Each December, the Business Journal picks companies and people to watch in the coming year. Our picks for 2005 are set to appear next week.
For now, we’re taking a look back at our picks of a year ago and recapping how they did in 2004.
With some, we looked like sages. With others, we proved to be off the mark. But all turned out to be worth watching to varying degrees, even if for reasons we didn’t expect.
Person to Watch:
Henry T. Nicholas III
Broadcom Corp. Cofounder
Nicholas, former chief executive of Irvine-based Broadcom Corp., got a lot of attention in 2004, but admittedly not for the reasons we had expected.
After stepping down from chipmaker Broad-com in early 2003, we thought for sure the unrelenting Nicholas might make an investment or even start a company. After all, the guy’s worth nearly $2 billion and isn’t one to sit still.
Nicholas didn’t invest in any technology companies that we know of. And he assures us he’s happy spending time with his family and isn’t looking to start a company.
But we weren’t entirely off. Turns out, Nicholas was a great person to watch.
In June, he was the subject of a page 1 story in the Wall Street Journal that detailed his departure from Broadcom amid family troubles and changes at the company he help start in 1991. The story also looked at the role he still plays at the chipmaker as its largest shareholder along with cofounder Henry Samueli.
A month later, Orange County’s younger set got a glimpse of Nicholas,including details about his hilltop mansion with a recording studio, sports bar, grotto and other indulgences,in an OC Weekly cover story.
“For some reason, people like to read about me,” Nicholas told the Weekly.
Perhaps Nicholas’ crowning achievement this year was his fight against Proposition 66 on California’s November ballot. The measure, which would have weakened California’s “three strikes” law, lost, thanks in part to a last-minute cash infusion and media blitz by Nicholas.
Nicholas, whose sister was murdered 20 years ago by her boyfriend, donated $3.5 million to the No on Proposition 66 effort. He also gives to victims’ rights groups in memory of his sister and said he’ll now begin funding some political causes, too.
And while Nicholas said he’d whip Gov. Arnold Schwarzenegger in arm wrestling, don’t look for him to run for office.
“I do not have the ability to not say what I think,” he told the Business Journal.
On the philanthropic front, in February Nicholas’ foundation gave $10 million to St. Margaret’s Episcopal School in San Juan Capistrano, where his three kids attend.
As such, Nicholas proved a great person to watch in 2004. And he still could end up backing or even starting another tech venture. Or he could get into another type of business altogether.
,Andrew Simons
Company to Watch:
Avamar Technologies Inc.
Irvine-based Avamar got $15 million richer in 2004.
But the maker of data storage software didn’t go public or get acquired, like we hinted at in picking it as our technology company to watch for 2004.
At the time, Avamar had raised $35.5 million in venture funding, a total that now stands at more than $50 million after another round in September.
In 2002, Avamar brought on Chief Executive Kevin Daly, who once headed Quantum Storage Solutions Group, part of Milpitas-based Quantum Corp.
Daly headed up ATL Products Inc., when it still was part of Anaheim-based Odetics Inc., and oversaw the company’s blockbuster 1997 offering and subsequent buy by Quantum.
Avamar makes software that lets companies back up large amounts of data without “tying up the pipes” of storage networks. According to company officials, Avamar’s software is a cheaper, more efficient way for banks, government agencies and others to back up data.
The company said it recently closed its largest order to date, installing software and computers at data centers for an unnamed financial institution.
Avamar easily could be a pick to watch for 2005. And, to be frank, it’s been a while since an Orange County startup has hit a home run. The last one: Access360 Inc.’s 2002 sale to IBM Corp. for an estimated $200 million.
So who might be interested in Avamar? Think EMC Inc. or Hewlett-Packard Co. Just a thought.
,Andrew Simons
Person to Watch:
Lawrence “Larry” Higby
Chief Executive
Apria Healthcare Group Inc.
Higby’s Apria, facing cuts in government reimbursement, leaned more heavily on its specialty: acquisitions.
A year ago, Higby, the Lake Forest-based home healthcare company’s veteran chief executive, was dealing with a changed Medicare landscape, thanks to the Medicare Prescription Drug, Improvement and Modernization Act.
President Bush’s reform cut reimbursement on some respiratory drugs that Apria and its rivals provide for Medicare patients.
The challenge earned Higby the slot as the Business Journal’s healthcare executive to watch in 2004.
Indeed, the Medicare cuts have impacted Apria to the tune of $11.5 million through the first three quarters of the year.
How did Higby handle it? By buying up smaller rivals that can’t afford to compete in the lower reimbursement landscape.
Apria, which has a history of making plenty of buys, paid $147 million for 26 acquisitions so far this year. The second and third quarters alone saw 19 deals, “representing 75% more business than we acquired in the comparable period of 2003,” Higby said.
The acquisitions have helped Apria bump revenue 5% through the September quarter, though operating profit is flat at about $149 million.
Another impact on Apria’s revenue: a parting of the ways with Gentiva CareCentrix Inc., a client that steered managed care patients to home healthcare providers. The companies couldn’t agree on a new contract.
Apria provides breathing treatments, such as oxygen tanks, ventilators and drugs for use in patients’ homes. It also provides hospital beds and wheelchairs for home use.
Even with the Medicare reimbursement cuts, Higby said he sees value in the sector. Medicare and Medicaid reimbursement accounted for about 34% of Apria’s revenue last year. In the second quarter, the share was 37%.
Apria still gets most of its revenue from patients who belong to private sector managed health plans. That’s something that Wall Street likes about it relative to some of its competitors.
Apria’s stock is up about 10% this year.
Higby won a victory in October when the federal Centers for Medicare and Medicaid Services decided to levy a service fee when Apria provided respiratory medications in patients’ homes.
“We are optimistic that the service fee recently endorsed by (the Centers for Medicare and Medicaid Services) will ensure that Medicare beneficiaries will continue to have access to these respiratory medications and related homecare in 2005 and beyond,” Higby said at the time Apria released its third-quarter results.
,Vita Reed
Company to Watch:
3F Therapeutics Inc.
It wasn’t the blockbuster year that we had forecast for this Lake Forest maker of heart devices.
No buyout. No venture funding.
A year ago 3F was flush with cash, having nabbed $14.2 million in venture capital funding led by a big medical device maker, Natick, Mass.-based Boston Scientific Corp. It looked like the startup, which has raised $30 million so far, would be in for a big year.
Still, while 2004 has been a relatively quiet year for 3F, it hasn’t been uneventful.
The company spent much of the past 12 months working on its Aortic Bioprosthesis heart valves, which are designed to be implanted with a catheter.
Perhaps the biggest news out of 3F came in October, when it said its Aortic Bioprosthesis Model 1000 replacement heart valve received European Union approval.
The approval allows 3F to start selling in Europe, the company said.
3F Chief Executive Walter Cuevas said the European regulatory signoff helped take 3F, which was founded in 1998 by Dr. James Cox, a cardiac surgeon, from “an exclusive development-stage organization to a broad-based commercial organization.”
Besides Boston Scientific, 3F’s investors include Domain Associates, a venture capital firm with offices in Laguna Niguel and Princeton, N.J., and Cardiac Concepts of Little Rock, Ark.
Even with European approval, 3F still is some time away from releasing the valves in the U.S.
Cuevas estimated last year that the valve wouldn’t be ready for the domestic market until late 2005 or early 2006.
3F is working in a market dominated by big names.
Its potential rivals include Irvine-based Edwards Lifesciences Corp., which also is heavily involved in less-invasive heart valves, and two Minneapolis-area heart valve companies, Medtronic Inc. and St. Jude Medical Inc.
,Vita Reed
Company to Watch:
Boeing Co.
Boeing didn’t let us down in 2004.
The company added 731 workers to its Orange County ranks in the past year, bringing its total to 12,170 people in Anaheim, Huntington Beach, Seal Beach and Irvine.
The 6% yearly job gain is the second year of hiring for Boeing here after years of cuts.
Early in the year, Boeing started a recruiting drive to hire thousands of people companywide, including at least 1,000 in Southern California.
Defense spending is driving the growth. Boeing is working on lighter, faster combat vehicles in Huntington Beach and missiles and battlefield network operation centers in Anaheim, among other projects.
In August, Boeing paid an estimated $40 million to $70 million to buy Irvine-based Frontier Systems Inc., a maker of unmanned aerial vehicles known as drones.
Space projects also kept Boeing busy in 2004. The company’s Huntington Beach-based Phantom Works division in November saw a jet designed for NASA, the X-43A, break a speed record, flying nearly 10 times the speed of sound.
And Boeing’s Huntington Beach operation won a $39 million contract to work on aerospace vehicles for NASA’s Langley Research Center. The Surf City site also is set to play a key role in a $34 million initial project to put people back on the Moon and possibly Mars.
For Boeing as a whole, the Chicago-based company started the year mired in scandal. By December, things were looking up with higher third-quarter profits and nice gains on Wall Street. But challenges remain as fallout from rocket and supply tanker scandals persist.
On another front, Boeing has enlisted the government in its fight against Europe’s Airbus SAS, which has won a series of commercial jet deals at Boeing’s expense.
Earlier this month, the company shifted Scott Carson from Irvine-based Connexion by Boeing to lead the struggling commercial airplanes sales team.
Chief Executive Harry Stonecipher, who spoke before the Orange County Business Council in summer, seems confident the worst is behind Boeing. A federal probe in the company’s tanker contract win is set to wrap up early next year.
,Sherri Cruz
Market to Watch: NAFTA
OK, we weren’t exactly on target last year when our 2004 preview read: “Orange County’s export growth next year will come mainly from one place: NAFTA.”
In fact North American Free Trade Agreement partners Mexico and Canada have lost ground in the past year to the Asia-Pacific region as an export destination for OC companies.
Local exporters were pegged to send $4.3 billion worth of goods to Mexico and Canada in 2004, according to last year’s forecast from California State University, Fullerton. The school’s revised forecast says those two countries won’t come anywhere near that mark.
Cal State Fullerton now expects OC exports to Mexico and Canada will come in at about $3.2 billion. The good news: That’s still a 19% rise in exports to the NAFTA partners versus $2.7 billion in 2003.
Canada is set to contribute about $1 billion to the total, with Mexico buying $2.2 billion worth of OC goods. That’s a nice rebound for Mexico, which had dropped to $1.9 billion in 2003.
Overall, OC companies are expected to grow exports by 20% to $10.7 billion.
The numbers reflect an ongoing shift.
Two years ago Canada and Mexico bought almost as many goods as the entire Asia-Pacific region. Cal State Fullerton projected the NAFTA partners were expected to make up more than 43% of OC’s yearly exports, up from 40% in 2003 and 23% in 1994,the year NAFTA took effect.
But now it looks like Canada and Mexico will account for 30% of OC’s exports in 2004 while the Asia-Pacific region will make up 37%.
Japan’s economic rebound has helped boost exports there, while China, South Korea and Taiwan have continued to post gains following the Asian currency crisis in the late 1990s.
With the tumbling U.S. dollar, which makes it more attractive for foreign buyers to snap up American goods, it’s not clear to observers why exports have shrunk to the NAFTA partners.
“Exports to Canada are showing a continuing downward trend,” said economics professor Vincent Dropsy, who does Cal State Fullerton’s OC export forecasts. “While Canada’s economic growth has not been as strong as expected, that alone isn’t enough to explain why export growth seems to be slowing so much.”
The story could be that exporters are focusing more on the fast-growing Asian region.
,Chris Cziborr
Person to Watch:
Finbarr O’Neill
Chief Executive
Mitsubishi Motors North America Inc.
O’Neill, chief executive of Cypress-based Mitsubishi Motors North America, didn’t get the job done in 2004. But he made headway.
The longtime auto executive joined Mitsu-bishi more than a year ago with the charge of turning around the Japanese company’s U.S. arm.
Mitsubishi had grown fast here by offering financing deals to young buyers, a strategy that came home to roost in 2003 in the form of bad loans and leases. That led to the ousting of former boss Pierre Gagnon and O’Neill’s arrival.
O’Neill, who won high marks for driving growth at Fountain Valley-based Hyundai Motor America Inc., has made changes for the better at Mitsubishi.
He’s firmed up financing and targeted marketing toward more dependable families and older buyers. He’s also spent time reassuring Mitsubishi’s 600 North America dealers.
And O’Neill took a play from his book at Hyundai by pushing beefy warranties and service in Mitsubishi’s advertising, instead of sexy cars and easy credit.
O’Neill just needs more time, according to Robert Hill, partner for Deloitte Consulting LLP’s Asia-Pacific automotive practice in Santa Ana.
“He’s the real deal,” Hill said. “Finbarr is very well respected.”
One of O’Neill’s first tasks was to cut jobs,about 21% of Mitsubishi’s OC staff and 1,200 jobs at its Illinois plant. He also shook up the top ranks with the resignation of three senior executives and the arrival of former colleagues from Hyundai. They include Bob Martin, former head of product planning for Hyundai Motor America.
The moves weren’t enough to convince one investor. Earlier this year, DaimlerChrysler AG, which holds a 37% stake in Mitsubishi, decided not to invest more in Mitsubishi.
Mitsubishi isn’t out of the game, according to Hill. O’Neill needs more time to lobby for funding from Japan, he said.
,Sherri Cruz
Company to Watch:
Wet Seal Inc.
We picked Foothill Ranch-based Wet Seal to watch in 2004 on the prospect of a turnaround. The teen retailer proved worth watching for more gloomy reasons.
Wet Seal continues to struggle with quarterly sales declines, which started in late 2002. It’s seen a revolving door of executives. A bankruptcy filing continues to be on the minds of company watchers.
In November, Wet Seal struck a $56 million debt deal with SAC Capital Management LLC and other investors, who’ll likely push to close many of Wet Seal’s 550-some stores.
Wet Seal isn’t alone. Hot Topic Inc. and Abercrombie & Fitch Co. also have lost shoppers to rivals Forever 21 and Pacific Sunwear of California Inc.
But Wet Seal’s woes go deeper. In August, the company’s board set up a special committee to look at alternatives, including possible bankruptcy reorganization.
Rothschild Inc. was brought on in September to advise on options. One was a buyout offer from an undisclosed rival. Wet Seal’s board passed on the bid, saying it wasn’t high enough.
Rumored prospective buyers include Forever 21 and Clothestime Inc., which used to be based in Anaheim and now is part of New York apparel maker JW Associates.
At one point, former chief executive Kathy Bronstein made an unsuccessful bid.
At this time a year ago, we pinned chances of a turnaround on Peter Whitford, who was recruited from Walt Disney Co.’s store chain to revive Wet Seal. Whitford stepped down in November as part of the debt financing deal.
Joseph Deckop, Wet Seal’s executive vice president, is running things on an interim basis with board member Henry Winterstern as chairman.
But the bad news keeps coming. For the quarter ended Oct. 30, Wet Seal reported a loss from continuing operations of $25 million, versus a $6.4 million loss a year earlier.
Executives didn’t answer any questions from analysts during their last conference call.
Wet Seal closed four stores during the recently ended quarter. It’s now down to 558 stores from 590 a year ago.
,Sherri Cruz
Person to Watch:
Jonathan Jaffe
Chief Operating Officer
Lennar Corp.
Jaffe achieved at least two key objectives this year: climbing Lennar’s corporate ladder and wrapping up a major land buy.
Already the top West Coast executive for Miami-based homebuilder Lennar, Jaffe was promoted to chief operating officer in summer. He’s the only company officer here.
His previous title: president of the homebuilder’s Western region.
“Jon has been the guiding light and driving force of our remarkable expansion into California and throughout the West,” Chief Executive Stuart Miller said in a statement.
In early 2004, Jaffe helped finalize the joint acquisition by Lennar and sister company LNR Property Corp. of Valencia-based Newhall Land & Farming Co. The Newhall Land buy gave Lennar and its partner control of 34,000-acre Newhall Ranch, the largest development approved in Los Angeles County.
Jaffe runs things from Lennar’s new regional headquarters in Aliso Viejo. Last year the company signed a $27 million, 7.5-year lease for a 137,352-square-foot building at the Summit Office Campus there.
In July, some 500 workers moved from Mission Viejo and other Lennar offices to the new digs.
Lennar isn’t a top seller in the county of late. It has about five housing communities open for sale in Orange County. Irvine’s Standard Pacific Corp., one of the county’s top builders, has more than twice as many communities for sale.
Still, Jaffe is gaining ground with a two-pronged approach. His company schmoozes local landowners to get choice parcels and goes after big redevelopment projects, such as the reuse of former military bases.
Jaffe is rumored to be eyeing the auction of former El Toro Marine base land, which should take place early next year.
Lennar with partner William Lyon Homes of Newport Beach got a big chunk of the former Tustin Marine base. They are developing the land for homes.
Last month Lennar was one of seven homebuilders selling during opening weekend of Woodbury, a large masterplanned community by Newport Beach-based The Irvine Company.
Woodbury is part of the much larger Northern Sphere development north of El Toro.
,Mathew Padilla
Company to Watch:
The Voit Cos.
Sales of industrial buildings proved profitable once again this year for Woodland Hills-based Voit. But its development arm has had to grapple with a spike in the cost of construction materials.
Perhaps the sweetest event for the company in 2004: selling out Voit Brea Business Park, a 532,000-square-foot, 18-building industrial development in Brea.
In October Voit announced it had sold the last two buildings at the office park. The final two buyers were Lanny Electronics and Western Switches & Controls, a distributor of switches to equipment makers.
A big reason we chose Voit as real estate company to watch is its 19-building Tustin Gateway Business Park in Tustin. Construction on the former 1 million-square-foot campus of Steelcase Inc. started in summer.
After Steelcase moved its local operations to Industry in 2002, Voit renovated half the facility and sold it to Fresno-based Bedrosians, a tile and countertop maker.
Tustin Gateway, at Warner and Bell avenues, is set to total 265,000 square feet. Two buildings were in escrow before construction began.
But Voit, like other developers, has felt the sting of higher prices for steel and concrete. In a June interview, James Camp, a senior vice president with Voit, said that higher materials prices were pushing the overall cost of new projects up by as much as 10%.
He said then sales prices should rise on new buildings as a result.
Voit’s brokerage division has kept busy negotiating sales as well as some sizeable leases amid another year of low interest rates.
The company’s brokers negotiated a $58 million sale of three office buildings in downtown Santa Ana to Birtcher Anderson Realty LLC in August.
And its development and investment arm recently paid $10 million for an 86,600-square-foot office building in Tustin. Voit turned around and immediately leased half the building to Safeco Corp.
,Mathew Padilla
Person to Watch:
John Campbell
State Sen.-elect
District 35
True to our prediction, Campbell continued to play a hot hand in 2004. But most of his conservative causes remained just ideas in a state government dominated by Democratic legislators and a moderate Republican governor.
Campbell graduated from the Assembly to the state Senate, whipping fellow termed-out Assemblyman Ken Mad- dox in a contentious Republican primary, then coasting to victory in the general election.
Campbell tried to keep Gov. Arnold Schwarzenegger toeing a fiscally conservative line. But it was the governor who moved Campbell leftward on the state budget deficit, persuading Campbell to reverse his position and support the successful $15 billion bond initiative.
Campbell scored a key victory against his Orange County Democrat nemesis, state Sen. Joe Dunn, Garden Grove, by engineering a budget-compromise provision that severely weakened Dunn’s workplace protection bill (or “sue your boss” bill, as Campbell and other critics described it).
Meanwhile, Campbell continued penning a weekly e-mail missive that has a cult following, as well as contributing occasional pieces to the Business Journal. And he became a weekly regular on Hugh Hewitt’s nationally syndicated radio show.
While he is expected to remain a close adviser and ally of the popular governor, Campbell may lose a bit of clout: His status has been reduced from top Republican on the Assembly budget committee to that of a freshman senator.
One of Campbell’s top goals for 2005: qualifying an initiative to slap a hard spending cap on lawmakers.
,Rick Reiff
Government to Watch:
Irvine
Irvine ended an eventful year with a bang: the heated November election.
Critics of outgoing Mayor Larry Agran launched an assault on his ethics, casting doubt on whether he would win a council seat as previously expected.
The attacks culminated with a contentious mailer sent to Irvine homes that looked like an issue of Irvine World News. The mailer was a collection of articles from different newspapers about how associates of Agran allegedly could benefit from redevelopment of the former El Toro Marine base and the creation of a city-controlled utility.
Doubt about Agran’s chances proved misplaced. After a nail-biting vote count, Agran emerged with more votes than any other council candidate. He also backed the winner for mayor, Beth Krom.
Agran and his allies will have a majority on the council next year with the election of Sukhee Kang.
Still, Agran is sure to be under intense public scrutiny next year, which may hamper his influence and agenda.
Election issues aside, plans for the redevelopment of El Toro inched forward this year. In January the Local Agency Formation Commission approved Irvine’s plan to annex El Toro, nixing an appeal by the Airport Working Group. Irvine has laid down the basic zoning for the redevelopment of the base and set development fees.
The transformation of El Toro into a Great Park,really a series of smaller parks, other open space uses as well as houses and commercial space,is Larry Agran’s dream. It also was his tool to kill plans for a commercial airport at the base.
The Navy twice delayed its much anticipated online auction, which now is scheduled for early next year.
Developers seem ambivalent about the auction. It’s a chance to get control of prime property in the heart of the county. But the Navy has divided the land into four large parcels, each with an odd mix of uses, such as land for housing, businesses, golf courses and cemeteries.
Another headache: there are splotches of land that may be contaminated. Under federal law, those pieces can’t be immediately transferred to a buyer until the Navy shows that the land has been cleaned.
An even bigger housing development than earmarked for El Toro is the massive Northern Sphere development by Newport Beach-based The Irvine Company. Northern Sphere surrounds the base, mostly north of it.
With an airport out of the picture at El Toro, Irvine has allowed plans for more homes in the base’s buffer zone; Lake Forest is doing the same.
Northern Sphere could include up to 12,000 homes and apartments.
The first big portion of Northern Sphere opened for sale in November. There are 4,270 houses, condominiums and apartments marked for Woodbury, as well as 450,000 square feet of shops and restaurants, 13 neighborhood parks and one 30-acre central park.
Another key development area for the city is east of John Wayne Airport. There, developers are building or planning 10 condominium towers as well as thousands of other condos and apartments.
The city last week held a public meeting to discuss the concentration of housing near the airport, especially in and around Jamboree Road. The city plans to hold more meetings and explore ways to improve transportation in the area.
Last year Irvine voters rejected CenterLine, a proposed light rail project, but there are other options. Irvine and the Orange County Transportation Authority may come back with another light rail proposal, or turn to more frequent buses instead.
Next year promises a continuation of all the issues raised in 2004. Irvine certainly is worth watching again.
,Mathew Padilla
Person to Watch:
Matt Ouimet
Disneyland Resort President
A year after being named president of the Disneyland Resort in Anaheim, Ouimet has rounded out his executive team with a host of hires and launched plans for the biggest marketing push in Disneyland history: its 50th anniversary in 2005.
Since Ouimet’s arrival, he and others have focused largely on sprucing up Disney-land Park for 2005, resulting in long closures for some big rides such as Space Mountain.
Early summer at-tendance numbers were promising, though a mid-summer slump, due partly to added restrictions on free passes, resulted in an attendance drop of 7% to 9%. But hotel occupancy was up in summer, as was guest spending, driven by an increase in park ticket prices and fewer discounts.
Things also are looking up for Ouimet on his most pressing task: boosting attendance at Disney’s California Adventure. This year’s debut of “The Twilight Zone Tower of Terror” boosted interest in the park, which also is set to see sprucing up for the anniversary bash.
Ouimet called planning of the 50th anniversary celebration a highlight of his first year.
“I recognize this is a unique and important time in Disneyland’s history and I’m fortunate to be part of the cast that will continue Walt Disney’s legacy into the next 50 years,” he said.
As expected, Ouimet is bringing cruise ship Disney Magic to the Port of Los Angeles in May for 12 summer cruises to Mexico.
Ouimet is the former president of the Disney Cruise Line in Florida, which received some of the highest guest ratings in company history.
The fourth quarter’s upturn in tourism bodes well for Ouimet in 2005. Next year stands to be a watershed event for him and the parks as they mark what Disney is dubbing the “Happiest Homecoming on Earth.”
,Sandi Cain
Entity to Watch:
Garden Grove
We gambled by picking Garden Grove as our entity to watch,and won.
The city made national news earlier this year when it flirted with the idea of enlisting Steve Wynn to bring an Indian casino to town. Resident uproar brought an end to the idea, but not before putting Garden Grove on the map.
“We got national press from the casino stories,” said Greg Blodgett, the city’s manager of redevelopment on Harbor Boulevard. “That drew attention from potential developers.”
The extra attention could help as Garden Grove touts a redevelopment plan called International West.
The 400-acre complex, which took shape in 2004, could be developed in four stages along Harbor south of the Disneyland Resort in neighboring Anaheim.
Plans include commercial, retail and entertainment venues as well as hotels and a theme park.
As part of the project, the city this year saw Arcadia-based Kam Sang Co. sign on to develop two hotels on a 5.5-acre site on Harbor. Kam Sang also owns the Holiday Inn Anaheim at the Park.
The city’s redevelopment agency has bought 13 of the 18 parcels needed for International West and helped to relocate businesses from the area.
Construction of the first hotel, a 288-room Sheraton, is expected next fall. The second is slated to get under way in 2006 and likely will be an extended stay-style hotel.
The city talked up International West at the country’s largest theme park convention hosted by the International Association of Amusement Parks and Attractions in Orlando in November.
Blodgett and co-project manager Greg Brown said the convention was “very productive” and included meetings with “large entertainment companies.”
,Sandi Cain
Person to Watch:
Kim Burdick
Bank of America Orange County President
In his first full year running Bank of America’s operation here, Kim Burdick said he’s grown deposits to $13 billion as of June 30, up more than 20% from a year earlier.
The gain is notable given that Burdick took over at a time of change for local banks. The stock market continued to draw investors away from the safety of bank accounts. And the real estate finance market kept cooling.
“In 2004, the markets have been more rational,” Burdick said.
Burdick attributed the deposit gain to existing customers and ones lured away from rival banks.
Burdick replaced longtime local leader Tara Balfour in late 2003.
Before becoming OC president, he headed up Bank of America’s Southland premier banking operation for accounts larger than $100,000 from Newport Beach. He’s kept that role as president.
Burdick added three branches here in 2004 and plans to add two to three more next year, he said. When he took over, the bank had closed some branches and cut local employment.
Like other lenders, Burdick had to deal with a downturn in mortgage refinancing, which pushed his mortgage business down by about 5%, he said.
“It was strong through the first half of the year, but as interest rates rose, it weakened,” Burdick said.
,Andrew Simons
Company to Watch:
Blackstone Group
It was a big year for Blackstone Group LP in Orange County.
The New York private equity firm, with partner Providence Equity Partners Inc. of Rhode Island, wrapped up a $2 billion deal in May that allowed shareholders of Irvine-based Freedom Communications Inc. to sell their stakes in the media company, which publishes the Orange County Register.
About 58% of the shares held by descendents of Freedom founder R.C. Hoiles were sold. Blackstone and Providence were limited to buying 49.9% of the voting stock of Freedom.
The deal concluded two decades worth of infighting among Hoiles family members who wanted to cash out their Freedom stakes, and those who wanted to stay. An auction last year pitted big media companies, private equity firms and a family investor group against each other.
Blackstone largely has been known here prior to its Freedom buy as a real estate investor.
In April Blackstone sold 15 acres at Irvine’s Park Place to Los Angeles-based Maguire Properties Inc. for $260 million. Blackstone bought Park Place from L.A.’s Oaktree Capital Management in 2002 for a reported $200 million.
Meanwhile, Blackstone and Goldman Sachs Capital Partners reportedly contributed $78 million to the $275 million buy of Seal Beach-based Baker Tanks Inc., with Chicago-based private equity firm Code Hennessy & Simmons LLC picking up the bulk of the tab. Baker was bought from Chicago’s Pritzker family.
,Andrew Simons
