Standing head “Economic Indicators,” with individual heads for each item

Tropicana chooses City of Industry

In a warehouse that never gets warmer than 35 degrees Fahrenheit, Tropicana is demonstrating daily why the nation’s leading juice company chose the City of Industry for its huge distribution center.

Tropicana, which recently introduced a new blend for children called Tropicana Bursters, chose the City of Industry because it is “the right place to be for distribution to the West Coast,” says Harold Hildenbrand, Director of West Coast Operations. Juice is shipped to the City of Industry from Florida and California, then is packaged and distributed to 13 western states, including Alaska and Hawaii.

Hildenbrand looks forward to Tropicana’s growth and expansion as new products continue to be developed and presented to the public. “There is a great opportunity for growth in the juice market,” says Hildenbrand. “Right now, only a third of home breakfasts include orange juice.” Also, because America has become such a health-conscious society, Tropicana has introduced calcium and vitamin fortified versions of its juices.

The Tropicana facility is also becoming more and more computer based. Currently, it has computer automated blending and processing. There is also a new technology center being developed in Florida.

“Tropicana is a classic example of the top reasons businesses come to, and stay, in the City of Industry,” says Don Sachs, Executive Director for the Industry Manufacturers Council. “The easy access to railway and freeway transportation and a large available labor force make the City of Industry ideal for business.”

Hildenbrand says the city was very helpful in Tropicana’s move to Industry. “When we look at the city and all its advantages, they’ve helped us grow our business,” says

Hildenbrand. “They’re a great partner.” In 1990, Tropicana bought its building from another beverage manufacturer. The combined facts that the building was already regulated to city standards and that officials were so helpful, made the move to

the City of Industry quick and simple.

Orange County recovers

Barely two-and-a-half years after its emergence from bankruptcy, Orange County now stands at the national forefront as a leading “post-suburban” economic region, according to a new La Jolla Institute study.

According to the study, “Orange County: The Fate of a Post Suburban Paradise,” Orange County’s increasing ethnic and cultural diversity coupled with its economic emergence as a high-tech center will increasingly drive the region’s growth while creating a model for other regions nationally.

The 24-page study, authored by Pepperdine University and La Jolla Institute senior fellow Joel Kotkin, reports that Orange County, now the nation’s fifth most populous county, is a new kind of giant metropolis — decentralized, demographically and economically cosmopolitan, and increasingly independent from neighboring Los Angeles County.

“Orange County represents the expanding economic and cultural role of `post suburban’ communities in America,” said Kotkin. “We’re seeing major structural changes in the way the region’s economy works and the expanding economic role of immigrants and ethnic entrepreneurs.”

The study uses the term “post suburban” to represent a new kind of metropolitan area that lacks a traditional urban core, but nevertheless provides its residents with many of the employment, consumer, and lifestyle options once associated with large urban cities.

According to Kotkin, “It’s crucial that business leaders and public officials understand the region’s economic and demographic changes and act so that the county is positioned to prosper in the global economy of the 21st century.”

Stan Oftelie, Orange County Business Council president and chief executive officer, said, “The business council plans to use these positive findings to show how having an available diverse workforce is a very positive asset to a company locating in Orange County.”

Study sponsors include The James Irvine Foundation, Orange County’s United Way, the Orange County Human Relations Commission, Chapman University, the Orange County Business Council, the Orange County Hispanic Chamber of Commerce, and the Orange County Korean Chamber of Commerce.

Founded in 1995, The Orange County Business Council combined the forces of three major Orange County business development groups — the Industrial League of Orange County, the Orange County Chamber of Commerce and Partnership 2010. The OCBC serves as the unified, effective and pro-active voice of business in Orange County and provides a central focus to the county’s economic development program. The organization has more than 1,400 business members.

The La Jolla Institute is an independent, nonpartisan, nonprofit policy research institute with headquarters in Claremont, Calif. La Jolla Institute’s research and activities are designed to educate business, government, civic and educational institutions on the unique opportunities and challenges of the Information Age.

California Dreamin’ returns

More people are moving into California from other states than are moving out of the state, according to recent data collected by the California Chamber of Commerce’s Economic Advisory Council.

“This is a clear sign of the growing attractiveness of California and its booming economy,” said J. Gordon Palmer, Jr., Chairman of the Chamber’s Economic Advisory Council, and manager of master planning for the Port of Long Beach.

“For many years prior to the recession of the early 1990’s, California experienced a net in-migration of people moving here from other states,” said Palmer.

“During the early part of this decade, as the state’s economy weakened, California experienced a net out-migration of California residents moving to other states. Now that pattern has reversed and California again has net in-migration from other states, for a net

increase of 115,000 people,” Palmer added.

California’s economy continues to show impressive growth, according to a report released on Wednesday by the Chamber’s Economic Advisory Council, a statewide panel of economists from the private and public sectors.

The state’s job growth rate is running at about a 3 percent annual rate — the seventh fastest growth rate in the nation. In addition, the state is adding jobs at a rate that will create about 370,000 jobs during the year — more than any other state in the

nation.

California’s job growth is supported by the strong demand for telecommunications services, a robust entertainment industry that is expected to add 22,000 new jobs in 1997, an encouraging housing market and its position as the leading state for the movement of

international trade.

Tourism remains a major industry for California and continues to grow, despite the decline in foreign visitors, generally attributed to flood damage to popular rural destinations such as Yosemite National Park, and the lack of new attractions at the state’s amusement parks this year. In addition, there is a strong competition from other states to capture tourism spending.

Water group plans lake

Plans for a 2,000-acre recreation area surrounding what will be Southern California’s largest lake have been unveiled Tuesday by the Metropolitan Water District of Southern California.

“The Eastside Reservoir Project will be a major Southern California recreation destination,” said Metropolitan general manager John R. Wodraska. “Economic studies predict that nearly 2 million people will visit the reservoir each year.”

A public meeting on the up to $200 million plan is scheduled for Oct. 28 in the city of Hemet, Calif., followed by a vote on the draft recreation plan by Metropolitan’s board of directors at its November meeting as a basis to obtain construction permits. Many of the planned recreation facilities could open by mid-2000, with other facilities to come in stages. The reservoir is expected to be filled by 2004.

Discussion about the plan came during Metropolitan’s monthly board meeting, where directors reviewed the draft recreation plan and guiding principles, as well as a business plan to attract private developers and concessionaires.

Earmarked in the plan are separate recreation areas adjacent to the two major dams. Planned features include family, group and RV camping areas, an 18-hole championship golf course, an equestrian center, swimming and recreation lakes and special events meadows. Also envisioned are a hotel and conference center, two marinas, a historic working farm, and soccer and baseball fields.

Metropolitan proposes $58 million to develop the recreation area infrastructure and the two smaller lakes, sports fields, special event areas, equestrian center and picnic areas. Other features such as the golf course, the water park, and the hotel and conference center would be built with private funds. Two marinas likely would be funded by a mix of private and public investment.

The Metropolitan Water District is a regional water agency that imports water from Northern California and the Colorado River, and delivers it on a wholesale basis to the coastal plain of Southern California. Through its 27 member public agencies, the district provides almost 60 percent of the water used by nearly 16 million people living in portions of Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties.

Building booms

Building activity in California jumped to its highest level in six years last quarter, the result of rising home prices and a rapidly expanding economy, a real estate information service reported.

Construction financing totaled $3.56 billion for the July-to-September period. That was up 26.3 percent from $2.82 for the previous three-month period, and up 25.3 percent from $2.84 billion for last year’s third quarter, according to Acxiom/DataQuick Information Systems.

This year’s third-quarter dollar volume was the highest since $3.73 billion for third-quarter 1991. Building activity is currently at twice the bottom 1993 levels.

“This is money that gets pumped directly into the economy through job payrolls and supply expenditures. The expansion of the building sector is steady and we expect construction activity to grow well into next year,” said Mike Ela, DataQuick president.

Southern California showed the strongest increase in building activity, with Los Angeles County going from $317 million a year ago to $520 million last quarter, a 63.2 percent increase. Construction levels are still flat in the Central Valley.

DataQuick monitors all real estate activity in California and other states and provides information to consumers, lending institutions, title companies and industry analysts. The numbers include all construction loans, commercial as well as residential. A construction loan is typically recorded a few days before building activity actually begins.

Venture fund announced

Brentwood Venture Capital has announced the closing of its eighth venture capital fund, Brentwood Associates VIII, a $160 million fund, which will focus on early stage investments in the fields of information technology and health care. Brentwood Associates VIII continues Brentwood Venture Capital’s strong tradition of working with innovative entrepreneurs to build successful, rapidly growing companies.

Brentwood Venture Capital has been both the financial and strategic force behind several recent high tech winners in both information technology and health care. Examples of the firm’s latest information technology successes include: WebTV Networks, the pioneer in home Internet access devices recently acquired by Microsoft; Documentum, a leader in enterprise-wide document management solutions for large companies; and Xylan, an innovator in high-bandwidth network switching systems which was one of the largest IPOs last year.

In addition to significant experience in working with early stage companies, Brentwood’s success in information technology investing comes from focusing its efforts on early stage opportunities in the areas of networking products, enterprise software, and the Internet, areas in which the firm’s partners have in-depth knowledge and extensive contacts. “Our 25 year history of successful investing allows us to add significant value beyond the capital we invest,” affirms John Walecka, the Brentwood General Partner who led the Xylan and Documentum investments. “The combination of industry-specific knowledge, experience working with early stage companies, and extensive contacts in the industries in which we invest, contributes to the success of our portfolio companies.”

Brentwood Venture Capital’s health care investments cover the areas of medical devices, biotechnology/pharmaceuticals, drug delivery, medical information systems, and health care services. “We continue to look for those product and service opportunities that contribute real value to health care delivery in terms of improved patient outcomes and more cost-effective medical practice,” states Ross Jaffe, MD, one of Brentwood’s General Partners focused on health care investments. The firm’s significant expertise in medical devices is illustrated by such investments as Biopsys Medical, a public company recently acquired by Johnson and Johnson for its less-invasive systems for diagnosing and treating breast cancer, and Micro Interventional Systems, a developer of catheters and related devices for treating vascular problems and tumors in the brain which was acquired by Medtronic. Biotechnology and drug delivery successes include public companies such as Coulter Pharmaceuticals, Depotech, and Aradigm.

Brentwood Associates VIII is the next in a series of recent venture capital funds that have demonstrated the firm’s ability to generate outstanding returns for its limited partners. Prior funds include Brentwood Associates V, a $50 million fund raised in 1989; Brentwood Associates VI, an $80 million fund raised in 1993; and Brentwood Associates VII, a $115 million fund raised in 1995. Each of these recent funds is well above the top quartile of funds raised in its vintage year according to Venture Economics data.

The firm’s new fund, Brentwood Associates VIII, enjoys a strong and diverse set of Limited Partner investors including long term Brentwood supporters Harvard Management Co., Brinson Partners, Inc., Horsley Bridge Partners, St. Paul Venture Capital, ARCO, and Mellon Bank, and new investors The Walt Disney Company, Pfizer, TIFF, Memorial Sloan-Kettering Cancer Center and The Duke Foundation. “Our existing Limited Partners alone over-subscribed our fund,” noted Jeff Brody, a General Partner focusing on information technology and Internet investments such as WebTV Networks. “We took that not only as a compliment for our past achievements, but also as a strong endorsement of our strategy going forward.”

Four of the five General Partners who raised Brentwood VIII have been general partners with prior Brentwood funds. Brad Jones anchors the firm’s Los Angeles office and invests in both information technology and health care companies. John Walecka and Jeff Brody spearhead information technology investments in Silicon Valley from the firm’s Menlo Park, CA office and Ross Jaffe, MD leads the firm’s health care investing from the Menlo Park office.

Brian Atwood, the former CEO of Glycomed and a Venture Partner at Brentwood, had been promoted to General Partner and will focus on life sciences investments. Stu Schuster, former Executive VP of Marketing at Sybase, will continue to serve as a Venture Partner working with Brentwood information technology companies.

Brentwood Venture Capital was founded in 1972 as Brentwood Associates. Over the last 25 years, Brentwood has grown to be one of the oldest and largest firms in the venture capital industry, raising over $750 million in capital and investing in over 300 entrepreneurial companies. Brentwood is dedicated to working closely with motivated entrepreneurs, helping to guide corporate growth, strategy and development, recruit outstanding management; raise additional capital and increase shareholder value.

Brentwood has offices in Menlo Park, Los Angeles, and Irvine, CA. Additional information is available on the Brentwood website at: http://www.brentwoodvc.com.

Latin PC market grows

Preliminary findings from International Data Corp.’s Latin America Quarterly PC Market Tracker show regional desktop and notebook PC shipments of 935,000 for the third quarter of 1997. The regional PC market grew by 32 percent over the third quarter of 1996, representing a better performance than the 29 percent year-on-year growth registered in the second quarter of this year. Expansion in each of the region’s largest country markets supported this rapid growth.

Venezuela and Chile led the region in shipment growth with 53 percent and 49 percent, respectively. While the rapid growth in Venezuela is partially attributable to recovery from the country’s banking crisis, Chile’s economy has been relatively stable. “The growth in Chile’s market must be understood in the context of government efforts to control inflation, which slowed the market. Nevertheless, year-to-date shipments in Chile are up a solid 30 percent,” said Loren Loverde, IDC’s senior Latin America PC analyst.

Results in Argentina were similar to those in Chile in that shipments were up a substantial 42 percent versus a slow third quarter last year. In Mexico shipments increased by 32 percent versus a year ago as the country continued its recovery from the December 1994 Peso Crisis. In Brazil, the region’s largest market, shipments were up 26 percent versus the third quarter of last year, and up over 16 percent from the second quarter of this year, continuing a year of solid growth.

The Colombian market posted the slowest growth of the six major country markets in Latin America. While shipments declined by four percent versus the second quarter, total shipments were up more than 21 percent versus last year’s third quarter, with year-to-date shipments also up more than 20 percent.

Combined, the top five vendors continued to represent roughly 45 percent of total desktop and notebook PC shipments in Latin America. They were Compaq, IBM, Acer, Hewlett-Packard and Brazilian vendor Itautec, which moved back into fifth as Apple fell out of the top five.

Headquartered in Framingham, Mass., IDC reports quarterly on the personal computer (desktops, notebooks, and servers) market in Latin America. Each report series provides an overview of key issues and regional market data comparisons. The country reports contained in the quarterly report series include Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela. IDC market segmentation, vendor market shares, forecasts, and political, economic, and IT market analyses can be found in each of the six individual country reports in the series. The research can be purchased by contacting Loren Loverde at 650-962-6470. IDC’s World Wide Web site (http://www.idc.com) contains additional company information and recent news releases, and offers full-text searching of recent research.

Lease sets a record

In the largest lease transaction on the Westside this year, the law firm of Troop Meisinger Steuber & Pasich, LLP, has signed a 15-year lease for approximately 140,000 square feet of office space at 2029 Century Park East (Century Plaza Towers).

TMS & P; will occupy five floors and a portion of a sixth in an aggressive expansion move from the firm’s current 80,000 square-foot tenancy at 10940 Wilshire Blvd.

The novel lease structure involved obtaining a surety bond to secure TMS & P;’s obligation in lieu of a traditional personal guarantee by the firm’s partners. The “lease bond” concept was jointly developed by TMS & P; and J & H Marsh McLennan Inc. Robert J. Plotkowski, a partner in TMS & P;’s Real Estate Group, served as legal counsel for the firm in the lease and bond negotiations.

According to Plotkowski, “The lease bond arrangement is an entirely new concept that facilitates structuring a transaction that is more advantageous to both the tenant and the property owner.” Commencement of the lease will be September 1998.

Troop Meisinger Steuber & Pasich, LLP is the eighth largest and fastest-growing law firm in Los Angeles County and represents clients in virtually all areas of legal practice, including insurance coverage, entertainment, corporate, litigation, tax and real estate.