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City Has Potential To Help Fost er The Tech Eco nomy In Long B each

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September 10-23, 2013


‘A Busy Fall Up Ahead’

Campaign Rumors Aplenty

Finance Experts Offer Insight On Factors Impacting Business Markets ■ By TIFFANY L. RIDER Assistant Editor


■ By GEORGE ECONOMIDES Publisher’s Analysis ig city, small town, is how many people prefer to B describe Long Beach. That, of course, means lots of rumors when election season rolls around. This year, leading up to next April’s primary, the rumor mill is working overtime. Up until a week ago, one hot rumor was that Congressman Alan Lowenthal was tired of traveling to D.C. and had decided to run for mayor. The second part of the rumor was that councilman and mayoral candidate Robert Garcia would drop out of the race to run for Lowenthal’s seat in Congress. So the Business Journal asked. “I think you can safely say that a Capitol Hill staffer confirmed that Alan is quite happy in Congress,” said a Capitol Hill staffer who is close to Lowenthal. Another rumor was that Mayor Bob Foster was ready to announce who he’s backing to replace him so as to “push money to his” candi(Please Continue To Page 21)

e live in a changing world, for sure,” according to W. Henry Walker, CEO of Farmers & Merchants Bank in Long Beach. “There just don’t seem to be any absolutes right now.” For business owners, knowing what is uncertain in the economy can help them make important decisions about investments such as hiring, purchasing equipment and production. Some of the major issues include the imple-

Former California Gov. George Deukmejian visited the Business Journal to dicuss the just opened Governor George Deukmejian Courthouse in Downtown Long Beach. A resident of the city since the 1950s, he said, “Long Beach has been very good to me over the years. So I am most grateful and feel very blessed about it. And this is the topper.” (Photograph by the Business Journal’s Thomas McConville)

Deukmejian: A Neighbor, A Courthouse And A Legacy ■ By SAMANTHA MEHLINGER Staff Writer e was our state assemblyH member, our state senator, our state attorney general and our state governor, but through all the years and all the titles, Gov. George Deukmejian has never forgotten that to Long Beach, he is also our neighbor. The Business Journal invited “our neighbor” to discuss The Governor George Deukmejian Courthouse – which opened yesterday, September 9 – his legacy

Golden Star Restaurants Celebrate 50th Anniversary

and his views of the California judicial and correctional systems. If you told Deukmejian, who at age 30 opened his first law office in the 1950s in Long Beach, that a courthouse would one day be named in his honor, you might have been met with a laugh. “I never expected when I came to Long Beach in 1958 that anything like that would ever happen,” Deukmejian told the Business Journal, inflecting with a soft chuckle. “I am truly very humbled about the fact that they (Please Continue To Page 16)

Annual, In Depth Interview With Mayor Bob Foster • See Section B

mentation of the Patient Protection and Affordable Care Act (ACA), the Federal Reserve’s plans to taper its bond purchasing program, our country’s debt-toGDP (gross domestic product) ratio and the impending decision by Congress to raise the government’s debt ceiling. Karen Codman, financial advisor and partner of Long Beachbased FSC Securities Corporation, told the Business Journal that many of her small (Please Continue To Page 12)

Long Beach Ambulance Fees Set To Jump 18.6 Percent The $1,445,000 Increase To Fund Fire Department Staff ■ By TIFFANY L. RIDER Assistant Editor s part of the master fee schedule approved with the fiscal year 2014 budget, the costs for basic life support (BLS) and advanced life support (ALS)


ambulance trips have been increased 18.6 percent. The price hikes, effective October 1, are expected to cover the costs of upgrading staffing within the Long Beach Fire Department. BLS patient transport charges go to $1,198, a bump of $178, while ALS patient transport fees increase to $1,675, or $263 (Please Continue To Page 9)

MemorialCare Health System Launches Seaside Health Plan In Long Beach ■ By TIFFANY L. RIDER Assistant Editor easide Health Plan, a planS to-plan service owned by MemorialCare Health System,

See Story On Page 19 Long Beach Business Journal 2599 E. 28th Street, Suite 212 Signal Hill, CA 90755-2139 562/988-1222 •


PAID Long Beach, CA PERMIT NO. 254

officially opened for business September 3 at 2840 Long Beach Blvd. Individuals were assigned to the new plan as of September 1. MemorialCare employees in Long Beach were informed that the new, not-for-profit plan serves Medicare, Medicaid (Medi-Cal) and dual eligible individuals as well as those enrolled in commercial plans that had contracts with Universal Care. Seaside Health Plan holds contracts with Anthem Blue Cross, Blue Shield of California, Care 1st Health Plan, Health Net and L.A. Care Health Plan, and offers access to more (Please Continue To Page 10)

MemorialCare Health System recently announced the opening of its managed care program, Seaside Health Plan, in Long Beach. Pictured, from left, are Seaside Health Plan executives: Jay Davis, senior vice president; Sandie Taylor, vice president of operations; and Mark Gunter, director of finance. Not pictured: Barry Smith, chief medical officer. (Photograph by the Business Journal’s Thomas McConville)

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INSIDE THIS ISSUE 2 Long Beach Business Journal

September 10-23, 2013

3 Newswatch • Up To Three Vacancies Looming On Water Board • City Hall News In Brief • Revisions To On-premises Sign Ordinance • Long Beach Transit Board Unaware Of Additional Orders • Project Manager To Oversee Port Headquarters Move • Marijuana Ordinance May Be On April 8 Ballot • Long Beach-Based Apriso Acquired By French Company • International Trade News

12 Financial Services Industry • Factors Impacting Business Markets, from Page 1 story • Wells Fargo Wealth Management: Establishing Living Trust • ACA Small Business Tax Credits

16 Gov. George Deukmejian 18 Focus On Retailers • One New: Transformations • And One Celebrating 50 Years: Golden Star Restaurants

21 PoliticalWire 22 Biz Quiz • New Quiz: It’s A Fruity Biz Quiz • 193 Enter Last Issue’s Universities And Their Homes Quiz

24 Perspective Realty Views Affordability Taking A Hit By Terry Ross Effective Leadership Life Is Too Short To Be On A Waiting List By Mick Ukleja Business As Usual Great Leaders Have A Plan B By Stuart Friedman Business Law Knowing Too Much About One’s Internet Customers By Tom Ramsey

26 In The News • The Village Bakery Opens In Downtown’s East Village • Dream Inspired Design Supports Eco-Friendly Businesses • Callaloo Caribeen Kitchen Opens On East Anaheim Street • Pandor Artisan Boulangerie & Cafe Opens In Belmont • Mobul Home Medical Equipment Store Opens In Los Altos • Bixby Knolls Welcomes Five Starr Pilates

3 Long Beach Tech Scene • Start-up Community Thrives, Regardless Of Venture Capital

Section B Corporate Presence And Annual Interview With Mayor Foster Follow the Business Journal on social media . . . and at

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NEWSWATCH September 10-23, 2013

Long Beach Business Journal 3

Up To Three Vacancies Looming On The Five-Member Water Commission Curious Agenda Item For This Week’s Meeting Draws Attention ■ By GEORGE ECONOMIDES Publisher Harry Saltzgaver was appointed to the Long Beach Water Commission last November. On October 1, the executive editor of Gazette Newspapers, begins serving as president of the commission. Frank Martinez, joined the board a month ago. He’s the new vice president. The elections took place September 5, 6:30 p.m., during a special meeting of the board. It was the only agenda item. During the September 4 annual interview with Mayor Bob Foster, the Business Journal learned that he expects three vacancies on the five-member board. The terms of two members – John Allen and Paul Blanco – expired in 2012 and they stayed on at the mayor’s request. The other boardmember is Suzanne Dallman, whose term expires this year. Allen is a possible replacement on the Metropolitan Water District Board for the late Lillian Kawasaki. An announcement is expected soon. Blanco and Dallman, according to a source who did not want to be identified, want out for personal reasons. A press release announcing Saltzgaver’s appointment noted, “The City Charter

entrusts the board with significant responsibility and authority. The board establishes the water department’s mission and goals, and adopts policies and strategies to meet these ends. The board submits an annual budget to the city council, fixes water and sewer rates, hires the general manager and establishes compensation for all LBWD employees.” The mayor is not sitting on his thumbs, but admitted it is difficult to find qualified people who want to volunteer their time on city commissions. In the annual interview with the mayor – in this edition’s Section B – Foster said, “It’s not as easy as people think. First of all, I meet with almost every candidate. So it takes time. I would rather have a board go with a couple of vacancies than put someone on there that I don’t know or don’t have some confidence in.” City councilmembers are also asked by the mayor’s office to make recommendations from their individual districts to ensure citywide representation. There are more than 220 positions on active city commissions, many of which are district specific. According to the mayor’s office, he will soon be announcing upwards of two dozen appointments.

Peculiar Water Board Agenda Item The water commission meets this Thursday, September 12, 9 a.m. at the (Please Continue To Page 4)

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NEWSWATCH 4 Long Beach Business Journal

Water Commission (Continued From Page 3)

Making A Difference: One School At A Time My fellow citizens: ask not what your city can do for you . . . ask what can you do for your city – paraphrasing John F. Kennedy. While very simple, it is critical to our future. Leadership Long Beach reminds us we are the key to the success of our community. After going through the program, I became keenly aware of how to create change and the resources to make it Julie Larkins, CEO happen. CDF Financial During the Institute Services, LLC LLB 2012 program, we have an opportunity to participate in “Principal for a Day” at a local school. It was surprising to see how understaffed and underfunded schools are. Teachers often have to fund their own supplies. Determined to make a difference, my company, CDR Financial Services, became involved in an 8th grade mentoring program for The Colin Powell School for Success. It started by arranging a field trip for The Male Academy to our office. Each student filled out an application, interviewed with a manager and then were mock “hired” based on their interviews. It provided a peek into the real world for the students. We challenged the students to achieve a 3.5 GPA by graduation and provided weekly mentoring. If they earned a 3.5 GPA we would reward them with a laptop, printer and accessories. The program resulted in some students improving their grades from a .5 GPA to a 2.0 GPA in a matter of a few weeks. Because of significant improvement in grades, we worked with the school to start The Female Academy. This year 20 students earned laptops at their graduation. While some might argue they achieved the 3.5 GPA because they wanted the laptop, I say they achieved a 3.5 GPA! Recently I was asked why my husband and I do this. The answer is rather simple: “These children are our future.” They will be making decisions that will impact us, positive or negative. So my fellow citizens: ask not what your city can do for you . . . ask what can you do for your city. YOU can make a difference. If you would like to find out more about LLB or join our efforts in making a difference for these students, please contact me directly at 562/983-8686 or (Founded in 1989, Leadership Long Beach offers principled leadership programs by educating and engaging adult and youth leaders on issues important to the city’s future and sustainability. For more information, go to or ■

department administration building, 1800 E. Wardlow Rd. Agenda item #7 may be of particular interest. It reads: “Discussion and possible action on motion pursuant to Section 54960.1(c)2 of the Government Code to rescind any discussion, deliberation, action or concurrence, that may have occurred outside a duly noticed public meeting regarding the board’s position on supporting financial incentives for replacing turf fields with artificial turf fields.” Deputy City Attorney Richard F. Anthony is scheduled to lead the discussion. Section 54960.1(c)2 reads: “Within 30 days of receipt of the demand, the legislative body shall cure or correct the challenged action and inform the demanding party in writing of its actions to cure or correct or inform the demanding party in writing of its decision not to cure or correct the challenged action.” The interpretation may be that a commissioner may have been involved in or initiated an inappropriate discussion – outside a commission meeting – regarding an issue on which the commission is deliberating. A Business Journal representative is attending Thursday’s meeting to learn more. (Editor’s note: as a policy, the Business Journal does not allow its employees to serve on any city commission, committee, task force or related group, or on any nonprofit organization board, in order to ensure there is no conflict of interest and to not compromise the publication’s editorial integrity.) ■

City Hall Actions And News In Brief ■ By SAMANTHA MEHLINGER Staff Writer Budget Discussion September 14 – Third District Councilmember Gary DeLong is discussing the recently passed fiscal year 2014 city budget at the Long Beach Republican Women Federated’s monthly meeting on September 14. DeLong is chair of the city’s budget oversight committee. “The city council passed a balanced and responsible budget. Operations were kept lean and additional investments will be made in our streets, sidewalks, parks and libraries. And over $7 million was set aside in reserves to offset future pension increases and unfunded liabilities,” DeLong said in a statement. The breakfast meeting is held at Skylinks Golf Course across the from airport. Breakfast is served at 9:30 a.m., and business is conducted from 10-11:30 a.m. Cost is $15. To RSVP, call 562/260-5601 or email Long Beach Business Workshop September 18 – Fourth District Councilmember Patrick O’Donnell hosts a “Doing Business in Long Beach Workshop” on September 18, 8 a.m. at WE Labs, 235 E. Broadway, 8th floor. The focus of the workshop is tech companies, with representatives from such companies and from the city available to answer ques-

September 10-23, 2013

Business Owners Take Note . . . Revisions To On-premises Sign Ordinance The council voted on September 3 to approve an ordinance pertaining to on-premises signs. The ordinance included many amendments, mainly pertaining to the types of signs allowed. Derek Burnham, planning administrator for the City of Long Beach, said no changes are retroactive. A “creative sign permit” replaces the “sign standards waiver” process for sign designs that require special exemptions to the zoning code. The creative sign permit allows for speedier review of designs. A new historic sign process exempts designated historic signs from most on-premise sign regulations. Cabinet signs, which utilize one flat surface, must now include protruding lettering. Supports for freestanding signs must now be at least half the width of the sign, and signs within this category are allowed only in commercial districts. Foam letter signs must be plastic or metal coated. Permits for wall-painted signs are now required. Roof signs are now allowed via the creative sign permit process. Contact information on major signs is now allowed, with size restrictions. Temporary banners are restricted to placement on a building only, rather than on fences or poles. Real estate signs on commercial and multi-family properties may only encompass 16 square feet. Banners must have a maximum length to height ratio of three-to-one units, and banner permit fees are to be significantly reduced in fiscal year 2014. The council also approved a recommendation directing on-premise sign amendments to be submitted to the California Coastal Commission to ensure they align with Certified Local Coastal Program standards. Now Prohibited: • Freestanding signs with bare metal poles as bases • Flat sheet signs (signs painted or lettered onto a flat sheet surface, like plywood) • Inflatable, air-blown signs • Flag signs (currently prohibited, but now more explicitly so) • Decorative flags • Projected light signs Regulations For Electronic Message Center Signs: • Required to be on the site of the business owning it • Limited to commercial zones and major arterial class streets • Restricted night-time brightness • Standards for message transition and duration. tions. “It’s an opportunity for small business to learn what Long Beach can do for them and it’s an opportunity to learn what I can do for small business,” O'Donnell said of the event. “It’s a two-way street. Why WE Labs? I think it’s pretty obvious. It’s about the next economy. Steel mills are not going to move to Long Beach, so what we need to do is to create a platform so the next Long Beach economy can flourish. And that’s the creative economy.” Airports Convention – The city council votes tonight, September 10, on an agreement with Annual Airports Council International-North America (ACI-NA) to host the group’s annual conference, which attracts attendees from airlines, airports, the Federal Aviation Administration (FAA), the Department of Homeland Security, the Transportation Security Administration, as well as corporate and general aviation attendees. The Long Beach Airport and Long Beach Convention & Visitors Bureau (CVB) are co-hosting the conference in 2015. Attendance is expected to number more than 2,000 with an economic impact to the city of $4.69 million. More Than $1 Million For Airport Taxi Lane Repairs – Taxi Lane J at the Long Beach Airport is “greatly deteriorated,” causing concern about foreign object debris, according to a staff report. The council votes tonight to award a $1,431,500 contract with a contingency of $357,875 to All American Asphalt to reconstruct the taxi lane. Other work includes improving pavement markings, storm drains, drainage and infield grading. The project is funded by an FAA grant and is budgeted within the airport fund. New Traffic Control System For Ocean Boulevard – The council votes tonight to award a contract to Flatiron

Electric Group for the installation of an advanced traffic control system along Ocean Boulevard from Alamitos Avenue to Belmont Shore. The contract total is $1,680,878, plus a contingency of $252,132. The project includes the following: installing three new traffic signals along Ocean Boulevard at Orizaba Avenue, Coronado Avenue and Loma Avenue to facilitate bike and pedestrian access to the beach bike path; implementing a “pedestrian scramble” at 2nd Street and Livingston Drive so that pedestrians may cross the intersection from any corner; implementing adaptive traffic signal software, allowing signals to adjust sequencing to meet changing traffic conditions at 18 traffic signals; and installing fiber optic communications, vehicle detection systems and closed circuit television surveillance to remotely monitor traffic signals. Police Officers For Long Beach Schools – The Long Beach Police Department is entering into an agreement with the Long Beach Unified School District (LBUSD), pending city council approval tonight, to supply up to five school resource officers to reduce and prevent student-related problems. The agreement extends from this September to June of 2014 at a total cost of $845,974. LBUSD incurs 71 percent of these costs, while the city incurs the remaining 29 percent. State Funds For Long Beach Health – The council votes tonight to execute an agreement with the California Department of Public Health Network for a Healthy California for $2,960,209 to fund the Healthy Active Long Beach Project (HALB). The project has received funds from this state department since 2003. The contract extends for three years and funds (Please Continue To Page 5)

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NEWSWATCH September 10-23, 2013

the project’s goals of promoting healthy eating, exercise and federally funded nutrition assistance programs to decrease the likelihood of obesity and disease. HALB benefits low-income individuals participating in or eligible for the USDA’s CalFresh program. Tonight, the city council also votes to execute an agreement with the California Department of Health Care Services to fund Long Beach’s Child Health and Disability Prevention (CHDP) Program for early detection and prevention of disease for a total of $593,892 from July 1 of this year to June of 2014. Grants For Parks – If approved by the council tonight, the city manager will submit three grant requests for a total of

Long Beach Business Journal 5

$900,000 to the Los Angeles County Regional Park and Open Space District. Projects that benefit include: completion of the Drake Park and Cesar E. Chavez Park trail, with a total project cost of $2,813,000; creation of a new park along the southern end of the Pacific Electric right of way near Park Avenue, with a total project cost of $2.5 million; and a supplement to the Wrigley Greenbelt Project, at a total cost of $1.3 million. Representation For Rail Yard Law Suit – On August 13, the city council approved a $250,000 agreement with the law firm of Shute, Mihaly & Weinberger LLP so the firm may continue representing the City of Long Beach in its lawsuit

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against the City of Los Angeles and the Burlington Northern Santa Fe Railway Co. regarding the Southern California International Gateway rail yard project. Subsidence Report – The city council, on September 3, received a staff report from the Long Beach Gas & Oil Department examining subsidence, a change in elevation caused by oil drilling operations. Elevations at the convention center, four offshore drilling islands, the central city, Alamitos Bay, Naples and Piers C, E and H were stable from November of 2012 to April 2013. The ground elevation at Pier A declined up to one inch, and mitigation efforts adjusting oil field efforts were put in place.

Elevations in Piers D and T rose up to 0.7 inches, which is considered within normal limits and is not likely to continue. The report notes that elevation changes may also be caused by tidal cycles, temperature changes and changes in deep earth tectonic plates. Douglas Park Tract Ownership – The Boeing Co.’s request that subdivision agreements for portions of Douglas Park be transferred to Sares-Regis was approved by the city council on September 3. Applicable tracts within Douglas Park include areas north of Cover Street and west of Lakewood Boulevard. Homeless Community Development – (Please Continue To Page 6)

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NEWSWATCH 6 Long Beach Business Journal

City Hall News In Brief (Continued From Page 5)

The city council approved a final map outlining an area adjacent to Cabrillo High School for future development by Century Villages at Cabrillo, a housing community located within the proposed boundaries that is dedicated to providing transitional and permanent housing to the homeless. The proposed area encompasses about 15.9 acres, which, if the map is approved, may be divided into 16 parcels for the future development. Harbor Department Fuel Expenditure Audit – City Auditor Laura Doud’s recent audit of the harbor department’s fuel expenditures confirmed that the port has “good controls” in place for most of its fuel transactions. The audit report, released September 5, is the second of four detailing the city’s fuel expenditures. Doud’s audit found that 97 percent of the harbor department’s fuel is accessed through fuel rings, which are placed around vehicles’ fuel tanks and programmed with the vehicle number and fuel type used so that, when the fuel nozzle touches the ring, fueling is allowed. This measure is “more effective in limiting unauthorized access to fuel” than other methods, according to the auditor’s office. The harbor department purchased about 109,000 gallons of fuel at a cost of $388,000 in fiscal year 2012. “I am very pleased to find that the harbor department has good controls in place for the majority of their fuel transactions,” Doud said in a statement. Areas of weakness included: a lack of inventory to keep track of fuel rings; a lack of system parameters to restrict use based on odometer readings and travel distance; and usage of inadequate devices for three percent of fuel dispensed. Long Beach Water Quality Grades – Beaches in Long Beach are healthy overall, with 90 percent receiving “A” and “B” grades in Heal the Bay’s summer report, which extended from Memorial Day to August 21. Twelve beaches received A grades, two received B grades and one received a D. In the past 30 days, all beaches received A+ grades. “Overall, our local water quality is steadily improving over the past few years,” Mayor Bob Foster said in a statement, adding, “I’m proud of our progress and I know that we will continue with our many efforts to clean up our beaches.” Repairs To Naples’ Seawalls – The

September 10-23, 2013 California Coastal Commission at its Southern California meeting from October 9 to 11 is hearing a request from the City of Long Beach to repair Naples’ seawalls. According to city reports, the seawalls are significantly dilapidated and are at risk of collapsing during a moderate earthquake. The city is requesting approval to install a cantilevered sheet pile wall to provide support, and has reserved $9.2 million in Tidelands funding for the effort. Vice Mayor Robert Garcia is a member of the Coastal Commission and stated that he has been working with the city and commission to address the situation. Councilmember DeLong, whose district encompasses Naples, said in a statement, “While I had hoped this project could have moved more quickly, I am encouraged that both sides are working together to fix this critical issue.” New Library Software – The Long Beach Public Library has incorporated a new software system to better track circulation levels, manage library user accounts, maintain the online catalog, integrate the digital archive, check out library materials and monitor how funds are spent on specific genres. The software also enables self-checkout, which is going to be available at all Long Beach libraries. In a statement, Foster said, “This technology will allow us to be more efficient and to track our resources better.” For more information about Long Beach libraries, visit 2nd District Port Tour September 11 – Suja Lowenthal, 2nd District councilmember, hosts a free sunset boat tour of the Port of Long Beach this Wednesday, September 11, from 6-8 p.m. Guests have the opportunity to learn about daily port operations, current projects and environmental programs. Light food and refreshments are available. Guests should arrive at Dock 7 at Shoreline Village, 401 Shoreline Dr., by 5:30 p.m. Lightweight outwear and comfortable shoes are suggested. RSVP to 562/570-6684. Carpentry Workshop For Kid September 14 – Councilmember Gerrie Schipske hosts a carpentry workshop for 20 middle school students at Rosie the Riveter Park, 4900 E. Conant St., on September 14 from 9 a.m. to 1 p.m. Schipske said in a statement, “Learning these skills helps young people gain confidence, build self esteem, and create something for their community that will be there for many years.” ■

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NEWSWATCH September 10-23, 2013

Long Beach Transit Board Unaware Staff Added 20-Bus Option To Contract For Low-Emission Buses ■ By SAMANTHA MEHLINGER Staff Writer An option for purchasing 20 more zero emission buses was added to Long Beach Transit’s contract with BYD Motors without the board of directors’ knowledge, Boardmember Maricela De Rivera pointed out at their meeting on August 27. Rolando Cruz, executive director and vice president of maintenance and facilities at Long Beach Transit (LBT), admitted that including the option without board approval was a “mistake” and that staff oversight was to blame. The board approved the contract with BYD, an American subsidiary of a Chinese company, for 10 of these buses back in March. Apparently, the August 27 meeting’s staff report was the first that boardmembers had heard of the contract amendment, which allows the board to approve the purchase of 20 additional buses within the next five years. Lori Ann Farrell, one of two boardmembers who voted against contracting with BYD for the bus order, firmly opposed the addition to the contract. “It sounds to me like the contract was written in error and went above and beyond what the board approved. On the fundamental issue of inclusion in the contract, it should not have been in there,” Farrell said at the meeting. Farrell, the former director of financial management for the City of Long Beach, and currently holds a similar position with the City of Huntington Beach. De Rivera and Farrell both questioned the legality of including the option without board approval, but the amended contract is still legally sound, Gary J. Anderson, deputy city attorney, told the Business Journal. “The fact that there is an option to purchase 20 additional buses does not make the contract illegal. It’s not on the material terms of the contract,” Anderson said. The board has to provide consent if the option were to be exercised. “If they are really concerned, they can amend the contract to delete the language,” he suggested. Barbara Sullivan George, chair of the transit board, told the Business Journal that the board and LBT CEO Kenneth McDonald are discussing the issue of how staff added language to a contract without board approval. We are “in discussions to address the oversight . . . that was included in the BYD contract,” Sullivan George said. Issues of product quality also arose at the meeting. Following the discovery of cracks on the BYD-engineered testing bus during Altoona testing, first reported by the Business Journal on August 23, Cruz told the board there are potential financial and scheduling impacts to the project, includ-

Long Beach Business Journal 7 ing a one-year delay in bus completion. The U.S. requires Altoona testing before buses can be put into service. Before the board chose BYD, they also had the option to contract with Proterra, an American company that already had Altoona-tested buses. The BYD bus was repaired and sent back for testing, which put the project behind schedule. “There definitely will be a monetary impact as a result of what’s going on,” Cruz told the board. He said LBT would negotiate with BYD regarding costs incurred. LBT spokesperson Kevin Lee did not say who would be responsible for any costs incurred, because “those negotiations have not been finalized, so no cost

or schedule terms have been outlined at this time.” Not included in the report was a request dated August 20 from the Federal Transit Administration to review BYD’s Buy America documentation. The FTA requires that over 60 percent of all bus materials be U.S.-made. An audit before the contract was awarded estimated 71.71 percent of the buses’ material to be U.S. content. The only portion of the buses manufactured in China is the bus frame, according to Lee. The major workings and interior of the bus are to be manufactured in Lancaster, California. Lee said the review is “a normal practice of the FTA for new bus procurements.” ■

Port Commissioners Appoint Project Manager To Oversee Interim Headquarters Cost Overruns, Delays Push Commissioners To Bring In City’s Manager Of Business Operations ■ By SAMANTHA MEHLINGER Staff Writer In an effort to speed up what is already at least a sixth-month delay in the harbor (Please Continue To Page 8)

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September 10-23, 2013

Port Interim Headquarters (Continued From Page 7)

department staff moving to its temporary headquarters at the airport, the Long Beach Board of Harbor Commissioners voted to instate Del Davis, manager of business operations within the city’s public works department, to oversee the project. The commissioners requested Davis to report back to the board in two weeks with a comprehensive plan to move forward on renovations, and took action to suspend all work by the project’s design architect, Gensler & Associates, pending a report of their services from Davis. Davis was part of a three-person panel conducting a review of the project alongside Port of Long Beach Acting Executive Director Al Moro and Mike Conway, the city’s director of business and property development. The panel convened August 15. Moro told the commissioners that the port is paying for Davis’ services, which also involves looking at ways to cut project costs. At the September 3 harbor commission meeting, Moro presented the panel’s report, breaking down the higher-thanexpected costs. The building at 4801 Airport Plaza Dr., across from Skylinks Golf Course, was purchased last December for $14,250,000, with an additional $10,060,227 approved by the city council for tenant improvements, furniture, security and information manage-

A chart provided by the port breaks down the budget for the interim headquarters by individual costs, many of which are higher than expected at the time of purchase. Port staff was scheduled to move out of its current administration building this month, but project delays have set the move back by at least six months.

ment related equipment, the physical move from current headquarters, and contingency funds. In March, an additional $6,547,074 was added to the budget due to “an increased estimate” for these items. All restrooms in the building were completely gutted and are being rebuilt to meet Americans with Disabilities Act requirements, Moro said. “A large per-

centage of the cost in the $30.86 million budget is restroom renovations,” he explained. The board had already approved the renovations. Other underestimated costs were improvements to heating, ventilation and air conditioning systems, which dated back to the building’s construction in 1986. Some parts of this system were replaced, while others were repaired. Moro

said that the repairs and upgrades made to the building “for the most part should add value to the building upon resale.” “This building today is a lot further behind than the day we bought it,” said Commissioner Rich Dines. Commission President Thomas Fields agreed, but pointed out that the work causing delays is necessary. “What I am really getting at is the building came with issues, and I think some were unintended. I would rather not point fingers. There are more than enough fingers to be pointed around this whole thing,” Fields stated. Commissioner Doug Drummond summed up the commission’s greatest concern aside from high costs: “We were told we would be in the building in September. It is now September.” In an email to the Business Journal, Conway wrote that Davis had been project manager of the Long Beach Police Department’s interim occupancy of City Hall East. He oversaw the movement of staff from the police department’s public safety building at 400 W. Broadway to City Hall East, the renovation of a number of City Hall East’s floors and the complete renovation of the public safety building. Conway said this project was “pretty similar to the port’s current effort.” “I am fully confident that, working closely with Mr. Moro and port staff, we will work together to determine the most efficient pathway to deliver the port’s interim headquarters in a timely and costeffective manner,” he said. ■

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Long Beach Business Journal 9

Ambulance Fees (Continued From Page 1)

higher. Combined, these fee hikes are expected to generate $1,445,000 in revenue. In his presentation to the city council on September 2, Long Beach Fire Chief Mike DuRee reviewed his department’s action to alter the system from having a four-person truck and two-person engine at Station 17 to having a four-person truck at Station 17 and a four-person engine at Station 14. The action required adding six full-time equivalents (FTEs), he said. “Additionally, we are upgrading 18 firefighter positions to firefighter-paramedic, which will allow us to staff each fire engine with a paramedic,” as part of the rapid medic deployment (RMD) pilot program, DuRee said. “These costs will be offset by a proposed increase in the ambulance fees.” Dennis Strachota, budget manager for the City of Long Beach, told the Business Journal in an email that $1,445,000 is required for adding the six FTEs and staff upgrades for the RMD program. “An 18.6 percent increase to ALS and BLS transport rates will generate a like amount of revenue to cover this increased cost,” he wrote. The RMD pilot program, approved by the city council for fiscal year 2013 as a onesentence item in that budget, is in the process of being conformed to a Los Angeles County Emergency Medical Services Commission (EMS) pilot program policy approved in July. The department must wait until electronic patient care reporting is in place and

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Effective October 1, fees for ambulatory transport services will increase by 18.6 percent to cover personnel costs in the Long Beach Fire Department. (Photograph by the Business Journal’s Thomas McConville)

properly functioning before implementing the pilot program – probably sometime in the first quarter of 2014. The city gave the department $1.8 million in one-time funding in 2013 to float the department through the time needed to get the RMD program approved and in place. Once implemented, the RMD model is expected to save the city $1.8 million a year. At the budget hearing, 5th District Councilmember Gerrie Schipske asked what would happen if the program was not implemented at all. “If the RMD program is not implemented, we would have a $1.8

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million shortfall on our budget that we would need to find either an equivalent offset or make other reductions someplace to get structurally balanced,” DuRee said. In that scenario, it is unclear if the ambulatory fee increases would be reduced as well. “I’m approaching the RMD program from the standpoint that it can in fact be implemented,” DuRee said. “It is feasible. It is a good opportunity for the city to deploy in a different way that would actually generate the savings. I’m not looking at it from a standpoint that it’s not going to happen. It’s just a matter of when.” ■

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NEWSWATCH 10 Long Beach Business Journal

Seaside Health Plan (Continued From Page 1)

than 300 primary care physicians to its members. Seaside is currently affiliated with physicians from MemorialCare Medical Group, Children’s Clinic Serving Children and Their Families, Family Medicine Program and others at MemorialCare hospitals in Long Beach. In addition, the health plan is positioned to participate in the California Children Services demonstration project under the Medicaid Section 1115 Waiver. “The new health plan and other capabilities further our role in population health management, medical homes, accountable care, information technology, best-practice medicine and other health care reform ele-

September 10-23, 2013 ments,” Barry Arbuckle, Ph.D., president and CEO of MemorialCare Health System, said in a statement. “They expand our ability to partner more directly with health plans, employers, hospitals, physicians and providers to better serve patients and local communities.” As previously reported by the Business Journal, MemorialCare purchased certain assets of Universal Care back in November 2012 with the intention of forming Seaside. The new plan garnered approval from the California Department of Managed Care earlier this year. The administrative offices near the new Todd Cancer Pavilion opened September 3 with approximately 25 employees, according to Jay Davis, senior vice president of Seaside Health Plan. Davis told the Business Journal

that MemorialCare has plans to expand Seaside into Orange County and join the health insurance exchange Covered California. He also noted that the company would pursue discussions on a partnership with Molina Healthcare in the future. “We are actively in discussions with partnering health plans for determining how to participate in the health benefit exchange. We really see what we do as complementary to what the various health plans do,” Davis said. “If you live in the greater Long Beach area and have interest in opportunities to enroll in a health plan, we are here to serve our community. We are all here to serve their healthcare needs.” For information on Seaside Health Plan, call 855/367-7747 or visit ■

Councilmember Requests Discussion On Placing Medical Marijuana Ordinance On April 2014 Ballot ■ By TIFFANY L. RIDER Assistant Editor Long Beach residents may get the chance to vote on the extent to which medical marijuana distribution is regulated within city limits. An item on tonight’s (September 10) Long Beach City Council agenda requests the city attorney to prepare a ballot measure for the April 8 primary election “providing for the regulation of medical marijuana collectives.” The item was submitted to the city clerk by 2nd District Councilmember Suja Lowenthal’s office on September 5. There are two major factors responsible for bringing forward this item. The first are the actions taken by Long Beach Citizens’ and Patients’ Rights Political Action Committee (PAC) to sue the city to recognize the signatures gathered by Jeremy Coltharp and Edith Frazier, filed with the city earlier this year, to authorize the city to regulate and tax medical marijuana collectives. In the original 43,159signature petition submitted to the city in February, the city clerk was able to verify 31,294 valid signatures. At the time, the petition sought a special election to put medical marijuana regulation on the ballot. Because the number of verified signatures was shy of the 15 percent of registered voters requirement of the city, the item was laid to rest. Now the PAC has attempted to resurrect the petition and use the verified, valid signatures to put the same ballot measure to a vote of the people in the April 8, 2014, primary election, as the number of valid signatures exceeds the requirement of 10 percent of registered voters for a primary election. “We may have our personal orientation to certain issues, but it becomes compelling to have that discussion – whether we’ve had it 12 times before or not – when you have this movement of folks that gathered signatures,” Lowenthal told the Business Journal. “That’s not an easy thing to do. It takes time and resources. It’s also compelling when they want to ask the voters. That’s really what people are asking us to do.” The second factor involved in this item coming to council is guidance on medical marijuana from the U.S. Department of Justice issued August 29, which may have deterred federal prosecutors from coming down on medical marijuana collectives. “It is a good time for us to ask the city attorney to prepare for the city council an item that could either pick up where we left off when we had an ordinance in place or look at the ballot measure that garnered so many thousands of signatures to be placed on the ballot and give the voters an opportunity to determine the extent of which medical marijuana dis-

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NEWSWATCH September 10-23, 2013 pensaries should be regulated within the city limits,” Lowenthal said. “In that regard, it’s a fair time to ask that question to the extent to which we can regulate medical marijuana in our city limits.” Those regulations could allow taxation of medical marijuana sales, something that Lowenthal said was part of the ordinance she originally brought to the council. The revenue generated from the tax would support public safety needs and be structured similarly to what Oakland has done in its regulation of medical marijuana collectives. According to the staff report, the city clerk estimates adding a ballot measure to April 8 primary election would cost between $208,726 and $243,933. ■

International Trade News In Brief ■ By SAMANTHA MEHLINGER Staff Writer Los Angeles Mayor Eric Garcetti To Speak At PortTechEXPO – Los Angeles Mayor Eric Garcetti is the keynote speaker at the luncheon of PortTech Los Angeles’ PortTechEXPO, tomorrow, September 11. The expo takes place from 9 a.m. to 5 p.m. at CRAFTED, 110 E. 22nd St., in San Pedro. “PortTech Los Angeles is a great opportunity for business and government to explore how they can work together to achieve our goals of a clean and prosperous city, region and world,” Garcetti said in a statement. Mario Cordero, chairman of the Federal Maritime Commission, is also speaking at the event, whose theme is “Global Technology Solutions for Ports and Beyond.” PortTech Los Angeles is a non-profit “business incubator” focusing on generating technology for the San Pedro Bay ports. Planned Construction And Traffic Impacts – Several construction projects are impactimg Long Beach traffic through September 16. Anaheim Street is being reduced to two lanes in both directions from the Los Angeles River to 9th Street Monday through Friday from 7 a.m. to 3:30 p.m. through September 13; motorists may access Anaheim Street via Harbor Avenue, Santa Fe Avenue and 9th Street. The exit ramp from southbound Queensway Bridge to the northbound 710 freeway and Queensway Drive is closed through

Long Beach Business Journal 11 September 16, with a detour via Harbor Plaza. Closure of a lane and the Harbor Plaza West exit on the southbound 710 Freeway and Harbor Scenic Drive is scheduled through September 16. Motorists may reach the Port Administration Building via the “Piers F, G, West Pico Avenue” or Harbor Plaza East exits. Port Of Long Beach Community Grants – In August, the Port of Long Beach announced it is funding local schools, parks and communities with $2.6 million in grants. Schools and parks are receiving $1.54 million to improve air quality using air filtration and air-conditioning. The remaining $1.09 million is dedicated to programs and education focused on asthma. These projects are meant to mitigate the impacts of port projects on local communities. “We’re delighted to help Long Beach breathe easier,” Long Beach Harbor Commission President Thomas Fields said in a statement. Funds are drawn from major port projects such as the Middle Harbor Terminal Redevelopment Project and the Gerald Desmond Bridge Replacement Project. Port Of Long Beach Workshops – The Port of Long Beach is hosting workshops on October 2-3 at which professionals will discuss the benefits of conducting business in a foreign trade zone and competing in global markets. The October 2 workshop is at Brandman University in Irvine at 16355 Laguna Canyon Rd., Room 111. The October 3 workshop takes place at the City of San Fernando’s Aquatics Center Conference Room, 208 Park Ave. Both events are from 8:3011:30 a.m. For more information, call Diana Lam-Brandt at 562/283-7757. To RSVP, visit: Port Of Los Angeles AA Bond Rating – The Port of Los Angeles (POLA) announced in August that it has maintained Standard & Poor’s (S&P) AA long-term bond rating – the highest possible bond rating for a port without taxing authority. POLA has maintained this rating since 1995. S&P cited POLA’s overall cargo traffic, its financial performance and “stable portfolio of assets” as factors. Molly Campbell, POLA’s deputy executive director of finance and administration, said in a statement, “Achieving the highest possible bond rating is a direct reflection of the port’s unrelenting focus on smart, longterm planning and careful oversight.”

Environmental Review For Proposed Berth Improvements – As part of an agreement between POLA and its tenant Yang Ming, the port is initiating an environmental review process for $122 million in proposed berth improvements to Yang Ming’s terminal facilities. The agreement extends Yang Ming’s lease to 2030, which may create as much as $525 million in port revenue. Proposed improvements include deepening the terminal berth to accommodate larger vessels, constructing a new wharf and expanding the West Basin Intermodal Container transfer facility. Union Pacific Develops Aerodynamic Technology For Double-Stack Trains – Union Pacific Railroad unveiled employee-engineered technology called “Arrowedge” in August, which enhances aerodynamic efficiency on double-stack intermodal freight trains, thereby reducing locomotive emissions. Double-stack trains stack two containers on top of each other for more efficient transport. The Arrowedge fits on top of the bottom container and has a tapered body to allow air to flow easier around the upper container, reducing aerodynamic drag and the amount of power required to move the train. Mike Iden, Union Pacific’s general director of car and locomotive engineering, said in a statement that the technology “represents Union Pacific’s focus on pioneering technology for operational and environmentally sustainable gains that ultimately result in enhanced customer service and community stewardship.” Long Beach City College Receives $300,000 Award – Long Beach City College’s (LBCC) Center for International Trade Development received a $300,000 award from the U.S. Department of Commerce to support California job creation and expand exports of beauty and health products to Brazil, China and the Persian Gulf. LBCC is using the funds to take 60 small- to medium-sized enterprises (SMEs) to tradeshows in three marketplaces and is training 80 SMEs to enter the Brazilian, Chinese and Persian Gulf markets. Lou Anne Bynum, LBCC’s executive vice president of college advancement and economic development, said in a statement that “Long Beach City College’s dedication to serving the business needs of regional and statewide companies is exemplified by the U.S. Commerce Department’s award to our Center for International Trade Development.” ■

Denny Bruns Steps In To Serve As Interim CEO Of Lakewood Regional Denny Bruns steps back into the top post at Lakewood Regional Medical Center as the interim CEO of the hospital upon the departure B. Joseph Badalian to another Tenant Healthcare-owned operation. As of last month, Badalian is the new president and CEO of Fountain Valley Regional Medical Center, while Bruns, who has 32 years of experience as a hospital CEO, came out of retirement for a second time to lead Lakewood Regional. Bruns took the helm as Lakewood Regional’s interim chief executive earlier this year while Badalian completed a training program though Harvard Business School. “I am extremely pleased to have the opportunity to lead a great organization like Lakewood Regional Medical Center,” Bruns said in a statement. “The hospital has an outstanding reputation in the community and has tremendous potential for growth. I look forward to working with the hospital’s excellent staff and continue to strengthen the coordination of care throughout [the] community.” For more information on Lakewood Regional, visit Charity Walk-a-Thon – The East Anaheim Street Business Alliance (EASBA) hosts an inaugural walk-a-thon benefitting ChildNet Youth and Family Services on Saturday, September 21. The walk begins at the Farmers & Merchants Bank parking lot at 3104 E. Anaheim St. The fee is $25, or $15 for participants under age 16, and includes a goodie bag, snacks, water, lunch and the opportunity to win prizes. Farmers & Merchants hosts a finish line festival with food and games. Lee Vieira, EASBA vice president, called the event a “win-win” for the EASBA. “With all proceeds going to ChildNet, this event will raise much-needed funds for a great non-profit that helps so many kids in need in so many ways,” he said. Volunteer Coastal Cleanup – The 2013 California Coastal Cleanup Day takes place September 21 from 9 a.m. to noon. To volunteer to clean up Alamitos Beach, Alamitos Bay Marina, Belmont Pier, Bluff Park or Mother’s Beach, print and sign the waiver form at http://www.longbeach. g ov / n a t u r e c e n t e r / v o l u n t e e r _ . a s p . Volunteers under 18 must have a parent or guardian sign their waivers. For more information, call 562/570-4876. ■

Long Beach-Based Apriso Acquired By French Software Company For $205 Million ■ By TIFFANY L. RIDER Assistant Editor Long Beach-based Apriso, a global provider of manufacturing software solutions whose clients include SpaceX and Tesla, was purchased earlier this year for $205 million. The acquisition by Paris-based Dassault Systèms was finalized in July. Chris Will, chief technology officer and co-founder of Apriso, told the Business Journal that the company had not been for sale. “We were a venture-backed company,” he said. “But on any given day . . . The day came.” Dassault Systèms, one of the largest software companies in Europe, offers a 3D digital mock-up and product

lifecycle management platform called 3DEXPERIENCE. “This acquisition will merge 3DEXPERIENCE and Apriso’s solutions and deliver a new business experience to our customers,” Bernard Charlès, president and CEO of Dassault Systèms, said in a statement. “The question isn’t simply, ‘What is the next innovative idea?’ but rather ‘Can you produce your idea quickly, efficiently and cost effectively? Can you excel in global business responsiveness and local production agility?’ These are questions 3DEXPERIENCE answers.” With Apriso in manufacturing software and Dassault Systèms in engineering software, the combination creates more of an

interactive process than a traditional process to support product proliferation in technology, according to Will. “Every industry we’re dealing with has product proliferation going on, including the auto industry,” he said. “We are a very international company. Over half our revenue comes from out of the country. We reflect a wider footprint. We’re this little company that is driving business for some of the largest manufacturers.” The acquisition, Will said, is about “being able to do that cost effectively and successfully.” Apriso, originally in Torrance, sought Long Beach for its office space to accommodate the software company’s needs. The location between Los Angeles and Orange

County and proximity to quality higher education were added benefits, Will said. Over the years, Apriso has fed its growth path through California State University, Long Beach, according to Will. “That has been working well for us,” he said. “Once you’re established and grow very quickly, staying where you are makes sense,” Will said. The company stayed within Long Beach, though moved offices three times to accommodate growth starting in the top two floors of what is now the Molina Center about 14 years ago, then to the World Trade Center and finally 301 E. Ocean Blvd, Suite 1200. Despite acquisition, the company and its 60 employees remain in Long Beach. ■

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FINANCIAL SERVICES INDUSTRY 12 Long Beach Business Journal

Factors Impacting Business Markets (Continued From Page 1)

business clients went under or completely scaled back during this economic recession and recovery. “They hung on with their fingernails as long as they could and then let go,” she said of some clients. “Clients lost jobs, even though theoretically the economy is in recovery.” Looming is the ACA, which takes effect January 1, 2014. “There is so much uncertainty about that,” Codman said, who noted she also works on employee benefits for some clients. “Business owners really have to keep their eyes on the Affordable Care Act and the issues of going onto the exchange, not providing healthcare to employees and tax issues. They could easily be hit by additional taxes.” Another hot topic in finance is quantitative easing, a program of the Federal Reserve to purchase approximately $85 billion in bonds and securities each month from the government in an effort to keep interest rates down. “The fact of the matter is, the whole quantitative easing movement was not good for small businesses,” Codman said. “They kept the interest rate so low. The quantitative easing was great for large businesses to borrow money and lend.” Mark Vitner, chief economist for Wells Fargo, told the Business Journal that peo-

September 10-23, 2013 ple who closely watch the Fed are hedging bets against what the Fed will do, and economic conditions don’t have to be perfect for the Fed to begin slowing its bond buying. “It would remove a great deal of uncertainty,” Vitner said of a quantitative easing slowdown. “I think that sends a message that the Federal Reserve has done everything that it can.” By dialing quantitative easing back, interest rates not under the control of the Fed will rise and short-term investments will suffer, Codman said. While Vitner admits that the federal funds rate at 10 basis points shows the country is far away from an economic recovery, the first step toward normalcy is to taper quantitative easing. “Normally the federal funds rate is roughly even with the sum of inflation and real GDP growth,” Vitner said. “Inflation is around 2 percent. Real GDP is around 2 percent. We would expect to see a federal funds rate of around 4 percent. We have very low short-term interest rates and historically low long-term interest rates that will likely go up further. The Federal Reserve controls the federal funds rate and has said they won’t raise it until 2015.” Codman also expressed concern about the country’s debt-to-GDP ratio, which is hovering at 105 percent. “We are buying more than we are bringing in,” she said. Moreover, the U.S. government is on track to hit its debt ceiling in midOctober.

While there is a lot of fear in the economy about Federal Reserve tapering down its quantitative easing program, Karen Codman, financial advisor and partner of FSC Securities Corporation in Long Beach, said reducing market manipulation, over the long term, is a positive for small businesses. Other issues to be aware of, she said, is the current debt to gross domestic product ratio of 105 percent, and the short-term impacts of the federal government raising the debt ceiling. (Photograph by the Business Journal’s Thomas McConville)

“It’s going to be a busy fall,” Vitner said. Though Congress has an approval rating at around 15 percent, “The business community would be elated if Congress came together. The debate on the 2014 budget will come to a head, and that may be an argument for Fed to hold off or to take a smaller step. We most likely won’t see a government shut down, but they won’t magically come up with a budget either. . . . If the president insists on raising taxes, I don’t think Congress would go for that. I don’t think they could

come up with entitlement reform either. . . . Folks remember what happened when the government was shut down temporarily in 2011. But, even then, it didn’t bring the economy to its knees.” Even in this changing world full of uncertainties, Walker concludes that businesses need to have good reserves, prepare for interest rates to rise and be ready to execute strategies that prevent detriment. “I think that the business deals people are in, they need to get into and out of them quickly,” Walker said. “They need to make sure they have exit strategies for deals that they are in. You don’t have a government that is friendly to business. What has been trending to an unfriendly environment to business started many years ago, and continues to get extreme. You have it in healthcare, you have it in regulation in banking, you have it all over the board. Having exit strategies is critical. “Also, if you have debt out there, people should be locking in their interest rates for long term. That is a critical component to accomplish. One of the best quotes I’ve heard, and I’ll steal it for this interview, is ‘We don’t have an economy. We have low interest rates.’” ■

Wells Fargo Wealth Management On Establishing A Living Trust ■ By TIFFANY L. RIDER Assistant Editor Maybe you’ve started a family and want to ensure your children are taken care of in the event of your unexpected death. Or maybe you’ve been putting off making some tough decisions until your hair is gray. Establishing what happens to your assets upon death may be a difficult process, but having a plan like a living trust in place can alleviate pressure on family and loved ones from having to make those choices themselves. (Please Continue To Top Of Next Page)

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FINANCIAL SERVICES INDUSTRY September 10-23, 2013 A living trust is essentially a document between a grantor, a trustee and beneficiaries, according to Robert Kacer, senior vice president of Wells Fargo Wealth Management Orange County and senior regional fiduciary manager. Kacer manages the financial institution’s trust business for Orange County. Kacer said Wells Fargo has a large trust operation in Long Beach with more than 200 people working to support everything he and his colleagues do in Newport Beach. Many times, when you establish your own living trust, you act as all three – grantor, trustee and beneficiary, Kacer said. The trust, however, also has an assigned successor trustee, or fiduciary. A fiduciary essentially takes care of someone’s assets upon death, or deaths if the relationship is with a couple. “We play a very similar role on a corporate side where we will act as a successor trustee for an individual who has complicated relationships and complicated assets that maybe go beyond an individual experience,” Kacer told the Business Journal. “When someone becomes incapacitated or passes away, that’s when you look at a trust document and its provisions directing you to take care of their assets.” Assets may include financials, real estate, oil interests and gas royalties, among other things. There are many reasons why someone would establish a living trust, Kacer said. “Younger people want to name who the guardians of their children may be. It’s

Long Beach Business Journal 13 important for people with young children [to select a guardian] and [also to designate who will control] the assets to take care of their children,” he said. There are different tax benefits for establishing different types of trusts. Some people use it to avoid probate (appraisal and taxation), to make sure assets are accurately and efficiently distributed. Since a living trust can be a complicated document for anyone to create, Kacer strongly recommends having an attorney draft it. While Kacer said he does offer some tax information to clients, Wells Fargo prefers to work with their clients’ attorneys and tax professionals on their living trusts. “At Wells Fargo, we meet with our clients to talk about their financial goals, but also their giving and estate planning, and whether they want to leave a legacy,” he said. “Typically on a larger relationship, as a wealth advisor, we go through a long process to determine goals. Most of our clients have made their wealth. They do it for their peace of mind.” A living trust is usually established in coordination with a healthcare directive and will. A trustee or fiduciary manages the assets in the trust, and the will designates that process. Healthcare directives are typically outlined in a form that allows families and loved ones to follow through on designated end-of-life decisions. “We just recently had a client pass away and we had managed her account for a

long time,” Kacer said. “She had not shared what the family wealth was with the kids until she knew she was terminal. She trusted my trust and fiduciary specialist to schedule a meeting to talk about these issues. She relied heavily on the trust officer to handle that meeting. The client has since passed away. We recently met with the family. We are working on their estate and trust.” It can be difficult for seniors to make these decisions as many times they don’t have family members who are local, Kacer said, or do those family members have the acumen to handle their assets. “Many times it makes sense to bring in a

professional fiduciary,” he said. When seeking a professional fiduciary, people want experience – how he or she would handle certain life and asset situations. “It’s difficult to train for that, but we have a very supportive group at Wells Fargo,” Kacer said. “We rely on each other to deal with those issues. We’ve all unfortunately had to deal with that many times. Most of our people have 20 years in the business. You just develop over the years in dealing with clients. At the end of the day we put our clients’ interests first. We do our best to take care of them.” ■

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FINANCIAL SERVICES INDUSTRY 14 Long Beach Business Journal

September 10-23, 2013

ACA Small Business Health Insurance Tax Credits Available Only Through Exchanges Starting In 2014 IRS Proposes Two-Year Limit, Increase In Credit Amount ■ By TIFFANY L. RIDER Assistant Editor A proposal from the Internal Revenue Service (IRS) to amend the rules for the small business health insurance tax credit would increase the overall amount of the credit, but limit its availability. The IRS is accepting comments and public hearing requests on the proposed regulations through November 25. The credit has been available since the signing of the Patient Protection and Affordable Care Act (ACA) in 2010 for small business owners – who are defined as companies with 25 or fewer employees and average annual wages under $50,000 – who offer their workers health insurance. The proposed changes to the tax credit regulations are aligned with the new healthcare rules coming online starting in 2014 and thereafter, according to the IRS. Over the past three and a half years, small business owners in the black have been eligible for credits of up to 35 percent of the amount they pay toward their workers’ insurance premiums. Tax-exempt organizations have had the privilege of a 25 percent credit against payroll taxes over the same period, meaning they can get a check

While the definition of small businesses entitled for the tax credit available under the Patient Protection and Affordable Care Act is narrow, Ryan Partridge, senior tax manager with Holthouse, Carlin & Van Trigt LLP, told the Business Journal that businesses should examine their eligibility to ensure they can capture those benefits if eligible. (Photograph by the Business Journal’s Thomas McConville)

just for filling out the proper IRS forms without having any taxable revenue. Those percentages would increase starting in 2014 to 50 percent for small business owners and 35 percent for tax-exempt organizations. Also starting in 2014, the credit is limited to small businesses purchasing coverage for their employees through state health insurance exchanges, and those businesses can only take the credit for two years.

About five to 10 percent of clients at Holthouse, Carlin & Van Trigt (HCVT) meet the IRS’s definition of small business owner, HCVT Tax Senior Manager Ryan Partridge told the Business Journal, though he said, “I sense that most qualifying small business owners have no idea they may be qualified to claim benefits under the small business health insurance tax credit program.” At Windes & McClaughry, Tax and

Accounting Services Partner Susan Laputz and her colleagues get a weekly call or email about the tax credit. “More often than not they are not eligible because they have more than 25 employees or wages” that average higher than $50,000 a year, Laputz told the Business Journal. “It’s really the wage issue.” Approximately five percent of Windes’ clients are eligible for this tax credit, she said. The clients who are eligible are defi-

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FINANCIAL SERVICES INDUSTRY September 10-23, 2013 nitely using it, Laputz said. Partridge went so far as to say the program is likely underutilized by qualified taxpayers, though it is uncertain how underutilized the program will remain given the tax credit rules changing next year. “Even though they are qualified, I don’t know anybody yet who says they’re seriously considering purchasing health insurance through the exchange,” Laputz said. None of her clients are buying insurance through the exchange, she said, and it isn’t likely that the tax credit alone would drive a business owner to purchase through the exchange. “When we run the numbers for them, they may change their mind,” she said. “But they are going to look at the cost benefit.” The two-year limit on the credit may be a deterrent, though, according to Partridge. “I think a credit period of at least five years is reasonable,” he said. Both Partridge and Laputz agreed it all comes down to a costbenefit analysis on a per-client basis. Along with the two-year limit, the IRS proposal includes a transitional rule for companies in the event a health plan follows a non-calendar year schedule, meaning it does not coincide with year-end tax return filings. The rule allows a company that purchased health insurance through the exchange, say, in October, to claim the credit on its tax return for the entire year, even though the company didn’t buy it until near the end of the year. “It’s sort of a perk or benefit for the taxpayer,” Laputz said. “Ironically, every now and then the government makes a decision that demonstrates common sense. This, to me, makes common sense. It makes the claim and reporting as simple as possible.” Even so, Laputz said Windes’ clients were disappointed by the limited definition of small business. “They don’t consider themselves as wealthy business owners,” she said. ■

Long Beach Business Journal 15 HCVT Remains Top Accounting Firm In Southern California – Los Angelesbased firm Holthouse, Carlin & Van Trigt LLP (HCVT) was recently named one of the “Top Five Best Managed CPA Firms in the U.S.” by INSIDE Public Accounting (IPA). HCVT was also named to IPA’s “Top 100 CPA Firms” list in 2013 and to Accounting Today’s “Top 100” list earlier this year. HCVT is the largest CPA firm based in Southern California with eight offices, including one in Long Beach, 36 partners and more than 300 employees. It is also the 42nd largest CPA firm in the U.S. based on annual revenues. “Our deep technical knowledge, our integrated focus on the needs of the business and the business owner, our client service team relationships and our creative solutions differentiates

HCVT from both the Big 4 and other CPA firms in our service region,” Phil Holthouse, managing partner of HCVT, said in a statement. Learn more about the company online at Windes & McClaughry Partner Elected California CPA Society’s First ViceChair – Tim Good, a partner in Windes & McClaughry Accountancy Corporation’s Tax and Accounting Services department, was recently named first vice-chair of the California Society of Certified Public Accountants (CalCPA) and will serve a oneyear term. “We are very pleased with his commitment to CalCPA,” John Di Carlo, managing partner of Long Beach-based Windes, said in a statement. “We are extremely proud that Tim will continue Windes’ rich tradition of service to our profession.”

Farmers & Merchants Bank Of Long Beach Appoints COO – Melissa Lanfre, with 30 years of banking experience, has been appointed executive vice president (EVP) and chief operating officer for Farmer’s & Merchants Bank of Long Beach. She most recently worked for 10 years for Beach Business Bank, serving as EVP and chief administrative officer. In this newly created role, Lanfre assumes responsibility for overseeing the daily operations that support Farmers & Merchants’ 21 community banking offices in Los Angeles and Orange Counties. Lanfre becomes part of a fivemember executive management team, led by Daniel Walker, chairman of the board and chief executive officer, and Henry Walker, president. ■

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Financial Services News In Brief National Economic Recovery Brings Rising Workers’ Compensation Costs – The National Academy of Social Insurance (NASI) recently reported that costs to employers and workers’ compensation benefits paid rose in 2011 while the economy continued to recover. Coverage and wages increased in every state, and total benefits went up by 3.5 percent to $60.2 billion. Total benefits breaks down to medical care spending, which rose 4.5 percent to $29.9 billion, and wage replacement benefits, which increased 2.6 percent to $30.3 billion. Costs to employers went up 7.1 percent to $77.1 billion. “Workers’ compensation often grows with the growth of employment and earnings,” Marjorie Balwin, chair of NASI’s Workers’ Compensation Data Panel and professor of economics at Arizona State University’s W.P. Carey School of Business, said in a statement. In an effort to effect rising costs for employers, California approved Senate Bill 863 in September 2012. Most of the legislation took effect in July, with an updated medical provider network and physician fee schedule going into place starting in 2014. For more information on SB 863, visit htm.

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GOV. GEORGE DEUKMEJIAN 16 Long Beach Business Journal

September 10-23, 2013

Deukmejian By The Years 1928: Born in Menands, New York 1955: Moved to Long Beach, California 1957: Married Gloria Saatjian, to whom he is still married; they have three children 1958: Opened his first law office, which was located in Belmont Shore 1962: Elected to California State Assembly 1967: Elected to California State Senate 1979: Elected as State Attorney General

Deukmejian (Continued From Page 1)

decided to put my name on this beautiful new courthouse.” With sparkling pillars, a gleaming fivestory atrium, public-access retail and other modern amenities, potential jurors opening their summons are likely crossing their fingers in the hopes of being assigned in Long Beach. “Long Beach has been very good to me over the years. So I am most grateful and feel very blessed about it. And this is the topper,” Deukmejian said as he sat in the Business Journal offices, gesturing to a photo of the courthouse. Not only has the city supported him politically, he said, but he also met his wife, Gloria, here and put all of his children through Long Beach schools.

Influential Legislation As a lawyer, a legislator and a former attorney general of California, Deukmejian made his mark on the state’s judicial system by authoring and signing key legislation that in some cases even set national precedent. As a state senator, Deukmejian authored what would become California’s capital punishment law. Decades later, he is concerned about gridlock on the state’s death row. “It is very disturbing, because the people have voted at least two times that I can

recall that they want to have the death penalty in California and, along with that, that they want to see it implemented. What has delayed its implementation have been matters that the public did not consider or vote upon,” Deukmejian said. A moratorium on executions was handed down at the federal level in 2006 after the three-drug combination used in state lethal injections was found to be cruel and unusual punishment. But even before the moratorium was implemented, the logjam on death row postponed executions for years. Deukmejian hopes the state and the courts will find a solution so that people are not “waiting on death row for years and years” while “sentences are not being carried out.” There have been times when the governor made moves that were less in keeping with Republican Party lines. In 1989, he signed the state’s – and the nation’s – first assault weapons ban following the massacre of five young school children and the wounding of dozens others in the City of Stockton. “It was a very, very traumatic experience,” Deukmejian recalled. In his view there is “no reason” for anyone to own an assault weapon, adding that they were “developed for military purposes,” not civilian use. At the federal level, President Barack Obama and Senator Diane Feinstein have been working to reinstate the country’s assault weapons ban following a string of

mass shootings, including those at Sandy Hook Elementary and at a movie theater in Aurora, Colorado. Deukmejian declined to offer them advice, stating that it would be “pretty presumptuous of me to advise them.”

Contributions To The Judicial System In his tenure as governor, Deukmejian made between 800 and 900 judicial appointments. One of the primary reasons he ran for governor was to have the ability to appoint judges, he told the Business Journal. At the time he ran for governor, he said, “I was very concerned that some of the judges were not fully implementing the laws as they were intended to be implemented. So it was a big issue for me.” When asked if party affiliation was a factor in judicial appointments, Deukmejian said “yes and no,” laughing at himself a little for his contradiction. One reason he wanted to appoint judges was to provide some balance in the judicial system following Gov. Jerry Brown’s first- and second-term appointments, whom Deukmejian described as being mostly Democrats and liberals. Still, Deukmejian points out, “I appointed quite a few Democrats.” He estimates about 15 percent of his appointments were Democrats – a partisan to opposition ratio he estimates is typical amongst previous governors. Making these appointments was not a

1983: Elected as Governor of California, beating out Los Angeles Mayor Tom Bradley by a narrow 1.2 percent 1986: Elected to a second term as governor with more than 60 percent of the vote 1991: Finished term as governor and became a partner in law firm Sidney & Austin 2000: Retired 2013: Governor George Deukmejian Courthouse opens September 9

simple or speedy process, according to Deukmejian. Many parties were involved, he said, including state committees to assess candidates’ qualifications, letters of recommendation, and even locally appointed advisory boards. Quality counts the most to Deukmejian as far as judicial appointments are concerned. An important characteristic in a good judge includes sound “judicial temperament,” meaning that they are not highly emotional, he stressed. He also values judges who are not on any extreme of the political spectrum, are patient and are knowledgeable in the law. Crucial is “that they have a presence about them that demonstrates that they are in command of their courtroom,” he added. When election season rolls around, the governor said he gets a lot of phone calls from friends asking for advice on which judges to vote for. In his opinion, “There is not enough information provided to the voter.” The best people can do, he recommended, is do their own research. “If a person is really serious about voting on judges, they really have to do a lot of digging,” he said.

Reflections On Current Affairs Though out of office since 1991, Deukmejian is no stranger to current affairs afflicting the state’s correctional system. In 2004, he led a panel of experts commissioned by then-Gov. Arnold

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GOV. GEORGE DEUKMEJIAN September 10-23, 2013

Long Beach Business Journal 17

The Governor George Deukmejian Courthouse opened September 9 at 275 Magnolia Ave. in Downtown Long Beach. It replaces the 55-year-old courthouse at 415 W. Ocean Blvd., which closed September 6. The new courthouse hear civil, criminal, family law, unlawful detainer, juvenile delinquency and traffic matters. About 110,000 are expected to enter the courthouse monthly. The Los Angeles County District Attorney, Public Defender and Probation Department all have offices in the new courthouse. (Photographs, including those on adjacent page, by the Business Journal’s Thomas McConville)

Schwarzenegger to assess and provide solutions to problems facing the prison system. The panel returned with over 200 suggestions, including having a civilian oversight committee keep tabs on the correctional system, providing programs to help inmates adjust to life outside of prison upon release and reducing union influence over prisons. Though the suggestions helped provide insight into problems within the system, Deukmejian said, “I have no firsthand knowledge about what they ever did with the report and whether they ever implemented any of the suggestions.” Perhaps the biggest problem facing the California correctional system today is overcrowding – so much so that the federal government ordered the state to reduce its

population by the end of the year if there is no space to relocate prisoners. Even with his deliberate way of speaking, Deukmejian does not waste time in commenting that he is “very concerned” about the federal government’s hand in reducing the state’s prison population. “They haven’t had any responsibility for the operation of the state prison system, and now they come along and they order the state to do certain things. Now the judges on the federal court, once they are appointed they are appointed for life, and they are not accountable to the electorate,” he said. In addition to the federal courts acting without the weight of accountability on their shoulders, Deukmejian is concerned about impacts to communities from the

early release of prisoners, which is meant to alleviate overcrowding. He commented that, while the media often refers to these prisoners as non-violent offenders, “there is evidence that some of them have been committing additional crimes back in the community.” Just two weeks ago, Brown announced he is ordering inmates to be transferred to private and county jails rather than letting them out on early release. In his time as governor, Deukmejian ordered several prisons to be built, and the prison population subsequently increased by tens of thousands. But rather than suggesting more facilities be built, he supports Brown’s suggestion. “Obviously if there are facilities available then I think that they certainly

ought to be utilized before considering building more,” he said.

Looking To The Future Though Deukmejian is now retired, his gubernatorial predecessor, Brown, is back in office, leading what has very much become a “blue” state. When asked if he thinks a Republican will ever win statewide office in California again, Deukmejian laughed heartily and said, with humor, “Oh boy!” In all seriousness, though, he said, “It’s getting harder and harder for a Republican in California.” He explained that the trend in the state has shown voters leaning more toward liberal, Democratic Party candidates. “But I’m sure when the right person comes along who can generate confidence among the voters, the Republicans will come back.” ■

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FOCUS ON RETAILERS – ONE NEW 18 Long Beach Business Journal

September 10-23, 2013

Transformations Brings A New Kind Of Retail Store To Long Beach’s Broadway Corridor ■ By TIFFANY L. RIDER Assistant Editor Transformations is a hybrid retail store/classroom environment where patrons may come to treasure hunt, find solace or learn something new – an idea similar to that of other new businesses popping up in Long Beach, but a novel concept on Broadway. Transformations, located at 3409 E. Broadway, is the first venture for managing partner Noelle Harris and senior partner Kristina Sanborn. “We think there should

be a reality show about us,” Harris said. “We’re like Lucy and Ethel but we both want to be Lucy.” Sanborn described Transformations as a lifestyle store. “Women love to nest,” she said. “We like to mix and match. We are creating a place of beauty for people to be inspired to create beauty for themselves.” The store carries handcrafted gifts, handblown glass, hand-carved driftwood, all sorts of fair trade items and upcycled furniture, in addition to high-end and luxury home furnishings picked by Harris and Sanborn at

estate sales. “We are encouraging people to create their own sanctuary,” Sanborn said. In addition to selling retail items, Sanborn and Harris hope to host small classes on Feng Shui, meditation and yoga. Though it’s not an environment that is conducive to large classes, they hope to create a space with Transformations that lives up to the name of the store. “We are creating an environment for people to stay,” Sanborn said. Harris, a longtime resident of Long Beach, grew up in Belmont Heights. “It’s my stomping ground,” she said. Sanborn newly trans-

At left: Kristina Sanborn, left and Noelle Harris, recently opened a lifestyle store at 3409 E. Broadway in Long Beach. Their store features oneof-a-kind driftwood carvings, such as this giant Buddha head. Above: Transformation also carries artworks influenced by Eastern spiritual practices. Below: Transformations is designed as a space to relax, meditate, practice yoga and seek items to create a personal sanctuary at home. (Photographs by the Business Journal’s Thomas McConville)

planted her roots from Huntington Beach. “It was so homogenized,” she said. “Then my husband and I discovered Belmont Heights.” The two live about five blocks away from the store in opposite directions. “We definitely want to create a space in the community,” Harris said. “We are hoping we connect in with the design community. We have special pieces that someone might want.” Harris and Sanborn are former actresses and both have deep appreciation for the arts and for life. “Both of us are in our early to mid 50s,” Sanborn said. “You want your work to reflect the joy of your life. You don’t want to put up with baloney. Enjoy your friendship. Life becomes more precious.” Looking ahead, the business partners hope to support other businesses on the street, including Transformations’ new neighbor, the recently downsized Babcock and Cooke, and Iguana Import Gallery. “This street is blooming,” Harris said. “It’s really flowered. We want to enhance their business.” Transformations is open from 11 a.m. to 7 p.m. Tuesday through Thursday and Sunday, and from 11 a.m. to 8 p.m. Friday and Saturday. Closed on Mondays. The store had a soft opening September 5. Harris and Sanborn plan to host a grand opening in October. For more information, call 562/4381267. ■

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Long Beach Business Journal 19 The “family” and employees of Golden Star Family Restaurants pose at the original location on Pacific Coast Highway with a picture of grandfather, father, husband and founder of the restaurants, Jimmy Contos. Pictured standing are, from left, employees Maria Salinas, Betty Magana and Josie Lopez. Seated are, from left, sisters Sotiria Contos and Aristi Contos Anagnos with their mother and owner, Angela Contos. The newest members of the family are twins Angeliki (left) and Georgios Anagnos. Not pictured are family members Vasili Contos and Paraskevi Contos June. (Photographs by the Business Journal’s Thomas McConville)

Golden Star Family Restaurants Celebrate 50 Years In Business Continously Owned By The Contos Family; Two Locations ■ By SAMANTHA MEHLINGER Staff Writer

Golden Star Family Restaurants’ Westside Long Beach location at 1560 W. Pacific Coast Hwy has been in business since Jimmy Contos founded it on October 16, 1963. His daughter, Sotiria Contos, now manages the location. A second restaurant is located at 2100 E. Carson St., near Cherry Ave. Festivities are planned at both restaurants in October to mark the 50th Anniversary of the family business. (Photograph by the Business Journal’s Thomas McConville)

Golden Star Family Restaurants celebrates its 50th anniversary this October with special events for the community. The Westside Long Beach location at 1560 W. Pacific Coast Hwy. hosts festivities October 4-6, and events at the 2001 E. Carson St. location take place the following weekend, October 11-13. Sotiria Contos, daughter of Golden Star founder Jimmy Contos and manager of the Westside location, said that Saturday celebrations on October 5 and 12 are showcasing the local talents of the Long Beach 50th Polytechnic High School jazz band. “We all went to school at Anniversary Long Beach Poly so we love that,” Contos said of herself and Festivities her three siblings. Kids can enjoy balloon artists, too. “We will Planned try to throw in some 50-cent themed specials,” she added. October 4-6 Contos’ mother, Angela Contos, took ownership of the 1560 W. Pacific restaurants following her husband Jimmy’s passing in 2008. Coast Hwy. “This is quite a milestone for us. The only thing we’re sad Restaurant about is that our dad isn’t here. Everything else is every reaOctober 11-13 son to smile,” Sotiria Contos reflected. As the restaurants have endured for half a century, Contos 2001 E. Carson St. Restaurant told the Business Journal she is confident they retain the spirit with which her father imbued them. “He regarded his restaurants very much as a second and third home,” she recalled. “His buildings had a soul. They weren’t just a means to make money. They were very much tied to his heart.” She added that not a day goes by without another longtime customer telling her stories about her father. The restaurants still feature the original recipes by Jimmy Contos, including homemade soups, pastrami sandwiches, chili cheese fries, hamburgers and more. Contos said the restaurant on Pacific Coast Highway caters to “the longshoremen, the oil refineries and all the Westside Long Beach folks” with a drive-thru, fast-food style environment, while the location on Carson Street provides a sit-down, table-service type environment. For more information on Golden Star Family Restaurants, call the Pacific Coast Highway location at 562/435-6528 or the Carson Street location at 562/426-8869, or email ■

1_LBBJ_Sept10_SectionA_LBBJ MASTER LAyOUT 9/8/13 8:07 PM Page 20

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1_LBBJ_Sept10_SectionA_LBBJ MASTER LAyOUT 9/8/13 8:08 PM Page 21

POLITICALWIRE September 10-23, 2013

Long Beach Business Journal 21

Long Beach 2014 Election News

In 2009, Roberto U. had announced he would run against Johnson to replace his wife on the city council. He then backed out and she decided to pick up the baton and run as a write-in candidate. Johnson won easily. The only other candidate to announce for the 7th District seat is Larry King.

(Continued From Page 1)

date. “While for now I’m going to stay out of the race and not endorse anyone – I will leave that option open down the road,” Foster said during an interview last week at the Business Journal office. He did stress that “the public needs to be very vigilant with who they choose as their next mayor. I think people have to have confidence in someone with a track record of fiscal discipline, someone who understands the municipal finance system, who has the strength of character to stand up to the multitude of interests out there . . .” (See interview, Section B of this edition.) The most recent rumor was that if Bonnie Lowenthal runs for mayor, Suja Lowenthal (yeah, we know, that’s a lotta people with the same name in one story, so we’re going to use L for Lowenthal) and Doug Otto, both mayoral candidates, would drop out of the race. Bonnie L. announced last week she’s in. Reached by phone, both Otto and Suja L. laughed it off when asked if they were dropping out. Both reaffirmed that they’re in to win. We surmise that someone very close to Bonnie L. started that one – but we don’t want to start any rumors. In other election news, 7th District Councilman James Johnson, after banking more than $70,000 for his reelection bid to a second term, decided instead to run for city attorney. But hey, why not? After all, the city attorney’s job pays $252,565 as of August 1, while a councilmember is somewhere in the $30,000 range. With Johnson trying to move up, that opened the door for Roberto Uranga to see if he could be the second Uranga to serve as the 7th District’s councilperson. Urangas, Lowenthals and remember the Kells! Ernie and Jackie – is there something in the Long Beach water? Real estate executive Jack Rosenberg kept waiting for a “big name” to announce a run for the open seat in the 3rd District. No one surfaced, so he figured, ‘What the heck, I’ll do it.’ Johnson’s shift adds to what is already going to be the largest turnover of local elected officials in the city’s history. There will be new councilmembers in the 1st, 3rd, 5th, 7th and 9th Districts. And 4th District Councilmember Patrick O’Donnell is the favorite to win the assembly race to replace Bonnie L. If Suja L. wins the mayoral race, that will make seven new councilmembers in one year. There should be competitive races in most districts, with the exception of the 9th, where the only announced candidate is Rex Richardson, the current chief of staff to District Councilman Steven Neal, who is giving up his seat to run for the 64th Assembly District. In a nutshell, six of nine sitting councilmembers are running for higher office: Garcia and Suja L. for mayor, O’Donnell for assembly, the 5th District’s Gerrie Schipske, a mayoral candidate, Johnson for city attorney and Neal for assembly. Expect a lot of outside money to be

Jack Rosenberg Rosenberg has lived in the 3rd District for more than 20 years and has been active in a number of local organizations and civic groups, including: Long Beach Rotary, Operation Jump Start-Food For Kids Program, ProVisors and the Century Club. He has served on the Long Beach Community Development Advisory Commission and the Long Beach Golf Commission. He is a real estate executive at Cresa Orange County and is the Los Angeles Board President of the National Association for Industrial and Office Parks. Two other candidates have filed for the 3rd District: Daniel Haro and Martha Flores Gibson, who two years ago happened to go up against Bonnie L. in the assembly race.

Otto Picks Up Key Endorsements

Bonnie Lowenthal, a former councilmember for the City of Long Beach and the current representative for the California 70th Assembly District, officially announced on September 5 she is running for mayor of Long Beach. Among those she will running against is her former daughter-in-law, 2nd District Councilwoman Suja Lowenthal, making an already interesting race that much more intriguing. (Photograph by the Business Journal’s Thomas McConville)

flowing into Long Beach during the April primary, espeically from union groups.

Bonnie L. Assemblymember Bonnie L. held a news conference September 5 to make her mayoral run official. In her remarks to friends and supporters, she came up with a new slogan: “Jobs, Jobs, Jobs.” That conflicts with her votes in the state assembly to eliminate redevelopment (RDA) and enterprise zones, both job-creating programs and both strongly supported by Long Beach elected officials and businesspeople. According to the former California Redevelopment Agency, at least 4,000 direct jobs were lost when RDAs ceased. We are anxious hear about her ideas to add jobs locally. At her new conference, Bonnie L. said she’s running for mayor “because my heart is with this city.” She said her vision for Long Beach focuses on “public safety, safe neighborhoods, jobs, better schools, infrastructure and together I know we can achieve that.” It will be interesting to see the soft-spoken Bonnie L. in a debate up against the likes of mayoral candidate Damon Dunn, who is a polished speaker, quick on his feet and a fast learner about local issues.

James Johnson Johnson filed in January for his reelection bid to the 7th District. It’s curious that nine months later he would do an about face.

“I have had the opportunity to work as a litigator at California’s largest law firm, taught law at CSULB, led the effort to revise our City Charter, and served as assistant city auditor, in addition to my experience as an elected leader,” Johnson explained in a press release last week. “I believe I have the experience, education, and proven leadership to be the strong leader that Long Beach deserves as its next city attorney.” Johnson faces Charles Parkin, who was deputy city attorney under then-City Attorney Bob Shannon. Following Shannon’s retirement on July 1, the city council named Parkin acting city attorney. Parkin has significantly more experience in the legal profession than Johnson and a deep understanding of the city attorney’s office having been there since 1995. But this is an election, so anything can happen.

Roberto Uranga Uranga currently serves as a member of the Long Beach City College Board of Trustees. His wife, Tonia Reyes Uranga, served two terms as the 7th District’s city council representative. She is currently running for the 70th Assembly District seat held by Bonnie L. He was a longtime city employee, most recently serving as administrative officer for the city’s health and human services department. He was first elected a trustee to the college board in 2000.

Otto has quickly amassed an impressive list of endorsements – Republicans and Democrats – in his run for mayor. After previously picking up a key supporter in L.A. County Supervisor Don Knabe, he more recently has been endorsed by former Long Beach city managers James Hankla and Henry Taboada, former city councilmembers Renee Simon, Les Robbins, Val Lerch and Rob Webb, former fire chief Rick DuRee and former superintendent/president of Long Beach City College, Jan Kehoe, to name a few. As of early September, Otto reports nearly 200 endorsements. “Over my many years of service to Long Beach, I have made a personal commitment to do everything I can to make this city a livable, thriving community for the families and businesses that call Long Beach home,” Otto said in a prepared statement. “I am honored and humbled to have the support of so many trusted community leaders and friends, and to know that so many others are with me on a path to cooperative leadership. I believe together we can make a difference.”

A Pot(full) Of Votes Suja L. recognizes its going to be a tough race for mayor, especially with two Lowenthals on the ballot, so getting a edge is important. A handful of votes could swing the election. At tonight’s city council meeting, she be making her first move. She is proposing that her colleagues place a medical marijuana measure on the same ballot as the mayoral primary, April 8 (see story on Page 10.) If she is successful (she needs five votes) the measure will no doubt bring out voters who either never or rarely vote, but who would jump at the chance to do so to get the item passed. Now which mayoral candidate do you suppose will be the beneficiary of what could be thousands of “new” votes? Will mayoral hopefuls and current councilmembers Robert Garcia and Gerrie Schipske support Suja L.’s effort? ■

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BIZ QUIZ 22 Long Beach Business Journal

193 Enter Last Issue’s Universities And Their Home State Biz Quiz Entrants Who Indicated A Business Affiliation Donna Adle, J&L Jewelry Vazgen Arzoomanian, All Counties Courier Jimmy Askew, Northrop Grumman Ship Systems Frank Avila, Sears Tracy Balin, Heather R. Chambers, CPA D.J. Barton, Barton Machine Works Shirley Barton, Barton Machine Works Janis Bendle, Harbor Dental Society Carl Boaz, Huntington Ingalls Elaine Boaz, Naval Weapons Systems Ali Bonn, Stix Restaurants Mike Boyle, Long Beach Cycle Parts & Sales Marilyn Brandt, J&L Jewelry Lisa Brant, Long Beach Temp Services Sharon Brouwer, General Electric Denny Brown, Boeing Cathy Burrus, Coldwell Banker Beachside, Realtors Carol Caster, Computer Services

September 10-23, 2013 Joanne Castles, BP Corporation Pat Castles, BP Corporation Ed Castro, CSULB Heather Chambers, Heather R. Chambers, CPA Larry Chandler, Chandler’s Limited Cheryl Christy, Winnebago Victoria Cleaveland, CSULB Victoria Cook, Karl Ketterer, CPA Cathy Culling, Acumen Group Debbie Davies, City of Long Beach Melissa del Rosario, Workers’ Comp Appeals Board Diana Docton, Southland Motor Car Dealers Association Dave Eastman, Eastman Communications Joan Eddy, Blair Real Estate Penny Ferguson, Santa Fe Importers Renee Florsheim, Loyola Marymount University Dottie Franklin, DG Marine Services Taillor Franklin, DG Marine Services Michelle Gath, Don Gath Insurance Agency Terry Gill, J&L Jewelry Lalia Gonzales, Belen Neil Goodale, Maxim Crane Works Miles Green, Big 5 Lauren Gregory, J&L Jewelry Oscar Haaland, Haaland Automotive Carol Hecker, McDonald’s Brigid Hildeburn, Living Design John Hildeburn, Hasco Sporting Equip. Dave Hill, British Aerospace Engineering Kathleen Hooper, El Rancho Unified School District Julia Hornby, Sun Engineering Jackie Isenhower, Long Beach Unified School District

Dan Kachel, National Construction Rentals Karl Ketterer, Karl Ketterer, CPA Lon Kettering, Cal Cartage Charlotte Killebrew, Long Beach Dispatching Services Debra Kimutis, Long Beach Memorial Janis Krantz, J&L Jewelry Josh Krantz, J&L Jewelry Adrian Lee, Moffatt & Nichol Harold Lewis, CGI Karen Lucas, Lucas Property Management Pamela Lynn, USAir Molly Mahoney, J&L Jewelry Anne Mayer, Karl Ketterer, CPA Joyce McNary, Reed Express Ruth Medina, Petco Maureen Medrano, Reveree Brian Melrose, Princess Cruises Linda Melrose, Princess Cruises Fritz Milas, Backstop Sports Ali Miller, Petco George Miller, Environmenal Roofing Gigi Miller, Princess Industries Kobi Miller, Petco “Spike” Miller, Black Angus Kim Monson, Glendale Properties Bebe Morgan, Wells Fargo Lulu Morgan, PetsMart Tammy Morgan, Western Exterminator Veronica Morgan, Costco Barney Musselman, Heartwell Chiropractic Ed Nauman, Infor Software Gloria O’Connor, J&L Jewelry Melody O’Keefe, Heather R. Chambers, CPA Larry Partesotti, British Aerospace Engineering Ricardo Penny, Maritime Welding

Answers To Last Issue’s Universities And Their Home State Biz Quiz 1. Auburn Alabama 2. Bowling Green Ohio 3. Butler Indiana 4. Clemson South Carolina 5. Dartmouth New Hampshire 6. Duke North Carolina 7. Kent State Ohio 8. Lehigh Pennsylvania 9. Northwestern Illinois 10. Rutgers New Jersey 11. Tulane Louisiana 12. Villanova Pennsylvania 13. Wake Forest North Carolina 14. Weber State Utah 15. Yale Connecticut Tiebreaker What do the Texas A&M, Utah State and UC Davis athletic teams have in common? They share the same name as a mascot: Aggies.

George Pizzi, General Electric Michael Powers, Heather R. Chambers, CPA Michelle Qu, Panda Express Jess Reed, Reed Express John Reed, Yamaha Lois Reed, Petra Pacific Rosemary Reed, Santa Fe Importers Scott Reed, Kaiser Permanente Stacy Reed, Ruby’s Diner Lynette Rink, RAM Engineering Will Rink, RAM Engineering

1_LBBJ_Sept10_SectionA_LBBJ MASTER LAyOUT 9/8/13 8:08 PM Page 23

BIZ QUIZ September 10-23, 2013 Lupe Rodriguez, Piola Construction Co. Ruby Rodriguez, Jenny Craig Santiago Rodriguez, Yellow Freight Chris Ronan, British Aerospace Engineering Emma Sanchez, Yum Yum Donuts Lalo Sanchez, Galkos Cheryl Smith, J&L Jewelry Linda Spano, L.B. Unified School District Brian Super, G&C Equipment Tom Taylor, Tom Taylor & Associates Terri Thompson, J&L Jewelry Clara Tucker, ABS Americas John Tusak, Avalon Casino Theatre Israel Valverde, Maritime Welding Services Hank Vartanian, Sam’s Club Helen Vartanian, See’s Candies Matt Warner, Sir Mix Concrete Products Mike Warner, HB Arts & Crafts Norma Warren, CSU Chancellor’s Office Dean Weilacher, CSUN Kimberly Williams, LB Police Department Kesaraporn Yaemrugsa, Red Pearl Massage

Biz Quiz Winners NEIL GOODALE MAxIM CRANE WORkS Wins $40 towards lunch or dinner at a Business Journal restaurant advertiser. You pick, bring us the receipt and we pay up to $40. Must be used by October 15, 2013. Call LBBJ for a list of restaurants.

JIMMY ASKEW NORTHROP GRUMMAN SHIP SySTEMS Wins two tickets to a performance by International City Theatre.

VICTORIA CLEAVELAND CSULB Wins two tickets to a Long Beach Symphony Orchestra performance during its 2013 season.

DEAN WEILACHER CSUN Wins two tickets to a 2013 performance at the Long Beach Playhouse

FLO DARTT RETIRED/L.B. PUBLIC LIBRARy Wins two tickets to a 2013 season production by Musical Theatre West at the Carpenter Performing Arts Center.

JEAN DONNELLY RETIRED/LONGSHOREMAN Wins a $25 Gift Certificate to Buono’s Pizzeria, donated by Buono’s.

TRACY BALIN HEATHER R. CHAMBERS, CPA Wins a pair of tickets to the Aquarium of the Pacific valued at $50 and donated by the Aquarium.

VERONICA MORGAN COSTCO Wins 2 Medal Winning bottles of wine from the 2011 L.B. Grand Cru International Wine Competition, donated courtesy of Legal Aid Foundation of Los Angeles, dba Long Beach Grand Cru. Must be 21 years of age or older.

To Claim Your Prize Please Call the Business Journal at 562/988-1222

by September 26, 2013 Ask for Heather (M-F 8:30-5:30)

Long Beach Business Journal 23

Entrants Who Did Not Indicate An Employer, Are Self-employed, Retired, Or Are Students Maria E. Alarcon, Retired/City of L.B. Gary Albin, Retired/U.S. Marine Corps Kirsten Arkus, Student Dorothy Barton, Retired/Barton Machine Works Teddy Baxter, Retired/Litton Industries Ray Boland, Retired/Golf Pro-Instructor Anna Bonn, Composer-Film Industry Jim Brown, Retired/So. Cal. Gas Co. Pat Brown, Retired/Wm Orr School Frank Burger, Retired/U.S. Navy Mary Jane Carey, Retired Elizabeth Chan, Caregiver Donna Colbert, Retired/Los Angeles Unified Doris Colyer, Retired/Aviation Industry W.R. Czaban, Retired Flo Dartt, Retired/L.B. Public Library Mike Davis Jean Donnelly, Retired/Longshoreman Katie Earle-Mahoney, Student Rachel Ferguson, Retired/TWA Ron Ferguson, Retired/Woolworth Doug Fleischer, Retired Pat Fleischer, Retired Bernard Frydman, Retired/L.B.P.D. Vonda Frydman, Retired/Dr. M. DeLuca Dave Fucito, Retired/U.S. Navy Dennis Gill, Retired/Aquarium of the Pacific Janis Graham, Retired/Litton Industries Carol Haaland, Retired/Teacher Michael Hanna, Retired/U.S. Postal Service Nancy Hayden, Retired Bill Kahrs, Retired/Boeing Deborah Kailey, Retired/Social Worker Rich Killebrew, Retired/L.B. Police Dept. Jeanie B. Knorfler, Retired Jodie Kresl Brian Maginnis C.J. Miller, Retired/CSULB Len Miller, Retired/Northrop Grumman Carol Mitchell, Retired Bill Montgomery, Retired/LBFD Manuel Morgan, Retired/Knudsen Creamery Lew Nelson, Retired/Manner Plastic Materials Robert Pate, Retired/State of California Sofia Penny, Leisure World Caregiver John Phibbs Mathhew Phibbs, Student Guy Pullen, Artist Marilyn Reynold, Retired/U.S. Forest Service Vicky Ryan Lily Sanchez, Retired/Nurse Barbara Saposnek Lloyd Saposnek George Schwall, Retired/Northrop Grumman Virginia Schwall, Retired/A.M. South Bank Rene Serrano, Caregiver Dan Sewell, Retired Joanne Sheppard, Retired/B.U.S.D. John Sheppard, Retired/Boeing Donald Sipes, Retired Theresia Sipes, Retired Matthew Spaleta, Retired/Southwest Marine Ron Stevens, Salesman Brett Tarvis, Student Marilyn Tarvis Steve Tarvis Lori Taylor, Retired Carolee Townsend, Retired/Vyvx Richard L. Trotter, Retired/CUSD Ben Trucks, Retired/L.A. County Fire Dept. Rosa Valverde, Leisure World Caregiver Jim Welsh, Retired/Northrop Grumman Chuck Wittlinger, Retired Ralph Wolf, Retired/Disney

Biz Quiz Entry Form – SEPt 10, 2013, Biz quiz

Entry DEADLinE: must Be received no Later than Sept. 18th

It’s A Fruity Biz Quiz How often does this happen? You’re out for breakfast and you must choose one or more “side” items to go with your order. House potatoes, bacon, sausage, fruit cup, etc., and you go with – the bacon! Admit it. You know you should go with the fruit, but how can you pass up bacon? You justify it by telling yourself, “next time it’s the fruit cup.” Yeah, right. We all know fruit is good for us. The U.S. Department of Agriculture “recommends that you eat about two cups of fruit a day as a way to help meet your nutritional requirements. In this quiz, we’ve listed 5 different types of fruit. The name of fruit contains two words. You have to determine the first word (and we gave you hints). Then take the 6 letters in the squared boxes and unscramble them to get the answer.



(Hints: Presidents; “Mission Accomplished”)

2. (Hints: Brown, Deukmejian, Wilson)



3. (Hints: Gobi, Sahara) 4. (Hints: Small Tree, Evergreen Shrub)


5. (Hints: Asian, Marbles)


Your Six Letters: Unjumble them to get the answer Hint: This should put the squeeze on them Your Answer: Please PRINT Your Name Clearly: Employer/Name of Business:

or (check appropriate): Self-employed (

) Student (


Other (



Retired From:_______________________________

Save Postage. Fax your entry to: 562/988-1239 Win $40 towards your lunch or dinner at one of the following Business Journal/Destinations Magazine restaurant advertisers. You pick the restaurant and we pay up to $40 of your bill. Select from the following: Big E Pizza; Buono’s Pizzeria; Cafe Bixby in Bixby Knolls; Bubba Gumps at Rainbow Harbor; DiPiazza at PCH/Anaheim; George’s Greek Cafe (4 locations); Kafe Neo at 4th & Temple; Naples Rib on 2nd Street; Claires at the Museum; Parkers’ Lighthouse and Tequila Jack’s at Shoreline Village; Ports O’Call restaurant in San Pedro. Courtesy of the Business Journal. Win two tickets to a 2013 performance at the Long Beach Playhouse, valued at $44. Win two tickets to a Long Beach Symphony Orchestra performance during its 2013 season. Win a $25 gift certificate to Buono’s Pizzeria, with three locations to serve you: 2 in Long Beach and 1 in San Pedro

Win two tickets to any Musical Theatre West 2013 season production at the Carpenter Performing Arts Center. Tickets valued at $60.

Win two tickets to any 2013 performance presented by International City Theatre. Tickets valued at $88. Win two tickets to the Aquarium of the Pacific, valued at $24.95 each.

Win 2 Medal Winning bottles of wine from the 2011 Long Beach Grand Cru International Wine Competition. Must be 21 years of age or older to win this prize.

Send your entry so it ARRIVES no later than September 18th to: BIZ QUIZ, Long Beach Business Journal, 2599 E. 28th St., #212, Signal Hill, CA 90755.

ONE ENTRY PER PERSON Winners will be drawn from correct entries

1_LBBJ_Sept10_SectionA_LBBJ MASTER LAyOUT 9/8/13 8:08 PM Page 24

PERSPECTIVE 24 Long Beach Business Journal

September 10-23, 2013

Life Is Too Short To Be On A Waiting List



remember December 2011 like it was yesterday. It was quite a month, and the events made an impact on my psyche. There were two notable deaths. Kim Jong II. He was the dictator/god of North Korea, a man from the East. Christopher Hitchens was the iconic leader of the emerging atheist class of the West. Neither one died because they were penniless. They died because they ran out of time. They both publically declared that belief in God was nothing more than second rate superstition. Unlike that great theologian, Jay Leno, who recently said, “With hurricanes, tornados, fires out of control, mud slides, flooding, severe thunderstorms tearing up the country from one end to another, and with the threat of bird flu and terrorist attacks,

are we sure this is a good time to take God out of the Pledge of Allegiance?” The North Korean dictator was an expert in information “black out”. Kim Jong II, dead at 69, was noted for his oppression of religious faith. He lost his power to command, as well as his position to control. Christopher Hitchens, dead at 62, was the eloquent spokesman and debater for the nonexistence of God. He wanted to make sure that no one would suspect he would ever change his atheistic mindset. He said that if someone heard him changing his mind on his deathbed it would simply be the ranting of a “half-demented” man racked by pain and confused with drugs. Nice. I suggest to you that our great religious leaders and gurus cast a mighty shadow over those two deaths, and project light over billions of lives. No matter what your spiritual persuasion, their words are reminders of the value of life. Are you turning those minutes you are being given into moments? Life is a contrast between minutes and moments. Minutes you lose. Moments you initiate. You don’t make minutes. They come to you and you use them in the way you

choose. They are taken from us. Moments don’t come to you like minutes. They must be made, and nobody is better at that than you. The problem is that we often don’t see this until the minutes are running low. In her book, The Top Five Regrets Of The Dying, Bronnie Ware’s life was transformed by her years of working for and tending to the needs of those who had gone home to die. She was with them for the last 3 to 12 weeks of their lives. She saw phenomenal changes, along with the expected emotions. When questioned about their regrets, common themes began to surface. Here are the top five. 1. I wish I would have had the courage to live a life true to myself, not the life others expected of me. This was the most common regret of all. When people realize that their life is almost over and look back on it, it is easy to see how many dreams have gone unfulfilled. Most people had not honored their dreams and had to die knowing that it was due to choices they had made, or not made. Make moments. When you lose your health, it is too late. Note to self: health brings a freedom very few

realize, until they no longer have it. 2. I wish I didn’t work so hard. This came from every male patient that she nursed. They missed their children’s youth and their partner’s companionship. By simplifying your lifestyle and making conscious choices along the way, it is possible to not need the income that you think you do. By creating more space in your life, you become happier and more open to new opportunities, ones more suited to your new lifestyle. 3. I wish I would have had the courage to express my feelings. Suppressed feelings results in settling for a mediocre existence. Many developed illnesses related to the bitterness and resentment they carried as a result. We cannot control the reactions of others. However, speaking honestly raises the relationship to a whole new and healthier level. Either that or it releases the unhealthy relationship from your life. Either way, you win. 4. I wish I had stayed in touch with my friends. Many had become so caught up in their own lives that they had let golden friendships slip by over the

years. There were many deep regrets about not giving friendships the time and effort that they deserved. Everyone misses their friends when they are dying. It all comes down to love and relationships in the end. 5. I wish that I had let myself be happier. This is a surprisingly common one. Many did not realize until the end that happiness is a choice. They had stayed stuck in old patterns and habits. We are prone to the ‘comfort’ of familiarity. Do not let it overflow into your emotions. How wonderful to be able to let go and smile, long before you are dying. Life is a choice. It is OUR life. We can not create minutes, but we can create moments. (Mick Ukleja is a consultant, author of several books including co-author of Managing the Millennials: Discover the Core Competencies for Managing Today’s Workforce, coach, keynote speaker and president of LeadershipTraq, a leadership consulting firm. His clients have included Fortune 500 corporations, and non-profit organizations. Check his weekly blog at

Knowing Too Much About One’s Internet Customers

■ BUSINESS LAW By Tom Ramsey revious installments of this column have reviewed litigation based upon customers’ complaints that retailers were seeking, and obtaining, too much personal information about them when checking out. In those cases, the courts have held that ZIP codes and telephone numbers constitute personal identification information and cannot be solicited by retailers. By seeking or requiring such personal information, the retailers violated the provisions of the Song-Beverly Credit Card Act of 1971, which governs and issuance and use of credit cards. These cases involved the likes of Williams Sonoma Stores, Inc., Linens ‘N Things, Inc and Brookstone Company, Inc. They were centered about purchases of physical products at traditional “brick-and-mortar” businesses. The newest entry in the line of personal identification information cases involves sales by Apple, Inc., over the internet. David Krescent sued Apple because he was “requested or required” to provide Apple with his address and telephone number as a condition of accepting his credit card as payment for a purchase from Apple through its iTunes store located on its internet web site. David asserted that a customer’s telephone number or address is not necessary for any spe-


cial purpose incidental and related to the individual credit card transaction, such as shipping or delivery because neither exists: The delivery is by download. The basis of David’s claim was the 1971 Act. In part, the 1971 Act prohibits the following: Requesting or requiring, as a condition to accepting a credit card as payment, the cardholder to write any personal identification information upon the credit card transaction form or otherwise; utilizing a credit card form which contains preprinted spaces specifically designed for filling in any personal identification information of the cardholder. The new element is the purchase of an electronically downloadable product on line. Do the prohibitions set forth in the Song Beverly Credit Card Act of 1971 apply here? Of course, in 1971 such transactions were nonexistent. In response, Apple filed and served a demurrer to the complaint. By such a move, Apple asserted that even if everything David alleged were to be true, the 1971 Act doesn’t apply to internet transactions. David claimed that the 1971 Act was applicable to all transactions. The trial court sided with David and against Apple, as did the California Court of Appeal. The matter ended up in the California Supreme Court. The Supremes first explained the 1971 Act’s general qualification to its requirements: The 1971 Act “does not prohibit any person, firm, partnership, association, or corporation from requiring the cardholder, as a condition to accepting the credit card as payment in full or part for goods or services, to provide reasonable forms of positive identifica-

tion, which may include a driver’s license or a California state identification card, or where one of these is not available, another form of photo identification.” The Supreme Court observed that the language of the 1975 Act confirms that the legislature did not contemplate commercial transactions conducted on the then nonexistent Internet. “[I]n construing statutes that predate their possible applicability to new technology, courts have not relied on wooden construction of their terms. Fidelity to legislative intent does not make it impossible to apply legal text to technologies that did not exist when the text was created. Drafters of every era know that technological advances will proceed apace and that the rules they create will one day apply to all sorts of circumstance that they could not possibly envision.” As will become apparent, this language was not indicative of the court’s ruling. The Supreme Court then outlined the background of various statutes in light of technological changes

subsequent to when such statutes were written and response of the legislature to some of them. For example, in 2011 the restrictions against obtaining zip codes were made inapplicable by the legislature to “pay at the pump” transactions when an automated cashier at the pump requires and uses zip code information solely for the prevention of fraud, theft or identity theft. Rather than hope that the 1971 Act will somehow apply to the new technology without any change in its provisions, the legislature amended it to specifically cover technological advances. The court then concluded, “We cast no doubt on [David’s] claim that protecting consumer privacy in online transactions is an important policy goal, nor do we suggest that containing fraud is as important or more important than protecting preface. We express no view on this significant issue of public policy. Our role is to determine what the Legislature intended by the statute it enacted. Here the statutory scheme, considered as a whole, reveals that

the Legislature intended to safeguard consumer privacy while also protecting retailers and consumers against fraud. This accommodation of interests struck by the Legislature would not be achieved if [the statute in question] were read to apply to online transactions involving electronically downloadable products. Because we cannot make a square peg fit a round hole, we must conclude that online transaction involving electronically downloadable products fall outside the coverage of the statute….In light of our holding today, the Legislature may wish to revisit the issue of consumer privacy and fraud prevention in online credit card transactions.” The holding of the Court of Appeal was reversed. This should result in a judgment in favor of Apple. The case is entitled Apple, Inc., v. The Superior Court of Los Angeles County. It was decided in 2013. (Tom Ramsey is a Long Beach attorney who has specialized in business law for more than 40 years. He may be reached at

Elections 2014: Former Elected Officials To Have A Say What do John Calhoun, Rae Gabelich, Jeff kellogg and Les Robbins have in common? They are all former Long Beach elected officials. The Business Journal is bringing the four of them together this week to discuss the 2014 city elections. Each will be asked, specifically, what advice do they have for the candidates? It should be an interesting, and entertaining, discussion. The story will appear in the September 24 edition of the Business Journal. • John Calhoun, former city attorney, 1985-1998 • Rae Gabelich, former city councilmember, 2004-2012 • Jeff kellogg, former city councilmember, 1988-2000 • Les Robbins, former city councilmember, 1988-1998

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PERSPECTIVE September 10-23, 2013

Long Beach Business Journal 25

Affordability Taking A Hit

■ REALTY VIEWS By Terry Ross he increased housing activity spurred mainly by investors over the past year has had the fairly predictable outcome of stabilizing and even raising prices, and at the same time putting a dent in the affordability for the average consumer. Amid reports that investors are being put off by the increasingly higher prices that they must pay to purchase homes to flip and resell or to turn into rental properties, perhaps a more serious issue is that for the average consumer the cost of purchasing a home is going up because of higher prices and higher mortgage rates, while the income to pay for these increases is rather stagnant. This is going to be an increasing dilemma moving forward. One of the awkward nuances of the current increase in prices is that much of it is not driven by true consumer demand but by the investor market. If investors drive prices beyond a sustainable affordability factor, the real consumer buyer will be frozen out of the market in many cases and a slowdown in sales and appreciation will follow. According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI), 69.3 percent of new and existing homes sold


between the beginning of April and end of June were affordable to families earning the U.S. median income of $64,400. This is down from the 73.7 percent of homes sold that were affordable to median-income earners in the first quarter, and is the first time that the standard has fallen below 70 percent since late 2008. “Housing affordability has been hovering near historic highs for the past several years, largely due to exceptionally favorable mortgage rates and low prices during the recession,” said NAHB Chairman Rick Judson, a homebuilder from Charlotte. “Now that markets across the country are recovering, home values are strengthening at the same time that the cost of building homes is rising due to tightened supplies of building materials, developable lots and labor.” NAHB Economist David Crowe points out that, along with median price increases, government actions might also make housing less affordable to the average family. “Rising home prices signal the improving health in housing markets, and the median price of all new and existing U.S. homes sold in this year’s second quarter, at $202,000, was well ahead of the second quarter 2012 median price of $185,000,” Crowe added. “Together with rising mortgage rates, this contributed to affordability slipping to the lowest level in more than four years. Such movement would be less concerning were it not for ongoing discussions regarding potential changes to the mortgage interest deduction and federal support for the secondary mortgage market, both of which play enormous roles in keeping homeownership affordable.”

The methodology of the NAHB/Wells Fargo Housing Opportunity Index is to take a percentage of homes sold in a given area that are affordable to families earning the area’s median income during a specific quarter. Core Logic, a data and analytics company, collects prices of new and existing homes sold from actual court records. Mortgage financing conditions incorporate interest rates on fixed and adjustable-rate loans reported by the Federal Housing Finance Agency. Given these methods, OgdenClearfield, Utah, was rated the nation’s most affordable major housing market for a fourth consecutive quarter while a newcomer – UticaRome, New York – was the most affordable smaller market in the latest survey. Of the larger metro areas, 92.8 percent of all new and existing homes sold in this year’s second quarter were affordable to families earning the area’s median income of $70,800. This was slightly lower than the 93.4 percent of homes sold that were affordable to median income-earners in the previous quarter. Meanwhile, just over 97 percent of new and existing homes sold in Utica-Rome in the same period were affordable to families earning that area’s median income of $63,800. Other major U.S. housing markets at the top of the affordability chart in the second quarter included, in descending order, IndianapolisCarmel, Indiana; Harrisburg-Carlisle, Pennsylvania; Youngstown-WarrenBoardman, Ohio-Pennsylvania; and Buffalo-Niagara Falls. Smaller markets joining Utica at the top of the affordability chart included Kokomo, Indiana; Cumberland,

Great Leaders Always Have A Plan B

■ BUSINESS AS USUAL By Stuart Friedman n Thursday, just shy of 2 p.m., the VP of operations, Pat, walked into a meeting room. Several colleagues were already inside waiting. One observed that Pat was pale and his forehead was beaded with perspiration. He asked if Pat was feeling well. “I’m just a little overheated,” Pat replied. “I’m fine.” As the meeting commenced, Pat’s appearance grew worse. He became red in the face and was sweating profusely. This time when asked if he was feeling well, Pat confessed he was not. “You should go to the hospital, pronto!” John, the company president, declared. “I’ll even drive you, or we can call an ambulance.” Pat shook his head, declining the offer. He would be okay to drive himself home, he said. “I’ll get some rest and if I don’t feel better by morning, I’ll either have my wife


take me to the hospital or call an ambulance.” John is relatively new to the organization, having served only two years, but under his guidance, the company has experienced its greatest growth in 12 years. He views Pat as critical to their continued success. Pat is a 30-year employee of the privately held, familyowned business. He has much of the know-how necessary to run operations: purchasing/procurement, manufacturing, finishing, shipping/receiving, etc. His brain is a store of information, especially historical methods for solving complex problems that occur once every five or six years. Unfortunately, Pat has not been a good mentor or teacher to others in the organization over the years, nor has he been a very good supervisor. Typically, people go to him for help and he tells them “Don't worry, I'll take care of it,” which he does. The only problem is, he never teaches others how to solve the problems themselves. John has recognized this shortcoming and is planning to reorganize operations and put Pat in charge of special projects. He has hired two manager-level individuals to take over in operations and has all but guaranteed Pat a job until retirement so Pat won’t feel threatened or that he is being replaced before his time. In

return, John has asked Pat to document much of what he does day to day and participate in succession planning as Pat's responsibilities diminish over time. But Pat is a wordclass procrastinator. On one hand, until John and the new hires get up to speed in operations, he needs Pat; but, on the other, Pat is from the “command and demand” era of managing, which tends to foster distrust and angst among the staff. All in all, Pat appears to have positioned himself well to be "needed" by John and everyone involved with operations. He has made himself indispensable and created job security until he decides to retire. Good for Pat, but shame on the organization! Sadly, come Friday morning, Pat's wife went to wake her husband. He did not respond. He lay there dead from a heart attack in his sleep. There goes the succession plan . . . Do any of the following apply to your organization? 1. Do you have employees who refuse to share pertinent information with others? 2. Do you have employees who hoard information and seem to use it only for their advancement? 3. Do your employees hold you hostage because of what they know or what they can do?

Maryland-West Virginia; VinelandMillville-Bridgeton, New Jersey; and Bay City, Michigan. For a third consecutive quarter, San Francisco-San Mateo-Redwood City held the lowest spot among major markets on the affordability chart. In that area, just 19.3 percent of homes sold in the second quarter were affordable to families earning the area’s median income of $101,200. Other major metros at the bottom of the affordability chart included Los Angeles-Long Beach-Glendale; Santa Ana-Anaheim-Irvine; New YorkWhite Plains-Wayne, New York-New Jersey; and San Jose-Sunnyvale-Santa Clara; in descending order. All of the least affordable small housing markets were in California in the second quarter. At the very bottom of the affordability chart was Santa Cruz-Watsonville, where 30 percent of all new and existing homes sold were affordable to families earning the area’s median income of $73,800. Other small markets at the lowest end of the affordability scale included San Luis Obispo-Paso Robles, Salinas, Napa and Santa Rosa-Petaluma. If this trend continues, the danger is that, if investors seriously cut back on their purchases of homes, they will then have driven prices artificially high and have created a price level that the average consumer will not be able to afford, which could spin the market back to a heavily favored buyer’s market with declining prices once again. (Terry Ross, the broker-owner of TR Properties, will answer any questions about today’s real estate market. E-mail questions to Realty Views at or call 562/498-1049.) 4. Are you stressed every time you think of these team members or have to work with them? If you answered yes to any of these questions, it’s time to abandon business as usual and consider the following: 1. Ask your employees to document what they do. • Be specific about you want documented and when you want it. • Have the individuals who would use the information review it for completeness, correctness, and clarity. 2. Have your employees design a program to train appropriate team members, colleagues, peers, etc. 3. Create incentives and consequences to get the responses you want. 4. If you fail to get the desired responses, stop hoping these employees will actually help with succession planning. Like it or not, you cannot control other people, and, should someone quit tomorrow – or die, or be asked to leave – there is little you can do other than to have a “Plan B” in place. You’re the leader. It’s your choice! (Stuart Friedman is president of Progressive Management Associates. He helps his clients get their companies “Unstuck!” He guides organizations through cultural shifts by getting people aligned to strategic outcomes. He is a consultant, speaker, coach, and author. He can be reached at

Vol. XXVI No. 18 September 10-23, 2013 PUBLISHER George Economides VICE PRESIDENT SALES & MARKETING Martha Rangel SALES & MARKETING ASSISTANT Heather Dann GRAPHICS/PRE-PRESS Stephanie Hernandez DISTRIBUTION Conrad Riley EDITORIAL DEPARTMENT ASSISTANT EDITOR Tiffany Rider STAFF WRITER Samantha Mehlinger PHOTOJOURNALIST Thomas McConville COPY EDITOR Pat Flynn The Long Beach Business Journal is a publication of South Coast Publishing, Inc., incorporated in the State of California in July 1985. It is published every other Tuesday (except between Christmas and mid-January) – 25 copies annually. The Business Journal premiered March 1987 as the Long Beach Airport Business Journal. Reproduction in whole or in part without written permission is strictly prohibited unless otherwise stated. Opinions expressed by perspective writers and guest columnists are their views and not necessarily those of the Business Journal. Press releases should be sent to the address shown below. South Coast Publishing also produces Destinations and the Employee Times magazines. Office South Coast Publishing, Inc. 2599 E. 28th Street, Suite 212 Signal Hill, CA 90755 Phone: 562/988-1222 Fax: 562/988-1239 Advertising and Editorial Deadlines Wednesday prior to publication date. Note: Press releases should be faxed or mailed. No follow up calls, please. For a copy of the 2013 advertising rate card and editorial calendar, please fax request to 562/988-1239. Include your name, company and address and a copy will be sent to you. Distribution: Minimum 25,000. Regular Office Hours Monday-Friday 8:30 a.m.-5:30 p.m. Business Journal Subscriptions Standard Bulk Rate: $26.00 1st Class: $70.00 (25 issues – 1 year)

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1_LBBJ_Sept10_SectionA_LBBJ MASTER LAyOUT 9/8/13 8:08 PM Page 26

IN THE NEWS 26 Long Beach Business Journal

September 10-23, 2013

The Village Bakery Opens Downtown, Celebration September 19 Kim Sanchez, pictured, opened The Village Bakery last month in the East Village neighborhood of Downtown Long Beach. Sanchez, who has worked in restaurant management and co-owned a catering company, lives in the area. One day she walked to the bakery at 401 E. 3rd St. she enjoyed visiting and found it had closed. “I thought to myself, ‘That’s too bad,’” Sanchez told the Business Journal. “By the time I walked back to my house, the thought was, ‘Maybe I should open a bakery there.’” Though she had a job lined up with a new restaurant opening in Malibu, Sanchez decided to pursue the idea. The Village Bakery offers handcrafted artisan baked goods, Panini sandwiches, gourmet coffee and specialty retail. Baked goods include muffins, biscuits, cookies, tarts, brownies, bars, cupcakes, quiches and more, with some gluten-free and vegan items. The company also offers pastry or sandwich trays for events and hosts in-bakery cupcake parties. Looking ahead, Sanchez said she would like to expand the sandwich menu to offer more lunch options, start jarring homemade jams and establish relationships in town to help transform the bakery into a mini market for “awesome products that are born and based in Long Beach.” The Village Bakery is open 8 a.m. to 4 p.m. Monday through Friday, and 9 a.m. to 2 p.m. on Saturday. Closed Sunday. Sanchez is hosting a grand opening celebration from 4-8 p.m. on September 19. For more information, call 562/628-BAKE (2253) or visit (Photograph by the Business Journal’s Thomas McConville)

Dream Inspired Design Supports Eco-Friendly Business In Long Beach Ana Belén Salatino, left, and Shelby Sanchez launched their Long Beach-based business, Dream Inspired Design, in May. The creative duo provides web services, branding, marketing and graphic design services for companies that they consider creative, visionary, eco-friendly and globally conscious. Clients include Long Beach businesses Steamed Organic Vegetarian Cuisine, Sacred Roots, Sol Kitchen and Yogalution Movement & Ayurveda. The company also offers eco-friendly printing on 100 percent tree-free paper, using instead agricultural waste such as banana, lemon, mango and coffee. According to, Sanchez focuses on business development and Internet marketing. She has nine years of consulting experience and a degree in marketing from the University of Madison-Wisconsin Business School. Salatino is a visual artist in a variety of media and processes, and holds a degree in fine arts from the University of California, Santa Barbara. For more information about Dream Inspired Design, call 562/506-6214 or email (Photograph by the Business Journal’s Thomas McConville)

Callaloo Caribbean Kitchen Is Limin’ In Long Beach

Pandor Artisan Boulangerie & Café Opens In Belmont Shore Raffi and Tiffany Septjian, owners of Pandor Artisan Boulangerie & Café, opened the authentic French bakery’s third location in July at 5327 E. 2nd St. in Belmont Shore. Pandor’s flagship location is in the South of France, but the company got its start in the United States with a location in Newport Beach. The name, according to the company website, “was inspired by the French words for golden bread, Pain d’Or, and celebrates the true art of French baking.” Its wholesale counterpart, TRT Bakery, introduced its artisan breads in Orange County in 2011. The new-to-Long-Beach bakery serves fresh baked breads and pastries, as well as coffee, tea, omelets, French toast, sandwiches, tartines (open-face sandwiches), paninis, salads, soups and quiches. The company also offers catering for parties and corporate events. Pandor is open from 6 a.m. to 10 p.m. seven days a week. For more information, call 562/856-7777 or visit Pictured, from left, are: Kaela Krohn, employee; Raffi Septjian, co-owner; and David Iskander, employee. (Photograph by the Business Journal’s Thomas McConville)

Hamid Latiff brings Caribbean cuisine to East Anaheim Street with the opening of his restaurant Callaloo Caribbean Kitchen. A native of the Caribbean, Latiff missed his home country enough to bring the food to Long Beach. He opened the restaurant at 4137 E. Anaheim St. in late March. “The food is a fusion of the Eastern and Indian, Creole as well as the Spanish influences in the Caribbean,” Latiff told the Business Journal “Trinidad, being the most southern island, is a melting pot of culture and nationalities.” Latiff’s parents were also born on the island. His maternal grandfather came from Persia and his paternal grandfather’s parents moved from India to Figi before making it to Trinidad. “I have friends who are Irish background, Lebanese background, Asian background, and we were all born in Trinidad,” he said. Callaloo Caribbean Kitchen offers stewed fish, curry beef, curry goat and stewed oxtail, as well as vegetarian options and a variety of specialty drinks and side dishes. More vegetarian options are being added soon, Latiff said, including an eggplant dish. The restaurant space also has a large banquet room where a wedding dinner was recently hosted. “It’s really chill here,” Latiff said. “It’s really relaxed. We say ‘limin’ in the Caribbean for hanging out, so that’s a term you’ll hear here a lot.” The kitchen is open from 11:30 a.m. to 9 p.m. Sunday through Thursday, and 11:30 a.m. to 10 p.m. Friday and Saturday. For more information, call 562/230-7530. (Photograph by the Business Journal’s Thomas McConville)

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IN THE NEWS September 10-23, 2013

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City Has Potential To Help Foster The Tech Economy In Long Beach ■ By STEVE KOCHAN Co-Founder and CEO,

T Mobül Home Medical Equipment Store Opens In Los Altos Frustrated with the fact that he could not find a broad selection of home medical equipment in a clean, friendly retail setting, Wayne Slavitt decided to open a business to fit his needs. Slavitt, president and CEO of Mobül, said in a statement that he was seeking home medical equipment for his mother and mother-in-law when he got the idea for the concept for his store. “The baby boomers are getting older and starting to need assistance,” he said. “There will be close to 79 million people 65 years or older in the next few years with 10,000 turning 65 every day for the next 19 years. There is a clear need for a store that provides multiple solutions in one place.” Mobül offers mobility and home safety equipment from walkers to lift chairs, rollators, scooters, bath safety equipment, canes, beds, ramps and other aids for the aging population’s daily living. The store, located at 2153 Bellflower Blvd., is open from 10 a.m. to 7 p.m. Monday through Friday, 10 a.m. to 4 p.m. Saturday and 10 a.m. to 2 p.m. Sunday. For more information, call 562/343-7333 or visit (Photograph by the Business Journal’s Thomas McConville)

Bixby Knolls Welcomes Five Starr Pilates Starr Bunch has owned and operated a home daycare for 23 years in her Wrigley neighborhood in Long Beach. When Bunch sought a Pilates studio with reformer equipment, she was surprised to find the closest studio was more than a 20-minute drive. “When I decided I wanted to own my own studio, it was logical to open the business in an area that was in need of a high quality studio,” Bunch said in an e-mail. She opened Five Starr Pilates at 3750 Long Beach Blvd., Suite 150, in March. The studio’s eight instructors offer a combined 50 classes a week, including Pilates reformer classes, cardio trampoline classes, cycling classes and combination Pilates and cycling classes. “We believe fitness, as is life, is a journey, and it is our hope to join our clients on their individual journey and add to their fitness experiences by providing stellar, dynamic instruction that is never monotonous and always challenging,” Bunch said. “It is our goal to provide a place that is calming and inspiring, a workout that balances the body and teaches people that they too can love exercise and movement.” Five Starr Pilates is open from 6 a.m. to 8 p.m. Monday through Thursday, and 7 a.m. to 2 p.m. Friday through Sunday. For more information, visit or Pictured is Josh Tripp, cycling instructor leading a class. (Photograph by the Business Journal’s Thomas McConville)

he City of Long Beach has a great and until now very quiet and resourceful technology community that is ready to move to the next level. A level that is deserving of the International City to foster, nurture and grow. So what can the City of Long Beach to do help support this burgeoning technology sector of start-ups and new tech companies that are considering moving their operations from other cities in California? Supporting education is a key area. The city can help change policies in order to support the creation of the future job market. For example, computer science and basic programming classes should be an option for all elementary students. There are ways to change current curriculum to build the future internationally-recognized and highest tech-school system in the state. Real job skills of the future require a technical acumen and the city could start to move in the direction of policies that support this type of education throughout the school district. There is no greater equalizer for all of our Beachians and their children than the ability to become knowledgeable about technology and have basic programming abilities for a future workforce. The city has the ability to entice commerce to come to Long Beach. But it also has the ability to let investors and venture capital firms from the rest of Southern California know and better understand the high potential of hard working and cash-flow positive lean start-ups that are quickly evolving in the city. Attracting venture capital or capital for any project can oftentimes be very political, but this is a key area. City officials can help support the growth of these start-ups and technology innovators. The City of Long Beach can also help facilitate current companies that are operating in or around the Port of Long Beach to involve themselves, or work with, local companies first. Tell these firms to give us a shot! See what we can do. A lean company can turn and burn faster than anything in the business world. Contracts to smaller start-ups in the Long Beach area to create technologies or license them to other larger more established companies means key accounts for small local tech companies and wide-spread recognition. It also helps larger Long Beach-based companies to publicly display their support for smaller businesses in the community and the next generation of business leaders by putting their money where their mouth is. Let’s make the port the Silicon Port. Let’s make this city the beacon for businesses helping smaller local businesses and increasing local collaboration for the greater creative revolutions and innovations of tomorrow. The future looks bright for the Silicon port. And the future is just beginning. So let’s invite the rest of the world to get in on the ground floor and help our community realize what it truly means to be the International City!

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Corporate Presence Annual Interview WITH Mayor Bob Foster AND THE

Inside: A Look At Moffatt & Nichol, One Of Long Beach’s Top Corporate Citizens Photographs by the Business Journal’s Thomas McConville

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MAYOR BOB FOSTER September 10-23, 2013

Long Beach Business Journal 3-B

One Last, In Depth Interview With Two-Term Mayor Bob Foster A Very Candid Conversation On A Number Of Issues – From The Port To The Election Of The Next Mayor ■ By GEORGE ECONOMIDES Publisher hen Bob Foster ran for mayor in 2006, he was facing two candidates who each had served two terms on the city council, and through their work and community involvements were well known in the city. Foster prevailed, and most people in Long Beach who follow local government and city issues recognize he was the right choice. At the time, no one knew that a devasting recession was on the horizon. Foster’s experiences as a small business owner, a state senate and energy commission staffer, public affairs manager, and as president of one of the country’s largest utilities all came into play – none more important than his awareness that fiscal discipline was key to the challenges of a recession. Being thick-skinned and learning to say “no,” became attributes during very difficult economic times. Most residents who have been here during Foster’s seven-plus years as mayor, haven’t noticed much of a drop-off in city services and programs. That’s a testament not just to Foster, but to the combined efforts of councilmembers and city management and staff. At a time when nearly every city in America was reeling from the recession and forcing layoffs and reducing services, Foster, again drawing on his experiences, was preaching a leaner and more efficient operation. Today, as a direct result of Foster’s leadership, Long Beach is in better financial shape than most U.S. cities. It’s also a cleaner and greener city, while enjoying job growth in a variety of industries, including healthcare, international trade, technology and the service sector. The city’s infrastructure is in better shape than most people expected, but Foster points out, there is still much to be done. The Business Journal began annual interviews with the mayor of Long Beach back in 1988 when Ernie Kell was the city’s first citywide elected mayor. He was followed by Beverly O’Neill, who served from 1994 through 2006, and now Foster, who will pass the baton to a new mayor next July. In this wide-ranging, extremely candid interview, conducted Wednesday, September 4, at the Business Journal offices with Assistant Editor Tiffany L. Rider and Staff Writer Samantha Mehlinger asking the questions, Foster talks about the city’s next mayor, saying, “Put ideology aside. Put everything else aside. Who really has the ability to keep the fiscal discipline in place to protect the future?”


Priorities LBBJ: Since you’re not running for reelection, have your priorities for Mayor Bob and First Lady Nancy Foster in the courtyard of their home in Southeast Long Beach. the rest of your term changed? (Photograph by the Business Journal’s Thomas McConville) Foster: No. At the top of the list is, making sure that we stay on a fisactivity. The state, in a very shortsighted manner, decided to eliminate redevelopment and cally sound, stable basis; clean up the environment; work on keeping the crime rates down; reform enterprise zones. And as yet, I don’t know quite what that reform will take. and introduce some technical training in schools. All of these things are still the same. LBBJ: There has been a lot of activity with PBIDs (property and business improvement LBBJ: The city is in negotiations with four labor groups on pension reform. How much districts) in the city. Is that a possibility for replacing economic development? do you expect the city to save on an ongoing basis if those four groups agree to reforms? Foster: It helps. It doesn’t replace it. I think PBIDs are a really useful tool to be able to Foster: I can’t talk much about negotiations because they are ongoing, but we’re going consolidate areas to provide additional services or enhance existing services. Cleaning the to ask for the same pension contribution that other groups have given. It’s a smaller group streets, providing some monitors for public safety, being able to enhance facades and when you’re dealing with management, confidential, lifeguards and engineers [roughly those kinds of things. But it doesn’t replace the dollars. We had $100 million a year from 800 employees], so the savings are not large. But the savings to the entire city from all redevelopment, and it was a terrific program. Every dollar that we lost in tax increment pension reform combined is more than $200 million over 10 years, and I think that’s sighad been matched five times over from other agencies. It was a great program for the city. nificant. And it’s also part of the reason we have a surplus this year. In all candor and honesty, the city didn’t abuse that program. It used it the right way. There LBBJ: Does Long Beach serve as a model on pension reform for other cities to follow? is nothing that’s going to replace that. I think PBIDs are a great way to unite businesses Foster: Long Beach is the largest city in the PERS system – the Public Employees and residents in an area and provide some enhancement to the quality of life, and a reason Retirement System – and we’ve done about as much as we can do without changing the for businesses to move in. But they doesn’t replace cash. law or having the constitution changed. I don’t know if we’re a model, but I will tell you LBBJ: What economic development tools might the city explore? that I don’t know of a city that has done anything more than we have done, and there are Foster: They’re pretty limited. I think the best thing we can do is to make this place easvery few that have done what we have done. ier in which to do business. We started a couple of things. We have changed our planning and building process. It is now a one-stop shop. If you have a very simple project, you can Economic Development go in and get your permit in one day. The fees were cut by about a third. Everything is LBBJ: You were unhappy with the loss of the enterprise zone program. Has your opin- pretty self-explanatory. When you walk in you have good signage. We are not perfect at ion on that changed? it, but by and large the employees understand their job is to get some of these projects up Foster: No. I think the State of California has acted in an irresponsible fashion – both and running and online as fast as possible. I have had nothing but compliments on this on redevelopment and the enterprise zone funds – and they’re connected. Redevelopment process since it has been changed. and the enterprise fund law are the only tools that we had, I would argue, in California for So that provides an incentive for people. It’s easier to do business here. It’s a little economic development. And the state has taken both of them away. In the redevelopment cheaper to do business here. People get their hand held through the process. So that is area, it’s because it was seeking $1.7 billion to fill the state coffers – something they will something you can do. In the mayor’s office, we try to provide whatever assistance we can never achieve. And in the enterprise zone, it was enabling companies to take tax credits. to new business. But, in terms of financial assistance and the things that redevelopment can Now, having said that, both programs needed to be reformed. Both programs could have do, we’re very limited. I haven’t ruled out trying to put a program together. Quite frankly, been reformed, and you could have saved those tools to create jobs and enhance economic (Please Continue To Next Page)

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MAYOR BOB FOSTER 4-B Long Beach Business Journal there are people around the state who want to recreate redevelopment either through the ballot or through the legislature. I think that’s something we should explore. Now, we would start with a new baseline. In a state that’s hard in which to do business, not having that tool is going to put us in a difficult position. But beyond that, I think you have to start looking at your on regulations. Look at things you can eliminate – the things that may not be necessary – to make the process as simple as possible. And I found that most businesses want to know that they have a partner right next to them that is going to help them navigate that process. That’s been very useful for people. LBBJ: And you’ve streamlined the operation. Foster: Yeah. It’s not perfect yet, but it’s

September 10-23, 2013 really a lot better. The [City Hall 4th floor] service counter works very well, and people have a different attitude. We’ve got a brochure that explains it. We’re trying to make it as user-friendly as possible. And for small businesses, we have a small business registry. We give a bidding preference for small business, and we try to let them know when work is available in the city. So in that registry, they will get notice of things the city or the port are bidding out. Since the inception of the program in 2009, more than $16.2 million in city contracts have gone to small businesses. The number of small businesses in the city’s preference program for city contracts is 2,068. Another success is the 10,000 Small Businesses program by Goldman Sachs, where you’re getting real training. It does-

n’t do any good to give somebody capital if they don’t have a business plan, they don’t understand financing and they don’t have a network. The great thing about programs like Goldman Sachs’, is they provide that. So now you have a business that completes that program, which is ready to receive money. The biggest single problem I see with small business is they don’t have a business plan.

Jobs, Unemployment LBBJ: Jobs have been added in the city because of new businesses at Douglas Park and Molina Healthcare adding employees, and, of course, in construction at the port. So why is it that our unemployment rate has gone up monthly over the last six months? It went back up to 11.9 percent in July?

Foster: I don’t know how the statistics are derived. I don’t really understand. You have to wait for seasonally adjusted numbers to compare. Even the president can’t affect unemployment numbers. Let’s be really candid here. The only institution in America that can really affect the economy is the Federal Reserve. All you can do in government is try to make it easier for people to do business and eliminate obstacles. That is just simply the truth. We do know that the port is investing $4.5 billion in projects over 10 years. LBBJ: Is it because of our high number of low-income residents? Foster: Could be. I think our poverty rate has certainly gone down. When I came into office, it was getting up to like 22 or 23 percent. But that rate is down substantially. LBBJ: The Associated General Contractors of America reported today [September 4] that a survey of 700 construction firms found that 74 percent are having trouble finding qualified workers ... Foster: There is a mismatch today where we don’t have workers trained for the jobs. A lot of people are working on trying to provide that training. You’re kind of in a seam in the economy. You had a huge, major disruption with the Great Recession. And a lot of people who lost their jobs are never going to get those jobs back. They’re not coming back. But different jobs are here: jobs that have more to do with innovation, jobs that need training in the tech area, jobs that are more highly skilled. People need to be trained for these opportunities. I went over to the Pacific Gateway Career Transition Center and looked at a training program where people had lost their jobs. And what I heard in that room was actually very encouraging. Almost all of the people said they got very complacent in their job, they didn’t add skills. And they said from now on, they are going to make sure that they are as good an employee as they can be and as highly trained as possible. I think that’s the best protection for keeping a job. I don’t have the answer to the unemployment rate. I can only do what I can do. What we’ve tried to do is to make it very easy for people to come here. We try to give them the assistance they need. We try to make the process as understandable and as least encumbering as possible. I think we’ve done that, and I think over time you’ll see the economy grow here, and I think you’ll see that employment number move up.

Redevelopment Property LBBJ: We know that Mike Conway, in his new role as business and property development manager, is working on former RDA properties in the city. Can you give us an update on what’s happening with those properties? Foster: There are 225 parcels. The process is that we have to put a plan together that the [state] department of finance has to approve. That plan has to be presented in October, I think. To be really candid, we’ve had a pretty good relationship and track record with the state department of finance. We worked very hard, for

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MAYOR BOB FOSTER September 10-23, 2013 example, on the Shoreline Gateway East project at Alamitos Avenue and Ocean Boulevard. That project was going to go away. It’s on four different parcels that were going to go into this group [of 225 city parcels], and they were going to sell those parcels. We worked with the department of finance and the governor’s office to keep that project here. The argument was successful, because if you broke it up into four parcels, it would be worth nothing. If you keep it and move forward, both the city and the state are better off. And that got through. That got approved to go forward as a redevelopment project. So I think there are some things you can do with redevelopment if you make a good case. I wish we didn’t have to do any of this, but it is what it is. I think what we’re going to do, is some of those parcels are going to be up for bid; they’ll be out on solicitation. I think there will be a decent amount of interest on those properties. LBBJ: The money raised goes into the General Fund? Foster: No. Some of that money goes to the state. We get to pay off some of our debts, I believe, but most of the money goes to the state. That’s how they’re going to make their money.

Charter Changes? LBBJ: In the past, you’ve indicated that you would like some charter changes implemented. Foster: I did? Did I say that? LBBJ: Every year you say that.

Long Beach Business Journal 5-B

“My job is to leave this place better than I found it, and I think I’ve done that,” said Mayor Bob Foster (Photograph by the Business Journal’s Thomas McConville)

Foster: No, I never said that. LBBJ: For example, not having the mayor run council meetings. Foster: I don’t think you really need the mayor presiding over the city council. You could have a mayor that’s, basically, the executive. The city manager reports to the mayor. And you could have a legislative body, a council, that is led by their council president. That may or may not be better. This system has the advantage, in effect, of every Tuesday forcing the mayor and the city council to work together. I think it has

other advantages by the mayor sitting there and providing some direction and being able to veto something immediately if it is contrary to his or her policy. This process has seemed to work. Look, this structure took us through the largest economic downturn in the last 80 years. And we came through it now with a surplus. So I don’t think you can fault the structure and say some of the structure is not conducive to the efficient operation of the city. Could it be better? Probably. It’s kind of an evolutionary thing. I think the charter change

that occurred in 2007, where the mayor has additional authority and a line item veto and removal power, was very helpful. Those things are all used very sparingly, but they are very important. LBBJ: You didn’t use the line item veto this year? Foster: Well, that’s what the next two weeks are about. For example, I made it really clear in my recommendations, if you take the $3.5 million surplus and don’t roll it over next year, I’m going to have a real problem with that. And you know, I meant what I said last night [September 3 city council meeting when the fiscal year 2014 budget was passed]. I think that budget is a remarkably responsible document. Do you know any other city that’s putting away money for unfunded liabilities? Do you know another city that would have taken that city surplus and not used it for ongoing programs? We’re basically going to be structurally balanced for three years. That’s just essentially correct. Honestly structured balance. LBBJ: You’re making it easy for the next mayor. Foster: I am indeed. That’s my job. I believe that’s my job. My job is to leave this place better than I found it, and I think I’ve done that. LBBJ: A couple years ago you wanted to roll the civil service department into human resources. It was defeated by the voters. (Please Continue To Next Page)

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MAYOR BOB FOSTER 6-B Long Beach Business Journal Foster: I’ll be really candid. It’s stupid, the way we do it. It’s stupid and an anachronism. I mean, call it what it is. You should have a modern HR department. The problem with that ballolt proposition was, it wasn’t well understood and people were misinterpreting that we were doing away with the civil service commission, which is the bulwark of protecting employee rights. No one was doing that. Quite frankly, the civil service department, at times, is an encumbrance to having the hires done. Ask the police department and the fire department. It shouldn’t be this way. I have since put people on the commission who understand the need to modernize the department.

Contracting-out LBBJ: Is there more that can be done to contract-out city services to the private sector? Foster: I think you want to look at services that could be better performed by the private sector. It’s not just always about saving money. Let me give you an example. If you watched the budget meeting, this came up. In my recommendations, I said, look, we’ve talked for three or four years now about [possibly contracting-out] refuse, towing, street sweeping and IT [information technology]. Let’s get on with it. This is ridiculous. One councilmember came out and said, “Well that’s the one recommendation I don’t agree with. You know, we had this

September 10-23, 2013 incident with the landscaping contractor in Long Beach. I think that demonstrates the failings of contracting-out.” I think it actually does the opposite, because I can point to irregularities and problems in animal control, towing, fleet, parks and recreation – I won’t go into them now – that really were very difficult to deal with, that frankly could happen in any business, public or private, that happens when you have human beings involved. So, the fact that somebody wasn’t performing is not earth-shattering news. It could happen in the private or public sector. But what was interesting is how quickly you could change out the contractor. You found somebody that wasn’t performing, and, basically, from about the time you gave the notice, within 30 days you had another contractor working for you. LBBJ: So you have performance standards for these contractors. Foster: Yeah, you do, in the contract. Now try doing that if you try disciplinary action and try to remove somebody who is in a civil service job. How long is that going to take? The point is, services where you need to be nimble and you need to be quick and you need to be able to get things done and you have real standards of performance, might be better performed by the private sector. Would I contract out financial management? No. I think that’s something you have to have. Do you need a core of public works people? Absolutely. Do you want your own police force? Sure. But does it really matter who does your street sweep-

ing? Does it really matter who does your refuse collection? If you can do that with standards that you create, performance metrics that they have to meet, while treating the employees fairly, both in terms of their wages and benefits, what’s the problem? You don’t sit there and make a defense for public service by saying that someone either didn’t perform or had some illegal or inappropriate conduct. That occurs all over the place. LBBJ: Aren’t contractors encouraged to use city staff who were previously performing the work? Foster: If we were to contract out, my preference – and I would argue strongly for this – is that existing employees move over into those jobs. LBBJ: So you see some movement maybe this year? Foster: I think you’ll see some movement.

Port Of Long Beach LBBJ: Let’s talk about the port. Foster: My favorite subject. LBBJ: Do you think the port is being fiscally responsible in managing both its current assets and ongoing projects? Foster: I would say it differently. I would not say they’re being fiscally irresponsible. I think that they need to tighten up their financial controls and be more disciplined about how they spend money. That’s just my view. I am actually a very big fan of the port. Last night you heard from somebody on the council about how important it was to market the

port. Quite frankly, that’s the least of the things you have to do. The way you attract cargo here is you become the most effective and efficient port around. That’s what Middle Harbor and the investments [in other projects] are doing – to improve the infrastructure to make us have the ability to move cargo in greater volumes at greater velocities. I think you also need a reputation for a fiscally disciplined port. You have real financial controls in place. I think the very questionable overrun is on the temporary building [at the airport for harbor department employees]. And I would even add travel. To me, the lack of discipline on travel, where you’ve got one commissioner traveling twice as much as the others, I don’t see how that happens. And for what purpose? The truth is, you could make a rationalization to travel every month of the year. But what is really necessary? I think what’s necessary is major signing ceremonies, like OOCL. I am okay with that. Going over to give a speech? Eh, not so much. I think what you want to do is present an impression and a face to the world that you treat that money, the port’s money, with greater care than you do your own. That’s what a fiduciary does. So somewhere, somehow, I think they really need to take a careful look and review how they’re getting their specs done, how their requirements for various projects are actually coming about, and then what is it they’ve missed in these projects that there are overruns. Any time you are doing a project as large as the bridge or as large as Middle Harbor, there are going to be unexpected things. I understand that. That is what contingencies are for. But when you outrun the contingencies, you have to ask yourself, do we need some lessons learned here? And I’d like to see that. And they now have, they are going to hire 35 or so engineers. I think they recognize that they need to shore up their engineering side. I would also like to see real strict controls on the finance side. Last night, what we did as a way of imposing discipline is we said, you’re going to cap travel by any commissioner at $40,000 a year. Period. LBBJ: That’s a lot of travel. Foster: It is a lot. You want to know where one of them is right now? Close to $85,000. My only point here is, you have to impose some discipline. That’s our job. That’s the mayor and the council’s job. If you see something amiss – I mean no one is trying to fire anybody unless there was inappropriate conduct. But you have to impose discipline here. Okay? If you can’t do it yourself, we’re going to do it. You’re going to have $40,000 and you can change it with a super majority or four-fifths of the harbor commission. Look, there could be some kind of exigency that we don’t know about in the future, so if you have a safety valve four of them can say this is really needed and we have to do it. But you need to impose some discipline. LBBJ: What about oversight from the city? Foster: I think that that’s another thing. Every expenditure in the city for travel, at any high level, is scrutinized by the audi-

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MAYOR BOB FOSTER September 10-23, 2013

Long Beach Business Journal 7-B

Mayor Bob Foster is pictured with members of his staff at Rainbow Harbor. From left: Katrina Reynolds, community liaison; Stacey Toda, deputy chief of staff; Becki Ames, chief of staff; Jordan Kingsbury, intern; Deshe Gully, intern; William Doll, special assistant; David Gauthier, intern; and Carmen Viramontes, legislative aide. (Photograph by the Business Journal’s Thomas McConville)

tor, and we’re going to look at that [for the port as well]. LBBJ: Is there a way for the city engineer or somebody from the public works side to also take a look port projects prior to going out to bid? Foster: We have developed a more cooperative relationship. I want to give the port some credit here in recognition of the fact that they could probably use some outside help and perspective. We’ve got Mike Conway working with them, for example, on the temporary building [headquarters]. Mike’s got experience in that area, looking at if the lighting is right, if the heating and air conditioning system is right, as those are the elements that are driving the costs up in this building, to see if there are things that you could do cheaper. We already know the answer to that is yes. There’s no reason for this thing

to have gotten out of hand like it has [refer to story in Section A of this editon of the Business Journal]. I think the port is willing now to ask the question, “What happened here? Did our consultant not do their job? Did the internal staff require too much in the way of permanency in the structure?” Who knows? I’d like to see much more cooperation between the port and the city. . . . And I’ve made that case many times to the various commissioners. Some of them embrace it and some of them don’t. There’s still this culture at the port that, “We want our own land, our own language, our own flag, our own currency. We want to be the country of the port, and we don’t want you to interfere with us.” I’m not kidding. That culture has got to change. There’s got to be much more cooperation and integration between the city and the port.

Police At Port, Airport LBBJ: What do you think about the port’s dual security campus proposal? Isn’t that an example of cooperation between the port and city? Foster: It did not come without effort. I’ll be really candid with you. I think the optimum structure, if I had a magic wand, would be to have one chain of command for security. But you have a history here, and you can’t discount that. There are some cultural differences, and the port does at least have a point saying that, in addition to public safety it has continuity of operations, which is important. Although I would argue that is kind of everywhere. So, where it used to be that harbor patrol and police, for example, were two separate operations, now there really is a lot of integration. We have a commander overseeing that, who jointly

reports to the police chief and the executive director of the port. Look, you have to start somewhere. I think we’ve started at a good place. They were two separate operations. Now they’re moving into this other structure where there is a commander dedicated to the port. You have people from our police department at the port. The chief has a say in the hires. I think, gradually, it will migrate even further, but I’m much more comfortable now than I was two years ago. I was uncomfortable two years ago about security and the way it was run. It’s better now. LBBJ: We understand there is a similar movement at the airport. We have a letter from tenants complaining . . . Foster: We are looking at the airport. We can’t talk about the allegations of that letter. To be candid, we’ve had sworn officers (Please Continue To Next Page)

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MAYOR BOB FOSTER 8-B Long Beach Business Journal at the airport for years. That structure has been that way since 2006. This is not new. I wouldn’t get too nervous about the letter. LBBJ: The airport director said he can’t talk about it because of security issues. Foster: He can’t, and neither can we. I don’t think security at the airport is a problem.

BNSF Project LBBJ: If it were up to you, how would you compromise on the BNSF railway SCIG (Southern California International Gateway) project that as proposed butts up to West Long Beach? Foster: I would not say compromise. I think what needs to be done is to treat Long Beach residents with respect, at least with a sense that they are human beings that breathe air. Most of their [BNSF] actions are like the traditional impression you have of railroads going back to the octopus days. I think they want what they want and they are going to pursue it and they are not going to be deterred by anyone else’s interests or needs. Now that’s a bit stark. They’re a little bit better than that, but not much. To protect Long Beach residents, what’s needed, as a minimum, is that the businesses that are there thriving and employing people need to be relocated so those jobs do not leave this area. We need to be able to treat the residents with respect relative to the sound and nearness of the operation. So a buffer zone, and a real sound wall, need to be created. We

September 10-23, 2013 dammed. I think this is going to wind up costing them a lot of money and delaying them for many years. I heard there are now 18 litigants, including our school district. This is just stupid. I don’t understand why people conduct themselves this way. These are human beings we’re talking about. LBBJ: It doesn’t sound like the mitigation issues would be too expensive? Foster: In the long run it will be a lot cheaper. I thought we were making progress during a whole year of discussions. At the last meeting I had with both the CEO and the chief counsel, they basically said, ‘We are not doing anything. Just sue us. We’ll litigate. We’re not going to do anything until the litigation is over and the process is complete.’ LBBJ: Do all of the litigants agree with the steps you have indicated here? Foster: I think all of them would agree to that. I think some of them may want more. I think this is what we need to protect the people in Long Beach. LBBJ: So the next step is a court date? Foster: We’re going to make an attempt to get the major parties in one room with BNSF and the new mayor of Los Angeles. We’ll see. I’m hopeful that Mayor [Eric] Garcetti has a different view and wants to be a better neighbor than the previous administration.

“I get some really great letters from people who indicate they are glad that I was mayor and they can point to improvements in their own life that are a result of that tenure. That’s gratifying. So I’m really comfortable with my decision [not to run].” Mayor Bob Foster

have this concept of an urban forest, which is basically just trees and shrubs, not a park you walk through, as way to buffer both noise and air pollution from

the residents nearby. You want to be able to have pollution control, zero emissions, as a real goal with teeth in it. There are technologies that get you there. They can’t do it right away, but you have to have a real commitment towards it because you have a substantial amount of people living right in that area. When the BNSF project reaches full capacity, there would be 2 million new truck trips per year, which translates to 5,479 per day. That’s one-way trips. Existing truck traffic appears to be approximately half that. How can you tell me that the air quality in that area is going to be better? They’re not zero-emission trucks. We want to have some commitment to zero emission, and we want a public benefit fund to pay for the forest and also to upgrade the houses along the track. You’ve got houses within 25 feet of that track. They need double- or triplepaned windows, something to deal with the noise that is going to be created. I don’t think that’s too much to ask. If you look at other major projects, certainly the City of L.A. did it with the TraPac container terminal with the people of Wilmington; you have disconnect here with the fact that the project is in the City of Los Angeles, which I think has acted irresponsibly and not in a humane way at all. But they did it for TraPac when it was their residents, but now this project is in Los Angeles but the impacts are all in Long Beach. Matt Rose, the CEO of BNSF, told me, to my face, that if Long Beach doesn’t want this, “We won’t build it.” Now, we have a 9-0 council vote and a mayor that’s opposed to it, and we’re litigating this issue. I think that is a pretty clear indication that we don’t want it as advertised. I don’t see him stopping. Quite frankly, their chief counsel is just an oldschool kind of chief counsel. He’s going to do it his way and everyone else be

Long Beach Airport LBBJ: Are you happy with the progress being made at the Long Beach Airport? Foster: We have an airport? Laughs LBBJ: Wasn’t the airport one of your key concerns when you were first elected? Foster: It was. I think that you can rack that up as somewhat of an accomplishment, to get that off of the controversy and off of dead center. You’ve now got a brand new terminal. Everybody loves it. Paradies is in there. They’ve got that thing . . . what do they call that thing? The Marché. It’s another word in the airport world. It’s basically what you would call a food court. It’s all Long Beach businesses. I’ve been through it several times. People are happy. It’s high quality food. I think it’s a great deal. It’s an attractive terminal and easy to use. The goal was to get from the curb through security and at your gate in 20 minutes. They almost always do it faster than that. It’s a great place and I’m very happy with what’s been done there. I think Mario [Rodriguez] is a very capable director of the airport. He’s doing a great job. By the way, we’ve done some things for the environment out there as well. That terminal was built to have solar collectors and is an environmentally sensitive structure as well. I love the airport. The Wall Street Journal said we were one of the top five regional airports.

Environment LBBJ: Since we’ve been talking about environment issues, do you think that Long Beach is a city that is ahead of the curve in terms of cleaning the environment? Foster: Yes. There aren’t many places that have a port, which was probably the major source of pollution. By everyone’s account, the Green Port policy has been successful and reduced pollution in almost

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MAYOR BOB FOSTER September 10-23, 2013 all of the criterion of pollutants, above 70 percent in reductions, well ahead of schedule. More is going to be done. You’re going to see more cold ironing. You’re going to see other equipment being used to handle the ships that can’t cold iron. I think the advances made in water quality are substantial. When I became mayor, water quality was a big issue. We were constantly receiving bad ratings for our beaches from Heal the Bay. We’ve actually embraced Heal the Bay. We are cooperating with them. We did a survey up the L.A. River to find out what some of the sources were, and we’re getting much better grades. We’ve made improvements to storm drains up the river. We’ve made improvements at some of the pumping stations. In the Alamitos Bay, we had a problem with storm overflow going out into the bay. That is now all going into the sanitation system. It’s made a dramatic difference for our beaches. We’ve cleaned up our air, improved our water. We do an awful lot internally with clean fleet technologies. All of our trash trucks are LNG (liquid natural gas). We can go on and on. We’re doing an enormous amount for separated bikeways and bike routes, trying to make it much more convenient for people to use bicycles to commute or for recreation. If you add up all of the things, plus what we’re doing at the airport, I can’t think of another city that has done all of those things together. Now, there probably are, but I’m very proud of what we’ve done.

Long Beach Business Journal 9-B

Infrastructure LBBJ: With the one-time dollars in the FY14 budget, is the city finally addressing one of your biggest concerns – infrastructure? Foster: We don’t have the resources to do all of the things we want to. When we did Measure I [proposed parcel tax with money targeting infrastructure needs, but defeated by voters], we identified about $700 million or $800 million worth of need in streets, public buildings, sanitation systems, all of that stuff. We’re not going to have that money. We’ve been fortunate that both from the stimulus funds and now from one-time dollars, that we’ve had far more money come in than we ever thought we could have without Measure I. It hasn’t come close to Measure I, but it has enabled us to start making a dent in our street problems. We used every bit of the stimulus money we could for infrastructure. This year we have now $61 million in one-time revenues to apply to streets, roads, parks, soccer fields. All of that makes not only an investment in the community but also enhances the quality of life. I think the good thing about this budget, with one little exception, all of those one-time items have gone for capital improvements, which is the principle we’ve always had here. I think last night’s budget was a great document in terms of investing in the city. Do we need more? Sure, we do. If the price of oil stays where (Please Continue To Next Page)

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E A C H ,


N C .

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MAYOR BOB FOSTER September 10-23, 2013 it is, we will always have a little bit to be able to use for infrastructure. I would keep it at the system we have now.

Long Beach Business Journal 11 -B This is a remarkably safe city now. It really is. I give a lot of credit to the men and women of the police force who are making that happen.

City Commissions LBBJ: Are there any commission appointments coming up? Foster: Yes. I’ve got a harbor commission appointment to decide. I think there are three on the water commission. Nick Sramek could be reappointed [to harbor]. I’ve met with Nick and I’m considering that. There are a couple of other candidates. LBBJ: But you don’t have the openings you had years ago, do you? Foster: We’ve tried to fill them. It’s not as easy as people think. First of all, I meet with almost every candidate. So it takes time. I would rather have a board go with a couple of vacancies than put someone on there that I don’t know or don’t have some confidence in. You’ll always have people that disappoint you. You try to minimize that. I think it’s important to scrutinize the appointments. [Later, the mayor’s office informed the Business Journal that out of 237 commission positions, there are 56 vacancies. Of these vacancies, 16 are part of inactive boards, and 15 do not have any applicants – many of these vacant seats are district specific. The mayor is in the process of soon filling at least 25 vacancies.]

Top Achievements LBBJ: From what you outlined earlier, it sounds like improving the environment has been one of the major achievements during your tenure as mayor? What other items would you include on your list of achievements? Foster: At the top of the list is that when I leave the city, it will be far more financially sound than when I became mayor. Pension reform is near the top of that list. That was very difficult to do. People don’t realize that if we had gone to the ballot, even if it passed, we would be litigating it for years. The employee groups would almost certainly sue. That’s been the experience in San Jose and San Diego. You would be years off from the savings even if they materialize. So, I think we did it the most effective way, which was at the bargaining table. I give a lot of credit to the employee groups, particularly the police who stepped up first. I think cleaning the environment at the port is on that list. Water quality improvements, which we talked about, are on that list. And I would add the ACE Academy [architecture, construction, engineering]. When I first ran, I said I wanted to introduce technical training back into schools. ACE has three or four years of graduates. I’ve worked with those kids and they are extraordinarily sharp. I’m proud of that program. If you look back at the things that I talked about when I ran for office the first time, I think I’ve been able to do everything except add 100 police officers. I will stipulate that I know more now than I did then and it’s not just the numbers game. I want to make sure the police have adequate forces, but there’s more to police work than just numbers. I think the crime statistics speak for themselves.

Time As Mayor LBBJ: What has been the most enjoyable part of your job as mayor? Foster: First of all, I’ve really enjoyed my time as mayor and I’m going to work until the very end of my term [July 2014]. The most enjoyable and rewarding thing is accomplishing something that you know would not have been done as quickly, or at all, if you weren’t there. There are not a lot of them, but that really is enjoyable; it’s a sense of accomplishment and a sense that you made a difference and that you have added some improvement to the lives of the people in the city. Secondly, by and large, I like being around people. I like the people that I’ve met and I get many compliments from people about how appreciative they are of the job that I’m doing and that they would love to have me run again. I hear that all the time. I get some really great letters from people who indicate they are glad that I was mayor and they can point to improvements in their own life that are a result of that tenure. That’s gratifying. So I’m really comfortable with my decision [not to run]. It is with some regret, but everything comes to an end. I’ve really enjoyed this experience in public service.

2014 Elections LBBJ: Is there anything else that you would like to add? Foster: Yes. This upcoming election, both for mayor and council, is very important. While for now I’m going to stay out of the race and not endorse anyone – I will leave that option open down the road. One of the things that concerns me is that the progress that has been made, particularly on the financial side, can be pretty easily undone. I think the public needs to be very vigilant with who they choose as their next mayor. I think people have to have confidence in someone with a track record of fiscal discipline, someone who understands the municipal finance system, who has the strength of character to stand up to the multitude of interests out there always demanding something, and say ‘no’ when they have to. That’s really important. I can tell you, from just this budget experience, think what would have happened if we had used one-time revenues for ongoing expenses. You could reverse this surplus in one year to a deficit. And that can happen. I would urge your readers and the residents of Long Beach to ask the very hard questions. Put ideology aside. Put everything else aside. Who really has the ability to keep the fiscal discipline in place to protect the future? That includes things like putting money aside for unfunded liabilities. That’s a responsible thing to do. I think that’s important. That’s what I’m going to be looking for in anybody I endorse. We’re not out of this economic problem yet. Even if we were, you don’t want to go back to the times that created the hole we put ourselves in. And that could easily happen. â–


2640 North Lakewood Blvd Long Beach, CA 90815


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CORPORATE PRESENCE 12-B Long Beach Business Journal

September 10-23, 2013


Moffatt & Nichol: A Long Beach-based Company With A Growing List Of International Clients

A rendering depicts Washington D.C.’s Southwest Waterfront marina, as planned and designed by Moffatt & Nichol. The waterfront area will feature a mixed-use development to meet residential, commercial and recreational needs. President Eric Nichol said much of the work on this project is being done from the Long Beach office. (Image provided by Moffatt & Nichol)

■ By SAMANTHA MEHLINGER Staff Writer ver the years, the planning and engineering services company Moffatt & Nichol has successfully expanded its reach across oceans and continents. It now has 600 employees in 30 offices in the Americas, Europe and the Middle East. Founded in Long Beach in 1945, the


global infrastructure advising firm remains one of the International City’s top corporate citizens. To get a better idea of how the company’s fingerprints have spread across the globe, the Business Journal sat down with Moffatt & Nichol President Eric Nichol at the firm’s headquarters at the Kilroy Airport Center.

Maritime And Environmental Work The origins of the company’s work in planning, design and construction manage-

ment services for ports, marine structures, terminals and related fields can be traced to its founders, who worked on naval facilities in Long Beach and Seal Beach before striking out on their own. After John Moffatt and Frank Nichol, Eric Nichol’s grandfather, formed the company in the 1940s, Nichol said the firm became known for its maritime-related work and bridge construction. The Gerald Desmond Bridge was one such project; the

Engineers and staff look over plans for marine structures, piers and wharves, designs for which the company is well known. Pictured from left are: Martin Eskijian, P.E.; Theresa Richards; Omar Jaradat, Ph.D.; Scott Nordholm, P.E.; Monica Martinez; and Ryan Chan. (Photograph by the Business Journal’s Thomas McConville).

landmark Moffatt & Nichol designed in the 1960s is now back in the news as it is being rebuilt to make way for more traffic in the Port of Long Beach. Throughout the 20th century, Moffatt & Nichol continued to leave its mark on Long Beach. In the 1960s, the firm had a hand in securing Long Beach’s most recognizable attraction: the Queen Mary. The company designed the ship’s moorings so that it could be permanently docked in the Long Beach harbor. Around 40 years ago, Moffatt & Nichol expanded its services into environmental projects such as coastal restoration and alternative energy facilities for liquid natural gas and offshore wind power. “We’ve been doing more and more every year. It’s been a steady ramp-up,” Nichol said. The company planned and engineered projects to restore local marine environments, like the Bolsa Chica Wetlands. “We opened that up to get some flushing action and get some wildlife in the wetlands,” he said. “We have also been doing some work here locally in the Colorado Lagoon and the Huntington Beach wetlands.” As the scope of Moffatt & Nichol’s work broadened, technology diversified. Advanced numerical modeling enables Moffatt & Nichol to consult with clients about potential impacts of a project on the natural processes of rivers, estuaries and coastal regions. “We see what effects construction will have on the flow of the ocean and on how the sand and sediment drifts,” Nichol explained. Better technology also has enabled Moffatt & Nichol to become more detailed in earthquake analysis. Now the company

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CORPORATE PRESENCE September 10-23, 2013

Long Beach Business Journal 13-B

runs models based on 30 earthquakes, rather than just one. This technology comes in handy when designing bridges, such as the Oakland Bay Bridge in eastern San Francisco – what Nichol describes as California’s largest infrastructure project. Moffatt & Nichol designed the foundations for the bridge, which opened on Labor Day. Modern technology is also implemented to adhere to post-9/11 security measures, such as the 2002 Maritime Transportation Security Act (MTSA). To comply with that act, Nichol said, “Moffatt & Nichol has designed and implemented a variety of MTSA compliant security measures including surveillance, access control and fiber optic connectivity for our port clients.”

Growth Abroad And At Home International expansion was accelerated as a way to cope with the recent recession, according to Nichol. “We had to broaden our ability. That’s where we started pushing on the Latin American market,” he said. “We took our existing services to clients that knew us in different countries.” Among international projects that helped the company make it through the recession were a new port container terminal called Port Khalifa in Abu Dhabi, a city in the United Arab Emirates, and bulk marine terminals for exporting coal, copper and other resources for mining clients in Mozambique, Colombia, Chile and Mexico. The company now has offices in Panama, Colombia, Brazil, Chile, England and the United Arab Emirates. While Moffatt & Nichol continues growing abroad, the company also maintains local clientele. The company provides program management and design services for the massive Middle Harbor Redevelopment Project, a $1.2 billion-plus endeavor in the Port of Long Beach that is combining two aging terminals and equiping them with newer, greener technology and the ability to accommodate larger vessels. “It is a huge undertaking,” Nichol said of Middle Harbor. The company’s main focus of contribution to the project is the design of its automation – using a system of automatically guided vehicles to transport containers. Although there is a port with similar technology in Virginia, Nichol said, “This will be the first major one in the U.S.” More than 180 people are employed at Moffatt & Nichol’s Long Beach headquarters. One reason the company remains based here, Nichol said, is that there are “a lot of talented people here locally.” The company draws specialized talent from local schools, like California State University, Long Beach. Additionally, he said, “It is easy to work with the city, and the two San Pedro ports keep us sharp.” “We have always been a part of the fabric of the community. That is very important to us,” Nichol said of being based in Long Beach. When asked to describe the company’s reputation, Nichol provided the following words: “Client focused. We are not interested in being big. We just want to be good.” ■

Moffatt & Nichol designed the foundations for the Oakland Bay Bridge in Eastern San Francisco. President Eric Nichol called the bridge, which opened on Labor Day, the “largest infrastructure project in California.” (Image provided by Moffatt & Nichol)

According to President Eric Nichol, Moffatt & Nichol took the lead in designing a new aircraft carrier wharf in Norfolk, Virginia. (Image provided by Moffatt & Nichol)

Moffatt & Nichol project engineer Alan Zhang, Ph.D., (left), and employee Hao Zhou utilize company technology called FlexTerm to optimize operations for a container terminal in Savannah, Georgia. (Photograph by the Business Journal’s Thomas McConville).

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CORPORATE PRESENCE 14-B Long Beach Business Journal

Coldwell Banker Commercial BLAIR WESTMAC Prepare Your Commercial Property for Sale or Lease he smell of warm baked cookies may help you sell your house, but not your commercial property. If you’ve ever sold a house before, you know the importance of preparing the house in the form of staging. Staging can take the focus off of negative aspects. The same principals used in staging a residential property can also be applied to commercial properties; they just have to be thought of in a different manner. Let’s be honest, unlike buying a home, where there is sentimental emotion when purchasing, chances are, what the building looks like has less effect on the actual purchase or lease decision. However, it can’t hurt to make the property appear in top shape. Here are some low cost suggestions to help prepare your property for sale or lease. Many of the suggestions will seem like common sense, but you would be surprised at how many of these are often overlooked: Landscaping – Make sure the bushes are neatly trimmed, the grass is mowed and the lawn looks healthy. You may want to put a couple thousand dollars into new landscaping if needed. Parking Area/Driveway – If your parking area or loading dock surface condition is stained or otherwise wornlooking, consider resealing it. If the parking lines appear faded, have them repainted. Remove any obstructions. Building Exterior – Have a cleaning service power wash the building exterior for a fresh look. Don’t forget the windows. Make sure you paint over any graffiti that can be an eyesore. Windows – Replace any cracked or broken glass and as previously mentioned, clean the windows. Roof – The roof may be the single most important aspect of your property. A well-maintained roof will say a lot about the overall condition of the property. Replace any broken or missing shingles or tiles and repair flashing where needed. If the roof is old and needs to be replaced, consider having the work done before selling the property. After following a few of these suggestions provided, you will realize there are simple and effective solutions for virtually any commercial space to get it sold or leased. Call Becky Blair, CCIM, President and Principal, Coldwell Banker Commercial BLAIR WESTMAC, LIC# 00630793,, (562) 495-6070.


Digital Installers Audio/Video Specialists DI Studios Has the High-Tech Venue for Hosting Any Holiday Gathering he most wonderful time of the year is just around the corner and DI Studios is ready to host those hectic holiday events. Whether it’s a business party or a family gathering, DI Studios can take on the task to make any annual celebration a high-tech hit. It’s never too early to plan a holiday party, and the best places get booked well in advance, so it’s best to get the venue sorted as soon possible. DI Studios has a modern, comfortable feel that can vary from high end to casual. The staff can assist with food, drink and décor in addition to the facility rental. Rusty Deeble, founder and CEO of DI Studios, has created a state-of-the-art showroom perfect for hosting any party. “We have video screens, music, lighting, even massage chairs,” said Deeble of his studio, which is a working example of the quality and craftsmanship his firm brings to all its clients. The showroom is equipped with a modern lounge that includes comfortable sofas and a 110” backlit screen with surround sound. There is also a private room with eight plush swivel chairs and a 60” screen, which sits adjacent to a roomy kitchenette. There is a fully-furnished back patio equipped with 46” screens and all-weather speakers, combining outdoor seating with high-tech entertainment. Security cameras are also located throughout the facility with a custom monitoring system. For more information about venue rentals or for a price guide, visit or call 562-484-4719. In business for 13 years, Digital Installers Inc. is a full service audio/video design firm headquartered in Long Beach, CA. The company specializes in home automation and custom TV installation, as well as corporate relocation and digital signage with a vast


September 10-23, 2013 project portfolio that includes Angel Stadium. They offer commercial and residential installations on a large or small scale, ranging from the simple to the very complex. Media Contact: Rusty Deeble, Owner 562.484.4719; 1530 E. Wardlow Rd., Long Beach, CA 90807;

Holthouse Carlin & Van Trigt LLP Certified Public Accountants or over two decades, Holthouse Carlin & Van Trigt LLP (HCVT) has provided accounting, tax planning and compliance, and business advisory services to large and mid-sized privately held companies, high-net-worth individBlake Christian, uals and families, service firms, CPA/ MBT real estate entities and business Founding Partner leaders in a variety of industries. Last month HCVT was again named as one of the “Top Five Best Managed CPA Firms in the U.S.” by INSIDE Public Accounting (IPA). HCVT has been on IPA’s “Best of the Best” and “Top 100 CPA Firms” lists for eight consecutive years, and also named to Accounting Today’s “Top 100” list earlier this year. These national rankings are very impressive since over 500 CPA firms are evaluated on over 50 performance criteria. With eight offices, 36 partners, over 300 total employees, and $72.5 million in annual revenues last year, HCVT is ranked as the largest CPA firm headquartered in Southern California and the 42nd largest (based on annual revenues) CPA firm in the U.S. HCVT is a member of the Long Beach Area Chamber of Commerce and proudly serves clients throughout the world, but focuses on a Southern California client base with offices in Long Beach, Orange County, West Los Angeles, Pasadena, Westlake Village, Encino, Camarillo as well as Fort Worth, Texas. Blake Christian, CPA/ MBT is a former KPMG partner and is the founding partner of the Long Beach office (1994) and knows that when it comes to effective corporate and individual tax planning, details matter. The importance of keeping his clients informed of the latest tax, economic and financial trends is paramount to quality client service. He was recently named as one of the “Top 50 Tax Bloggers in the U.S.” His insightful articles can be found at: Blake has over two decades of expertise in dealing with the California Enterprise Zone (EZ) program and is a nationally recognized expert, author and speaker on federal, state and local tax incentives. He has worked with a number of cities, has drafted legislation and has testified on the effectiveness of the EZ and other programs on several occasions. In 2008 he was awarded the California Chamber “Business Advocate of the Year” for his work with assisting taxpayers, cities and legislators in preserving the Enterprise Zone Program. Blake’s areas of concentration include: • Federal and California Enterprise Zone hiring and equipment tax credits • California and federal green tax incentives and eco credits • Comprehensive corporate tax planning • Holistic income, gift and estate tax planning for high net worth individuals Blake serves in leadership roles for a variety of local not-for-profits and is also involved with local, regional and statewide economic development efforts, including veteran job placement, and provides constant updates to his clients and business associates through technical articles he authors for national and local publications, blogs, seminars/webinars and podcasts video interviews. Blake and other HCVT EZ experts can be reached at (562) 216-1800, or His articles and videos can be accessed at: or Daily tax updates can be obtained by following him on Twitter at: or LinkedIn at: http:// w w w. l i n k e d i n . c o m / p u b / b l a k e - e - c h r i s t i a n cpa/0/108/a8b


Lakewood Regional Medical Center Los Alamitos Medical Center Dr. da Vinci Is In Two Local Hospitals Add Robotic Surgery Susan Morales, (562) 799-3573 Patrick Houston, (562) 602-6742 here’s a new surgeon in town – and he’s got four arms and lots of computer processors. You see, the “surgeon” actually is the da Vinci surgical system, a computerized robot that helps surgeons in the operating rooms. Robotic-assisted surgery provides surgeons with a steady set of hands that can hold and manipulate instruments under that the surgeons control. During the procedure, the surgeon’s hand movements are translated through the computer to the robot’s arms that then do the work. Safety mechanisms are in place to ensure that the robot only moves under control of the surgeon. If the surgeon looks away from the computer terminal, the robot locks in place. Lakewood Regional Medical Center (LRMC) and Los Alamitos Medical Center (LAMC) both added da Vinci Robotic Surgery programs recently. General surgeon Dr. Viken Konyalian, on staff at both facilities, did the first robotic surgery cholecystectomy (gall bladder removal) at LAMC. “The da Vinci robot allows for precision movement with three dimensional, high-definition visuals not possible with traditional laparoscopies,” he stated. The robot helps during laparoscopic surgeries that involve special instruments that are inserted through several small incisions in the body. One of the robot’s arms holds a special camera that provides three-dimensional views, including magnification of the area where the surgeon is working. Surgeons using the da Vinci surgical system report that the robotic instruments move more freely than the human wrist does, enabling them to get the instruments placed at the correct angle. Plus the robot can hold instruments without any of the fine motor movement that a human’s hands would have, making the surgery more precise. The robot’s arms can get to areas of the body that are harder to reach compared to traditional open and laparoscopic surgery. What types of surgery can the da Vinci system do? Surgeons may use the da Vinci system for a number of laparoscopic procedures including: • Hysterectomy • Cholecystectomy • Thoracic procedures What are the benefits of robotic-assisted surgery? Robotic-assisted surgery uses smaller incisions than traditional open surgery. These incisions may be smaller than those in a laparoscopic procedure without robot assistance. These smaller incisions may mean: • Faster recovery time • Less pain and bleeding • Less risk of infection • Shorter hospital stays • Smaller scars Any surgical procedure has risks, including reactions to medications, difficulty breathing, bleeding and infection. You and your physician should discuss the options for any surgical procedure including whether an open, laparoscopic or robotic-assisted procedure would be more appropriate for your health and condition. You also should discuss the risks and benefits of any procedure before making a decision. Should you consider robotic surgery, robotic surgery programs are now available at Lakewood Regional Medical Center ( and Los Alamitos Medical Center ( Visit our web sites to find out more.


PMC Planning is Our Passion; PMC Proudly Opens Newest Office in Long Beach MC, a trusted advisor to municipalities throughout California, has opened a new office in Long Beach. PMC’s Al Warot and John Bellas, two respected planners with more than 55 years of combined experience and deep roots in the Phil Carter Southern California area, will lead President the firm’s efforts in the new office. PMC “We are very excited about the


opportunity to expand our presence in Southern California,” said PMC President Phil Carter. “Al and John are great ambassadors to introduce PMC to the region.” Founded in 1995, PMC has provided clients with a wide range of urban design, sustainability, revitalization and contract staffing solutions. With offices throughout the Western United States, PMC has successfully worked with over 800 municipal agencies to help them realize their vision for a more sustainable future and create a sense of place and purpose for their communities. Since the beginning, PMC has been on the cutting edge of urban design, municipal planning and sustainability. The firm’s experts have led the charge in helping communities reduce harmful greenhouse gas emissions, design bike- and public transportation-friendly communities, obtain grant funding for revitalization projects, and ensure that vital planning services are provided even in the midst of budget cuts. “We believe in a boots-on-the-ground approach and work with our municipal clients in their offices as an extension of their planning staff,” said Carter. “This successful approach has allowed us to provide the temporary staff and expertise they need when they need it, and ensures ready access to resources and expertise for California’s agencies and the communities they serve.” PMC’s talented professionals provide a broad range of planning, environmental, finance, urban design and revitalization, facilitation, public outreach, conservation and biological resource, and sustainability and climate change services. The firm also has offices in Rancho Cordova (Sacramento), Oakland, Monterey, San Luis Obispo, Chico, and San Diego. More information about the firm is available at

Wells Fargo Five Keys to Getting a “Yes” for a small business loan hat does it really take for a small business owner to get a loan from a bank today?” It’s one of the top questions our bankers hear – and I would like to share our answer to this question. So to help even more small busiBen Alvardo nesses join those who are hearing Wells Fargo “yes,” we’d like to share the five Community things small business owners need Regional Bank to know when applying for a small President business loan or line of credit. 1. Show that your business generates steady cash flow. Cash flow is a key indicator of a business’ health and its future prospects. When you can show reliable cash flow for your business, your bank can see that you have the resources to pay for new loans. 2. Make sure your current debt load is manageable. Your bank wants assurance that your business can take on additional debt and is in a strong financial position to manage debt payments. 3. Maintain a good payment history. Before extending credit, a financial institution needs to be confident a business has the ability repay. Your payment history provides an important record of your ability to responsibly pay down debt. Obtaining a debit or credit card is a good way to begin building a payment history for your business. 4. Demonstrate business acumen. Your bank wants to see that you anticipate potential challenges and have the management skills to overcome obstacles and pursue growth. Have a business plan that addresses the challenges your business may face. 5. Build a solid relationship with your banker. A long-term relationship with your bank – both business and personal accounts – will give you the opportunity to show how you manage your finances as a creditworthy business owner. Finally, if debt, cash flow or payment history are the barriers to securing a business loan, take a good look at your business model. Can you identify new revenue streams for your business? Do you have opportunities to control costs? Are you able to improve profitability through changes in product mix, pricing or staffing? Your banker can help you consider all the options that will improve your business and the likelihood of getting to “yes” on your next loan application. Also, visit Wells Fargo’s Business Insight Resource Center ( to access additional videos and articles with information on loans and much more.


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LBBJ 09-10-13 Issue  

The Long Beach Business Journal is a biweekly publication of South Coast Publishing, Inc.

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