The Los Angeles Community Development Bank, the centerpiece of city efforts to revitalize depressed communities after the 1992 riots, could be forced to close if a radical restructuring now underway fails, according to a government report and city officials.
Although new management has aggressively worked to reverse the bank’s flagging fortunes, a new report by he Community Development Department indicates that early mistakes have taken a toll that could jeopardize the survival of the bank.
Battered by litigation and a devastating $24 million loss when its largest loan soured, the federally funded bank has nearly depleted its loan loss reserves and administrative funds. To keep making substantial loans, it must reshape itself dramatically to attract at least $25 million in capital, expected to come mainly from private lenders and investors, the report states.
Cable Issue Tops Lobbying List
Access to cable television lines and the huge development at Playa Vista were the top lobbying issues at Los Angeles City Hall during the first four months of 2000, according to a report by the city’s Ethics Commission.
Nearly $250,000 in lobbying fees was spent in the hope of influencing the decision on whether or not to require cable television franchise holders to open their lines to Internet providers. AT & T; was the top spender on the issue, reporting $163,991 paid to five lobbying firms during the period.
Meanwhile, the developer of the Playa Vista project spent $165,000 on lobbying efforts directed at facilitating construction of a planned community on 1,087 acres near Marina del Rey. The city last year approved spending $45 million in bond proceeds to help fund the project’s low-income housing component.
However, the council’s Budget and Finance Committee recently delayed a decision on committing $135 million in Mello-Roos bond financing until more reports could be provided on methane gas discovered at the site.
Gemstar Eyeing Acquisitions
After announcing a 91 percent increase in profits during its most recent fiscal quarter, Gemstar International Group Ltd. said it would be interested in a “transaction” with TiVo Inc., which sells a device to digitally record TV shows.
Henry Yuen, Gemstar’s chairman and chief executive, said he hadn’t made a formal offer to buy TiVo, which has a market value of $733.6 million. TiVo officials said they appreciated the interest but no deal is in the works.
Pasadena-based Gemstar, which produces VCR Plus television software, is in the process of buying TV Guide Inc. for $9.2 billion and also intends to spend as much as $1 billion to buy small stakes in interactive-TV providers over the next two to three years, said Yuen.
Bloomberg News
Ticketmaster Buying Competitor
Pasadena-based Ticketmaster Online-CitySearch agreed to acquire a smaller competitor, online ticketer TicketWeb, for $35.2 million in stock.
Ticketmaster Online-CitySearch allows Web surfers to buy tickets to more than 350,000 events each year, usually in large venues like sports arenas and concert halls. Berkeley-based TicketWeb serves 700 smaller venues, including nightclubs, bars and museums.
In addition to rounding out Ticketmaster Online’s ticketing offerings, privately held TicketWeb will complement the local Web guides produced by CitySearch. The company’s 51 city guides already offer listings of local events ranging from stand-up comedy acts to community service gatherings.
Netzero Acquires Search Firm
Free Internet service provider NetZero said it would buy Web search firm Simpli.com for more than $22 million in cash and stock to bolster its ability to sell lucrative targeted advertisements to its more than 4 million customers.
Privately held Simpli.com has developed technology that tracks the online movements of Web users to help companies identify consumers who are likely to be interested in their products. Meanwhile, Westlake Village-based NetZero is trying to turn as many of the 2.5 billion ads it displays each month into targeted ads because advertisers pay a premium for them.
NetZero spends between $4 and $5 a month per customer providing Net access and tries to make at least that much by selling ads that appear on customers’ computer screens as they surf the Web.
Corporations Aid Convention
With their big appetites for political influence, some of the nation’s biggest companies are helping foot the bill for the Democratic National Convention in Los Angeles.
Near the top of the donor list are Microsoft Corp and AT & T; Corp. Microsoft is donating roughly $1 million in computer equipment at precisely the same time the U.S. Justice Department is urging a federal judge to break the company into at least two parts.
AT & T;, meanwhile, has contributed at least $1 million to the convention in the form of services. The telephone giant is waging a national campaign to forestall efforts to open its cable lines to Internet service providers, a debate playing out in Los Angeles and many other major metropolitan areas.
Thus far, the Los Angeles host committee says it has raised roughly $31 million in cash and in-kind contributions for the convention.
Restaurant Eyeing IPO
The Los Angeles-based California Pizza Kitchen chain plans to test the choppy seas of the initial public offering market this summer by selling shares of its stock to raise an estimated $70 million.
Known for its specialty pizzas with toppings ranging from tandoori chicken to grilled garlic shrimp, CPK said in its filing with the Securities and Exchange Commission that the money would be used to pay off $40 million in bank debt and buy back preferred stock. The offering price and number of shares to be sold were not disclosed.
The company, which owns and franchises 100 restaurants, including 41 in California, vowed to carefully choreograph further expansion in coming years, a move that an analyst said could reassure investors who were burned in the 1990s by the stocks of restaurant chains that pursued go-go growth plans while neglecting menus and service.
