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Monday, May 29, 2023

The Business Digest

Davis Plan Targets Congestion

Gov. Gray Davis took the wraps off a $5.2 billion state transportation plan that includes $2.2 billion for busways, light rail, carpool lanes, inner-city trains and some freeway expansion in Los Angeles, Orange County and the Inland Empire.

Choosing from long wish lists submitted by local and state officials, Davis proposed partial state funding for a light-rail line from Union Station to the Eastside, busways across the San Fernando Valley and along the heavily traveled Wilshire corridor, and a busway or light-rail line from USC to the Westside.

Davis proposed using $3 billion from the state budget surplus and asking voters to approve a $2.2 billion bond issue in part to build transit alternatives. An estimated 97 percent of the weekday trips taken in Los Angeles County are by motor vehicles and just 3 percent by mass transit.

Herbalife Buyback Scrapped

Citing funding problems, Herbalife International Inc. Chairman Mark Hughes scrapped plans to buy the Los Angeles-based company and take it private.

The collapse of the $223 million buyout becomes the latest adverse development in the history of Herbalife, which Hughes founded in 1980. Over the years, the company’s marketing tactics and product claims have come under scrutiny by U.S. and state regulators forcing Herbalife in at least one case to pay a sizable settlement.

The buyout plan itself had prompted shareholder lawsuits that were settled by Herbalife. Hughes currently owns about 54 percent of the company’s voting Class A shares and 58 percent of its nonvoting Class B stock.

Feud Flares at City Hall

The bitter feud between Mayor Richard Riordan and the city’s chief administrative officer, Bill Fujioka, escalated after the mayor’s staff refused to give the city’s fiscal analyst a summary of Riordan’s proposed 2000-2001 budget.

Fujioka and Riordan have been at odds for months, culminating with the mayor’s announcement in January that he wants to fire the CAO, whom Riordan and his aides regard as too friendly with City Council members.

Deputy Mayor Jennifer Roth, Riordan’s budget and finance director, denied that Fujioka was cut out of the loop. Although he may not have a copy of the summary, he should know what’s in the report because he was included in the mayor’s budget sessions, she said.

Mattel Sued by Rival

Hasbro Inc. filed a patent infringement lawsuit against rival Mattel Inc. over technology used to make a remote-control toy.

Hasbro said it owns the patents to technology that Mattel used to build its Super Rebound vehicle, introduced last year. Hasbro said it bought the patents to produce Ricochet, a remote-control vehicle with two high-torque motors and large balloon tires, which was on the market from 1994 through 1996.

Chris Byrne, editor of the publication The Toy Report, said Super Rebound, produced by the Tyco division of El Segundo-based Mattel, was one of the best-selling radio-control cars in 1999.

Osicom Announces Merger

Santa Monica optical networking firm Osicom Technologies said it would merge its Network Access subsidiary with Sync Research, an Irvine maker of computer networking gear.

Osicom and Sync shareholders will each own 50 percent of the combined company, to be called Entrada Networks. The new operation will be based in Irvine. No layoffs were planned.

Osicom’s Network Access subsidiary makes high-speed access devices for local and wide-area networks. Sync makes computer networking devices, giving the combined company a stronger position to compete in new markets.

Online City Marketplace Launched

A Los Angeles company opened an online marketplace for municipal governments that want to conduct business online.

Privately held ECitydeals.com secured $1.7 million in private funding in 1999 and is now seeking more. Founded by municipal government consultant Larry Kosmont, ECitydeals.com lists 130 cities, including 99 in California, that have agreed to conduct some business through the year-old company.

ECitydeals.com is one of a growing number of companies that hope to profit from the massive task of moving government transactions online.

Official Sentenced in Bribery Case

A former state deputy labor commissioner responsible for regulating working conditions in the garment industry was sentenced to three years in federal prison for taking kickbacks from clothing manufacturers.

Howard Hernandez, 48, of Montebello was arrested and fired in September 1997 after investigators saw him take a bribe in a Montebello parking lot while assigned to the Targeted Industries Partnership Program, an elite group that concentrated on catching labor violations in the garment and agricultural industries.

Hernandez admitted taking bribes from garment manufacturers, most of them in Koreatown, in exchange for not inspecting their facilities or for intervening to reduce fines assessed after inspections.

Hotel Occupancy Increases

L.A. County hotels were 80 percent full during February, which helped to erase most of a 5 percent drop in guest volume in January, tourism officials said.

The rescheduling of a major convention of music merchants from January to February was one of the primary forces behind the figures for both months, said Michael Collins of the Los Angeles Convention and Visitors Bureau.

According to statistics compiled by PKF Consulting, the average price per room in February rose from $117.84 last year to $123.69 this year. Collins said the rate hike is an indication that demand for Los Angeles among business and leisure travelers remains high.

Hike in Taxi Fares Eyed

A City Council committee proposed that taxi fares be increased an average of 12 percent in Los Angeles, in part because of rising gas prices.

If the proposal gets final approval from the council, the fare for a typical five-mile taxi ride would increase from $9.58 to $10.70, officials said. Council members said that if gas prices go down, the city could lower fares later.

The committee also recommended that all city taxi franchises be put up for competitive bidding, with incentives going to firms using ultra-low-emission vehicles that run on alternative fuels.

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