25 Deals That Will Have Lasting Impact

L.A.’s Deals of the Year Time to Consolidate

Gordon Moore’s Payback

What’s $600 million to a mega-billionaire, even in tough times? Despite plummeting net worth (from $26 billion in 2000 to $5.3 billion last year), Intel co-founder Gordon Moore’s donation to Caltech was the largest gift ever made to a single university and the second largest donation ever. (Not surprisingly, the donor champ is Bill Gates, whose $1 billion gift to establish a scholarship fund for minority students didn’t go to a specific campus.)

Since graduating from Caltech in 1954 with doctorates in physics and chemistry, Moore has given the institution $50 million, part of which was used to build an engineering laboratory with his name on it. He has sat on the university’s board of trustees for 18 years.

Caltech said the gift, which will be doled out in cash and stock over the next 10 years, will fund a series of scientific programs and projects. Moore didn’t have anything specific in mind.

The sizeable contribution gave hope to universities nationwide, many of which have seen gift-giving decline in proportion to the stock market’s travails. While most donations of comparable size were fueled by what’s already being called “the stock market of the ’90s,” Moore made his announcement long after the tech boom was officially over, and more than a month after the terrorist attacks on the World Trade Center and Pentagon.

Conor Dougherty

Rob to Riches

Proving again that he is never one to be counted out, Robert Maguire took his involvement in Playa Vista to a new level in 2001. Deals cut by the constantly-on-the-brink developer last year pushed up the likelihood that the sprawling Westside site would ultimately become the long-envisioned live/work community.

Maguire’s focus is on the “work” part of the equation. Most of his major moves came last summer, with two involving high-caliber players billionaire Sam Zell and world-renowned architect Frank Gehry.

Maguire brought on Sam Zell’s Equity Office Properties Trust as a partner in his 450,000-square-foot Water’s Edge office project, which is nearing completion on the northeast corner of Jefferson and Lincoln boulevards. A month later, Maguire exercised his option to buy 70 percent of the 115-acre studio campus site that DreamWorks SKG had abandoned in mid-1999. Bigger yet, Maguire announced that the 2.2 million square feet he plans to develop there would be designed by Gehry.

Escrow on the acquisition was supposed to have closed by yearend, but that deadline has been pushed back a month, according to Maguire spokeswoman Peggy Moretti. At least two glitches exist. First, seller Playa Capital LLC has to finish installing some infrastructure on the site. Second, and more significant, is that Maguire has to come up with about $100 million in cash. Based on his track record, he’ll get it somehow, somewhere.

Michael Stremfel

Just 85 More School Sites Left!

After years of blundering, the Los Angeles Unified School District showed signs that it might be getting its act together, at least on real estate deals. It pulled the trigger on two significant buys last year, with considerable help from outside advisors. (The district seems to be learning an invaluable lesson: Don’t rely on school bureaucrats to negotiate complex real estate deals.)

The first deal involved the district’s purchase of the office building at 333 S. Beaudry Ave., just west of downtown, as its new administrative headquarters. It didn’t get done without some drama: At the 11th hour, developer Rob Maguire tried to persuade the School Board and Superintendent Roy Romer to instead buy one of the Arco Plaza twin towers, with him getting the other one. A flurry of heated discussions, and accusations, followed before the LAUSD decided to stick with its initial plan, buying the Beaudry building. Major renovations are underway, and district staff members are expected to start moving in this April.

Then, last month, the district completed its 10-year quest to buy the Ambassador Hotel. The $105 million deal brought to a close a decade of legal wrangling with an investor group once led by New York developer Donald Trump. The district can proceed with its plan to transform the 23.5-acre site into a school. Now, all that’s left is acquiring 85 additional sites for new school construction.

Michael Stremfel

Electric Gray

When the year started, California Gov. Gray Davis was behind the eight ball in dealing with the deepening energy crisis. Having virtually ignored the problem in the fall of 2000, his administration was caught off guard by rolling blackouts in early 2001. Meanwhile, Pacific Gas & Electric and Southern California Edison racked up debts of $1 billion a month as the wholesale price of power they purchased outstripped what the utilities were allowed to charge customers.

Then the Davis administration tried to make up for lost time, ordering the state Department of Water Resources to buy electricity for the insolvent utilities negotiating long-term contracts with electricity providers.

All this didn’t stop PG & E; from filing bankruptcy in April. With Southern California Edison on the verge of bankruptcy, Davis appointee Loretta Lynch, president of the Public Utilities Commission, pushed through a record electricity rate increase to close the gap between wholesale and retail rates.

With the rate increase out of the way and wholesale power prices falling, Davis turned his attention to rescuing Southern California Edison. But his plan to buy the utility’s transmission grid for $2.7 billion died in the closing days of the legislative session. That’s when Lynch negotiated a deal with Edison to keep it out of bankruptcy through a combination of continued high rates paid by its customers and a suspension of dividend payments to shareholders.

Edison still must obtain bridge financing to allow it back into the business of buying power, while the state needs to sell $12 billion in bonds to repay its general fund and several major financial institutions.

Howard Fine

Mayne Attraction

Government office buildings are not often known for being architecturally interesting, but last year Caltrans decided to revolutionize the process by holding a design competition for its new $171 million regional headquarters in downtown Los Angeles.

Driving the process was Maria Contreras-Sweet, secretary of the state Business, Transportation and Housing Agency, who formed a selection committee of well-regarded experts. The result was three world-class finalists: Thom Mayne of Santa Monica, Rem Koolhaas of Holland and Benedetta Tagliabue of Spain.

Mayne ended up winning. His distinctive 15-story structure with perforated-metal-screen facades will soon begin rising just south of City Hall, between Los Angeles and Main streets.

The state’s decision to construct an “architectural statement” during a time of recession and government deficits raised a few hackles. But long after the recession ends, downtown L.A. will be graced with yet another architecturally significant structure.

If all goes as planned, the city is looking to install a block-long public plaza just west of the Caltrans project site. More important, the facility could serve as a model for how future public-sector buildings are developed.

Michael Stremfel

Amgen Makes Surprise Buy

After 21 years of largely internal growth that created the world’s largest biotech company, Amgen Inc. took Wall Street by surprise in December with the year’s biggest biotech deal.

The Thousand Oaks-based company offered $16 billion in stock and cash for rival Immunex Corp. of Seattle and Wall Street reacted with skepticism, questioning its nearly $30 a share price.

The deal’s linchpin is Enbrel, Immunex’s popular rheumatoid arthritis drug, which has annual sales of $750 million. Amgen will count on growing those sales to $3 billion by 2005, spurred by larger manufacturing capacity and new applications. It also can be marketed alongside Kineret, Amgen’s own newly approved arthritis drug, when drugs like Enbrel fail.

Still, analysts questioned the acquisition’s effect on Amgen earnings, which could be cut in half this year as the company swallows its rival.

No major opposition has yet to surface, but the Federal Trade Commission, as well as investors of Amgen and Immunex, must approve the deal. And Amgen’s stockholders can’t be too happy. Its stock was trading above $68 before the deal only to drop by more than $10 after the announcement. The stock has yet to recover.

Laurence Darmiento

Univision Gets Program Edge

Univision Communications Inc. pretty much has secured its place as the No. 1 network in the Spanish market by reaching long-term programming agreements with two of Latin America’s top show producers, Group Televisa of Mexico and Venezuela’s Venevision.

The $800-million deal gives Televisa and Venevision larger stakes in Univision, while guaranteeing the network exclusive rights to its partners’ popular programming. It also left Univision with Televisa’s L.A.-based recording company, Fonovisa.

The deal make it tougher for competitor Telemundo to vie for Latino viewers.

If NBC’s purchase of Telemundo is approved, the network may have to put some serious money into producing quality original programming for the No. 2 Spanish-language station group. Telemundo learned the hard way that viewers want original programs and that reworking English-language hits only alienates them. Spanish-language versions of “Charlie’s Angels” and other American shows proved huge flops for Telemundo.

Claudia Peschiutta

Clippers Grab Brand

The Los Angeles Clippers are determined to break their losing tradition. Though they’ve only been in the National Basketball Association playoffs three times over the last 25 years, the team has been collecting young talent and it looks as if it just might pay off.

Last summer the Clips acquired Chicago Bull Elton Brand, the No. 1 draft pick in 1999. Brand is well respected and averaged more than 20 points in the last two seasons. Shortly after the deal was announced, Clippers captain Lamar Odom predicted that the team would win at least 45 games in the 2001-2002 season, 14 more than last year (not to mention the Clippers’ greatest number of wins in a decade). The team last week was slightly over .500 in its win-loss record and fourth in the NBA Western Conference.

Should the Clippers turn into a force to be reckoned with, it will be a result of the NBA collective bargaining agreement reached at the end of the 1998-1999 season. That caps salaries for first-round draft picks and allowed the Clippers, a notoriously cheap team, to begin building a squad with first-rate players.

Conor Dougherty

Paribas, aka UCB, aka Sanwa

After a merger, a sale and yet another merger on the horizon, most people aren’t quite sure what they should call what used to be Sanwa Bank California. Following a consolidation of their parent companies in Japan, Sanwa Bank California and Tokai Bank of California merged to become United California Bank in June, a name that was said to underscore the new institution’s commitment to California. UCB tried to further distance itself from its former names, as well as from its Japanese parent, by instituting a $10 million ad campaign.

Just about the time Angelenos started taking notice, UCB’s parent company, UFJ Holdings, decided to sell the newly merged L.A.-based bank. Numerous bidders were said to be looking at the property (Citibank and Wells Fargo were both named as potential suitors), but in the end, UCB was sold to BNP Paribas SA, France’s largest bank.

Paribas plans to merge UCB with Bank of the West, thus ending the short-lived United California Bank name. The roster of decent-sized banks headquartered in Los Angeles has been shrinking over the past decade, and the sale of UCB which remains the largest L.A. bank until the deal closes puts an exclamation point on that trend.

Conor Dougherty

NBC Agrees to Buy Telemundo

The news that NBC planned to buy Telemundo Communications Group Inc. broke in October after months of rumors and speculation. The purchase, which has not yet been approved by the Federal Communications Commission, would make NBC the first English-language network to jump into the Spanish market.

The deal is worth about $2 billion in stock and cash. NBC also agreed to assume $700 million in debt of the No. 2 Spanish-language network.

General Electric Co.-owned NBC stands to gain because Telemundo would put it ahead of the other English-language networks by giving it access to the majority of the Latino households in the United States. With companies waking up to the fact that Latinos are the nation’s fastest-growing consumer group, NBC could become advertisers’ network of choice.

If the FCC approves the deal, NBC would have three stations in L.A. KNBC-TV Channel 4 and Telemundo’s KVEA-TV Channel 52 and KWHY-TV Channel 22. (The FCC permits networks to have no more than two stations in the same market.) The network would likely sell off low-rated KWHY.

Claudia Peschiutta

EchoStar’s Bid for DirecTV

Few deals of 2001 had more drama than EchoStar Communications’ $26 billion bid for Hughes Electronics’ El Segundo-based DirecTV unit.

For much of the year, News Corp. was considered the odds-on choice to acquire the DirecTV operation from General Motors Corp., which operates Hughes as a separately traded subsidiary. Then came EchoStar’s audacious bid that at first few on Wall Street took seriously.

In order to satisfy GM’s cash requirement, EchoStar lined up $5.5 billion from Deutsche Bank and UBS Warburg. But the UBS financing fell through. EchoStar Chief Executive Charles Ergen, who has a personal net worth north of $7 billion, offered to guarantee the remaining $2.75 billion himself. That day, News Corp.’s Rupert Murdoch issued a press release announcing that he had withdrawn the News Corp. offer, stating that the deal had been stalled for too long. The next day, Ergen moved $2.75 billion of his shares into a trust, thus guaranteeing a bridge loan floated by GM. Credit Suisse First Boston has since agreed to provide EchoStar the money.

The deal still might not get past regulators, but should it close EchoStar will have access to 16.7 million subscribers, more than 90 percent of all satellite-TV subscribers in the United States. Regulators already have named a team to review the purchase, signaling that a decision will come sooner rather than later.

Conor Dougherty

Joint Strike Fighter’s Local Impact

Either way, it looked like Northrop Grumman Corp. was going to come out a winner the company was in line to be a subcontractor for both teams competing for what may end up being the largest military contract ever. But as the primary subcontractor for Lockheed Martin Corp., Northrop had cause to cheer when Lockheed landed the $200 billion contract to build 3,000 F-35s (formerly billed as the Joint Strike Fighter).

Northrop will gain 20 percent of the overall contract, leading the local defense industry, which is expected to account for half of the overall project over the 40-year life of the program, creating thousands of jobs.

Northrop, which will build the center and aft fuselages of the next-generation Stealthy fighter at its El Segundo plant, plans to hire 1,200 workers, mostly engineers, in the next 18 months. Roughly 250 local businesses making tools, metal plating and communications products also will increase their employment rolls by about 900 jobs this year alone.

No one expects the F-35 to bring the region’s aerospace industry back to its 1988 peak of more than 274,000 jobs. But the program signals an upswing in employment, which will fall below 100,000 this spring before climbing back to 110,000 by the end of the year.

David Greenberg

Mann Sells MiniMed

Last year once again saw one of L.A.’s most promising companies get gobbled up by an outsider.

This time it was MiniMed Inc., the Northridge-based brainchild of entrepreneur Alfred Mann, which was bought for $3.8 billion by Medtronic Inc., the world’s largest medical device company. The deal is expected to give Minneapolis-based Medtronic a double-digit growth platform: MiniMed’s industry-leading portfolio of insulin pumps and glucose monitors.

The deal also included the sale of Mann’s privately held Medical Research Group, which is working on a fully implantable insulin pump and glucose monitor that works like an artificial pancreas.

What does L.A. get out of the deal? While MiniMed becomes a unit of Medtronic, the company is staying in town at its new $70 million headquarters on the campus of Cal State Northridge.

More importantly, the deal netted Mann $1 billion as well as the time to focus on other privately held local companies: Advanced Bionics, a maker of implantable hearing aids and Mannkind Corp., a developer of vaccines for cancer and allergies.

Mann might end up selling those too. After all, MiniMed marked the sixth company he has sold since he got started as an entrepreneur in the 1950s.

Laurence Darmiento

Northrop Acquires Newport News

On the heels of gaining a hefty slice of the Joint Strike Fighter contract, Northrop Grumman Corp. beat out General Dynamics Corp. to acquire Newport News Shipbuilding Inc. for $2.1 billion. It placed Century City-based Northrop, which last spring completed its $5.1 billion purchase of Litton Industries Inc., as one of the nation’s premier shipbuilders.

Two weeks after General Dynamics made its $2.1 billion all-cash offer in April, Northrop countered with a stock-and-cash deal that is expected to increase in value as the defense industry steps up spending as a result of the war on terrorism.

Northrop had help from the government in its bid. The Pentagon endorsed the Northrop deal and the Justice Department filed an anti-trust lawsuit to block General Dynamics’ purchase of Newport News, which is the nation’s only manufacturer of nuclear-powered aircraft carriers. The Northrop acquisition prevented General Dynamics from having a permanent monopoly in nuclear-powered vessels.

With the Newport News purchase, Northrop’s worldwide employment increased by 17,000, to 97,000. Its Litton sector, which is based in Woodland Hills, is the nation’s largest builder of non-nuclear combat ships.

David Greenberg

Disney Buys Fox Family

Even in a year that saw Walt Disney Co. shutter its Internet group, slash 4 percent of its workforce and suffer declining theme park attendance (even before Sept. 11), its $5.5 billion deal for the Fox Family Channel was, by all measures, a big deal.

By shelling out $3 billion in cash and assuming $2.3 billion in debt, Disney oversaw the divorce of Haim Saban and Rupert Murdoch’s News Corp., uncomfortable partners in the cable venture.

In taking charge of the renamed ABC Family network, Disney added 81 million U.S. subscribers as well as 34 million in Europe and Latin America. Disney plans to use the networks to show original programming in addition to peddling content seen on its networks.

Though the terms of the deal were adjusted downward by about $100 million between the time it was announced and its October closing, some critics contend Disney still overpaid. But in a deal free of regulatory oversight, Eisner & Co. picked up another venue to market its second-run content, access to a sizeable library and eyeballs in foreign countries.

Conor Dougherty

Health Department Gets a Head

It’s the job not many would want, but in the end the County Board of Supervisors finally got their man.

Late in the year, the board settled on Dr. Thomas L. Garthwaite as the new director of Los Angeles County’s sickly health department. And if anyone is up to the task of taking over an agency facing a nearly billion-dollar budget shortfall, it would appear to be Garthwaite at least measured by his resume.

As an undersecretary in the Department of Veterans Affairs, Clinton-appointee Garthwaite was chief executive for the nation’s largest integrated health system, with a $20 billion annual budget and 163 hospitals. The county’s $2.9 billion health agency is far smaller, but unlike the VA its budget is shrinking because of cuts in federal aid, even as demand for its services are expected to rise.

Garthwaite is said to have been successful in transforming the VA from an expensive, hospital-based system to one that treats more of its veterans in outpatient clinics the same marching orders he will face at the county when he takes over Feb. 1. But don’t be surprised if the supervisors ask Garthwaite to work some of his Washington contacts for a break from the federal aid cuts.

Laurence Darmiento

NetZero, Juno Become United

Still thumbing his nose at critics who continue to predict the demise of free Internet service, Mark Goldston in September merged his NetZero with Juno Online Services, creating United Online Inc.

The new company and its 6.1 million users put itself in the class of the world’s largest ISPs AOL, MSN and EarthLink and well ahead of any other locally-based ISP. NetZero and Juno continue to operate independently.

Goldston, chairman of the new company, refused to concede that the era of free Internet connection was ending, even as his users were being shepherded from the free service to a monthly fee service.

United Online will offer customers a little taste of the Internet for free, which is supposed to get them hooked for more time online. Then they reach for their wallets or so goes the plan. At the time of the merger, both companies had 1.25 million paid users.

Looking to cut costs two months after the merger, United Online pulled the plug on an unspecified number of broadband users the company claimed were too expensive to carry.

Christopher Keough

Vivendi Universal Grows

Being the world’s second-largest media company is not enough for French-owned Vivendi Universal. Last month the company made moves into the U.S. media market in the hopes of competing more efficiently with AOL Time Warner, Walt Disney Co. and Viacom.

On the same day it approved a $1.5 billion investment in EchoStar Communications Corp., Vivendi’s board approved a $10 billion purchase of the entertainment assets of Barry Diller’s USA Networks. Should the deal close, Diller, who had said he would never work for anyone again, will oversee Universal Studio’s theme parks and movie studio, in addition to USA’s cable networks, television production unit and film company.

The combined deals will give Vivendi more than a fighting chance in the cable programming business. USA will hold onto its Home Shopping Network and Internet companies, including Ticketmaster, and Vivendi will keep Universal Music Group separate from the new company.

Vivendi’s purchase of USA, and Diller with it, provides additional credibility, especially on Wall Street where the French company’s acquisitiveness has not been well-received. Also, the EchoStar investment will allow Vivendi to beef up its U.S. distribution, a crucial part of any media empire.

Conor Dougherty

Wellpoint Makes Its Move

If Wellpoint Health Networks Inc. should emerge as the nation’s largest health insurer, 2001 will surely go down as a watershed year.

In March, the Thousand Oaks-based company closed a $700 million deal for Cerulean Cos., operator of Georgia’s Blue Cross and Blue Shield plans. It then followed up in October with a $1.3 billion offer for RightChoice Managed Care, the for-profit parent of Missouri’s Blue Cross and BlueShield plans. And just a month later it announced another $1.3 billion deal, this time for CareFirst Blue Cross and Blue Shield, a Maryland-based non-profit that is the D.C. region’s largest insurer.

The RightChoice deal should be completed in the next few months, but Wellpoint faces a tough fight for CareFirst, which first must convert to for-profit status over the opposition of lawmakers and consumer advocates. But should WellPoint prevail, it would have close to 16 million members and surge past Cigna Corp. as the nation’s third-largest health insurer.

The Wellpoint formula? Analysts praise the company’s strong leadership, efficiency and profitable premium pricing. Hospitals groan about stingy reimbursement rates.

Either way, the company is in far better shape than such former rivals as Maxicare Health Plans Inc., which went belly up last year after failing to respond to a marketplace that squeezed insurers with conflicting demands: greater choice by consumers and higher reimbursements by medical care providers.

Laurence Darmiento

Pop Goes the MOCA

In a town known for its irreverent attitude towards just about everything, perhaps it’s appropriate that a retrospective of Andy Warhol’s artwork should make its one and only U.S. stop in Los Angeles next year.

The review of 50 years of work by the pop icon is coming to the Museum of Contemporary Art in downtown L.A., thanks in part to $250,000 kicked in by the city. The Warhol survey runs from May 25 to Aug. 18 and will feature works never seen by the public.

Fresh in the minds of city officials is the Van Gogh exhibition at the Los Angeles County Museum of Art, which nearly three years ago generated $122 million for the local economy, including 32,000 hotel room nights being booked. The Economic Development Corp. of Los Angeles County estimates that the Warhol retrospective could add a bit more than that to the local economy.

The Los Angeles Convention & Visitors Bureau already has inked a deal with American Express Corp. to use the exhibition to develop travel packages. The joint effort is aimed at having tourists stay at one of 10 Los Angeles hotels. So far the Westin Bonaventure Hotel and Suites and the Omni Los Angeles Hotel in downtown L.A. have signed up.

Deborah Belgum

Calmart Lease Deal

New life was injected into the California Mart in downtown L.A. when one of the three buildings that makes up the behemoth apparel showroom center was leased last summer to a Dallas-based company that specializes in the gift and home-accessories business.

The $18-million a year lease deal reduces the high vacancy rate in the 3-million-square-foot center located at 9th and Los Angeles streets in the heart of the Fashion District at the edge of downtown.

Judah Hertz, whose Hertz Investment Group purchased the California Mart nearly two years ago from Equitable Life Assurance Co. for $90 million, had been thinking of leasing one of the buildings for offices.

But then one of the country’s largest showroom operators, Dallas Market Center, along with British-based DMG World Media and George Little Management, stepped into the picture looking for additional space to house gift and home-accessories manufacturers’ showrooms.

New tenants have moved into the top floors of the building as more showrooms are being renovated. The renovation should be complete in time for the California Gift Show at the Los Angeles Convention Center in July, which attracts 2,000 exhibitors and 33,000 attendees.

The deal is expected to drive new business to the downtown area’s hotels and restaurants, as well as tighten up the available office space in the downtown area with ancillary businesses.

Deborah Belgum

More Nurses Organize

With no fewer than 4,700 registered nurses at seven of the county’s private hospitals joining unions for the first time, 2001 was a year the region’s hospital industry would just as soon forget.

Thousands more around the state were organized by the California Nurses Association and the Service Employees International Union, as were licensed vocational workers, technicians and other hospital workers.

The plum? The CNA’s victory over management at the massive Long Beach Memorial Medical Center, an election that added 1,500 nurses to its ranks.

The cause? A hospital nursing shortage that has given labor an advantage over management while fueling discontent among nurses who are being asked to take care of more patients despite fewer numbers.

Labor says the answer lies in lower nurse-to-patient ratios that will improve working conditions and attract nurses back to hospitals, while hospital officials say that addressing the shortage’s roots are much deeper.

The unions have made the ratios a key demand in their contract negotiations while awaiting the release of mandated ratios by the state health department required under a new labor-backed law.

Laurence Darmiento

TV Station Consolidation

The move toward media consolidation took another leap forward when News Corp. bought Chris-Craft Industries Inc. for $4.4 billion.

Under terms of the deal, Fox television group got 10 new stations and became the largest station owner in the country. The deal also created duopolies for Fox in major cities, including Los Angeles, where the group now owns KTTV-TV Channel 11 and KCOP-TV Channel 13.

One of the benefits of having two stations in the same city is that an owner can cut costs by consolidating operations. With news operations at both its L.A. stations, Fox is expected to shut down the less successful one at KCOP.

Shortly after the sale was announced, KCOP laid off 12 employees in its accounting and programming departments. While some fear that consolidation will lead to less diversity in the market, it makes Fox more attractive to advertisers, a big advantage in the soft ad market.

The deal could lead other media companies to extend their reach in order to compete with Fox, which now has a total of 33 stations.

Claudia Peschiutta

Hollywood Union Deals

After months of speculation about the potential impact of strikes by Hollywood writers and actors, both unions averted walkouts. Television and film writers ratified a new three-year contract in early June.

Hollywood writers are now entitled to the same residual payments for shows aired on the Fox network as those on the other major networks. Other gains included increased residual payments for shows sold into foreign markets. But some proposals that the writers had originally made, such as residuals for videocassettes and increased payments for old TV shows rerun on cable, were left out completely.

The WGA agreement set the stage for a settlement by the Screen Actors Guild, which agreed on a new contract about a month later.

The media hype surrounding potential strikes drew world attention. A Milken Institute study commissioned by former Mayor Richard Riordan concluded that strikes would hit the area hard, though the findings failed to consider that production had ramped up in the first part the year in anticipation of a work stoppage.

Conor Dougherty

LACMA Renovation/Demolition

With the strong support of billionaire philanthropist Eli Broad, the board of the Los Angeles County Museum of Art decided to level most of its existing campus and replace it with an edgy $300 million complex to be designed by world-renowned Dutch architect Rem Koolhaas.

Not surprisingly, there is some controversy over tearing down four of LACMA’s six main buildings, one of them only 15 years old. The two lucky enough to be spared are the Pavilion for Japanese Art and the former May Co. building (which will likely house major exhibits while construction is underway).

Several questions loom about the project, starting with the obvious: who will fund such an overhaul? But it might be easier to get money for a nearly complete rebuilding of the site than for simply a rehabilitation that was proposed in a competing, more costly plan by Jean Nouvel. Also, Broad has pledged to become a major contributor to the project.

In addition to his plan being well liked, Koolhaas won LACMA officials over with a charming personality and a familiarity with American culture.

Conor Dougherty