LA Biz Observed archive

Mark Lacter covered business, the economy and more here from 2006 until his death on Nov. 13, 2013.
The entire LA Biz Observed archive — more than 10,000 blog posts by Mark — remains online and available.
April 2011

Two Hollywood moguls planning Hawaiian production studios

The Hawaiian legislature is close to passing a measure that would increase tax credits for shooting films and television shows.

California lowers population count

State officials have downsized their estimate to 37.5 million (as of Jan 1, 2011) after being at odds with the U.S. Census numbers.

Glendale Galleria plans renovation

Looks like the gloves are coming off as the mall's owner, General Growth Properties, must keep pace with Rick Caruso's Americana at Brand.

Bad times hitting poor people the hardest

This may seem pretty obvious, but the truth is different recessions will treat income groups in different ways.

Friday morning headlines

Gas prices inch higher, McCourt warns of cash crisis, Assembly votes to dissolve Vernon, and Aetna scales back rate hikes.

Big jump in businesses owned by Asian-Americans

A total of 1.5 million U.S. businesses were owned by people of Asian origin in 2007, up 40 percent from 2002.

Keynes vs. Hayek: An economic debate that rocks!

Music video helps explain why Washington is in near-gridlock these days.

Grauman's Chinese to be sold to producers

The historic theater is being purchased by Don Kushner and Elie Samaha.

One in four Californians read at least one book a week?

Seems hard to believe. Check that, seems impossible to believe.

What is Ron Burkle's motivation for pursuing Kings?

The Bev Hills billionaire met with Sacramento Mayor Kevin Johnson in L.A. earlier this week.

Steve Soboroff using Twitter to rouse Dodger support

The team's new vice chairman is pushing his efforts to make the stadium more fan friendly.

California pension systems lose $105 billion

That's almost a fifth of the investment losses for the nation's state retirement systems in fiscal year 2009, according to the Census Bureau, another reminder of the state's massive - and unfunded - pension obligations. All of the state public employee retirement systems lost money in 2009, but California lost the most. From press release: The nation's state retirement systems totaled $2.0 trillion in holdings and assets in 2009, a loss of $641.3 billion (24.0...

What to make of slower economic growth?

The professionals are basically saying, don't worry, the recovery is still happening. Others aren't so sure.
In the world of Antonio, there are no checkbooks, at least the ones with his name at the top.

Thursday morning headlines

Growth is sluggish, jobless claims take off, baseball officials deny McCourt claims, and Californians oppose extending taxes.
Here's another fine mess that Villaraigosa has gotten us into.

*Baseball turns down McCourt's proposed deal with Fox

This is the long-term TV agreement that Dodger owner Frank McCourt had been counting on to bail him out of his huge debt loads.

Trump's race-baiting will not go away

That's the pathetic part of this morning's release of the Obama birth certificate.
The deal would have union members forking over 4 percent of their salaries.

Fed playing down higher costs

The central bank believes that the recent run-up in oil prices will subside and inflation was not an immediate concern.

Prices taking off at area restaurants

Well, what do you expect? Beef prices have jumped 11 percent from last year, and fruits and vegetables are up 4.3 percent.

Wednesday morning headlines

L.A. is most polluted area, McCourt visits MLB executives, county supervisors approve Marina developments, and LAX names concession winners.

Robert Petersen's widow gives big donation to car museum

We're talking about $100 million in buildings, land, cars, and cash.

MySpace bids expected this week

Parent company News Corp. is seeking bids of at least $100 million - far below the $580 million that the media giant paid for the social network site

Business Update on KPCC

This week's biz chat looks at California's weird recovery and the continued stalemate in the state and local housing markets.

Stocks still rolling along

Wall Street is sticking with the glass half full position, despite worrisome signals that the recovery might be slowing down.

Couric may be headed to ABC News

The deal would include a daytime talk show plus exposure across all the network news platforms.
With a shortfall of more than $400 million, I just wonder whether Wendy Greuel might want to chase bigger game.

Tuesday morning headlines

L.A. home prices take a dip, Brown still floundering over budget, city sues low-income housing developer, and Kings could move to Anaheim after all.

American Apparel shares soar!!!

Stock in the L.A.-based retailer (and home to the irrepressible Dov Charney) jumped 27 percent today... to $1.58 a share.

Andersons donate $25 million to UCLA's Anderson School

John and Marion Anderson have given almost $42 million to the school, named in their honor.

Gas prices finally settle down

Frankly, there's no way of knowing whether this is a pause or a peak - the experts are split.

Dodger overseer is named

The former president of the Texas Rangers will monitor the club's business and finance operations.

All you need to know about the housing slump

DistressingGapMar2011.jpg The gap between existing home sales and new home sales points to the continued abundance of distressed properties.

Recession hits real estate agents hard

Not a great business to be in, even with a slight recovery at hand.

The $5,000 cab ride from NY to L.A.

Dan Wuebben was celebrating his 32nd birthday with his investment banker pal John Belitsky when they hatched this crazy idea.

L.A.'s dirty little secret about furloughs

Paying a bit for health care coverage might seem a reasonable alternative to losing work time. But many city workers don't even have to worry about furloughs.

Monday morning headlines

Support for cutting public pensions, Hancock settles on death benefit claims, big jump in venture funding, and plane rupture tied to Boeing assembly.

Downtown landlord stuck with pile of debt

MPG Office Trust defaulted on the loan for Two Cal Plaza and filed notices of imminent default on the Wells Fargo, Gas Company and US Bank towers.

Elon Musk's plan for going to Mars

Best case 10 years, worse case 15 or 20 years, says the CEO of Hawthorne-based SpaceX.
Well, at least under the current system. An emergency room physician lays out the obvious (but often unappreciated) conflict

How a single lobbyist stole a major LAX concession deal

In L.A. politics, you're only as good as your lobbyist, and John Ek is a good one.
it's worth remembering that Commissioner Bud Selig had signed off on McCourt's highly leveraged, highly questionable purchase in 2004.

Friday morning headlines

Gas prices increase slowing down, California coffers filling up, American Apparel dodges another bullet, and DWP offers rebate for charging electric cars.

*Takeover of Dodgers centers on TV money

Baseball commissioner Bud Selig was concerned that McCourt would use the money from a 20-year deal with Fox to cover his personal liabilities, not operate the team.

*Traffic nightmare begins on Westside

It's bumper to bumper below the LABO perch on Westwood Boulevard.
No need to raise it - just promise to pay off investors first, and after that whatever she and the other nut jobs consider important.

More signs that Kings might stay in Sacramento after all

The Maloof family is running into some serious pushback on its planned move to Anaheim.

Voter initiatives are killing California

Here's a very insightful assessment of how our state governance got to be its current dysfunctional self.
Whether a strike actually gets called is another story.

*Mattel loses copyright suit

A federal court jury in Santa Ana rejected the toymaker's claims that it owned the idea for the popular Bratz dolls.

Thursday morning headlines

Soboroff says McCourt can "pay the piper," Californians rate the economy, state workers didn't repay state loans, and perhaps a new high-rise in Century City.

*Did anyone see the Dodgers takeover coming?

Steve Soboroff sure didn't. Hired just yesterday as the team's vice chairman, he had told reporters that McCourt's financial situation was a "nonissue,"

*Shocker! Dodgers taken over by Major League Baseball

*updates at the bottom Wowser -- Commissioner Bud Selig has seized the club from Frank McCourt, announcing that MLB will oversee all aspects of the business and the day-to-day operations of the team. "I have taken this action," Selig said in a statement, "because of my deep concerns regarding the finances and operations of the Dodgers and to protect the best interests of the Club, its great fans and all of Major League Baseball." Selig...

Big day for stocks

The Dow hit a three-year high, gaining 186 points to close at 12,453.

Villaraigosa presents plan to close $457 million deficit

Is Villaraigosa betting that he can get away with a nip-and-tuck approach to deficit reduction for the remaining two years of his term?

Forget the skeptics, a U.S. default would be a very big deal

money-market.jpg The biggest immediate threat, according to a new report from JPMorgan, would be a run on money market funds.

How do McCourt and other rich guys avoid paying taxes?

In the case of the Dodger owner, he just borrows against the team's ticket revenue and other assets.

Wednesday morning headlines

New rules for airlines, Villaraigosa to release budget, Riordan to endorse Beutner, and proposal to cut welfare costs in L.A. County.
Cuban says he is "just testing the waters" and wouldn't sell "unless the offer is very, very compelling."

*Dodgers hire Steve Soboroff to improve fan experience

His title is vice chairman and it sounds like his marching orders will center on being, well, the anti-McCourt.
Not quite a convenience store and not quite a supermarket, the F&E stores continue to be a headache for its British parent, Tesco.
Not if the filings are down because of various holdups within the mortgage industry.

Business Update on KPCC

The state has become too reliant on the personal income tax, and L.A.'s tax holiday for new businesses doesn't help anybody else.

Gold rush is back in Silicon Valley

Lots of dealmaking these days involving deep-pocket investors and countless startups.

Trump campaign already getting old

I've tried to steer clear of his nonsense, but ABC's George Stephanopoulos seems to have made a few dents in the Trump armor.

Tuesday morning headlines

Hiring day at McDonald's, no budget woes for L.A. County, transit projects threatened by budget cuts, and LAX modernization benefits economy.

Plans to be announced for new downtown hotel

Anschutz Entertainment Group will sell a parcel just north of the J.W. Marriott hotel.
We're talking about the Chandler family, former CEO Dennis FitzSimons, and of course hedge funds and money managers.

Ticketmaster to price concert tickets like air fares

The greater the demand, the higher the price.

L.A. wants guarantee that NFL team will stay for a while

As in 20 or 30 years - or until all city debt related to the project is paid off.

Gas prices still climbing - but why all the fuss?

The impact of past oil shocks has been bigger than the numbers alone would suggest.

*How big a deal is S&P cutting U.S. outlook to negative?

Before we get too carried away, it's worth remembering what S&P did. The ratings agency lowered its outlook for U.S. debt, not its actual rating.

L.A. County consumer spending coming back - but slowly

laconsumer.jpg The pickup is slower than in other parts of Southern California.

Port of L.A.'s dredging project to be completed in 2013

The idea is to make the port deep enough for a new generation of larger ships.

Monday morning headlines

Stocks take sharp drop, Socal commercial real estate starts to come back, air fares are on the rise, and downtown stadium deal won't reach council for a year.

Did Bill Gates really rip off Paul Allen?

Actually, Allen comes off somewhat mealy-mouthed when he's asked about the episode.

NBA gives Sacramento 2-week reprieve

The league will extend its relocation application deadline from this Monday to May 2 so the city can line up ways to keep the team. "We don't know if it's real or pie-in-the-sky, but we'll knock ourselves out finding over the next few weeks," Stern said. But he added that Southern California would be able to support a third franchise if a decision is made to move the team to Anaheim. How the Kings' owners,...

So much for making L.A. more business-friendly

Now that Austin Beutner is off to run for mayor, I'd imagine that business will no longer be priority one.

Jobless rate drops, but so do number of jobs

L.A. County's unemployment rate fell to 12.3 percent in March from 12.6 percent the month earlier and 12.9 percent in January.

Friday morning headlines

L.A. inflation picking up, U.S. taxes at historic low, Brown to seek fall tax vote, and billboard company gets sued.

How about a moratorium on Dov Charney profiles?

Haven't we had about enough? More importantly, hasn't Charney had enough?

Ron Burkle expresses interest in buying Sacramento Kings

Not that the team is for sale, but the L.A. billionaire did emerge today as wanting to keep an NBA team in Sacramento, whether it's the Kings or some other franchise. Burkle came forward after Sacramento mayor and former star forward Kevin Johnson made a final plea to league owners to keep the Kings from moving to Anaheim. From Bloomberg: Burkle's group wants to keep a franchise in Sacramento, Johnson said. "This is not meant...

*Austin Beutner to explore run for mayor

L.A.'s first deputy mayor is submitting papers to the City Ethics Commission.

Grocery workers union calls for strike authorization vote

Still, I'd be surprised if they weren't able to cut a deal. This is not a great time to be striking.

House passes budget bill

The vote was 260-167, with 59 Republicans breaking ranks. The bill will now move to the Senate, where it's expected to pass quickly.

No wonder Tom Gores bought the Detroit Pistons

gores.jpg The L.A. billionaire is a sports nut.

Port traffic a mixed bag in March

L.A. had a good month - Long Beach not so much.

Why Countrywide execs were not prosecuted

Mostly it was a matter of criminal investigators not getting assistance and documentation from regulators.

Never mind orange juice, how about apple juice futures

Well, it's more like apple juice concentrate, which looks like molasses but when mixed with water creates the apple juice that most of us buy.

Thursday morning headlines

Big drop in L.A. foreclosures, California might be holding back jobs recovery, Sacramento Kings to present relocation request, and what city was Villaraigosa talking about?
They're called "cookies," and apparently it's been a common practice at some of the city's ritziest hotels.

Extra controllers for Burbank, Ontario, San Diego

The three Socal airports had been using only one air traffic controller in the off hours, but now the FAA is bringing on an additional controller.

Jerry Snyder gives up on Valley Plaza

The L.A. developer has handed over the 23-acre North Hollywood site to a commercial lender and investment trust.

Magic Johnson, Ron Burkle buy 3 Phoenix radio stations

More media properties for the former Lakers superstar and the Bev Hills billionaire.

Obama's muddling solution to the deficit

His proposal is certain to please almost no one - a combination of budget cuts that the left doesn't want and tax increases that the right already calls a non-starter.

Texas, Ohio not happy about L.A. getting space shuttle

Some folks are claiming that politics factored into the decision.

Really big ship stops in Long Beach

ship2.jpg We're talking monster size - the world's largest non-tanker ship, with nine decks and 540,000 square feet of deck space.

Mixed bag for housing

March home sales in L.A. County jumped almost 40 percent from the previous month, but fell 2.3 percent from a year earlier.

Wednesday morning headlines

Obama pushes budget plan, Villaraigosa talks education rather than budget, California sees jump in long-term unemployed, and Univision to add two channels.

Sidney Harman dies

The 92-year-old audio pioneer recently made a splash with his purchase of Newsweek.

Business Update on KPCC

This week's biz chat with Steve Julian looks at the Dodgers and whether owner Frank McCourt can hold on.

California Science Center gets space shuttle Endeavour *

shuttle-endeavour-landing.jpg NASA's decision will be a big deal for the local tourist industry, perhaps making the shuttle one of the most popular visitor destinations in California. The Endeavor will be displayed at the Science Center, which is located in Exposition Park and billed as the West Coast's largest hands-on science center (the Mercury, Gemini and Apollo spacecraft are already there). As for the others, the Discovery will be displayed at the National Air and Space Museum's...

Amazing amateur video of Air France collision

The A380 slams into a Delta commuter jet last night at JFK. Nobody was hurt.

Trying to bypass the office candy dish

Eating two pieces of candy each workday without cutting calories elsewhere or exercising more will cost almost 25,000 calories a year.

Why Obama should be concerned about Trump

He's now talking about running as an independent - and if that happens, he could upend races in any number of states.

Teachers' pension fund falls further behind

Unfunded liabilities for the California State Teachers' Retirement System now total $56 billion, up $15.5 billion.

Tuesday morning headlines

Carmakers warn of shortages, shares of 99 Cents Only Stores take off, fired construction chief gets year's pay, and NYT loses readers since pay wall went up.
He'll be leasing studio and office space at the MBS Media Campus.

Another big jump in L.A. gas prices

Ouch - an average gallon of regular is $4.19 a gallon, up almost a dime from last week.

SF to Paris in 2 minutes

Photos shot roughly every two miles between take-off and landing in Paris.
"I would not minimize the risk to our country and to our state," the governor tells CBS 2/KCAL 9 political reporter Dave Bryan.

Dealmaker Lynn Tilton bares all

tilton110418_560.jpg She wears miniskirts practically up to her crotch, and can be so emasculating that it took one employee months after leaving the firm to have sex again.

Monday morning headlines

Economy to gain momentum, county might get involved in downtown stadium plan, state jobless claims fall, and Dov Charney scrambles for cash.

Budget deal gets done

Government shutdown is averted, but no one comes off looking very good.

*Last-ditch effort to avoid government shutdown

CNN is reporting that negotiators are focusing on a proposal to keep the place running for three more days.

How much is THR parent losing? Or earning?

A source says the company is on track to lose as much as $10 million a year. Nonsense, says owner.

L.A. billionaire to buy Detroit Pistons

The deal that seems to drag out forever is finally getting done.

Four L.A. councilmen fined for accepting freebies

In separate deals worked out with the city's Ethics Commission, they'll pay a combined $13,300.

Farrah Fawcett's condo on the market

farrah.jpg Whoever is handling the estate is asking $1.88 million for the 2-bedroom, 2.5-bath unit at The Wilshire building.

Will McCourt cut back on beer sales? Don't bet on it

Cutting back on beer sales, which everyone knows is largely to blame for the increasing unruliness, would eat into Dodger revenues.

Senate GOP leader expects budget deal

Prospects on this thing have been bouncing around for several hours.

Friday morning headlines

Oil and gas keep rising, pension woes were ignored by local government, possible freeze on health care contributions, and Saudi prince withdraws mega-mansion plan.

Marijuana could become legalized in 2012 - but then what?

Nobody has the foggiest idea of how the business side of marijuana legalization would play out.
Once more, there's no ability or interest in anticipating trouble - just reacting to it.

State's cash position worsens

March was a lousy month for California's coffers, with total receipts coming in at $370 million below estimates.

Audit blasts DWP on renewable energy plan

City Controller Wendy Greuel found that the utility was more lucky than good in securing 20 percent of the city's power needs from renewable energy last year. "The DWP only achieved a 20 percent renewable energy portfolio due to abnormally cool temperatures and higher than expected wind at department-owned wind farms," Greuel said in a letter accompanying the audit. From the LAT: Standing next to Greuel at a morning news conference, DWP General Manager Ron...

SEC charges investment advisor in alleged scam

The federal suit alleges that the firm misrepresented its size and poor financial condition.

*California impact of a government shutdown

The state has 140,000 federal workers, although it's unclear how many of them would be considered essential to the workings of the nation.

Thursday morning headlines

Emptier shopping malls, bleak prospect for Borders, Google is coming to Bev Hills, and a new home for THR.

Socal rents expected to flatten out

More folks figure that homes have become affordable, which should lower demand.

Trump jumps to 2nd place in WSJ/NBC News poll

Shows that Republicans are not at all satisfied with the usual suspects, and that a dark horse could still easily emerge.
Wow, this will create quite a stir: The measure would eliminate guaranteed pensions for all new hires except for police officers.

Knabe temporarily blocks labor deal with the MTA

The L.A. County supervisor wants no part of an arrangement that would compel MTA contractors to use union labor.

Getting a fair fare at LAX and other Socal airports

airport2.png Which airports are relatively cheap or relatively expensive to fly out of?

Glenn Beck to end Fox program

No date set for the final show, though Beck's contract with Fox ends in December.

Starbucks CEO on corporate responsibility

Howard Schultz, speaking at the Drucker Business Forum, says that tighter state and local budgets require companies to do more.

No shortage of opinion on Ryan's deficit plan

A proposal to slash almost $6 trillion from the federal budget is likely to stir up some interest.

Wednesday morning headlines

Boeing miscalculated on cracks, Dish Network wins Blockbuster, McCourt asks commissioner to approve loan, and Sofitel scraps helipad plan.

Business Update on KPCC

This week's biz chat looks at how executive pay is on the rise again and why women business owners have a tough time expanding their operations

Day in the life of L.A. traffic

Kind of a neat 1:38, so long as you're not in the middle of the mess.

L.A. location shooting slows down

Feature films were down 5.3 percent in the first quarter, television down 3.7 percent, and commercials up 2.4 percent, according to FilmLA. Overall location shooting was actually up 4.7 percent, but only because of gains in smaller areas like music videos. Just seems like a sluggish stretch - commercials are coming off 18 months of strong activity, TV reality shows are off a bit, features are weak across the board. From press release: "The latest...

Growing prospect of government shutdown

The deadlock comes on the same day that the Republicans proposed a long-term budget plan that would involve $5.8 trillion in cuts over 10 years.

South Bay company working on 22-story rocket

The power coming out of this baby would only be rivaled by the Saturn V that went to the moon.
Healthy economy? No. Healthier than generally assumed? Apparently so.

Tuesday morning headlines

GOP plan to balance the budget, American begins LAX-Shanghai service, KB Home reports another loss, and Chase keeps expanding in California.

Alaska Airlines moves to Terminal 6; renovations planned

The carrier is making $271 million worth of improvements that will include additional gates and a baggage screening system.

L.A. gas prices barely budge

Most likely it's just a pause, considering that oil rose again today.

Rick Caruso coughs up a lot more money for Glendale hotel

The L.A. developer originally offered $6 million for the Golden Key Hotel and wound up paying more than $16 million.

Get ready for 'The Governator'

No doubt everything that Arnold Schwarzenegger wanted to do during his years in Sacramento.

Southwest reports more cracks

The subsurface cracks are similar to the ones found on the aircraft that split open on Friday.

Butler returning to title game was 7,500-1 longshot

Actually, it's 7,406-to-1.
Certainly among the biggest initial public offerings to be announced this year.

Monday morning headlines

Southwest cancels more flights, AirTran tops in quality, Disney to break ground in Shanghai, and fire sale for Sheen concert tickets.
The city has considerable leverage in working out a decent deal, perhaps even a lucrative one. But it's not likely to happen.

Villaraigosa to pay $42,000 ethics fine over tickets

L.A.'s mayor admitted that he failed to report free tickets to 34 events during his first five years in office.
CKX owns two-thirds of the "Idol" brand.
Pretty dumb indeed.

The not-so-terrific side to today's jobs report

Participation-rate-from-2001.jpg Just 64.2 percent of American workers are either in the work force or looking for a job, the lowest labor participation rate in a quarter-century.

Big bump for California women-owned businesses

The state saw a 54.2 percent increase in the number of women-owned firms from 1997 to 2011.

April Fools is no joke for laid off workers

Company told workers they would be getting more weeks in severance than was owed.

Friday morning headlines

Oil and gas prices back up, Californians can take the blame for budget mess, food truck vendors sue city of Monrovia, and Billy Joel kills memoir.

Strong jobs report, but...

Much of the good news does not reflect the current bout of bad news.