Santa Monica’s Week In Business

Michael Rosenthal

   Politics, Finance & Media
   Santa Monica now has the distinction of being governed by two widely disparate politicians with our new President George W. Bush (Republican) and new Mayor Michael Feinstein (Green Party). Bush "won" his office with a negative 500,000 votes (the new math and all) and went all the way to the Supreme Court to stop a complete vote count in Florida. Feinstein, on the other hand, was the leading vote getter among 13 candidates, which in Santa Monica makes you a winner. 
   I was a guest on Bill Rosendahl's Adelphia Cable program "Local Talk," last week. Fellow panelist, investment banker Mike Radlovic. was visibly excited about the Texas-Wyoming inauguration party for Bush and Cheney and the changes he foresees with the new government. Santa Monica and California are definitely not Bush country, as evidenced by the final vote count which gave Al Gore the state by a two million vote margin. Bush and his administration have offered no support to California during our energy crisis, refusing to step in and help control wholesale prices. Much of the blame for our current situation is due to Texas energy companies charging "whatever the market will bear". Contrast this to progressive Santa Monica which has designated "Green Power" as its power source and ses solar power to run our glorious Ferris wheel. 
   It seems premature to declare satisfaction with the Bush Presidency, particularly in light of Bush's choice for Attorney General John Ashcroft who has been criticized for his opposition to then-President Clinton's nominee for ambassador to Luxembourg because he's gay. 
   George W. Bush's Texas friends may throw a great party, but the jury is still out on his tax cut plan. I am certainly in favor of cutting taxes significantly and in a variety of ways, including some relief on the utility tax here in Santa Monica (currently at 10%). But, in Bush's second weekly radio address, he claimed the woman attorney with two children who makes $250,000 deserves a tax break as much as the maid with two children who earns $25,000. What he fails to mention is that the woman attorney, while being in the top 3% income bracket, also receives tax relief with her home mortgage deduction, company expense account, trust funds, and, undoubtedly, has keen accountants to further reduce whatever taxes she might have to pay. Bush wants to give "everyone" a tax reduction, yet the reality is that the top 1% of Americans who own nearly 90% of the wealth in this country and who need the break far less than the lower wage earners, who are often paid less then a living wage, will receive the bulk of the tax breaks. We need a tax cut that benefits the majority of Americans -- especially those who make minimum wages. 
   A friend of mine once described money as "the world game". The economy grew at the slowest rate in six years in the fourth quarter of 2000, advancing a measly 1.4%. During the second quarter of 1995, the economy advanced just .8% but it was followed by a solid economic expansion. The stock market started this year at virtually the same place it began the year 2000, but for many, the depressed stock prices suggest opportunity and some excellent buys. I lost significantly in one of my retirement stock funds this year. Not a pleasant feeling, and one I'm sure was shared by many others. To put it in perspective however, one has to remember the tremendous run-ups of the prior years and to remember that over any ten-year period in American history stock mutual funds have always increased in valuation and offer one of the best rates of return. No less a figure then Warren Buffett claims his favorite investment strategy is to "buy and hold," meaning he takes the long view on stock prices. A decidedly wise strategy. 
   One of the most telling statistics of 2001 was the generation of 268,000 new jobs in January. This year, promises lower interest rates, a federal tax cut and a growing population. All these factors indicate a good year ahead for business. Ultimately, individual creativity is what drives our economy forward. 

   Business Briefs
   Santa Monica-based Metro-Goldwyn-Mayer has made a significant investment in cable TV with its $825 million cash deal for a 20% stake in CableVision Systems. The deal offers access for MGM's library to be shown on properties owned by Cablevision, which include American Movie Classics, Bravo, The Independent Film Channel and WE: Womens Entertainment. MGM chairman Alex Yemenidjian says that MGM is adopting an aggressive growth strategy. "We're really at the beginning of our growth cycle. This transaction is the first of many...We want more cable channels, a broadcast network, and a television station group."
   Santa Monica-based Fandom has replaced the company founder Mark Young. Debra Streicker-Fine has been named its new CEO. 
   Santa Monica-based Universal Music Group has appointed JoAn Cho as associate director of business and legal affairs.
   The realtor who brought the Universal Music Group to the newly opened Arboretum Gateway, Neil Resnick, has reportedly moved to Grubb and Ellis.
   Macerich Co. owner of Santa Monica Place, was listed in the Los Angeles Business Journal as the ninth largest property management firm -- ranked by office and retail square footage -- in Los Angeles County. Established in 1975 with headquarters in Santa Monica, the firm employs 200 and has over 6.2 million square feet under management in LA County including the Westside Pavilion and the Marina Marketplace in Marina del Rey. Mace Siegel is the firm's chairman. 
   With 57 Los Angeles County employees, Santa Monica-based Watt Management Co. at 2716 Ocean Park Blvd. was ranked 14th.in the listing. The firm, headed by president James J. Magnin, has over 630 residential units under management. 
   Water Garden II on Colorado Blvd has just signed Netlock Technologies Inc. to a $2.8 million, 11,000 square foot lease in a deal brokered by Coldwell Banker Commercial Westmac. Netlock, is currently based in Brea. 
   Macpherson Oil Co. of Santa Monica is seeking restitution for $100 million in losses it claims it has suffered as the result of Hermosa Beach refusing it the right to slant oil-drill within the city. Santa Monica Bay has not seen slant oil drilling since the 1950s and a California Court of Appeal upheld the South Bay cities' ban.
   Will the city of Santa Monica allow a Del Taco to be built at 1866 Lincoln Blvd? Currently there is a Shell service station on the site, but the owner. Equiton Enterprises, is going before the Planning Commission Wednesday, February 7, to seek permission to rebuild the current facility to accommodate a 44 seat fast-food drive-through restaurant, while reducing the number of gasoline bays and service facilities. The city requires 29 parking spots and the plan calls for 28. City staff has recommended against the proposal claiming it "does not meet all applicable development standards including required parking, setbacks and hazardous visual obstructions requirements." 
   Hopscotch Kids' children's clothing, toy and furniture store has closed at 2728 Main Street in Santa Monica.
   The Heaven Sent store at 1412 Montana has also closed.
   Santa Monica-based Dr.Koop.com and West LA-based eToys have been notified by Nasdaq that they are in danger of being delisted because their stock prices are falling below the $1 dollar per share minimum requirement. eToys.The point might be moot however as eToys is in the process of laying off the rest of its staff.
   Santa Monica-based eCompanies is helping one of its incubated companies, Icebox.com, raise additional funding. The firm is down to 30 employees, after laying off 11 people due to cash shortages at the firm. 
   Several Westside companies received venture capital funding during the 4th quarter of 2000. Santa Monica based XDrive Technologies raised $50 million. The company provides hard drive space online, for companies and individuals. The company was the first to inform me of the term "Terabytes," Sounded like an ominous dinosaur, but was really just the next measurement up from a "Gigabyte". 
   Also receiving funding in the fourth quarter was CancerVax, a Santa Monica company that has recently moved to Carlsbad. Formed in 1998 by Dr. Donald Morten, the surgical director at the John Wayne Cancer Center, the firm raised $30 million to help support its efforts in developing a vaccine for Melanoma.