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SAN FERNANDOVALLEY BUSINESS JOURNAL

LOS ANGELES GLENDALE SANTA CLARITA BURBANK CONEJO VALLEY SIMI VALLEY SAN FERNANDO CALABASAS AGOURA HILLS ANTELOPE VALLEY
THE

Volume 18, Number 15

COMMUNITY

OF

BUSINESS

July 22 - August 4, 2013 $4.00

TM

Universal Axes
500 at Gibson

Up Front

ENTERTAINMENT: Layoffs follow

planned closure of amphitheater.

By MARK R. MADLER Staff Reporter

Richard
Mandeville is
debuting a pub
at a closed
theater. PAGE 3

High Tech: Medtronic

Chief Technology Officer John
Mastrototaro holds advanced
Threshold Suspend insulin pump
at companys Northridge lab.

Want to live
past 100? A
Japanese firm
says it knows
how. PAGE 5

BLOOD SIMPLE
Medtronic makes gains on diabetics artificial pancreas

By JOEL RUSSELL Staff Reporter

Profile

Dave Newmark
believes hes
no Mad Man.
You decide.
PAGE 6

Comment

HE Holy Grail in diabetes care is being

developed smack dab in the middle of the
San Fernando Valley. But this is one scientific adventure that is not quixotic.
Scientists at Medtronic Inc. announced last
month they have taken a big step forward in developing a commercially viable artificial pancreas, a
device that would improve the daily living of diabetics and decrease long-term medical complications.
The Minneapolis companys diabetes division
at 18000 Devonshire St. in Northridge disclosed

positive results of a field trial of an insulin pump

that automatically shuts down at night if a
patients blood-sugar level falls dangerously low.
Called Threshold Suspend, its the first system in
which a blood-sugar monitor controls a pump without a patients intervention. The study provided evidence that an automatic system was superior to current technology, in which the monitor alerts the diabetic, who turns off the pump manually.
The results were rather striking, said John
Mastrototaro, chief technology officer at
Please see BIOMEDICAL Page 38

PHOTO BY DAVID SPRAGUE

News &
Analysis

About 500 stage hands and other workers

stand to lose their jobs with the previously
announced closure of the Gibson Amphitheatre,
according to a layoff notice filed with the state.
The 6,000-seat Gibson, which opened in 1972
as an outdoor theater on the grounds of Universal
Studios, is being demolished to make room for the
planned Wizarding World of Harry Potter theme
park ride. Owned by the House of Blues Concerts,
a subsidiary of Beverly Hills-based Live Nation
Entertainment Inc., the Gibson is the largest performance space in the Valley.
Regional competition among venues has
Please see ENTERTAINMENT Page 40

Valley Law Firms

Hire Dont Fire
LEGAL: Local industry bucks

national downturn in job trends.

By JOEL RUSSELL Staff Reporter

By some measures, the law industry is a

shrinking career trap. You just wouldnt know it
from the employment figures of the largest firms
in the greater San Fernando Valley.
The 40 firms on the Business Journals list,
ranked by number of attorneys, collectively hired
35 attorneys last year and employ 690 lawyers.
Consider Sanford Michelman, executive chairman at Michelman & Robinson LLP in Encino,
the No. 2 firm on the list with 54 attorneys.
This year weve hired more in our Encino
office, and we have three more attorneys starting
in August, he said. Our business is growing in
Please see LEGAL Page 11

Forget Hollywood ... Head to Conejo?

TOURISM: Valley cities band together

SPECIAL REPORT
REAL ESTATE QUARTERLY

and form district to boost visitors.

By ELLIOT GOLAN Staff Reporter

Martin Cooper
says business
lost its way on
Independence
Day. PAGE 43

On a typical weekday afternoon in the Conejo

Valley, hotels are full of an odd mix of professionals,
ranging from suit-clad insurance executives to biochemists from around the globe.
But those business travelers drawn by the likes of
Thousand Oaks biotech giant Amgen Inc. and health
insurer Wellpoint Inc. depart on weekends, leaving
hoteliers struggling to fill all those empty rooms.
Now the cities of Agoura Hills and Thousand Oaks,
along with their 14 hotels, have teamed up to form a
Tourism Business Improvement District with the

ASSISTED DEVELOPMENT

PHOTOS BY DAVID SPRAGUE

Please see TOURISM Page 38

Agoura Hills: Sheraton GM Matt Huss.

Aging baby boomers have made

retirement projects the new hot
properties and the greater Valley
has its share. PAGE 19

Awards Luncheon: Tuesday, August 13, 2013 11am 1:30pm

Universal Hilton Hotel Universal City Tickets: $75 / Corporate Table of 10: $650
Register today! For more information, please visit www.sfvbj.com/bizevents

UP FRONT

JULY 22, 2013

PHOTO BY DAVID SPRAGUE

Now Showing: Restaurateur Richard Mandeville with theater owner Linda Fulton.

Theater
Spaces
Next Stage
Schreiber owner
leases property to
gastropub Fat Dog.
During its 10 years in
operation, the Avery Schreiber Theatre carved out a niche
in North Hollywood, hosting
local troupes such as Red
Brick Road and an improv
school for kids.
But on July 1, the 11050
Magnolia Blvd. theater took

its final curtain call and in its

unlikely place will open a
gastro pub called Fat Dog.
Restaurateurs Richard
Mandeville and wife Susan,
along with chef John
Gladish, leased the space
from building owner Linda
Fulton, who decided she no
longer wanted to operate the
theater after her husbands
death a few years ago.
As soon as we came
across the Schreiber Theatre it
was too good to pass up, said
Mandeville, 38. We want to
expand, but not aggressively.
This will be the third Fat

Dog location, with the first

opening in Montrose six
years ago and a second in
Hollywood in 2011.
Fulton, who has performed
on stage, decided to close
down the theater after having
taken a leave of absence from
the operation to help nurse her
husband, who had helped
finance the theater and died
from liver disease in 2010.
During that time, her
manager ran the theater dayto-day. When she returned,
she found it a struggle.
Running the theatre was a
lot of financial pressure. It

SAN FERNANDO VALLEY BUSINESS JOURNAL 3

became a lot of responsibility, said Fulton, 54.

The building had previously been named the Bitter Truth
Theatre and was where Fulton
studied and performed with
actor Avery Schreiber. She
bought the building in 2004
and named it after her mentor.
Fulton, however, is not
totally leaving the theater
world. She founded Total
Improv Kids, a theater school
for children more than a decade ago, and is moving that
to the nearby Sherry Theater.
Meanwhile, the theater is
being completely transformed into restaurant space
for Fat Dog, which will have
nearly 4,000 square feet,
including a full kitchen, bar
and outdoor patio.
The restaurant sells bar
food favorites with gourmet
ingredients, such as potato
skins with crab, asparagus and
hollandaise sauce. A French
dip sandwich gets upgraded
with gruyere cheese. Not to be
forgotten is the fat dog itself
an all-beef hot dog that exceeds the size of its bun.
Cocktails are exotic too.
The Key Lime Pug features
vanilla-flavored vodka,
Malibu rum, fresh lime and
pineapple. It should open by
the end of the year.
Shes a great landlord to
have for what were doing,
Mandeville said.
Megan Diskin

Performance
Review Isnt
Academic
Woodbury president
assesses organizations
for quality award.
One might imagine Luis
Calingo is plenty busy as
president of Woodbury University in Burbank. But he
has an unusual side job that
takes up a chunk of his time.
No, he doesnt
moonlight as a
piano player at
jazz bars on
weekends. Rather,
he serves as a
judge for the Malcolm Baldrige
Quality Award.
The awards are
given by the U.S.
Calingo
Commerce Department to recognize and encourage superior performance in organizations. They are named
after President Ronald Reagans
secretary of commerce, who believed quality performance was
the key to national prosperity.
In his duties as a judge
technically called an examiner
Calingo reviews written
applications from companies
and then joins small groups of
experts who compare results.
About 1,000 companies,
non-profits and government
agencies submit applications

each year, and about 500 examiners participate in the process.

As the competition intensifies,
examiners pay on-site visits to a
few companies. The visits are
supposed to be so confidential
that the examiners dont even
tell their spouses the destination.
But one time when Calingo arrived at a companys
headquarters he was greeted
by a giant banner declaring:
Welcome Examiners!
We looked at each other
and said, Isnt this supposed
to be secret? he
recalled. They
knew they were in
serious consideration to win the
award, and obviously they were
prepared for the
visit. If there had
been Google Alert
at that time, they
probably would
have used that too.
Calingo devotes at least 110
hours a year to his duties and
was recently reappointed for the
17th year. A business professor
by training, he credits his experience with turning him into an
academic administrator, first at
Cal State Long Beach in 2000.
What got me excited was
that you see the strategic
planning, operations, human
resources, finances and marketing for these best-in-class
organizations, he said.
Joel Russell

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JULY 22, 2013

NEWS & ANALYSIS

SAN FERNANDO VALLEY BUSINESS JOURNAL 5

PHOTO BY THOMAS WASPER

Salesmen: Anthony Raissen, left, and Tony Hatori with supplement products, Okinawa Life and NutriDiet.

Age Old Prescription

MARKETING: Japanese pharmaceutical maker launches high-end

supplement brand said to be based on Okinawa longevity secrets.

By MEGAN DISKIN Staff Reporter

he traditional diet on Japans subtropical

islands of Okinawa was heavy on seaweed, tofu, legumes and sweet potatoes.
It also was low in fat, sugar and salt, which
has contributed to one of the worlds highest
life expectancies at least before Western foods
began taking their toll the last few decades.
Now, a 100-year-old Japanese company, Kowa Co. Ltd., is trying to conquer the U.S. health
supplement market with pricey products that
include key ingredients from the original diet.
And as its entering a crowded supplement
market filled with competitors like L.A.s own
Herbalife Ltd., its relying on the expertise
of Anthony Raissen, a colorful Valley marketing executive with a long history in directresponse advertising.
Kowa Health Care America Inc., the
subsidiary of its Nagoya-based parent, has

hired Raissens InterQuantum Inc., an

Encino advertising and retail promotion company, to run a $14-million ad campaign to sell
Kowas dietary supplements at retail outlets
and directly to consumers. The subsidary is
run by Chief Executive Tony Hatori.
NutriDiet is a weight-loss supplement marketed to 25- to 64-year-old women. The product contains nutrients and probiotics said to be
consumed in Okinawa. A second product, Okinawa Life, focuses on longevity and targets
men and women older than 50. The ingredient
list features shima-tofu, the traditional tofu of
Okinawa; a purple ginger-like plant called
Zedoary; and a bitter melon called Goya.
Kowa Co. is a conglomerate that sells
health products along with a variety of other
goods, such as cotton and optical equipment.
The company reported more than $2 billion in
sales during the last fiscal year.
One month supplies of NutriDiet are being

sold for $39.95 while Okinawa life sells for

$34.95 for 150 pills. By contrast, Herbalife,
which is considered to have high price points
itself, has a suggested retail price of $16.99 for
a months supply of its Florafiber digestive aid.
Marcia Schurer, president of Chicago food
consultancy Culinary Connections, said that
while Kowa is entering a crowded supplement
market, there is always room for innovative
newcomers. But she questioned the pricing
strategy. These products are expensive, she
said. You might as well go to the grocery store
and buy those same fruits and vegetables. My
advice to anyone is to do your homework.
Long history
Takashi Narusawa, Kowa Health product
marketing manager, said that the company settled on supplements because they do not have
to go through the U.S. Food and Drug Administrations time-consuming review process.

Kowas products are based on a noted 25year-long study of Okinawans started in 1975
by Dr. Makoto Suzuki. Although higher penetration of fatty Western foods has cut life expectancy, the islands still have an overall life
expectancy of 83 years, which is one of the
highest in the world.
Kowa hired Suzuki and his scientists to
develop the supplements, which include prebiotics and probiotics to aid digestion and antioxidants that are supposed to lengthen life
expectancy.
Narusawa met with several advertising
companies, but ultimately chose InterQuantum after discussions with Raissen.
I asked so many questions, hundreds of thousands of questions to get to know the market,
Narusawa said. And he answered everything.
A South African native, Raissen first
achieved direct-marketing stardom in the
1990s with BreathAssure, a mint product that
featured ads created by Inter/Media Group, a
Woodland Hills advertising holding company
that specializes in direct response campaigns.
But after a court found that assure in the
product name was deceitful, it prohibited the
company from using the BreathAssure brand
and the company declared bankruptcy in 2000.
Later, Raissen and his wife Lauren founded InterQuantum, which was purchased in
2007 by Inter/Media. InterQuantum clients
include Hollywood 24-Hour Diet and the 48Hour Miracle Diet, as well as BreathGemz,
the mint pitched by ex-radio host Larry King.
Retail presence
For Kowa, InterQuantum has designed separate websites for each product and has created ads to run on cable TV channels. For NutriDiet, the company will target channels such as
the Oprah Winfrey Network and Lifetime.
Raissen also plans to place ads in publications
such as Redbook and Ladies Home Journal.
To reach the older audience for Okinawa
Life, InterQuantum will advertise on Fox
News, the History Channel and Biography
Channel, as well as on radio. Suzuki serves as
the TV spokesperson for both products.
InterQuantum released the direct response
ads in November and has used the feedback to
understand the best way to market the products.
GNC stores already carry NutriDiet and
plan to carry Okinawa Life by August.
NutriDiet will appear on Rite Aid shelves in
September, and Okinawa Life will follow
early next year, Raissen said. He is in talks to
place them in Walgreens, CVS and Walmart
stores as well. In August, he will promote the
products at the National Association of Chain
Drug Stores Total Store Expo in Las Vegas.
At the trade shows there are face to face
meetings with the retailer for 20 minutes. Its
kind of like speed dating, Raissen said.

Company Goes on Crusade to Own Property

INSURANCE: Unico leaving

Woodland Hills after

Calabasas acquisition.
By ELLIOT GOLAN Staff Reporter

Unico American Corp. is moving its headquarters to nearby Calabasas and plans to
become a landlord to boot.
The Woodland Hills property and casualty
insurer last month agreed to purchase a
46,000-square-foot building at 26050 Mureau
Road for $9.5 million. Escrow is expected to
close September 26.
The company, which operates several subsidiaries, entered into the agreement throuhg
its Crusader Insurance Co. unit, which offers
coverage for apartments, contractors and retail

businesses.
The building is currently 100 percent
leased, with Zurich-based reinsurer Swiss Re
occupying more than 36,000 square feet.
Crusader will serve as landlord of the building until it moves its operations, which could
be more than a year down the line.
Unico Chief Executive Cary Cheldin said the
purchase is considered a capital investment. The
company has been renting about 25,000 square feet
at its current office for more than 20 years.
Its a simple financial decision, Cheldin said.
The primary motivation is to own the building that
were occupying and discontinue being renters.
As an investment, Unico itself has been flat
this year. Its stock, which trades on the Nasdaq,
has hovered within 2 percent of where it closed
December 31. And in its first quarter which
ended March 31, there was zero net income per
share, compared with 9 cents a share in the first

Unico American Corp.

Woodland Hills

(Nasdaq: UNAM)
FRI. CLOSE, PAST 5 WKS

13.0

Employees: 81
Market Cap: $66 million
P/E: 45.66
EPS: $0.27

14.0
13.5

CEO: Cary L. Cheldin

12.5
12.0

July 17: $11.64

6/14 6/21 6/28 7/5

7/12

11.5
11.0

Source: Yahoo Finance

quarter last year.

But Crusader is making the purchase in cash.
Its retained earnings from prior years,
Cheldin said. It comes from Crusaders capital and surplus.
Lee Black, executive managing director at
the L.A. office of Cassidy Turley Inc. of St.
Louis, said the buy makes sense because of
Unicos plans to eventually move in.

This would have sold for less if it was just

an investment, he said. But this makes sense
as an owner-user. They get income for some
time while they get ready to move and theres
no risk of having an empty building.
Black added that the price, which amounts
to more than $200 per square foot, is a good
sign for the local real estate market.
The building has two stories and is located
about four miles from the companys current
headquarters at 23251 Mulholland Drive. Average rent for the building in Calabasas is about $22
per square foot, according to CoStar Group Inc.
Cheldin said that once the company sets up
its headquarters in the new building, it will occupy about 25,000 square feet and continue to
lease the remainder of the building.
Were insurance people, not real estate
people, he said. But this will leave us room
to grow.