JANUARY
Supermarket Rule:
Mayor Antonio Villaraigosa approved a grocery worker-retention ordinance in response to non-union chains buying union supermarkets. Under the Los Angeles city law, all stores larger than 15,000 square feet must retain existing
workers for 90 days after the sale
takes effect.
Hilton Takeover:
Hilton Hotels Corp. went back into the international hotel business, re-acquiring the hotel division of U.K.-based Hilton Group for $5.7 billion, which owned all Hilton hotels outside the U.S. The acquisition created the largest lodging company in the world. Hilton had sold its international division to Ladbroke Group in 1987.
Strategic Merger:
General Electric Corp.’s purchase of Arden Realty Inc. sent ripples through the local real estate market. In acquiring Arden’s 18.5 million square foot portfolio, the purveyor of microwaves and jet engines became one of the largest owners of office properties in Beverly Hills.
Critical Upkeep:
Cedars-Sinai Medical Center, the hospital that caters to L.A.’s Westside elite, opened the Saperstein Critical Care Tower. The facility is 250,000 square feet, contains 150 beds, and consolidates 120 intensive care units.
Insurer Consolidation:
Health Net Inc. acquired Long Beach-based health insurer Universal Care Inc., adding 20,000 beneficiaries. The Woodland Hills company is now the largest independent, for-profit health insurer in the state.
Promising Employment:
Los Angeles County experienced its best job performance since 2001, creating 50,000 payroll jobs and decreasing unemployment by a full percentage point. Despite fears of runaway production, the industry with the most gains was in motion pictures and sound recording, followed by hospitality and construction.
Sporting Buyout:
Green Equity Investors IV LP, an affiliate of the legendary Los Angeles private equity firm Leonard Green & Partners LP, bought Sports Authority Inc. for $1.3 billion, taking private the nation’s largest sporting goods chain, with 398 stores.
Disney Deal:
With the departure of former chief executive Michael Eisner and ascension of Robert Iger, Walt Disney Co. agreed to pay $7.4 billion in stock to acquire Pixar Animations Studios Inc. Apple Computer Chief Executive Steve Jobs, who had frosty relations with Eisner, now is a member of Disney’s board.
FEBRUARY
Mall Sale:
Hager Pacific Properties sold the 860,000-square-foot Baldwin Hills Crenshaw Plaza in the Crenshaw Corridor for $136 million to Chicago-based Capri Capital Advisors LLC, a minority-owned firm that invests in African-American and Hispanic areas.
Leadership Exchange:
Yash Gupta, the dean of USC’s Marshall School of Business, abruptly ceded his position, amid speculation there was concern over the school’s rankings drop. Thomas Gilligan succeeded Gupta as the new dean.
Private Eye:
The Pellicano scandal enveloped Terry Christensen, a prominent Los Angeles lawyer who represented billionaire Kirk Kerkorian. Christensen was indicted for his association with former private detective Anthony Pellicano and accused of conspiracy and wiretapping charges. Christensen was charged to pay a minimum of $100,000 in damages. He has denied any wrongdoing.
Electronic Transaction:
Jamdat Mobile Inc., a fast growing maker of cell phone games, was acquired by video game giant Electronic Arts Inc. for $680 million. Jamdat Mobile has changed its name to EA Mobile.
Downtown Revival:
A study conducted by the Los Angeles Economic Development Corp. estimated that there were 154 pending projects in downtown Los Angeles with a cumulative price tag of $12.2 billion. The construction should create 174,000 jobs and generate $25.9 billion in economic impacts if they are all built.
MARCH
Philanthropic Investment:
Billionaire philanthropist Eli Broad’s foundation, the Broad Foundation, contributed $25 million to USC to establish the Broad Institute for Integrative Biology and Stem Research at USC’s Keck School of Medicine. The 215,000-square-foot facility is expected to cost $150 million and be the largest stem cell research center in the state.
Increased Storage:
Glendale-based Public Storage Inc. bought Shurgard Storage Centers Inc. for $5 billion. The Seattle storage company was valued for its large European presence.
Shopping Deal:
Mall owner and operator the Westfield Group added three Los Angeles County department stores from Federated Department Stores Inc. as part of a 15-store deal. Those stores include Macy’s West Covina, Robinsons May Fox Hills in Culver City and Robinsons May Santa Anita Fashion Park in Arcadia. They are expected to be leased to trendier retailers such as Target.
Past Publisher:
Otis Chandler, the former publisher of the Los Angeles Times who developed his family’s newspaper into a national media source, died at the age of 78. His death came as the Tribune Co. struggled with declining circulation at the Times.
Union Leader:
Maria Elena Durazo was named executive secretary and treasurer of the Los Angeles County Federation of Labor, becoming the first woman to lead the labor alliance of 356 local unions and 825,000 members. She succeeded Martin Ludlow, who resigned due to a scandal over alleged illegal union funding used during his campaign.
Joint Transportation:
A joint venture was awarded a $420 million contract to build the Westside’s first light rail line, consisting of 9.6 miles from downtown Los Angeles to Culver City. It will include eleven passenger stations, three park and ride lots, bicycle lanes and a tunnel near USC. FCI Constructors, Fluor Enterprises and Parsons Transportation Group are on the venture team. The project is scheduled for completion in November 2009.
APRIL
Bank Relocation:
Comerica Bank Inc. moved its regional headquarters from Detroit to Century City and its entertainment finance division closer to Hollywood, bringing $55 billion in assets and opening 10 branches throughout Los Angeles in a robust year for banks.
Cartoon Contract:
The Screen Actors Guild approved a 20 percent increase in residual checks for actors who perform voice-overs for animated programs on basic cable. The raise was the first contract improvement in 16 years.
Homeless Provision:
A $100 million plan to build five regional centers for homeless people throughout the county was approved by the Los Angeles County Board of Supervisors. The action followed a furor over how the homeless live and are treated downtown.
Options Meltdown:
Vitesse Semiconductor Corp. became a visible local victim in Wall Street’s stock options scandal when an SEC-prompted internal probe revealed a variety of questionable accounting practices. By June, Vitesse’s stock was delisted from the Nasdaq as its chief executive and two other officials were fired and three years of financials were restated.
ABC Online: ABC television agreed to sell its content online through iTunes and began to offer selected shows on its Web site for free, supported by advertising. The move reflected the effort by old-line media firms to come to grips with the public’s desire for online and other new media.
MAY
MTA Imbalance:
Senate Bill 1507 passed the Senate Transportation and Housing Committee, shifting the Metropolitan Transportation Authority’s power structure. Los Angeles was required to relinquish one of its four seats on the 14-member board to the South Bay cities.
May Day:
A national protest dubbed “A Day Without Immigrants,” called for opposition to tightening restrictions on immigration through a boycott of work and school. A crowd of nearly half a million took to the streets of Los Angeles in one of the biggest demonstrations in the city in years.
Fraud Charge:
Douglas Dowie, former general manager of Fleishman-Hillard’s L.A. office and John Stodder Jr., former vice president, were found guilty on all charges of wire fraud and conspiracy for over-charging the Los Angeles Department of Water & Power on a $3 million contract. The trial closed a City Hall scandal dating back to the Administration of Mayor James Hahn.
JUNE
Universal Update:
Universal Studios Hollywood launched plans for a major facelift to improve its waning park attendance. The campaign features new attractions, rides, and a marketing strategy intended to draw families and younger guests.
Flight Factory:
A $2.1 billion contract was approved by Congress extending the production of Boeing Co.’s C-17 plane and saving the Long Beach factory from closing. The funding will allow construction of an additional 22 planes and will keep the plant open but only until 2009.
JULY
Univision Sold:
Univision Inc., the largest Spanish-language broadcaster in the nation, agreed to be bought out for $13.7 billion by a group led by Los Angeles billionaire Haim Saban. The offer, which included the assumption of $1.4 billion in debt, won out over a bid by Grupo Television and other private equity teams.
Full Dial:
To accommodate the growing demand for telephone numbers, all new numbers assigned in the 310 area code would have a new 424 area code. The so-called “overlay” plan also means that all calls dialed within that area code must begin with the three-digit area code.
Development Funds:
The California Department of Housing and Community Development gave $42.9 million to the Los Angeles region for housing. The money is a result of the approval of Proposition 46, a $2.1 billion housing bond approved in November 2002.
Graphic Duo:
In a twist, newly formed movie production house Fox Atomic teamed up withHarpersCollins Publishers to publish and distribute branded graphic novels from its Fox Atomic Comics. Four graphic novels with content from Fox Atomic theatrical releases and original content are planned for release in 2007. All entities involved are units of Rupert Murdoch’s News Corp.
AUGUST
Gas Summary:
Gasoline prices reached a record high across the nation and Los Angeles had the highest average price of gas in a major city at $3.265. Oil prices and high demand were the cause. Prices dropped to the $2.50 range at the end of the year.
Global Suit:
Goldman Sachs Group Inc., Merrill Lynch & Co., and over two dozen investment banks settled a shareholder lawsuit concerning Global Crossing Ltd.’s falsification of financial records for $99 million. Global Crossing went bankrupt in 2002 with $11 billion in debt.
Martha Living:
KB Home and Martha Stewart Living Omnimedia announced they are bringing their co-branded homes to the West Coast. The community is located in Perris featuring 125 homes and opened the end of the year. The Stewart homes were a bright spot in a down market for KB.
Ad Space:
Google Inc. and MySpace joined forces to combine search and advertising technology with the popular online social networking site. The agreement guarantees about $900 million to News Corp. for the next four years.
Disgruntled Demonstration
: The Engineers and Architects Association went on a two-day strike over a wage dispute with the administration of Mayor Antonio Villaraigosa. The City Council approved a retroactive 4 percent increase plus a 2.25 percent raise for 2007.
SEPTEMBER
Green Prospects:
Gov. Arnold Schwarzenegger signed AB 32, the Global Warming Solutions Act, making California the first state to adopt the Kyoto Accord by enforcing greenhouse gas emissions to 1990 levels by 2020. It was a major break from the Bush Administration for the GOP governor, who has moved increasingly to the left of center.
Minimum Raise:
The governor approved raising the minimum wage to $7.50 starting Jan. 1, 2007 and to $8 on Jan. 1, 2008. The increase makes the state’s minimum wage the nation’s fourth highest.
School Governing:
Mayor Antonio Villaraigosa won a major victory in his plan to submit the Los Angeles Unified School District under mayoral control. The Assembly voted 42-20 in favor of enabling legislation, shifting the bulk of decision-making authority away from the seven-member Los Angeles Unified School District board. However, a December court decision overturned the law.
Harmonious Mix:
Vivendi SA acquired the BMG Music Publishing Group for $2.09 billion. The acquisition makes Vivendi, the owner of Universal Music Group, the owner of the world’s largest music publishing catalog. The acquisition came as music CD sales shrank amid increasing online downloading of songs.
HQ Move:
MGA Entertainment, the maker of the increasingly popular Bratz line of dolls, bought the 26-acre site of the Los Angeles Times’ Chatsworth facility for its new corporate headquarters.
OCTOBER
Cost Cutter:
NBC Universal cut about 700 jobs in an effort to save $750 million annually, reducing its workforce by 5 percent. The company, under pressure from corporate parent General Electric Co., plans to redirect its investments and restructure its television network to rise from its third place standing amongst the networks.
Healthy Role Model:
Walt Disney Co. offered healthier food at its theme parks and plans to use its name and characters only on products that meet specific nutritional guidelines. All food with trans-fats will be removed from its theme parks and its licensed and promotional products by 2007.
Times Turmoil:
Jeff Johnson was fired as the publisher of the L.A. Times after refusing to implement Tribune Co.’s cost-cutting plans. The termination set off a chain of events, leading to an attempt by Eli Broad and Ron Burkle to buy Tribune, and David Geffen to offer $2 billion to buy the Times.
Hollywood Park:
The Hollywood Chamber of Commerce proposed building a park on top of the Hollywood (101) Freeway from Sunset to Hollywood boulevards, by constructing an overpass and planting greenery on top.
NOVEMBER
Bail Out:
Bruce Karatz resigned from his post as KB Home chairman and chief executive after it was discovered he had personally backdated stock option grants. He agreed to repay $13 million for the incorrect reporting of stock-option grants. Jeffrey Mezger succeeded Karatz.
Election Results:
Voters said yes to all of the bond bills to improve and restore the state’s infrastructure and education system. The $37 billion bond package promises to be a boost for the state’s already booming construction industry.
Done Deal:
Walt Disney Co. agreed to distribute Disney programming to cable operator Comcast Corp. Comcast acquired Disney’s 39.5 percent ownership in E Networks for $1.23 billion.
Dream Deal:
DreamWorks Animation SKG Inc. said that a group led by Microsoft co-founder Paul Allen will sell up to $330 million worth of DreamWorks stock, effectively winding down Allen’s 10-year involvement with the Glendale studio. DreamWorks’ creators, Jeffrey Katzenberg, Steven Spielberg and David Geffen, are not selling shares in connection with the group’s sale. Allen is the company’s largest single holder with more than 14 percent of the stock.
MySpace Sued:
Universal Music Group sued News Corp.’s MySpace.com for copyright infringement, citing MySpace.com users’ penchant for posting content produced by Universal artists. The suit, which followed unsuccessful negotiations between the two companies, seeks to shut down the popular social networking site and requests $150,000 for each offense.
DECEMBER
Adios Baja:
Wendy’s International settled the sale of its 298-unit Baja Fresh Mexican Grill chain for $31 million to an investment group led by David Kim, an Anaheim-based restaurateur and retailer who owns the Sweet Factory Chain. Baja Fresh has foundered under Wendy’s ownership.
Pass Off:
The WNBA Board of Governors approved the sale of the Los Angeles Sparks for $10 million to a private investment group led by Carla Christofferson and Katherine Goodman.
Universal Development:
Universal Studios unveiled sweeping plans for residential, office and entertainment projects on its site over the next 25 years. However, nearby residents quickly raised concerns about traffic congestion despite plans for major road construction and traffic re-routing in and around Universal City.
Stock Swap:
News Corp. Chief Executive Rupert Murdoch and Liberty Media Chief Executive John C. Malone agreed to a major stock swap. In the deal, Liberty got the 39 percent stake in DirecTV Group Inc. that was owned by News Corp. plus three Fox regional sports networks. In exchange, Malone gave his $11 billion stake in News Corp. to Murdoch.
Public Apparel:
On consecutive days, two iconic Los Angeles apparel companies took different routes to the public markets. American Apparel, the casual clothing chain headed by controversial co-founder Dov Charney, was sold to a publicly traded investment group for $385 million. FOH Holdings Inc., the parent of Frederick’s of Hollywood, followed with a reverse merger with New York-based intimate wear maker Movie Star Inc.
Compiled by Jade Takahashi
