Year in Review
Corporate scandals, political turbulence and labor turmoil created unsettled times for L.A. and its citizens
January
Homestore Woes: A year of often startling revelations in corporate America hit home at Westlake Village-based Homestore.com, where Stuart Wolff resigned as chairman and chief executive. This came after the Internet company announced it had overstated revenues.
Global Scandal: Another L.A.-area firm reported trouble as Global Crossing Ltd. filed for Chapter 11 bankruptcy protection. Its founder, Gary Winnick, remained under the microscope throughout the year amid Securities and Exchange Commission and Justice Department investigations of possible securities law violations at the telecom firm.
New Network: Taking a chapter right out of its own melodramatic novelas, Univision launched a Spanish-language network amid the worst advertising market in decades. TeleFutura was to shun the novela concept in its bid for younger viewers, but reversed course a few months later.
Construction Plans: L.A. Mayor James Hahn, who seemed to improve his standing during the year after a shaky start to his term, announced a plan for a $100 million trust fund to build affordable housing in Los Angeles, although the plan has run into funding troubles.
February
Heartache for Hollywood: TrizecHahn Corp. took a $217 million write-down on its Hollywood & Highland project. The retail/entertainment development opened to a dismal retail environment just weeks after the Sept. 11, 2001 attacks and still hasn’t really caught on with shoppers and tourists.
Parks Out: L.A. Mayor James Hahn said he would not support the reappointment of Police Chief Bernard Parks. The announcement sparked outrage within the African-American community, which had strongly backed Hahn in the election.
City of Taxes: A study by real estate consulting firm Kosmont Cos. ranked Los Angeles as having the highest business taxes in the state. The least expensive cities were Santa Clarita, Lancaster and Carson.
March
Andersen in L.A.: L.A. accounting firms geared up for an all-out war to recruit Arthur Andersen clients and staff as the accounting firm was charged with obstruction of justice for destroying records in the Enron scandal.
In The Grove: The city’s newest retail/entertainment complex, The Grove at Farmers Market, opened to big crowds and traffic concerns. By year’s end, the mall was considered to be a success overall, with its 14-screen cinemas becoming the highest-grossing theaters in L.A. County.
Riordan Shocker: Former L.A. Mayor Richard Riordan, in one of the biggest meltdowns in California political history, lost to novice Bill Simon in the Republican gubernatorial primary.
Kodak Moment: The Academy Awards were held for the first time at the Kodak Theatre at Hollywood and Highland. The new venue was given good reviews as being photogenic in its television debut.
April
Ten Years After: L.A. marked the tenth anniversary of the riots sparked by the Rodney King verdicts. The decade since the violence found a rejuvenated South L.A. with new shopping centers dotting the area and home prices rising. But the makeover remained incomplete as overall employment fell and pay disparities remained
Gemstar Woes: Shares of Gemstar-TV Guide International Inc. tumbled 50 percent during a wave of disclosures concerning the company’s accounting practices, including recognizing revenue it didn’t receive.
Ponzi Problems: EarthLink Inc. co-founder Reed Slatkin pleaded guilty to orchestrating a scheme that solicited $593 million from about 800 investors.
Telemundo Sold: Federal regulators approved NBC’s $2.7 billion purchase of Telemundo Communications Group Inc., the second-largest Spanish-language network. Because of the purchase, NBC agreed to divest itself of KWHY-TV (Channel 22) in L.A. to comply with regulations regarding ownership.
May
Geffen Donation: Entertainment mogul David Geffen gave $200 million to the UCLA School of Medicine, which was renamed the David Geffen School of Medicine.
TV Ties: Viacom, owner of KCBS (Channel 2), won approval for its $650 million purchase of KCAL (Channel 9), creating L.A.’s third television duopoly.
Budget Woes: Gov. Gray Davis, in his May revision of the state’s budget, said that California’s deficit had risen to $21 billion.
Opening Kickoff: Anschutz Entertainment Group proposed building a $400 million football stadium south of downtown near Staples Center. The plan was later withdrawn after county officials objected to declaring parts of the area a redevelopment zone and the L.A. Coliseum Commission committed $1 million in funds to study the feasibility of putting a new stadium there.
Secession War: The Local Agency Formation Commission voted to put secession of the San Fernando Valley and Hollywood from the city of Los Angeles on the Nov. 5 ballot, eliminating the last hurdle before the votes. The commission later voted down an effort to put Harbor secession on the ballot.
June
Wasserman Dies: Hollywood legend Lew Wasserman died at 89. He was the former chairman and chief executive of MCA Inc., the parent of Universal Studios, where he worked for 50 years.
Health Crisis: In a bid to close $57 million of a nearly $700 million budget gap in the next several years, L.A. County Supervisors voted to close 11 clinics, eliminate all in-patient services at High Desert Hospital in Lancaster and cut 5,000 jobs in the health department.
Water Problems: A cutback in water supplies and rise in prices loomed for L.A. as snags were developing in several measures to keep water flowing to the area. Among them: money to fix the state’s Bay-Delta region and a plan to transfer surplus Imperial Valley water to urban users.
Parks’ Planned Return: Ousted L.A. Police Chief Bernard Parks said he would begin raising money to run in the race for the 8th Council seat held by Mark Ridley-Thomas, who would leave the council because of term limits and be elected to the Assembly.
July
LAX Redo: Mayor James Hahn and airport officials announced a $10 billion overhaul of Los Angeles International Airport. The plan included reconfiguration of several terminals and runways and the construction of an off-site parking area and people mover.
Insider Activity: Insider selling at L.A.’s 50 largest public companies increased their sales by nearly 5 percent during the first five months of 2002 compared with the like period a year ago. This contradicted the nationwide figures, which fell by 27 percent.
Prime Property: The assessor’s office reported that a hot residential real estate market fueled a 6.2 percent rise in L.A. County property tax rolls in 2001 over 2000 levels. The total value was $647.2 billion.
August
Health Pledge: Tom Scully, the official who administers the Medicaid and Medicare programs, said the federal government would not allow the L.A. County health system to collapse when its federal bailout expired in three years.
Simon Verdict: Finding fraud and other misconduct, an L.A. Superior Court jury ordered William E. Simon & Sons to pay $78 million to the former owner of a pay phone business it had done business with. The verdict against the GOP gubernatorial nominee’s company was later reversed.
Disconnected: Thomas S. Hughes, the chief executive of San Pedro-based EConnect, was arrested and charged with repeated violations of securities laws.
September
EIDC Scandal: The L.A. County District Attorney seized records from the Hollywood headquarters of the Entertainment Industry Development Corp. and the home of its president, Cody Cluff, who was being investigated for allegations of lavish spending and improper political contributions.
Port Closure: All 29 West Coast ports were shut down after shipping companies claimed dockworkers were staging a slowdown as negotiations over a new contract dragged on.
Golf Sale: The board of National Golf Properties Inc., the troubled real estate investment trust, entered into an agreement for a sale to a real estate fund run by Goldman Sachs.
New Landmark: The Cathedral of Our Lady of the Angels was dedicated before 3,000 guests. The $189.5 million edifice was the first American cathedral to be built in three decades.
October
Arco Option: After gaining control of the debt on downtown’s Arco Plaza, Kings Capital said it was seeking to sell its option to purchase the office building. The option specified a price of $255 million.
New Chief: William Bratton, former New York police commissioner, was chosen by Mayor James Hahn to become L.A.’s next police chief. He was approved overwhelmingly by the city council.
TV Static: The Federal Communications Commission voted to block the purchase of El Segundo-based Hughes Electronics Corp., owner of satellite service DirecTV, by EchoStar Communications Corp.
Port Opening: West Coast ports were reopened after President Bush invoked the Taft-Hartley act ordering a 60-day cooling off period between shipping companies and dockworkers.
November
Budget Cuts: Gov. Gray Davis, in a bid to stem a ballooning state deficit that was approaching $30 billion, called a special session of the legislature for December to deal with the problem.
Where to Play?: A report commissioned by the L.A. City Council seeking to identify potential sites for an NFL stadium narrowed the choices to the Coliseum, a rail yard near Union Station and a downtown location adjacent to Staples Center.
Port Settlement: Negotiators for West Coast dockworkers agreed to a new six-year contract that would speed the implementation of technology and boost union members’ pay and benefits.
Tenet Ills: The stock price of Tenet Health Care Corp. collapsed amid multiple federal probes concerning Medicare payments and its aggressive pricing strategies.
Decision 2002: Gov. Gray Davis won re-election, albeit unconvincingly, over challenger Bill Simon and both San Fernando Valley and Hollywood secession efforts went down to defeat at the polls.
Carson Arrests: Four Carson city officials are arrested on charges of bribery and extortion after a two-year investigation.
December
Syncor Fine: A subsidiary of nuclear medicine firm Syncor International Corp. of Woodland Hills was fined $2 million after pleading guilty to making improper payments to employees of state-owned health care facilities in Taiwan. The plea was part of the settlement of cases with the Department of Justice and SEC.
Coast Decision: A halt on new oil and natural gas drilling off California’s coast was upheld by a federal appeals court.
Special Session: California legislators, called in by the governor for a special session, adjourn quickly after deciding to wait for Gov. Gray Davis’ spending cut proposals in January.
Targeting Dry Cleaners: The South Coast Air Quality Management District voted to bar dry cleaners from using perchloroethylene, a suspected carcinogen, by 2020.
UAL’s Turbulence: United Airlines’ filing for Chapter 11 bankruptcy was expected to have little effect on Los Angeles International Airport.
Done Deal: Northrop Grumman Corp.’s $11.8 billion purchase of TRW Inc. was approved by shareholders.
Water Cuts: Farmers in the Imperial Valley rejected a deal to transfer some of their water to urban users leaving it open for federal officials to cut back Colorado River water from California.
