Person to Watch: Dwight Decker
Chief executive,
Conexant Systems Inc.
For the most part, Dwight Decker did what we had in mind in 2006, with some twists here and there.
The chief executive of Newport Beach-based chipmaker Conexant Systems Inc. continued a return to profitability for most of the year until the quarter ended Sept. 30.
That’s when Conexant slipped to a net loss, due in part to a decline in value of an investment in spinoff Mindspeed Technologies Inc., also of Newport Beach. Conexant was profitable in the quarter excluding Mindspeed and other items.
Decker also checked off a big item on his to-do list: selling off Conexant’s stake in Newport Beach chip plant Jazz Semicon-ductor Inc.
Conexant is set to get $100 million in the sale of its former chip plant, which it broke off in 2002.
Newport Beach-based Acquicor Technology Inc. is acquiring Jazz in a deal set to close in the first quarter.
Selling off Jazz was a big part of Decker’s plan to restructure Conexant’s debt. Jazz first filed to go public in early 2004, but never made a go of it. The company, a contract maker of chips for other companies, again sought to go public this year, seeking to raise $105 million.
Then came Acquicor, a company started by Apple Computer Inc. alums with the sole purpose of buying and running another company.
The deal didn’t come fast enough to help with Conexant’s debt. In 2006, Decker refinanced the company’s debt, issuing $250 million in convertible notes to pay off $197 million in debt that was due in May and to pay down some due in February.
He also promoted a pair of lieutenants. Lewis Brewster, executive vice president and chief operating officer, took on another role as general manager of Conexant’s broadband business. Brewster replaced Jeff Crosby, who resigned this year.
Sailesh Chittipeddi joined Conexant as the vice president of global operations, reporting to Brewster.
Two years ago, Decker came out of semiretirement to rejoin Conexant as chairman and chief executive. Decker served as Conexant’s chairman and chief executive from 1999 through early 2004, when the company undertook a difficult acquisition of New Jersey’s Globespan Virata Inc.
He launched a three-part recovery plan to put Conexant on track for profitability. Part of the plan has been to shift some engineering to China and India.
,Sarah Tolkoff
Company to Watch: Bitfone Corp.
We were half-right in our advice to watch Laguna Niguel-based Bitfone Corp. this year.
What we had in mind,a buyout or public offering,didn’t happen.
Still, the maker of software to update wireless phones remotely had a big year.
The company grew sales, landed several key customers and saw a round of venture funding, according to Chief Executive Gene Wong.
“It’s been a tremendous year,” he said. “2006 really saw Bitfone flourish.”
Bitfone recently raised $10 million, bringing its total raised to about $70 million, Wong said.
Vinod Khosla’s venture capital firm Khosla Ventures in Menlo Park led the funding. Khosla is a founder of Sun Microsystems Inc.
New customers include China Mobile Ltd., T-Mobile International AG & Co., Samsung Corp., Kyocera Corp. and Alltel Wireless Inc.
Bitfone now has contracts with some 25 companies, Wong said. Its software is embedded in Motorola Inc.’s Razr phones.
Sales have doubled this year, though Wong declined to give specifics. Bitfone increased its workers by 20% to 140, he said.
Back in 2005, Bitfone landed an undisclosed investment from Qualcomm Inc. The head of Qualcomm’s venture division now is an observer on Bitfone’s board.
“We have a great relationship,” Wong said.
Bitfone is working with Qualcomm to “roll our technology into all of their chips,” he said.
As for why we picked Bitfone as a company to watch, Wong was coy when asked if the company has gotten buyout offers or plans to go public.
“I’d say anything is possible,” he said. “Let’s just say it’s a hot space for a hot company, and I think a number of companies would be interested in offering the features that we provide.”
But Wong cautioned it’s early yet.
“Mobile phones are turning into little computers, and they need to be managed and updated,” he said. “We are still early in the journey.”
Person to Watch: Douglas Holte
Senior vice president,
Hines Interest LP
Douglas Holte, Western regional partner and head of Orange County operations for Houston-based developer Hines Interests LP, didn’t disappoint as our real estate person to watch in 2006.
When the year started, Hines’ OC holdings were small: a 1.2-acre parcel at 2211 Michelson Drive, valued at about $12 million.
Since then, Holte has assembled land in Irvine capable of housing 1.2 million square feet of new or redeveloped commercial space.
Towers, mid-rise office space, warehouses and low-rise offices are on the books for Hines in Irvine. The developer appears well on its way to Holte’s goal at the outset of the year: overseeing $1 billion in local real estate deals in the next few years, either by building or buying.
“We’re excited to play a role in Irvine’s next stage of growth,” Holte said. “This is going to be a permanent location for us. Irvine is the best value for an employer in California.”
At a time when other developers were focused on building homes in the business area around John Wayne Airport, Hines went against the grain and saw a need for more office space. With a slowdown in the local housing market, the strategy looks smart.
The slower housing market “is probably a healthy thing for the area,” Holte said.
There still is demand for commercial space near the airport, he said.
Hines was in on three big buys in the airport area in 2006.
In August, it bought a 6-acre site along Jamboree Road. Cisco-Linksys LLC, a unit of Cisco Systems Inc., rents the 120,300-square-foot industrial building on the site.
In October, it bought a similar parcel next door to the Cisco building, at the corner of Jamboree and Michelson Drive. The space now is used as a factory by Irvine-based women’s clothier St. John Knits International Inc., the county’s biggest apparel maker.
Hines also is considering a third industrial property along Jamboree. That building, next to Cisco-Linksys, once housed a medical device unit of Tyco International Ltd.
Early plans are for Hines to build a mid-rise office campus along Jamboree, likely starting when St. John’s lease runs out in 2011. A hotel also could be built.
In another deal, Hines and Newport Beach-based real estate investment bank Buchanan Street Partners in November bought the 2323 Main St. building that currently holds the headquarters of athletic shoemaker American Sporting Goods Corp., which is moving to Aliso Viejo.
The 260,000-square-foot office and warehouse previously had been controversially slated for condominium development.
Hines will keep the space for business and will renovate it for a company,perhaps an apparel maker,seeking a combination of low-rise office and warehouse space.
Meanwhile, Hines is on track to open its $90 million office tower, 2211 Michelson, in May. The 12-story, 260,000-square-foot office building being developed with Crescent Real Estate Equities Co. broke ground earlier this year. It could be the first to finish among several towers going up near the airport.
The first few leases for the tower are being finalized.
While Irvine has been the focus of Hines’ OC operations, Holte isn’t ignoring the rest of the region.
The company is working with Englewood, Colo.-based Archstone-Smith Trust to propose a mixed-use development for a 51-acre acre plot of land surrounding Angel Stadium of Anaheim.
Their plan is one of five bids being considered for the land, which the city still could end up using for an NFL stadium. A decision for the Anaheim site isn’t expected until later next year.
“It would be fun,” Holte said of the project.
,Mark Mueller
Company to Watch:
Standard Pacific Corp.
Standard Pacific Corp. felt the effects of the slowing housing market as much as any homebuilder in 2006.
We chose the Irvine-based homebuilder as a company to watch in 2006, noting the company’s fortunes are tied to the health of the country’s hottest housing markets. That proved to be correct, though not in the way Standard Pacific would have liked.
The homebuilder is big in California, Florida, Arizona, Texas and Las Vegas. Those markets have seen some of the biggest yearly drops in home sales this year, due to higher interest rates, falling affordability and weaker homebuyer confidence.
Standard Pacific’s stock suffered as a result, falling nearly 65% from its high in early 2006, as the company came up against what it called “challenging market conditions.”
The company’s most recent earnings report detailed the problems the company has been facing. Third-quarter earnings fell to $30.8 million from $96.4 million a year earlier. Most analysts were expecting profits of up to $44 million.
New home orders, or contracts to buy a Standard Pacific home, were 1,200 in the quarter, a 58% decrease from a year ago.
In Southern California, new home orders were off 72% from a year earlier, even though Standard Pacific was building at 28% more developments than a year earlier.
Standard Pacific’s cancellation rate for the third quarter was 50% of orders, compared to 18% a year ago. Buyers are having a hard time selling their existing homes, which scuttled purchases of new Standard Pacific homes, the homebuilder said.
The company said last week that things are improving in the current quarter.
Standard Pacific still is on track to post its third-most profitable year in the company’s 30-year history, according to Chief Executive Stephen Scarborough.
And some recent positive reports from Wall Street analysts,who believe the worst of the housing slump may be over,has helped the company’s stock rebound in the past few weeks, to near its six-month high.
Locally, the company’s attempts at urban redevelopment have seen mixed results.
Near Union Station in Los Angeles, Standard Pacific backed out of a $34 million condo conversion project this summer, after slow sales. The homes are being turned back into apartments.
And in Irvine, plans for a five building, 444-unit condominium project at the site of an industrial building were abandoned after the local market turned and the company saw lawsuits over the project.
Person to Watch: David E.I. Pyott
Chief executive,
Allergan Inc.
We tapped David Pyott as our healthcare person to watch in 2006 on the heels of the company’s surprise $3.2 billion bid for Inamed Corp. late last year.
2006 was no less eventful. Integrating Inamed into Allergan and creating a big player in medical cosmetics took up most of the year.
One of the key moves: creating a new unit, Allergan Medical. It includes wrinkle remover Botox, facial smoothers, breast implants, wrinkle reducers and a stomach band device to fight obesity.
Allergan came out with its first product from the buy, Juv & #233;derm, a wrinkle-reducing drug, in September.
The drug maker also wrapped up a loose end from the Inamed buy in November when it spent $217 million to buy Groupe Corneal Laboratories, Juv & #233;derm’s developer. The buy gave Allergan worldwide rights to Juv & #233;derm and a range of hyaluronic acid dermal fillers for wrinkles in the lower face.
In November, Allergan finally got word from regulators that they again would allow silicone breast implants,another Inamed product,back on the market for the majority of American women after a nearly 15-year absence.
Taking on implants gave Pyott pause at first, he said.
“Then we did all the analyses and checks and discovered, really, there was no issue with silicone,” he said.
On the personnel front, Pyott gained a clear No. 2 in February, when F. Michael Ball, a longtime member of Allergan’s executive team, was promoted to president.
Earlier this year, Allergan got a boost from stock guru Jim Cramer during his “Mad Money” TV show on CNBC, saying “vanity is en fuego” and suggesting that investors go after what he called the best in breed in cosmetic plays.
And Pyott also revealed that he is not only Allergan’s top official, he is a client as well. He told the Financial Times that he has used Botox.
“Yes, I have used Botox,you’ve always got to try your own product,” he said.
,Vita Reed
Company to Watch: Devax Inc.
We predicted that Devax Inc., an Irvine heart device maker, would have a big 2006, thanks to a fat war chest of venture funding and plans to do a clinical trial and global marketing of its lead product.
Well, Devax didn’t see any major events in 2006 (think trial results, another big funding or even an acquisition). Yet the company did make some moves.
Devax makes Axxess, a drug-coated stent that treats heart and vessel ailments. Late last year, the company raised $32 million in a fourth round of venture funding, bringing its total raised to $48.4 million.
This year, the company started enrolling patients into an Axxess clinical trial in June that spans the U.S., Europe, Australia and New Zealand.
In a release, Devax said it expected data from that trial in support of an approval application with the Food and Drug Administration.
Devax also received a patent in October for a stent to treat blood vessel bifurcations. Irvine’s Knobbe, Olson, Martens & Bear LLP of Irvine represented Devax.
The company started in 1999 and moved to Orange County in 2001, following an earlier round of venture funding and was forged in the incubator of Michael Henson, a key figure in OC’s device industry. Jeff Thiel, who previously worked at Radiance Medical Systems, another Henson-related company, is chief executive.
Devax licenses the drug and an absorbable polymer coating used in Axxess from Occam International, an arm of Singapore’s Biosensors International Group Ltd.
Company to Watch: The Irvine Company
We were a little early to the party in setting our sights on The Irvine Company’s resort developments for 2006. The company is on schedule with its Pelican Hill Golf Club improvements and a resort development, but much of the work this year has been away from the public eye.
The Pelican Hill Golf Club was closed to install a new watering system with underground cisterns to capture runoff water for recycling.
A few of the course’s holes also will sport new looks that move them away from the Pelican Hill Inn.
The Golf Club will reopen late next year, with the resort to follow in 2008.
More visible were changes at The Island Hotel Newport Beach, which the Irvine Co. began operating a under a new name a year ago.
The hotel, formerly the Four Seasons, upgraded suites, the lobby and its restaurant and brought in general manager Ray Jacobi.
He previously was chief operating officer of Dallas-based Rosewood Hotels & Resorts, a top luxury hotel operator.
Jacobi replaced Hansjoerg Maissen, who returned to his role with the company’s golf operations to oversee the reopening of Pelican Hill.
The Island also added a director of restaurants, Sebastien Silvestri, who came to The Island from the Bellagio in Las Vegas.
The Irvine Co. advertised The Island heavily in meetings trade publications and said it met first-year expectations as an independent brand. A few analysts suspect the hotel may have lost some brand-loyal Four Seasons business travelers but report that operating profit still increased.
Looking ahead to 2008 when the Pelican Hill Resort opens, the company hired Michael Donahue as vice president of marketing for the resort properties division. He previously was with the Grand Wailea Resort & Spa on Maui and La Costa Resort & Spa in San Diego.
“He has great instincts for how to position and promote world-class hotel and resort properties,” said Terry Petty, president of resort properties.
Additions at the company’s shopping centers, Fashion Island, Irvine Spectrum Center and Crystal Cove Promenade, were more visible to the public.
Mastro’s Steakhouse, which opened at Crystal Cove Promenade late last year, has been a hit. The center also added two men’s stores. The biggest buzz at the center probably resulted from an informal show of luxury and exotic cars whose owners gathered on Saturdays for coffee. Word spread, the number of gawkers increased, and the Irvine Co. asked them to relocate the show.
Fashion Island added half a dozen retailers and Blue Coral Seafood & Spirits. At Irvine Spectrum Center, a Target store marked the first pairing of Target and Nordstrom in the same center.
,Sandi Cain
Person to Watch: Henry Samueli
We hit a homerun with our pick of Henry Samueli as the person to watch in tourism for 2006.
This year, he renamed the Mighty Ducks of Anaheim the Anaheim Ducks and gave them a new logo and colors. Then Samueli signed a naming rights deal that changed Arrow-head Pond of An-aheim to Honda Center. The new naming rights deal is worth an estimated $60.4 million,fifth largest deal in the U.S. this year according to Sports Business Journal.
Ducks season ticket sales grew from 9,000 last season to 11,750 so far this year. Last season’s playoff appearance, some personnel moves and a strong start on the ice have contributed to the increase.
The Ducks signed a multiyear sponsorship with Miller Brewing Co. in August, making Miller Lite the exclusive sponsor of the Ducks and Honda Center.
“From my perspective, the Samuelis have embraced ownership and management of Honda Center and the Ducks at the very highest level,” said Tim Ryan, president and chief executive of Honda Center. Ryan also is executive vice president and chief operating officer of the Ducks.
Two years ago, Samueli and wife Susan took over management of what then was Arrowhead Pond from bankrupt Covanta Energy Corp. Last year, the Samuelis bought the Mighty Ducks of Anaheim from the Walt Disney Co. for a reported $70 million.
At the newly christened Honda Center, an 18-month improvement project is in its final phase.
The $13 million effort included a paint job, new food and drinks and better signs, including a marquee along the Orange (57) Freeway.
Improvements to the restaurant, team store, team facilities, sound system and video system in the arena were included in the renovation.
Both the arena and the Ducks added employees throughout the year, bringing the current total to around 180 people. Honda Center hopes to finish in the top 15% of national arenas again for 2006, according to Ryan.
Honda Center is set to finish 2006 with 154 events, including 24 concerts. Performers have included Blue Man Group, Bon Jovi and Coldplay.
It also hosted the first Ultimate Fighting Championship in California.
The Samuelis continue to pursue an NBA team for Orange County, though no official talks are under way.
Ryan said the capacity crowds that attend Los Angeles Clippers games played at Honda Center have proven Orange County is a strong market for the NBA.
“Now there are no lease hurdles, we have a perfect demographic and a first-class facility,” Ryan said. “We’re ready.”
Company to Watch: St. John Knits International Inc.
We expected more changes to play out at Irvine-based St. John Knits International Inc. in 2006. Boy, did they.
Richard Cohen, who came onboard in 2004 as chief executive, abruptly resigned in April after his bold moves of gearing the upscale women’s clothier to younger women backfired.
Since, St. John has steadily brought back executives and designers from the old guard, including longtime chief designer Marie Gray and her daughter, Kelly, former creative director, who both left during Cohen’s time.
Mom and daughter are working as consultants at St. John several days a week to help make changes intended to woo back customers,affluent women in their 40s, 50s and 60s,that snubbed the sleeker designs unveiled last year.
Another big hire: Bruce Fetter, who had left St. John in 2005 after eight years, regained his post as chief operating officer and president on Nov. 1.
On the manufacturing front, St John in October sold its Irvine plant and said it has an eye on moving within five years.
For now, the company is leasing back the building at Michelson Drive and Jamboree Road. Developer Hines Interests LP of Houston, along with pension fund California Public Employees Retirement System, bought the building for an undisclosed price.
The deal allows for St. John to continue using the facility until 2011. After that, it remains to be seen where the company will produce its clothes. The company has 2,283 Orange County workers.
St. John is one of the few big apparel makers to actually make clothes in Orange County.
In the past few years, the company has been streamlining local manufacturing. Most other apparel companies design clothes here and have them produced in Asia or Mexico.
In a statement, St. John interim Chief Executive Philip Miller suggested that jobs would remain in the area.
“We are looking for local real estate that is even more convenient for our work force, which will allow us to intelligently plan a relocation in a way that would minimize any disruption,” Miller said.
In the meantime, St. John remains on the hunt for a new chief executive and said it will bring back what many customers missed: more knits, more color and more comfortable clothes.
,Jennifer Bellantonio
Person to Watch: Joel Waller
Chief executive,
Wet Seal Inc.
Joel Waller’s work in 2006 at mall clothing store operator Foothill Ranch-based Wet Seal Inc. could end up being seen as a model turnaround.
Waller, our retail person to watch this year, has continued to right the seller of clothes for girls and young women since taking over in 2004.
The company’s woes began in the late 1990s, when its styles fell out of favor with teen fashionistas. Many expected Wet Seal to file bankruptcy, which it didn’t.
Waller, with the help of turnaround consultant Michael Gold, closed unprofitable stores, switched up management and cut costs. Wet Seal now runs 416 stores,326 Wet Seal stores for girls and 90 Arden B stores for women. It expects to open 27 stores this year.
Two major events for the company this past year: the Security and Exchange Commission ended a probe without taking action of the timing of a Wet Seal stock sale by Canadian lingerie retailer, La Senza Corp. Wet Seal also unsuccessfully bid to buy bankrupt G+G Retail Inc. for $15.2 million. Los Angeles-based BCBG Max Azria Group Inc. paid more than double that to win the chain of 566 stores.
After losing money in recent years, Wet Seal posted its second straight quarterly net profit for the three months ended Oct. 28. It reported net income of $2.4 million, compared to a loss of $6.5 million a year earlier. Sales were up 11% to $143.3 million, a bit higher than analysts’ expectations.
The chain’s same-store sales in November posted a 5.5% gain, surpassing Wall Street’s expected 4% increase.
Wet Seal’s shares are up about 40% for the year through early December with a recent market value of nearly $560 million.
The company is going into the holiday shopping season with a new chief merchandising manager, design team and buyers for its Arden B. stores. Arden B. is expected to begin selling its new line in the spring.
But Wet Seal still has a ways to go, according to one analyst. Brean Murray, Carret & Co. analyst Eric Beder recently said, “New management can only do so much to fix a number of key mistakes from prior management.”
,Sherri Cruz
Mall to Watch: Irvine Spectrum Center
This past year marked the pairing of the odd couple,Nordstom and Target,at Irvine Spectrum Center. It seems to have paid off. More people are coming to the center, which is nearly full of retailers.
As our mall to watch for 2006, Irvine Spectrum Center proved worthy. The mall has attracted a bit of everything,upscale and basic stores as well as boutiques such as Jeany, a pricey jeans store that opened this year. Coming next year: H & M;, which has the fashion-conscious frothing for its stylish, yet affordable fashions.
Irvine Spectrum Center is The Irvine Company’s largest shopping center after Fashion Island. The mall now has 1 million square feet of space with the opening of Target this year.
Shoppers were up 26% Thanksgiving weekend from a year earlier. Sales at the center’s stores are up 20% since Nordstrom opened in 2005, according to the Irvine Co. The Target effect has yet to be measured.
Two new parking structures have helped alleviate the parking pain. The structures use computers to count cars and display to shoppers how many spaces are left.
The Irvine Co. continues to build up apartments and offices near the mall, such as The Village Cambria luxury apartments. Development brings more shoppers.
Irvine Spectrum Center still has its giant wheel, movie theaters and an annual ice rink, though these days it seems to have evolved from an entertainment center to a store-driven mall.
Other newcomers to the mall this year: Santa Barbara-based This Little Piggy Wears Cotton, Donna B’s Gourmet Cookies & Cakes, Apple Store, the Saleen Store, teen retailer Aeropostale, New York & Company, the Levi’s Store and Naartjie (pronounced Narchee), which sells colorful South African-designed clothes for children.
Person to Watch: Stephen Gordon
Stephen Gordon, founder of Irvine’s Commercial Capital Bancorp, had a billion-dollar 2006.
In October, he sold the thrift to Seattle-based Washington Mutual Inc. for $983 million in one of the larger deals of the year.
We thought Commercial Capital could be acquired when we picked Gordon as our finance person to watch. But, in all fairness, we considered the thrift’s fast growth of earlier years, recent acquisitions and a shifting market more in our selection.
At this time last year, Commercial Capital was coming off three years of heady growth. It had just paid $40 million for Sacramento’s Calnet Business Bank to expand in Northern California. And it had hired real estate banking executives away from rival Comerica Inc., which sparked a lawsuit that Washington Mutual settled last month for $47 million.
The thrift faced a challenge: keeping up its growth amid higher interest rates. Like others, Commercial Capital was paying more to lure deposits, which it used to fuel loans to apartment owners. How Gordon managed the delicate balancing act of higher rates was a key reason for our pick.
Gordon, who felt Wall Street undervalued his company amid higher rates, started looking for a buyer in late 2005, according to Securities and Exchange Commission filings.
A host of possible buyers were contacted, including Washington Mutual and possibly Wachovia Corp. Commercial Capital was close to selling to another company when Washington Mutual came back with an offer.
Gordon, who left after the acquisition, owned about 5 million shares and held the rights to another 1 million in options. His stake was worth about $90 million in the buyout.
,Michael Lyster
Company to Watch: Pacific Life Insurance Co.
Newport Beach-based Pacific Life Insurance Co. saw a big change in 2006.
Longtime Chief Executive Thomas Sutton said earlier this month that he’s handing over the reins to Jim Morris starting next year.
Sutton, who plans to stay on as chairman, faced mandatory retirement next year at age 65.
The announcement formalized a succession plan that had been in the works. At the start of 2006, Morris was made chief operating officer, a move that put him in line to follow Sutton.
Sutton has run the life insurer for the past 17 years. Morris also is a company man, having joined Pacific Life as an assistant actuary after graduating from the University of California, Los Angeles, in the early 1980s.
In April, Pacific Life announced a big expansion set for early 2008. The company plans to move about 1,000 workers to a nine-story office tower it’s having built in Aliso Viejo.
The building should allow Pacific Life to shift some operations from elsewhere in the county and give it room to grow.
2006 stands to come in as a strong year for Pacific Life.
The company’s assets,policies, investments and planes from the company’s aircraft leasing business,were $95 billion as of Sept. 30, up from $86.9 billion at the end of 2005.
Revenue through Sept. 30 was up 15% from the year-ago period to $3.9 billion.
The company went into the year on the heels of a big acquisition.
In 2005, Pacific Life paid $2.6 billion to buy aircraft leasing company Boullioun Aviation Services Inc. of Seattle. The move doubled the size of Pacific Life’s Aviation Capital Group, which was launched more than a decade ago and now has 220 planes worth more than $5 billion.
Person to Watch: John Moorlach
John Moorlach lived up to the billing of politician to watch in 2006. He ran for Orange County supervisor and won, trouncing labor-backed challenger David Shawver, a Stanton councilman.
Moorlach has been one of the county’s most popular politicians ever since he warned in 1994 about the impending county bankruptcy.
After 11 years as county treasurer, Moorlach said he wanted a more direct role in shaping county policy and reforming the budget. So he gave up the relative security of treasurer to run for the lower-paying, term-limited seat on the Board of Supervisors.
Moorlach worries that pension and benefit hikes granted to public employees in recent years aren’t sustainable. He says the county “dodged a bullet” this past year only because a third straight year of double-digit growth in property tax revenue offset spiking pension costs. With the housing market softening, another windfall is doubtful.
“I won! Now I’m ready to save the pension plan as priority one,” Moorlach said.
Moorlach, along with another newcomer to the board, former Assemblywoman Pat Bates, and the re-elected Chris Norby, are expected to form a solid majority for reform.
Labor tensions lie ahead. A conciliatory sounding Nick Berardino, labor rep for rank-and-file employees, cited “harsh reality” in negotiating retiree health-benefit givebacks even before Moorlach’s swearing in. But Moorlach’s first move as new supervisor to similarly rein in the deputy sheriffs’ benefits already has prompted threats of a job action.
,Rick Reiff
Consultant to Watch: Forde & Mollrich
It was a busy year, but a mixed one at the ballot box, for our 2006 consultant to watch, Forde & Mollrich.
F & M;’s candidate lost the most expensive supervisor race in county history. But Larry Agran allies Beth Krom and Sukhee Kang won re-election to the Irvine City Council, likely ensuring that F & M; will continue its consulting work for the Great Park.
F & M;’s reputation for invincibility took a hit when Pat Bates won both a primary and runoff against its client Cassie DeYoung to claim the open South County supervisor seat.
DeYoung, mayor of Laguna Niguel, spent a staggering $4 million of her family’s money (nearly half of funneled through F & M;, which in turn paid vendors). A hard-hitting direct mail blitz,an Arnold Forde trademark,couldn’t overcome the name recognition advantage of former assemblywoman Bates, who spent about $1.3 million. F & M; stoked the South County opposition that killed the proposed El Toro airport. But the firm’s attempt to create a similar populist uprising over a proposed mountain tunnel,opposed by DeYoung, worth studying according to Bates,fizzled. F & M;’s no-bid Great Park deal got scaled back. Contracts that generated $1 million a year in revenue expired in mid-2006. F & M; is now being paid up to $353,000 for one year by the Great Park design team.
Country to Watch: Japan
Japan,the second largest market for Orange County exports after Mexico,didn’t see the growth some had hoped this year. But it saw growth nonetheless, after spending much of the past 15 years stagnating.
That’s why we tapped Japan as our country to watch in international trade for 2006.
We weren’t far off the mark. Japan’s economy is expected to grow by 2% this year, on par with 2005. But the Nikkei stock index, which hit a five-year high last year, is flat for 2006. Investors are worried in part about the slowing U.S. economy.
The good news: Japan is buying more. In November, imports were up 17% from a year before.
Orange County exporters are projected to send $1.3 billion in goods to Japan this year, up 12% from 2005, according to California State University, Fullerton.
Japan is a key market for local medical device makers, electronics companies, clothing makers and others.
For many, Japan is a lucrative yet trying market.
Some local medical device makers have complained about Japan’s onerous regulators.
“Japan’s system for approving use of new medical technologies is the slowest and most costly in the developed world,” Michael Mussallem, chief executive of Edwards Lifesciences Corp., the Irvine-based heart valve maker, said before Congress earlier this year.
,Michael Lyster
