upside." "Anything we do is either going to take market share away from one of our competitors or allow us to grow in a new and exciting way," he said.

Sugar said Northrop remained committed to its bid to win a $40 billion order for new refueling tankers for the Air Force, which now expects to announce its decision by Jan. 31.

"We're not making any contingency plans for if we don't win it. We're proceeding to try to win it," he said, acknowledging that the company did not win every one of the thousands of competitions it entered.

"The competitive process is a good one and it creates a better outcome for the U.S. government and it sharpens us too," he said.

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Source: Reuters

[Westsidelife]

CSC buying First Consulting for $365M

Los Angeles Business from bizjournals
October 31, 2007

Computer Sciences Corp. is buying another local company, scooping up Long Beach's First Consulting Group Inc. for $13 a share, or about $365 million, in cash.

The deal represents a 30 percent premium to First Consulting's closing price on Tuesday of $9.98. In afternoon trading, FCG shares (NASDAQ: FCGI) were at $12.70.

CSC is making the buy to strengthen its healthcare capabilities and offerings, as well as presence in the United States, Europe and Asia.

The boards of directors of both companies have approved the deal and will now go to FCG shareholders. Should the deal be approved, it will close in early 2008, during CSC's fiscal fourth quarter and FCG's fiscal first quarter.

According to CSC, the transaction is expected to be neutral to CSC's earnings and accretive to free cash flow within the first 12 months.

El Segundo's CSC (NYSE: CSC) is an information technology company.

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Source: Los Angeles Business from bizjournals

[Westsidelife]

Northrop gets pair of contracts for radar system

Los Angeles Business from bizjournals
November 1, 2007

Northrop Grumman Corp. has been awarded two contracts from the Air National Guard in support of a radar program.

Northrop will provide both the radars and logistical support for AN/APN-241 program. The radars provide navigation and weather information for the Air National Guard's C-130H and C-130J tactical airlift aircraft.

The contract value for the radar systems is $13.5 million, while the contract for continued logistical support is worth $6.6 million.

Northrop (NYSE: NOC) is a defense and technology company based in Los Angeles.

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Source: Los Angeles Business from bizjournals

[Westsidelife]

Jacobs Buys Texas Firm

By ALLEN P. ROBERTS Jr.
November 2, 2007

Jacobs Engineering Group Inc. said Friday that it has agreed to buy Fort Worth-based Carter & Burgess. Terms of the deal were not disclosed.

The move will add 3,200 consultants to the Pasadena-based engineering company and also expands the company’s presence in the “fast-growing” Southwestern region, Jacobs said in a statement.

The addition will also add services such as land development, distribution and warehousing.

This is the second acquisition by Jacobs this year: The company bought Morristown, N.J.-based engineering consulting firm Edwards & Kelcey in March for an undisclosed sum.

Shares in Jacobs dropped 50 cents Friday to $83.93 in afternoon trading on the New York Stock Exchange.

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Source: Los Angeles Business Journal

[Westsidelife]

Tanked Up

Subcontractors will win big whether Northrop or Boeing gets Air Force contract.

By RICHARD CLOUGH
Los Angeles Business Journal Staff
November 2, 2007

Alcoa Fastening Systems is like a lot of aerospace suppliers in Los Angeles County.

The Torrance subsidiary of Alcoa Inc. is curious to know if Boeing Co. or Los Angeles’ own Northrop Grumman Corp. will receive the huge $40 billion contract to build a new generation of U.S. Air Force tankers to replace the aging KC-135.

But no matter which defense giant is chosen as prime contractor, Alcoa Fastening expects big business to come its way. The subsidiary has been specifically identified by Northrop as a supplier for its KC-30 tanker program. But the contractor also is a supplier to Boeing and that means it would likely get business if Boeing’s KC-767 is chosen as the new tanker.

“A lot of the local suppliers need to be neutral because both are their customers,” said Rick Sharpe, senior vice president of global aerospace customers and marketing for the subsidiary. “(Either tanker) is going to need the unique things we make.”

So while Northrop Grumman and Chicago-based Boeing duke it out on a national stage in the fight for the massive military tanker program, the local aerospace industry – which produces everything from electrical wiring to wing components – is sitting pretty, even though the final assembly of either plane would be completed out of state.

Boeing and Northrop are competing to build 179 aerial refueling tankers to replace a fleet of Boeing-made aircraft that have been in the skies for more than 50 years. The stakes are monumental: After the initial order, the military plans to buy several hundred additional planes in what would amount to well over $100 billion in new orders.

The Air Force has pegged this program as one of its top priorities, and is expected to announce the winner in late January. A production schedule has not been released.

Northrop, which has $30 billion in annual revenues, is expected to announce this week that it has identified 40 California companies that would supply parts to its KC-30 tanker program, contributing some $360 million annually to the state’s economy. In total, the program would support about 7,500 direct and indirect jobs in California.

But the state also would receive big business from Boeing, which still runs the massive C-17 cargo jet assembly line in Long Beach. Boeing says its program would have a $175 million impact in California, generating 4,000 jobs.

“There would be a significant amount of work in L.A. County,” said Bill Barksdale, Boeing’s tanker spokesman.

International team

It might seem that the larger economic and job creation figures – and the fact that Northrop has its headquarters in Century City – would give the local company an edge in California.

But Northrop has caught flak for partnering with European Aeronautic Defense and Space Co. to build its aircraft, a modified version of the Airbus A330 airliner.

The team plans to assemble the plane in an Alabama facility, but much of the work would be done in France, which has caused concern among some politicians and labor groups.

The California Labor Federation, the state arm of the AFL-CIO that represents more than 2 million union members, expressed concern last month over the inclusion of EADS in the Northrop bid and asked the Air Force to award the contract to Boeing.

“EADS’s violation of trade laws should be enough to disqualify this European company from receiving any U.S. government contract,” said Art Pulaski, executive secretary-treasurer of the federation, in a letter to Air Force Secretary Michael Wynne.

But Northrop is fighting back, saying the program would support 25,000 American jobs in total.

“Sixty percent of the parts for the KC-30 will be supplied by U.S. manufacturers,” said Randy Belote, Northrop’s tanker spokesman. “Any attempt to cast it as anything other than an American tanker is misleading and disingenuous.”

Boeing boasts that it plans to assemble its KC-767 tanker – a modified version of its 767 commercial aircraft – in plants in Washington and Kansas with no major production done outside the United States. As a result, Boeing says its program would support 44,000 American jobs.

But both companies have singled out L.A. as an important manufacturing center for their respective programs.

Indeed, while L.A.’s aerospace manufacturing industry has declined from its heyday more than two decades ago, it still boasts a vast network of suppliers who specialize in everything from wing tips to electrical wiring to fuselage skins. Sharpe of Alcoa estimated up to 90 percent of the country’s aerospace fastener makers are in the county.

As the industry has transitioned from one characterized largely by final aircraft assembly to one of subassembly and technological development, the sector has lost jobs, but it has stabilized in recent years. The local aerospace industry supported over 200,000 jobs in 1990, a number that fell to a record low of 75,000 in 2003, about where it is now.

Local presence

But as the industry has shrunk, it has given aerospace suppliers a larger piece of the puzzle as each new program comes forward.

“There are fewer players in aerospace today than there were 20 years ago, so that makes each program more important for you to be a part of and it makes the programs bigger,” Sharpe said.

Still, Northrop and Boeing have significant local presences.

With more than 20,000 workers in Los Angeles, Northrop is the county’s second largest employer, while Boeing is the third largest, with 16,510 local employees.

Nearly 6,000 of Boeing’s local employees work in the company’s Long Beach assembly plant for the C-17 cargo plane.

Boeing said in June it expects the government to fund the purchase of 10 additional C-17 planes next year, which could keep the plant open until at least 2009. But the program is widely thought to be in danger of being shut down soon.

The tanker program could help replace many of the expected C-17 job losses locally, but Jack Kyser, chief economist of the Los Angeles County Economic Development Corp., said it remains to be seen exactly how many jobs are local.

“If they’re scattered around California, then that wouldn’t go very far for us in Los Angeles County,” he said.

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Source: Los Angeles Business Journal

[Westsidelife]

Building Boom Sweeping L.A.’s Film Studios

REAL ESTATE: It’s less about show biz, more about lease prices.

By ANNE RILEY-KATZ
Los Angeles Business Journal Staff
November 2, 2007

Earthmovers are groaning across Sony’s Culver City lot these days as they grind up the ground to get ready for construction of two big buildings that will rise above the studio’s sprawling site.

And that’s not the only studio work going on behind the cameras in Los Angeles.

There’s a flurry of construction activity at the city’s studios from Hollywood to Santa Monica. Faster than Rhett told Scarlet to bug off, a new landscape is forming on the industry’s storied lots. Hardhat workers are riveting steel beams. Executives are looking at blueprints. Leasing agents are planning to get tenants for office space.

This backlot building boom is driven by several engines. Primary among them are low office vacancy rates and high rents in surrounding areas. The studios plan to lease out office space – regardless of whether the new tenants are show biz folks.

“It’s a good way to have money coming in,” said John Tronson, a principal at Ramsey-Shilling Commercial Real Estate Services. “It’s better to buy land with studios on it now and add other buildings so it generates income and is not just sitting there.”

Another factor: Some studios need to upgrade and get wired for the digital era. Those tend to move into the new office space instead of leasing it all to outsiders.

Also, private equity companies that have recently acquired several independent production facilities are pressing for the cash that they could make off real estate development.

Major building projects are in the works or planned at studios including Sony, Tribune, NBC Universal, Sunset Gower and Fox.

“These are great pieces of land on prime locations,” said Ann Gray, an architect who headed Paramount’s on-lot development from 1987 to 1994. “Right now there is massive interest in looking at these lots and modifying them for income purposes.”

Among the studio projects:

- Two four-floor buildings are being built on Sony’s Culver City lot that will bring about 600 employees from other locations around Los Angeles onto the campus, eliminating the need for costly rental space.

- NBC Universal’s $3 billion expansion of its Universal City property, including the construction of 2,900 apartments, lofts and condominiums, additional office space, and an upgrade of its studio and entertainment facilities. The proposal is currently working its way through the city entitlement process. The studio’s new facilities will be located next to the subway connecting Universal City to downtown Los Angeles and across the street from Universal Studios.

- Tribune’s lot is for sale and the company plans to build office, mixed-use and production space on the Sunset Boulevard property.

- A five-story office building opened on Fox’s Pico Boulevard lot last year and the studio is nearing completion on another office building and parking facility.

- A six-story, 96,000 square foot building to house Technicolor’s postproduction facilities is under construction on Sunset Gower’s 15-acre lot in Hollywood.

Money play

With office space throughout the Hollywood area and Westside scarce and pricey, studios with available on-lot space are maximizing the potential for real estate income. The sky-high rents – office space is edging toward $4 per square foot in areas like Hollywood and the Westside – and low vacancy rates make the conversions very appealing financially.

Sony’s development will allow the company to bring employees back onto the lot, and save money by vacating rented space elsewhere.

The studio’s 125,000-square-foot Fourth Avenue building will be the new home of Sony Pictures Television and the 96,000-square-foot Culver building will serve as Sony Pictures Television International’s headquarters. The project includes office space and a courtyard with a total of about 44,000 square feet, as well as a new 1,000-vehicle parking lot. Construction is to be completed by the summer of 2009.

The studio maintains it will recoup the costs through environmental initiatives and eliminating rentals.

“There are multiple benefits to this construction – for one, we’ll see a long-term savings on leases,” said Jim Kennedy, a Sony spokesman. “Our leased office space is currently in Westwood, and that’s not an inexpensive place to rent.”

Also, private equity has recently entered the studio ownership game with plans for real estate development. The investments underscore the value of studio land.

The listing of the former Columbia Pictures headquarters in Hollywood was the most recent in a handful of studios that changed hands or went on the block: Carlyle Group paid $150 million for Manhattan Beach Studios in June. Sunset Gower Studios was sold by GI Partners for $205 million in August. Culver Studios was put up for sale by ownership group, PCCP Studio City Los Angeles LLC this summer and is expected to fetch about $150 million.

“We feel we will be very successful in applying our office expertise and transferring that to the studio world,” said Howard Stern, the managing partner of Sunset Gower studios. “Production office space has much shorter term occupancy than a traditional office building, but productions are drivers of demand.”

Sunset Gower is nearing completion on a six-story building to house post-production operations of Technicolor Inc, a division of France-based Thomson. The company signed a long-term lease last year to occupy the entire building. The $40 million project, slated for completion early next year, is on a former parking lot at the northeast corner of the 15-acre Sunset Gower Studios lot, between Gower and Gordon streets.

Digital technology is another driver of the developments, since high definition digital facilities are now the industry standard. The last time most studio lots saw significant upgrades or construction activity was in the mid- 1990s. After more than a decade, the need to bring facilities into the digital era is a key component in some of the work.

“We’ve got to keep up,” said Vinnie Malcolm, KTLA’s general manager. A new, hi-def station is part of the plans for the Tribune lot. “Everyone will have upgraded over the last three to five years, so it’s important to stay on par.”

It’s sometimes easier to design and build production facilities than it is to retrofit old ones.

Technological upgrades are part of NBC Universal’s plans, which call for the sale of part of the 35-acre studio lot in the Burbank Media District. The new building will include virtual studios, interactive graphic capabilities, a glass-walled newsroom and other digital upgrades.

“Some of the studios have these dilapidated old buildings limping along and need to upgrade the technological aspects, so they might as well build new from the ground up in the interest of modernizing it all,” said Tronson of Ramsey-Shilling.

Content factor

Changing entertainment content is a factor, too. The preponderance of reality programming has changed the use of studio space. With fewer sitcoms and dramas in production, less studio space and more offices are the order of the moment. With the three-camera stages used for sitcom-style production going empty, underutilized production space is being transformed for commercial use.

Some are apprehensive that the conversion trend could go too far, and office uses will overwhelm the traditional use of studio campuses.

What’s more, runaway production is also seen as an underlying reason for the shift to office use.

“It’s criminal that that our state does not offer any production incentives, and they take Hollywood production for granted,” said former Paramount executive Gray.

But executives say even with new development popping up, the studios themselves are largely unaffected and will still be used for entertainment production.

“It’s great to bring in office space,” said George NeJame, Tribune’s vice president of operations. “But if you lose stage space there’s no reason for the offices, so you really have to strike a careful balance. We are a production lot first and foremost.”

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Source: Los Angeles Business Journal

[Westsidelife]

Northrop gets $18M Air Force deal

Los Angeles Business from bizjournals
November 14, 2007

Northrop Grumman Corp. has been given an $18 million contract from the U.S. Air Force to develop and manufacture a new set of data links used to gather mission information on Air Force planes.

The new data link, known as Plug & Play II, will provide high-capacity digital recording capability for both video and audio collected during a mission and will include two-way data transfer with an onboard server.

Delivery of links will take place between September 2008 and January 2010.

Northrop (NYSE: NOC) is a defense and technology company based in Los Angeles.

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Source: Los Angeles Business from bizjournals