december 23, 2014-january 19, 2015 section a

December 23, 2014-January 19, 2015 lbbusinessjournal.com

HealthWiseImpact

Of Addiction8

The College

Of Business

Administration

At CSULB

It Was A

Very Good Year

See Pg. 4

Long Beach Business Journal2599 E. 28th Street, Suite 212Signal Hill, CA 90755-2139562/988-1222 • www.lbbusinessjournal.com

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Black GoldLong Beach Assessing The BudgetImpacts Of The Falling Price Of Oil

LookingAheadIt Was An Eventful Year, But A Better One Awaits � By GEORGE ECONOMIDES

Publisher’s Perspective

T his has certainly been aneventful year internation-

ally and across the United States.Long Beach also made its shareof news. From the rise of the Islamic

State of Syria to a pending shift in

Hospital ChiefLocal Resident Joel Yuhas NamedCEO Of St. Mary Medical Center

Dignity Health, which provides health care at more than 40 hospitals and carecenters in California, Arizona and Nevada, announced last week that Joel P.Yuhas has been named president and CEO of St. Mary Medical Center in LongBeach. (Photograph by the Business Journal’s Thomas McConville)

(Please Continue To Page 15)

Happy Holiday Wishes . . . From The Long Beach Business Journal Team. Our Next Issue Publishes January 20, 2015.

Our Offices Are Closed December 24-28 And December 30-January 1

� By DAVE WIELENGA

Contributing Writer

A wide-ranging search fornew leadership at Dignity

Health St. Mary Medical Center-Long Beach ultimately led backhome when Joel P. Yuhas, a resi-dent of Bixby Knolls and a for-mer St. Mary executive, wasselected president and chief exec-utive officer. His first day on thejob is January 5, 2015.“Joel was the unanimous

choice among representativesfrom all our key stakeholdergroups who participated in the

interview process,” said a writtenstatement from Steve R. Barron,the senior vice president for theSouthern California operations ofSt. Mary’s corporate parent,Dignity Health. “His impressiverecord of success and leadershipachievements in the health careindustry, along with his familiar-ity with St. Mary Medical Centerand Long Beach, made him theobvious selection.”Yuhas had been executive vice

president and chief operating

Section B Is A Focus On TheHospitality AndTourism IndustryPictured is John Jenkins, Jr.,

General Manager of The Queen Mary.

(Photograph by the BusinessJournal’s Thomas McConville)


Going GreenFrom Disney To Louis Vuitton, The Lighting Design AllianceCreates Sustainable Illumination � By SAMANTHA MEHLINGER

Senior Writer

I n a renovated, former cos-metics manufacturing build-

ing on the border of Signal Hilland Long Beach is a companywith an international list ofclientele including the likes ofDisney, Louis Vuitton and BeatsBy Dre. The Lighting DesignAlliance, founded by CEOCharles “Chip” Israel in 1992,specializes in illuminatingeverything from single-familyhomes to the entire Venetianhotel and casino in Las Vegasand, whenever possible, does so

with energy-efficient, sustain-able lighting designs.Since the Lighting Design

Alliance was founded, the com-pany has grown from threeemployees to 30, Israel told theBusiness Journal. The alliancehandles about 300 projects peryear. “We fortunately have a verystrong design team here, andeverything we do is by repeatbusiness,” as well as word ofmouth, he noted. A portfolio ofthe company’s work featuresdizzyingly long lists of projects,not only throughout the UnitedStates but also in countries such

� By SAMANTHA MEHLINGER

Senior Writer

S ince Long Beach was firstimmortalized as an oil

town in famed author UptonSinclair’s novel Oil!, the city hasbeen known for its oil produc-tion, derived from the oil fieldlying beneath it. The sale of thatoil provides a steady stream ofcash into Long Beach’s TidelandsFund, which funds important city

services and capital projects. Butoil is a volatile commodity, and,as its production ramps up else-where in the country, its price hasdropped to nearly half of what thecity budgeted to receive for capi-tal projects, and $20 per barrelbelow what it budgeted for oper-ations, according to John Gross,the city’s director of financialmanagement.As of December 20, the price

Civic CenterArchitect GibbsSpeaks Out On Project� By DAVE WIELENGA

Contributing Writer

A few hours before the citycouncil made its

December 9 decision to junk thecivic center that has hovered andhunkered across six blocks ofDowntown Long Beach since1977, the man who once led theall-star team of architects that cre-ated the complex answered thetelephone in the same BixbyKnolls office where he drew theblueprints four decades ago.




1_LBBJ_DEC_23_2014_SectionA_LBBJ MASTER LAYOUT 12/21/14 5:02 PM Page 1

INSIDE THIS ISSUE2 Long Beach Business Journal December 23, 2014-January 19, 2015

3 Newswatch3-Update On Railway Project mediation3-Furloughed Union Employees Win In Court, Get Paid4-Port-Owned Chassis Pool Moves Forward6-Herlinda Chico Announces Bid For Special Council Election6-Long Beach Wins Big Grant From Bloomberg Foundation8-Long List Of New Laws Impacting Business

10 Going Green10-Talco Plastics Major Recycler12-The Lighting Design Alliance, continued from Page 1

14 Real Estate14-Leases And Transactions14-Green Light For Historic Ocean Center Building

15 Publisher’s Perspective16 Long Beach Civic Center17 In The News

17-New Resident Manager For Merrill Lynch17-76-Year Christmas Tradition For F&M Bank Continues17-Wing Chun Temple Opens In Signal Hill

18 PerspectiveRealty ViewsApartment Construction Up, But Rents DownBy Terry RossEffective Leadership Santa Claus’ Secret For Getting The‘Right’ Things Done By Mick UklejaThird Sector Report The Nonprofit Label: A Threat ToCommunity Progress? By Jeffrey WilcoxHealthWise Impact Of Addiction By Mario San Bartolome, M.D.

Section BFocus On Hospitality Tourism• Industry Overview• Hoteliers Feeling The Love As Occupancy, Room Rates Up• From Omelet Cook To GM Of The Queen Mary• Multiple Hotel Renovations Planned• How Long Beach Spells Success: The Pacific Ballroom• Attractions Report Growing Revenues, Visitor Counts• CVB Online Outreach Puts Spotlight On Long Beach

And Retail Real Estate

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1_LBBJ_DEC_23_2014_SectionA_LBBJ MASTER LAYOUT 12/21/14 5:02 PM

NEWSWATCHDecember 23, 2014-January 19, 2015 Long Beach Business Journal 3

Railway ProjectMediationMeetings:

‘Nothing Resolved’� By DAVE WIELENGA

Contributing Writer

After three mediation sessions itremains difficult to assess the prospectsfor reaching an out-of-court settlement ofthe lawsuit pending against the City ofLos Angeles over its approval of a 153-acre rail yard that the Burlington NorthernSanta Fe railroad (BNSF) plans to build ina part of the Port of Los Angeles thatabuts West Long Beach neighborhoodsand schools.“We had three days of mediation and

nothing is resolved,” reports Mike Mais,Long Beach Deputy City Attorney. “Butwe are still in mediation . . . and stillhopeful. We’re just kinda taking a breakfor the holidays.”The process, overseen by retired

Sonoma County Judge William L.Bettinelli, is intended to avoid years ofcostly and complicated litigation that mayawait if the suit filed in June 2013 goes totrial as scheduled in November 2015. Butin this case, mediation means managinglogistics that could easily become tan-gled, too. Although widely presented as a Long

Beach vs. Los Angeles showdown, thelawsuit actually features seven petitioners,including the City of Long Beach and theLong Beach Unified School District aswell as environmental organizations, busi-nesses threatened with relocation andneighborhood groups.“I’ve never been involved with a case

that has seven petitioners, each of themwith attorneys and clients” Mais says.“Simply calling a meeting with the peti-tioners group alone amounts to coordinat-ing the schedules of a good 30 people.When you add some pretty large crewsfrom the City of L.A. and BNSF – oh, andthe judge’s schedule, too – it’s really oneof those things you have to play by ear.”The actual mediation?“The judge usually does a shuttle diplo-

macy back and forth between the partiesto see if there’s any movement, to see ifthere’s a common ground that can bereached,” Mais explained.Mais says he went into the first three

mediation sessions simultaneously hopinghe’d come out with something definitiveto report and realizing he’d be surprised ifhe did. He’s still not about to predict anoutcome or a timeline for reaching one –not when the next meeting hasn’t evenbeen scheduled. “I guess it will depend on how close

the parties can get,” he says.“Remaining very, very far apart mayend the process. If they get close and itbecomes a matter of hammering outdetails, then things could go on and on,depending on scheduling. “We’re definitely not there – not at

either scenario – but we’ve got, literally, afull year before the trial is scheduled to

begin. That’s plenty of time to kind of,hopefully, resolve this. And everybody isstill talking.” �

City Pays UnionEmployees MillionsFor Court-Rejected

Furloughs� By BRANDON FERGUSON

Last week, the city’s unionized work-force got a de facto Christmas bonus:$3.9 million in back pay – $1 million ofwhich was interest. The payout was for a

mandatory furlough the city had orderedin 2009, which the Public EmploymentRelations Board (PERB) ruled in 2012had violated the city’s negotiation obli-gations. In the midst of the Great Recession, the

city was negotiating with the InternationalAssociation of Machinists and AerospaceWorkers (IAMAW), which represent mostof the city’s employees, in an effort toreduce costs. Facing a budget shortfall ofmore than $16 million, the city exploredvarious options with the IAMAW such asimposing hiring freezes and placing limi-tations on contracting authority. The par-ties were unable to reach an agreement.During the May 5, 2009, council meet-

ing, then-Director of Human ResourcesSuzanne Mason said if the city didn’t

impose the furloughs, it would be requiredto layoff 200 employees in order to gener-ate enough savings to balance the budgetprior to the end of the fiscal year.“We must do something now,” she said.The Long Beach City Council passed a

resolution ordering the 40-hour furloughs,which took place between June andSeptember 2009. Firefighters and policeofficers, both considered essentialemployees, were not furloughed.Following the council vote, the IAMAW

filed an unfair labor practice charge withPERB, which ruled that the city had vio-lated its obligations under the Meyers-Milias-Brown Act by unilaterally impos-ing furloughs before conferring with theunion in good faith.

(Please Continue To Next Page)


NEWSWATCH4 Long Beach Business Journal December 23, 2014-January 19, 2015

The city appealed the PERS’ decision to the California StateCourt of Appeals, which issued a ruling in August. Though thecourt argued that an employer can make unilateral decisionsbefore bargaining obligations are met, it specified that anemployer may only do so in the event of a fiscal emergency. Thecourt reasoned that the city failed to prove its case.“When the city unilaterally imposed the furloughs, it had

untapped reserves (in its budget stabilization fund) thatexceeded the savings to be generated by the furloughs,” thecourt argued.City Attorney Charles Parkin, who at the time of the council

decision was an assistant city attorney, explained to theBusiness Journal that he hadn’t been present for the discussionthat had ended in a staff recommendation to impose the fur-loughs. He added the city had believed it had legal standing toorder employees to take time off.“I believe there were discussions on the [fiscal] emergency

and whether the emergency was sufficient. I think the [court’s]decision gives us additional instruction in the future, but, at thetime we made the decision, we believed there was a legal basisfor implementing the furloughs,” Parkin said.Workers received the back payment on December 19 as part

of their regular paychecks. The IAMAW represents more than3,500 city employees in various fields from trash collection tooffice workers. Calls to two IAMAW representatives seekingcomment for this story weren’t returned. �(Brandon Ferguson is a former staff writer for the Business Journal)

Port-Owned Chassis PoolProposed To Harbor Commission� By SAMANTHA MEHLINGER

Senior Writer

Port of Long Beach (POLB) Chief Executive JonSlangerup’s proposal for the port to operate its own fleet ofchassis, the trucking equipment used to haul containers, wasscheduled for the Long Beach Board of HarborCommissioners’ review yesterday, December 22, after theBusiness Journal went to press. If created, the fleet of chassis, commonly referred to as a

chassis pool, would help alleviate congestion caused by alack of the equipment available for truckers to move cargoduring peak shipping times. A shortage of chassis combinedwith larger-than-average shipments coming to the port hasbacked up the flow of goods going to and from the port inrecent months. Other factors have been at play in congestion as well:

months-long negotiations between the longshore workers’union and the organization representing their employers haveled to fewer workers being deployed to the port to move cargoin the past month or so, Slangerup recently told the BusinessJournal.Congestion has been so prominent that some companies

diverted holiday cargo from the Port of Long Beach, optingto send it instead to other West Coast ports, through thePanama Canal to the East Coast or even by airfreight,according to Dr. Noel Hacegaba, chief commercial officerfor the Port of Long Beach. “It’s hard for us to quantifyexactly how much cargo has been diverted, but we knowcargo has been diverted to other gateways,” he told theBusiness Journal.Slangerup’s recommendation to the board was to issue a

request for proposals (RFP) for a private party to partner withthe port to create its own pool of about 3,000 chassis for useduring peak shipping times. “This would be a fleet we wouldreserve for peak demand. When I say peak demand, I’m notjust referring to your holiday peak season, but I’m also refer-ring to your peaks week to week,” Hacegaba said. “So, whena large vessel arrives at any given container terminal, ourchassis pool will be made available when the existing supplyis not sufficient to meet the demand.”The port “is open to all ownership models [of a chassis

pool], including POLB-owned assets, or scenarios where pri-vate parties may own the assets,” Slangerup’s recommenda-tion stated. If approved, the RFP would be issued in early

January and the deadline to respond would be January 30.The commission would approve a contract in March and thechassis pool would become operational in June, according tothe proposal.Another of Slangerup’s initiatives to get cargo moving

faster through the port was to open a temporary storage yardfor empty containers at Pier S, operated by PashaStevedoring. The storage yard is set to open December 29,according to Hacegaba. “It’s a temporary storage yard thatallows truck drivers who are entering the harbor to drop offtheir empty containers at that site and then proceed to theyards to pick up empty cargo,” he explained. Due to the peak holiday shipping season combined with

some of the worst congestion the port has ever experienced,terminals have been too full for truckers to drop off emptycontainers, thus making it impossible for them to return theirchassis for use by other truckers. “By creating such a yard,we are allowing and facilitating the ingress of chassis in tothe yards . . . but it also frees up space in the yards so, insteadof having empty containers stacked up and taking up space,those empties can be taken off-site and make more space forinbound cargo,” Hacegaba said.Congestion issues at both ports have lessened in the past

two weeks, Hacegaba noted. “Based on the figures we’veseen, especially the numbers of vessels at anchor, we can seethat we are past the peak in terms of congestion,” he said.“We don’t see the same number of vessels at anchor that wedid five or six weeks ago. We used to see from six to eight;now we’re seeing anywhere from one to two.”In addition to the port’s initiatives to alleviate current con-

gestion and prevent it in the future, port staff has beenfocused on meeting with beneficial cargo owners – the enti-ties that own the cargo that is shipping through the port – tounderstand their needs, Hacegaba said. “We’ve been spend-ing a lot of time talking to them, recognizing that they’re theones making the decisions where the cargo goes. And ouremphasis and our objective in meeting with them has been:number one, to update them; number two, hear their con-cerns; number three, answer their questions; number four, tellthem the steps we are taking and initiatives we’re leading,and build confidence in our port and in our gateway.” �

It Was A Very Good YearThroughout 2014, the College of Business

Administration has had the pleasure to shareits story with this finepaper’s readers. CBA is awonderful college withdedicated and committedfaculty, staff, and stu-dents, and the articlesillustrated the many waysthat our faculty and stafftouch the lives of our stu-dents. CBA alumnimight have learned aboutnew programs or activi-ties that have been addedsince they graduated.Hopefully all readers

sense CBA’s dynamic nature and how we con-tinually strive for excellence.On campus, decisions are made against the

standard: will this enhance and improve stu-dent success? We are also career-focused, andI believe that the articles demonstrate ourcommitment to student success, academicallyand professionally. My conversations withalumni indicate that CBA has always helpedits graduates achieve the “American Dream”of career success, a better life, and upwardmobility. I know that CBA students havealways worked while going to school, andthen tirelessly pursued careers to get ahead. Nothing has changed: we continue to help

our students make the “American Dream” areality. I recently visited business schools inChina and Korea. People there are pursuingDreams, too. Whether American, Chinese, orKorean Dreams we all want the same thing:successful careers, financial stability, andhome ownership. It was sometimes difficult totell whether I was in Beijing, Seoul, or SoCal. This series about CBA is ending, but what's

past is prologue, according to Shakespeare.My Asia trip showed that CBA must continueto evolve and adapt to ensure our students’success in the globally competitive world.Stay tuned for future developments.I thank George Economides for the idea

for this series and his staff for their supportduring the year. The collaboration of ourfaculty, staff, and campus and communitypartners was essential in making this serieshappen. I very much appreciate eachauthor’s effort to craft an article that broughtto life all that our college represents. LongBeach is a wonderful community, and it wasan honor and privilege to show how CBA isa vital part of this community. Finally, Ithank the readers of our column and for theencouraging feedback we have received.

(The College of Business Administration atCal State Long Beach is an AACSB accred-ited business school that provides undergrad-uates and MBAs with the knowledge andskills necessary to be successful in theircareers and to propel the economic develop-ment of our region.)

By Dr. Michael Solt,Dean,

College of BusinessAdministration,California State

University, Long Beach

(Continued From Page 3)

per barrel of crude oil was $57.13. For fiscal year 2014-2015,the City of Long Beach had budgeted for the price of oil toremain at $100 per barrel to fund capital improvement proj-ects in the Tidelands area (oil-producing areas around thecity’s shoreline) and $70 per barrel to fund city operationssuch as police, firefighters and lifeguards, according toGross.“Yes, the falling oil prices are a concern. Exactly what the

impact is, we’re still working on [determining that]. It wouldbe nice if prices were stable, but they’re not,” Gross told theBusiness Journal.“[City] staff recognized even as the price was above $70

that there was an issue,” Gross said. “Staff is looking at itboth in terms of what the falling price means in terms of rev-enue and what is our recommended strategy.”In addition to potential impacts to vital city resources such

as police and fire, Gross said city staff is examining how thefalling price of oil might impact capital improvement projects. “There are a whole series of capital projects that have been

approved in the past and are planned for the future,” he said.“Those include such items as seawalls, the Belmont AquaticCenter, the Alamitos Bay Marina, the Belmont Pier and theRainbow Lagoon project,” in addition to other projects suchas beach restrooms, he explained. “Those are all projects thathave been at one time or another approved by city council orare on the five-year plan. So the question is, are those proj-ects impacted, are they not impacted? That is what we are try-ing to ascertain.”Gross and city staff are working on a report outlining

potential impacts to the Tidelands Fund, which he estimatedwould be completed by the end of the year. The Long BeachCity Council likely won’t take any action on the report’s find-ings until next year, as the council is not scheduled to meetagain until January 6. �

Black Gold(Continued From Page 3)



Herlinda ChicoAnnounces Bid For4th District Seat


Contributing Writer

Herlinda Chico has resumed her run to rep-resent the 4th District on the Long BeachCity Council, joining another former candi-date for the office, John Watkins, in the racetoward a special election to replace PatrickO’Donnell, who gave up the seat halfwaythrough his four-year term when he waselected to the state assembly on November 4.Daryl Supernaw, who lost a runoff toO’Donnell in 2012, is also consideringanother shot.Chico declared her intentions on

December 18, the morning after the citycouncil set the date of the special electionfor April 14, 2015. However, no candidacywill be legitimate until proper paperwork issubmitted and approved during the officialfiling period, which the council establishedbetween January 5 and January 16, 2015.Chico, who served as a legislative aide to

former 7th District councilmember ToniaReyes Uranga, began campaigning for the4th District’s council seat two years ago.O’Donnell had just completed his secondterm and was running for the state assemblyseat Bonnie Lowenthal said she was vacatingto pursue the state senate office that AlanLowenthal had just left for a seat in Congress.

But Ricardo Lara’s strong challenge toBonnie Lowenthal’s senate aspirations setoff a chain reaction. When she decided torun for another term in the assembly,O’Donnell decided to seek a third term onthe city council and Chico decided to with-draw and wait . . . until now.The winner of the special election will

complete the final two years of O’Donnell’sterm, which expires in July 2016. �

Mayor Garcia SaysBloomberg Grant Is A

‘TransformativeOpportunity’


Contributing Writer

Mayor Robert Garcia says Long Beach’seconomic development will be the firstchallenge addressed with the $3 million,three-year Innovation Grant the city justreceived from Bloomberg Philanthropies.“It’s time to focus on innovative eco-

nomic development for the 21st century,”Garcia said in an announcement preparedby his staff, describing the grant as a“transformative opportunity.”The Innovation Grant program, a project

of former New York Mayor MichaelBloomberg, calls for the formation ofInnovation Teams (or “I-Teams”) com-posed of a new chief innovation officer, asocial scientist researcher, a data program-

mer, a designer and technology innovationfellows. The teams are intended to functionas in-house consultants, moving from onepriority to the next, at each stop chargedwith finding and applying new ways forcity halls to deliver services that improvethe lives of residents.Garcia and City Manager Pat West will

lead Long Beach’s I-team, which Garcia’soffice indicated will initially suggest howto best stimulate growth, create jobs andleverage resources, particularly through theonline delivery of services. From there, theteam will help improve services, enhancecivic engagement and uplift neighborhoodsand business districts.Long Beach is among 12 cities in the

United States selected for Innovation Grantsthis year out of more than 90 applicants.Other cities chosen include Los Angeles,Jersey City, Minneapolis, Albuquerque,Boston, Peoria, Rochester and Seattle. Formore information visit Bloomberg.org. �

Congressional FundingIncludes MillionsFor At-Risk Youth

Advocacy By Rep. Alan LowenthalGets Program Funding Approved


Contributing Writer

STARBASE and Sunburst, militarilyunderpinned educational outreach pro-

grams that operate locally at the JointForces Training Base (JFTB) in LosAlamitos, have received $56 million in fed-eral funding to continue their work withthousands of at-risk youth, thanks to advo-cacy by Rep. Alan Lowenthal (D-LongBeach) and Congress’ last-minute passageof a $1.1 trillion national funding package. STARBASE, created by the U.S.

Department of Defense, is based upon thestudy of so-called STEM (science, technol-ogy, engineering and math) subjects, aimingits influence at fifth-grade students who arehistorically under-represented in suchclasses – those with disabilities, socio-eco-nomic disadvantages or living in extremelyrural or urban areas. The STARBASE pro-gram at JFTB serves nearly 4,000 students ayear and will share in a $25-million allotment. Sunburst, one of the California National

Guard’s Youth Challenge programs, helps16-to-18-year-old high school dropoutsredirect their lives during a 22-week resi-dential stay at JFTB. Lowenthal helpedsecure a $31-million increase in fundingfor the military-style program, which notonly steers participants back onto a path tograduation through the teaching of stan-dard classroom subjects, but to successfullives beyond a diploma through the empha-sis of values, life skills and self-discipline. “Our 21st-century economy requires

21st-century skill sets,” Lowenthal said in astatement released by his office inWashington, D.C. “These programs at theJFTB are doing great work for our commu-nity, and we must continue to prepare ouryouth for the future.” �

www.longbeach.gov/purchasing

www.longbeach.gov/pw/towing/auction.asp

Bidder RegistrationRegister with the City of Long Beach at www.longbeach.gov/purchasing to receive noti�cations of bid opportunities. Additional details on upcoming

bids and how to register can be found on the website.

Small Business Enterprise ProgramTake advantage of the City of Long Beach Small Business Enterprise (SBE) Program. To learn more about becoming a part of the SBE Program and

certi�cation process, visit the City’s Purchasing website.

Facade Improvement RFP DV15-012 01/16/15Preparation of a Housing RFP DV15-027 01/15/15Paci�c Coast Hwy Sanitary Sewer WD-0413 12/17/15Cellular and Multiband Two-Way Radio RFP DC15-038 01/08/15Building Material, Lumber & Related ITB LB15-020 01/07/15Fuel Dispensing Truck 2500 Gallon Diesel ITB FS15-030 12/30/14Publication Printing for Parks, Rec & Marine ITB PR15-37 12/29/14

**Some of the listed projects have scheduled mandatorypre-bid meetings which may have already occurred

due to publication lead times**



Prepared By The CaliforniaChamber Of Commerce

� By GEORGE ECONOMIDES

Publisher

Some of the new laws for 2015, such asmandatory paid sick leave, make signifi-cant changes to California’s legal land-scape. Other new laws make changes todifferent parts of existing law or may onlyaffect employers in specified industries,such as farming.Unless specified, the following list of

new legislation goes into effect on January1, 2015.More details are available in a free

CalChamber white paper, available here.

Leaves of Absence

Mandatory Paid Sick LeaveThe biggest news in the leaves of

absence arena is mandatory paid sick leave.AB 1522, the Healthy Workplaces,

Healthy Families Act of 2014, requiresemployers to provide paid sick leave to anyemployee who worked in California for 30days at an accrual rate of one hour forevery 30 hours worked.Employers are allowed to limit an

employee’s use of paid sick leave to 24hours or three days in each year ofemployment and may put a maximum capon total accrual of 48 hours or six days.The effective date for employers to beginproviding the paid sick leave benefit isJuly 1, 2015.The law contains many different

nuances, such as detailed recordkeepingand notice requirements, including a newposter requirement. The law also containspenalties for noncompliance.

Time Off For Emergency Duty:Expanded Category

AB 2536 adds new personnel to the listof employees eligible for protected time offfor emergency duty.AB 2536 also requires an employee who

is a health care provider, as defined, tonotify his/her employer when he/she is des-ignated as emergency rescue personnel andalso to notify the employer at the time thatthe employee learns that he/she will bedeployed for emergency duty.

Discrimination,Harassment And

Retaliation ProtectionsSeveral new laws expand employee pro-

tections for 2015.Protections For

Unpaid Interns And VolunteersAB 1443:Adds unpaid interns and volunteers to

the list of individuals protected fromharassment under the Fair Employment andHousing Act (FEHA);Prohibits employers from discriminat-

ing against individuals in an unpaidinternship or another limited durationprogram to provide unpaid work experi-ence for that person; and

Extends religious belief protections andreligious accommodation requirements toanyone in an apprenticeship training pro-gram, an unpaid internship or any otherprogram to provide unpaid experience for aperson in the workplace or industry.

Nondiscrimination: Driver’sLicenses For Undocumented PersonsAB 1660 makes it a violation of FEHA

for an employer to discriminate against anindividual because he/she holds or presentsa driver’s license issued to undocumentedpersons who can submit satisfactory proofof identity and California residency. Suchdiscriminatory actions will constitutenational origin discrimination under FEHA.These driver’s licenses are often referred

to as “AB 60 driver’s licenses,” after thename of the bill passed last year.AB 60 driver’s licenses are scheduled to

start being issued on January 1, 2015.AB 1660 clarifies that actions taken by

an employer that are required to complywith federal I-9 verification requirementsunder the Immigration and Nationality Act(INA) do not violate California law.AB 1660 also provides that it is a viola-

tion of FEHA for an employer to require aperson to present a driver’s license, unlesspossessing a driver’s license is (1) requiredby law; or (2) required by the employer andthe employer’s requirement is otherwisepermitted by law.AB 1660 further requires any driver’s

license information obtained by anemployer to be treated as private and con-fidential.

Immigration-Related ProtectionsAB 2751 expands the definition of an

unfair immigration-related practice toinclude threatening to file or filing a falsereport or complaint with any state or fed-eral agency. Current law extended the pro-tection only to reports filed with the police.AB 2751 also clarif ies that an

employer can’t discriminate against orretaliate against an employee whoupdates his/ her personal information“based on a lawful change of name,[S]ocial [S]ecurity number, or federalemployment authorization document.”

Prohibition Of DiscriminationAgainst Public AssistanceRecipients: Public Reports

AB 1792 prohibits discrimination andretaliation against employees receivingpublic assistance; which is defined asmeaning the Medi-Cal program.AB 1792 also requires state agencies to

prepare an annual list of the top 500employers with the most number ofemployees enrolled in a public assistanceprogram. The reports will be made publicand will be prepared starting in January2016.“Employer” is defined by the law as an

individual or organization with more than100 employees that are beneficiaries of theMedi-Cal program.

Harassment Prevention Training:Prevention of Abusive ConductAB 2053 requires employers that are

subject to the mandatory sexual harass-ment prevention training requirement forsupervisors to include a component on

the prevention of “abusive conduct,”beginning January 1, 2015. “Abusiveconduct” is specifically defined by thenew law.This new law does not mean that an

employee can sue for abusive conduct inthe workplace unless, of course, the con-duct becomes discrimination or harassmentagainst a protected class. The law merelyrequires training on prevention of abusiveconduct.

Harassment Prevention Training:Farm Labor Contractors

SB 1087 imposes specif ic sexualharassment prevention training require-ments on farm labor contractors, includ-ing a yearly training requirement forsupervisory employees and training fornonsupervisory employees at the time ofhire and every two years thereafter. Therequired content for the training is not asinvolved as AB 1825 training.The law also places restrictions on the

ability to grant a license to a farm laborcontractor who has engaged in sexualharassment, changes the exam require-ments and increases licensing fees, bond-ing requirements and penalties.

Wage And HourSeveral new laws will increase employ-

ers’ wage-and-hour obligations in 2015.Many of the new laws in the wage and hourarena deal with increasing penalties andexpanding liability, instead of imposingsignificant new obligations on employers.Increased Liability For Employers

That Contract For LaborAB 1897 imposes liability on employers

who contract for labor. The purpose of thelaw is to hold companies accountable forwage-and-hour violations when they usestaffing agencies or other labor contractorsto supply workers.In brief, if a labor contractor fails to

pay its workers properly or fails to pro-vide workers’ compensation coverage forthose employees, the “client employer”can now be held legally responsible andliable. The law contains specific defini-tions and exclusions.For more information, review the Labor

Contractor (AB 1897) – Fact Sheet.Rest And Recovery Periods

SB 1360 confirms that recovery periodsthat are taken pursuant to heat illness regu-lations are paid breaks and count as hoursworked. SB 1360 reiterates what is alreadyin existing law in this area and was passedsimply to clear up any confusion employersmay have had.

Waiting Time PenaltiesThe Labor Commissioner can cite an

employer who pays less than the minimumwage; the citation can include a civilpenalty, restitution and liquidated damages.AB 1723 authorizes the LaborCommissioner to also include in this citationprocess any applicable penalties for anemployer’s willful failure to timely paywages to a resigned or discharged employee,also called “waiting time” penalties.The law does not create new penalties;

just a new way for the Labor Commissionerto enforce existing penalties.Another new law, AB 2743, provides a

waiting time penalty if unionized theatricaland concert venue employers violate anyagreed upon timeframe for payment offinal wages contained in a collective bar-gaining agreement.

Protections For Complaints Under The Labor Code

AB 2751 clarifies that the $10,000penalty against an employer who discrimi-nates or retaliates against an employee whocomplains of Labor Code violations will beawarded to the employee or employees who“suffered the violation.”Timeframe For Recovery Of Wages:

Liquidated DamagesAB 2074 states that a lawsuit seeking to

recover liquidated damages for minimumwage violations can be filed any timebefore the expiration of the statute of limi-tations that applies to the underlying wageclaim, which is three years.Some recent court cases had held that

liquidated damages claims had to be filedwithin one year.

Child Labor Law Violations:Increased Remedies

AB 2288, the Child Labor ProtectionAct of 2014, provides additional penaltiesfor violations of California laws regard-ing employment of minors, including apenalty of $25,000 to $50,000 for “ClassA” violations involving minors 12 yearsof age or younger.In addition, the statute of limitations

for claims that arise from violations ofemployment laws is tolled, in otherwords, delayed or suspended, until theminor is 18 years of age.

Foreign Labor ContractorsSB 477 is noteworthy for employers

that use foreign labor contractors torecruit foreign workers for Californiaassignments. The new law, in part,requires foreign labor contractors to meetregistration, licensing and bondingrequirements by July 1, 2016.Employers are prohibited from using

non-registered foreign labor contractors tosupply workers in California. SB 477 alsoimposes disclosure requirements and otherobligations on foreign labor contractors.There are penalties for noncompliance andjoint liability for employers who use non-registered foreign labor contractors andpotential for civil action.

Prevailing WagesA number of bills signed this year relate

to prevailing wages. Employers who pro-vide services or construction work on pub-lic works projects for the government orpublic entities must pay the prevailingwage, which is usually significantly higherthan the minimum wage.The bills include:AB 26;AB 1870;AB 1939;AB 2272;AB 2744; andSB 266.One notable bill, AB 1939, allows a con-

tractor to bring an action against “hiringparties” to recover any increased costs(including labor costs, penalties and legal

New Employment Laws Affecting Businesses In 2015



NEWSWATCHDecember 23, 2014-January 19, 2015 Long Beach Business Journal 9

fees) incurred because of a determinationthat the work performed on the project wasa covered public work and is subject to pre-vailing wage laws.Another notable bill, SB 266, responds

to concerns regarding delays in determin-ing whether a project is a public worksproject for prevailing wage purposes.

BACKGROUND CHECKSSeveral new laws relate to criminal back-

ground checks.Criminal History Information

In Public ContractsAB 1650 requires contractors who bid on

state contracts involving on-site construc-tion-related services to certify that theywill not ask applicants for on-site construc-tion-related jobs to disclose informationconcerning criminal history at the time ofan initial employment application.

Services To MinorsAB 1852 requires a business that pro-

vides specified services to minors to pro-vide a written notice to the parent orguardian of the minor receiving those serv-ices. The written notice should address thebusiness’s policies relating to employeecriminal background checks.

Workplace SafetySeveral new laws pertain to workplace

safety.Penalties For Failure

To Abate Safety HazardsCal/OSHA can require an employer to

abate (fix) serious workplace safety vio-

lations and also to issue civil penalties.An employer can appeal the citation.AB 1634, in effect, prohibits the state

Occupational Safety and Health AppealsBoard from modifying civil penalties forabatement or credit for abatement unlessthe employer has fixed the violation.In cases of serious, repeat serious or

willful serious violations, AB 1634 willgenerally prohibit a stay or suspension ofan abatement requirement while anappeal or petition for reconsideration ispending, unless the employer can demon-strate that a stay or suspension will notadversely affect the health and safety ofemployees.E-mail For Workplace Safety ReportsAB 326 allows employers to e-mail their

reports of a work-related serious injury, ill-ness or death to the Division ofOccupational Safety and Health.Previously, the Labor Code required animmediate report by telephone or tele-graph. The reference to telegraph isremoved and replaced with e-mail.

Workplace ViolencePrevention Plans: Hospitals

SB 1299 requires Cal/OSHA to adoptstandards by January 1, 2016, that requirespecified types of hospitals, including gen-eral acute care hospitals or acute psychi-atric hospitals, to adopt workplace violenceprevention plans as part of the hospitals’injury and illness prevention plans. Theintent is to protect health care workers andother facility personnel from aggressiveand violent behavior. �

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GOING GREEN10 Long Beach Business Journal December 23, 2014-January 19, 2015

� By SAMANTHA MEHLINGER

Senior Writer

At the northernmost part of Long Beach,bordering the City of Paramount, TalcoPlastics, Inc.’s Post Consumer Plant recy-cles 350 million plastic containers everyyear, according to Ajit Perera, vice presi-dent of post-consumer operations.The company was lured to Long Beach by

city staff in 1993. At the time, the city hadrecently been designated as a recycling mar-ket development zone by the State ofCalifornia’s CalRecycle program, accordingto Jim Kuhl, manager of the Long BeachEnvironmental Services Bureau. “There are40 zones in California. It is a program thatoffers low-interest, below-market loans,” heexplained. “Talco got about $4 million inloans to help them create their line and theirbusiness,” he recalled.Perera explained that the post-consumer

recycling segment of Talco’s business wasoriginally located in Whittier, with thecompany’s industrial recycling plant. Theloans available through CalRecycle, andobtained with the help of the city, enabledTalco to create an individual facility inLong Beach dedicated solely to post-con-sumer plastics recycling. The plantemploys 35 people, many from surround-ing neighborhoods, Perera said.“This is a good city to be in. The city has

been forthcoming and [has] worked with usmany times,” Perera said. “You know, we are

running a recycling facility in the middle ofa residential area. We run into issues withthe neighbors on and off and the city hasalways come [to our aid],” he added. Eventhough neighbors sometimes complainabout noise, a tour of the facility typicallyalters their opinions of the plant, Perera said.“I have people who come and say, ‘I livearound the corner, I want to know whatyou’re doing here because we hear all thisnoise and we don’t like it.’ I say ‘Come andwalk the plant, see what we do. We’re clean-ing the world one bottle at a time.’ And thenthey leave with a very good feeling.”About 95 percent of the plastic Talco

recycles is sourced from California andpurchased from material recovery facili-ties (MRFs) such as locally based WasteManagement, which collects post-con-sumer recyclable material for the City ofLong Beach, Perera said. Talco buys andrecycles a specific type of plastic foundmostly in milk and juice containers, waterbottles and detergent containers.“Water bottles or detergent bottles, if you

put [them] in your recycling container,actually eventually end up here for process-ing,” Kuhl said during a tour of the plantled by Perera. MRFs sort plastics by typeand then bundle and ship them to busi-nesses like Talco, which bid for them atcompetitive rates.“Normally, when you go to the store, the

price is marked and you buy. This is theother way around,” Perera said of his busi-

ness. “As the buyer, I have to make an offerand bid for it. And then they [the MRFs]will go around and whoever bids the high-est gets it . . . A lot of buyers will generallytry to offer a higher price than the markethoping that load comes to them. So it is avery competitive business and we getsqueezed in the margin,” he explained.California has created a competitive

market for recyclable plastics because thestate requires a specific percentage of recy-cled content to be used in certain contain-ers, such as those holding laundry deter-gent, Kuhl explained. “That helps drive thedemand for their products,” he said.Bundles arriving at Talco are stacked high

above the ground in rows, making for color-ful makeshift hallways behind the plant.When plant workers are ready to recycle thematerials, they break open the bundles bysawing through them, Perera said. “Then wehave infrared technology that sorts the plas-tic further,” he said, explaining that, eventhough MRFs sort plastics before sendingthem to purchasers like Talco, other types ofplastics and contaminants are often mixedin. Varying types of plastics are used in dif-ferent materials, and differing plastic com-positions cannot be mixed when recyclingthem for reuse, he explained.Contaminants sometimes come in the

form of trash. “We get trash cans, pallets,toys, water hoses, syringes. I mean youname it, we get it here – including thekitchen sink, which we have found,” he said.

North Long Beach’s Talco Plastics Recycles Mil

Talco Plastics, Inc.’s Post Consumer Plant in North Long Beach recycles mi reuse in manufacturing similar goods. Ajit Perera, vice president of post-con check out Talco’s finished recycled product during a tour of the plant. (Pho


GOING GREENDecember 23, 2014-January 19, 2015 Long Beach Business Journal 11

Other contaminants are chemicalsstored in plastic containers. “People usecontainers for very different stuff. Theywill take a milk jug and put their motoroil in it,” Perera said. “We hate to see bot-tles with engine oil, because we havewater treatment,” he said, explaining that,before plastics are recycled for reuse at

Talco, they are washed. “We usually recy-cle our water 15 times before we use it . .. Oil changes the chemistry and reallymakes a muck of things.”Because of these contaminants, Talco

typically loses 25 percent of the material itpurchases. “It goes back into the trash asresidue, because some of the bails are soheavily contaminated,” Perera said.After contaminants and unusable plastics

are sorted out and usable plastics are sortedby color, Talco grinds up the plastic, washesand dries it and then remakes it into tinypellets to be sold to plastics manufacturersfor reuse. “It goes back into detergent andoil containers, or it goes into trash contain-ers, pipes, sheeting, nursery pots . . . That isthe whole recycling cycle,” Perera said.Manufacturers take the pellets and typi-

cally mix them in with newly made plastic,although in some cases more environmen-tally conscious companies will use 100 per-cent recycled plastic in their products, Pererasaid. Most Long Beach residents have someplastic recycled by Talco on their properties– the company that manufactures the city’strash cans sources its plastic from Talco.“We sell 2.5 million pounds of plastic

every month,” Perera said. The market isgrowing, too, he noted. “I don’t want tomention names, but the largest retailer in theworld is making a push right now to putmore post-consumer material in their prod-ucts. So we have seen more and more peoplecalling us and requesting more material.” �

les Millions Of Containers For Reuse Each Year

rth Long Beach recycles millions of plastic containers each year. The company turns used plastic containers into small pellets for a, vice president of post-consumer operations for Talco, and Jim Kuhl, manager of the Long Beach Environmental Services Bureau, ng a tour of the plant. (Photograph by the Business Journal’s Thomas McConville)

A worker at Talco Plastics sorts through used plasticcontainers to remove any contaminants orunwanted plastics that the company is unable torecycle. The company recycles a specific type ofplastic found in detergent containers and milk andjuice bottles into a pelletized material, which is pur-chased by plastics manufacturers. (Photograph bythe Business Journal’s Thomas McConville)


GOING GREEN12 Long Beach Business Journal December 23, 2014-January 19, 2015

as China, India, Italy,Lebanon and Qatar.The alliance has satellite

offices in Colorado, Texas,Dubai and Shanghai. Israeltravels about 20 days eachmonth due to the company’swide reach. “I was in Indialast night and I just gotback,” Israel said as he ledthe Business Journal on atour of the company’s head-quarters in Long Beach offTemple Avenue onDecember 15. “We’re doing

a nine million square-foot buildingthere,” he said, adding that the proj-ect is a $1 billion home for one ofthe wealthiest people in the world.The home is being built with someof the most up-to-date and sustain-able lighting available to serve as atechnological showcase, he noted.Back in the U.S., the alliance’s

headquarters, designed by Israel,serve as a model for sustainablelighting designs and as a portfolio

and showcase for the company’s clients.“The whole idea is to use as little electrical as possi-

ble,” Israel said as he explained the various types ofsustainable lighting elements in his company’s offices.To achieve that end, the building harnesses and reliesheavily upon what Israel called “the most logical andmost overlooked” source of illumination: daylight. The Lighting Design Alliance’s headquarters has 80

holes cut into the ceiling to allow natural light inthrough several different kinds of skylights. Variationsof a small type of skylight consisting of a metal cylin-drical tube that extends from the ceiling all the way tothe top of the roof are found throughout the buildingin places one would normally see recessed lights, suchas in front of bathroom mirrors and above desks.

Sunlight enters the tube on the roof and bounces off the inner reflective sur-face, illuminating interior spaces. Lights are affixed to the inside of the fix-tures for night lighting. “The idea is we can bring light through multiple sto-ries,” Israel said of the fixtures, which he called solar tubes. Towards the back of the building, a large open office space is lit primarily

by many large skylights – some flush to the ceiling and others angled. Theangled skylights have motors attached to their windowpanes so that workerson the floor can open or close them to let heat escape rather than turning onair conditioning, Israel said. Other skylights have mirrors attached to themwhich rotate with the sun as it moves throughout the day, allowing sunlight tobounce inside. Installations of colored art glass below these skylights reflectcolors and patterns on the office walls at different angles as the sun moves,allowing the skylights to do double duty as illumination and art.Through conserving electricity in the day by illuminating the office with day-

light and reducing the need for indoor climate control, the Lighting DesignAlliance is able to operate with an energy load of about 0.1 watt per square foot,while most office buildings operate at one watt per square foot, Israel said.Using daylight works well for buildings that are one or two stories tall, but

after that it gets trickier, Israel noted. “If it’s a 30-story building, then some ofthese daylighting techniques would not work. However, we work with otherpeople and universities who are trying to bring light in horizontally,” he said.“It’s very easy to do that in the first 10 to 15 feet [from a daylight source], butwhat’s tough is 15 to 30 feet away from a window . . . There are techniqueswhere we can bounce light off of films on windows so it hits the ceiling andkicks in further,” he explained.While most of the Lighting Design Alliance’s building is illuminated by

daylight, it is also outfitted with light emitting diode (LED) lights, which aremore energy efficient than traditional incandescent bulbs. Incandescent bulbs“ooze light” in many directions and overheat easily, Israel said. LEDs do notcreate much heat and produce stronger light that is easier to focus on a certainpoint, such as a desk or an art piece. “The LEDs are a directional light source.In other words, they are like mini flashlights . . . so if you have a high ceilingand you want to shoot the light [on the ceiling] to the ground, the LEDs canbe much more efficient,” he explained. The Lighting Design Alliance is working to make LEDs even more efficient,

The Lighting Design Alliance Founder/CEO Chip Israel looks down from a bridge in a long hallway at his company’s officeson Temple Avenue in Long Beach. The skylights above him light the entire hallway. In the evening, multi-colored energy-effi-cient lighting installed in the skylights illuminates the area. The lights are able to change color at varying speeds, and arecontrolled by a panel in the hall. The firm designed the illumination for the new SLS Las Vegas (top photograph, providedby company), a hotel and casino built in the location of the former Sahara Hotel and Casino on the Vegas strip. In centerphotograph, also provided by The Lighting Design Alliance, the firm’s 22,000-square-foot offices are lit primarily by daylightfrom 80 skylights of varying types and sizes. Pictured, larger skylights illuminate a gaming area for the 35 company employ-ees. In bottom photograph, a skylight in the office is outfitted with motorized mirrors that follow the sun throughout the day,maximizing the amount of daylight streaming through the glass. Electric lights are located within the skylight for use duringnighttime. (Photographs by the Business Journal’s Thomas McConville)

The Lighting Design Alliance (Continued From Page 1)



GOING GREENLong Beach Business Journal 13

both in terms of lighting performance andthe amount of material needed to make theirfixtures. A prototype of an LED lamp shin-ing light on a pool table at the LightingDesign Alliance is built to a much smallerprofile than usual, Israel pointed out. “Theone over the pool table is a fixture that isabout the thickness of a piece of cardboard,where before it used to be four to six inchestall,” he said. His company has proposed useof the lights at the nearby Los CerritosCenter mall.Much of the energy used to power lights

in alliance’s offices is harnessed throughthe use of solar cells. If it weren’t for theenergy needed to run the employees’ com-puters, Israel speculated the building wouldbe able to operate at net zero energy use.Helping to reduce the amount of energy

used are photocells – little sensors placedaround the building and in lights that auto-matically detect whether or not enoughdaylight is available to light an area. Whenthe sensors detect there is insufficient day-light, the electric lights turn on. Israelhopes to further develop the technology sothat every light fixture will come with asensor, rather than the sensors having to beinstalled later at more cost. In addition to the Lighting Design

Alliance’s many year-round projects, Israelsaid company representatives teach guestlectures at universities. The alliance alsooften hosts architectural and design firms,such as the American Institute ofArchitects, at its Long Beach office formeetings and special events. �


REAL ESTATE14 Long Beach Business Journal December 23, 2014-January 19, 2015

Leases AndTransactions

Inco Commercial Realty announced thefollowing transactions:• 2H Property 3060 LLC purchased a

31,502 square feet of land at an undisclosedsite in Long Beach for $240,000. BillTownsend of Inco handled the transaction.• Reddy Urgent Care signed a five-year

lease for 2,450 square feet of retail space at4284 & 4288 Katella Ave. in Los Alamitos.Inco’s Debra Orth handled the transaction.• Herman Stephen Duran signed a three-

year lease for 1,500 square feet of retailspace at 9025 Slauson Ave. in Pico Rivera.Inco’s Orth and James Arias handled thetransaction.Coldwell Banker Commercial BLAIR

WESTMAC announced the followingtransactions:• Per Ankh Life Skills leased 2,040 square

feet of office space at 2429 Pacific Ave. inLong Beach. Coldwell Banker’s Becky Blairand Hosseinzadeh handled the transaction.• Tigrami LP purchased 7,900 square

feet of industrial space at 1340 W. CowlesSt. in Long Beach for $925,000. The prop-erty was sold by the Curtis L. CorporonTrust. Coldwell Banker’s John Eddy andTyler Rollema handled the transaction.

• The City of Long Beach purchased a4,830-square-foot office building at 1858Atlantic Ave. for $380,000. The propertywas sold by the Michael E. Crawley &Patricia S. Crawley Trust. ColdwellBanker’s Blair handled the transaction.• The Los Angeles County Offices of

Education leased 5,670 square feet ofoffice space at 440 W. Anaheim St. in LongBeach for $307,048.68. Blair and Eddyhandled the transaction.• Anytime Maintenance on Wheels LLC

leased 3,250 square feet of industrial spaceat 1667 W. 9th St. in Long Beach. Eddy andRollema handled the transaction.• Gluefolder LLC leased 2,400 square feet

of industrial space at 3395 E. 19th St. inSignal Hill. Eddy handled the transaction.• Alfonso P. Madrid leased 6,400 square

feet of industrial space at 1327 W.Gaylord St. Eddy and Rollema handledthe transaction.• Audiuva, dba/Zounds Seal Beach,

leased a 700-square-foot retail space at2908 Westminster Ave. in Seal Beach.Coldwell Banker’s Brian Russell and ShevaHosseinzadeh handled the transaction.Lee & Associates announced the follow-

ing transactions:• Vanguard Logistic Services leased

2,891 square feet of office space at the5000 E. Spring Street building near the air-port. Lee & Associates’ Jeff Coburn andShaun McCullough represented the land-lord, 5000 Spring LLC, and the tenant wasrepresented by CRESA. • Universal Technical Institute leased

3,595 square feet of office space at the

5000 E. Spring Street building. Coburn andMcCullough represented the landlord andJLL represented the tenant.• JSA has leased 1,875 square feet of

office space at the 100 W. Broadway build-ing. Lee’s Coburn and McCullough han-dled the transaction.• Stearns Lending, LLC signed a lease

for an unidentified amount of office spaceat the 5000 E. Spring Street building.Coburn and McCullough represented thelandlord and Jack McNutt of Newmarkrepresented the tenant.• LPC West LLC purchased a 150,000-

square-foot office building at 3131Katella Ave. in Los Alamitos fromSupermedia Services. McCullough repre-sented the buyer. �

Planning CommissionApproves Design ForOcean Center BuildingThe design by Studio One Eleven

Principal Michael Bohn, AIA, to revital-ize Long Beach’s historic Ocean CenterBuilding was approved unanimously bythe Long Beach Planning Commission onDecember 18. The site is located at OceanBoulevard and Pine Avenue and aims toserve as a key pedestrian linkage betweenupper and lower Pine Avenue. The pro-posed adaptive reuse of the building callsfor converting 69,108 square feet ofoffice space to 74 residential units. �

– From Staff Reports

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PUBLISHER’S PERSPECTIVEDecember 23, 2014-January 19, 2015 Long Beach Business Journal 15

relations with Cuba to souring relationswith North Korea to the vote for Scottishindependence to the Ebola outbreak inAfrica – to name but a few – there has beenmuch for the media to report. There alsoseemed to be more tragedy during this yearthan usual across the globe as conflictsraged in schools, shopping centers andneighborhoods throughout the MiddleEast, Africa and parts of Asia.In the U.S., the divide among politicalparties widened as President Obama’s sup-port gradually slipped throughout the yearand Republicans swept the mid-term elec-tions in resounding fashion. While peoplethroughout the country raised their arms inprotest to a grand jury decision inFerguson, Missouri, race relations werefurther rocked by the on-camera death of ablack man at the hands of police officers,followed this past weekend with two NewYork police officers being assassinated.There has indeed been much turmoil. On abrighter note, it appears the job marketcontinues to gain momentum and may bethe strongest of the past seven years. Residents of Long Beach experienced atransition in leadership as Robert Garciabecame the city’s first openly gay mayor,first Hispanic mayor and its youngestmayor, while five of the nine city councilseats changed hands. As the year draws toa close and the city embarks on the devel-opment of a grand civic center, LongBeach may be facing renewed financial

concerns as its reliance on oil revenue isbeing challenged by drastically lower rates.At the Business Journal, the close of thischapter in the publication’s 27-year historyis welcomed, as 2014 proved to be thenewspaper’s most difficult, due to unex-pected internal changes. But we embracethe future with a fresh approach, newenergy and new ideas. And, like most resi-dents of this great city, we are optimisticthat we are entering a year that promisesnew experiences and unprecedented poten-tial for growth.In 2015, the Business Journal is devotingtwo pages in each of its 25 editions to sup-port entities that are vastly underappreciatedfor their importance to the economic vitalityof our city: the arts and nonprofit organiza-tions, also known as the Third Sector.The Arts Council of Long Beach, headedup by Victoria Bryan, and the Long BeachNonprofit Partnership, under the guidanceof Linda Alexander, are each receiving onefull page to use as they wish to promote themission of their respective organizationsand to encourage support and involvementwith their activities. We hope BusinessJournal readers take the time to learn moreabout these organizations – and the manygroups and thousands of people involvedwith each of them – to better understandthe critical role they play in moving ourcity forward in a direction that touches –and benefits – all citizens and businesses.Our first edition of the year publishesJanuary 20. On behalf of everyone involvedwith the Business Journal, happy holidaysand our best wishes for the new year. �

Looking Ahead(Continued From Page 1)

1_LBBJ_DEC_23_2014_SectionA_LBBJ MASTER LAYOUT 12/22/14 9:42 AM

CIVIC CENTER16 Long Beach Business Journal December 23, 2014-January 19, 2015

Donald H. Gibbs wasn’t exactly waitingon the results of the council vote. At age80, he is still working. Many of his daysstill begin by commuting from his home onthe Palos Verdes Peninsula to the landmarkmidcentury modern structure that hashoused Gibbs Architecture for more thanhalf a century.Besides, Gibbs had no doubt that the cur-

rent civic center was doomed, and that thenew one, constructed through a public-pri-vate partnership, was a lock. “I think it will be unfortunate,” Gibbs

said. He started to say more, but stoppedhimself. “I can’t really criticize the projectaccurately because I haven’t followed all ofthat real closely. But I’m afraid the public-private partnership is going to cost the pub-lic a lot more money than it needs to.”Ultimately, the city council’s decision

was unanimous. The old civic center wasout because of its vulnerability to majorearthquakes. Gibbs was irritated by the talkof seismic shortcomings.“Nobody knows what ‘seismically

unsafe’ means unless you’re comparing aparticular standard to a particular earth-quake,” he said. “City hall met the code atthe time it was built, like any other build-ing, but seismic requirements keep chang-ing. If you want to parse words, city hall isup to code now because everything isgrandfathered in.”Gibbs says he’s examined seismic assess-

ments of the building.

“It looks like the basic frame is sound,like the welds are good,” he said. “The con-crete precast panels on the corners probablyshould be looked at to be sure they’re OK.”But Gibbs is suspicious about the process

that led to the city council’s decision.“Something else is going on,” he

asserted. “It wouldn’t be the first time aproject was passed because politicianswanted to leave their mark.”Of course, the current civic center is a

mark that Gibbs most likely expected to beleaving, a monument to his work with ateam – called Allied Architects – that fea-tured such Long Beach luminaries as HughGibbs (Don’s father), Edward Killingsworth,Kenneth Wing and Frank Homolka.Gibbs has enjoyed spotting city hall’s

20-story tower during his commutes toLong Beach.

“That’s one of the advantages of being anarchitect – you do a good job and you canbe proud while you’re driving around,” hesaid. “It’s quite satisfying, really.”Although Gibbs received the civic center

assignment more than half his life ago, theopportunity to build a house for his home-town may constitute the most prestigiousentry on a resume that’s practically a reg-istry of Long Beach landmarks: the GalaxyTowers on the bluffs of Ocean Boulevard,the Terrace Theater downtown, thePerforming Arts Center and The Pyramid atCal State Long Beach. It sounds like themost-enjoyable, too.“If you ever get the chance to do your city

hall, go for it,” Gibbs chuckled during acivic center study session at the Aquariumof the Pacific in 2012. “It’s a lot of fun.”Nonetheless, by the time Long Beach offi-

cials gathered to dedicate the new complexin 1977, the high point of Gibbs’ career hadacquired a downside – lots of people didn’tlike the structures, they didn’t mind sayingso, and their initial chilliness didn’t seem towarm with time. Over the years, these souropinions festered into a bad reputation. There’s no denying that the civic center

buildings weren’t the kind that come tomost minds at the mention of a city hall orlibrary. The Allied Architects skipped theGreek columns, Gothic spires and Romanrotundas. Instead, they delivered structuresin a genre that expresses its Late Modernheritage in a motif of scarred, unpaintedconcrete blocks and periodic plantings ofgroundcover and hedges, a landscape ofgray and green geometry that was deployedacross six full blocks of Downtown LongBeach. Lack of love for the complex mayhave made it easier to push a replacement.

A nuanced address by CouncilmemberSuja Lowenthal at that same 2012 studysession invoked many long-standing nega-tive perceptions of the current complex. Lowenthal decried a past full of “mis-

guided city projects” and “weaknesses inplanning.” She fantasized about buildingan amphitheater and stocking it with a fullschedule of musical events. She worriedabout “the soul of our city” and testified toher faith in “the importance of publicspaces in a city’s identity.”“Somewhere in the very near future I do

see a better civic center,” she said, “one thatreally is a great public space for the commu-nity – one that is our public living room.”Gibbs agreed, and during his turn at the

podium he sought to show Lowenthal thesimilarity of their visions.“One of our objectives was to create this

plaza – or living room – around city hall,”he began, his eyes searching the theatre forLowenthal. “For example, there is anamphitheater – well, what was anamphitheater – that was designed” . . .Gibbs stopped, thrown off track when he

realized Lowenthal wasn’t in the theatre.“Oh, I guess she’s left already,” he said, asmuch to himself as to the crowd, beforecontinuing.“So the amphitheater was designed

with seats, originally. We wanted to haveconcerts there, and speeches, and peoplemeeting there.“But the city council at the time said,

‘We can’t have seats because we don’twant anybody gathering there. We don’twant people around voicing their opin-ions.’ So this idea of the city’s living roomand all, that was one of our goals, but itwasn’t . . . uhhh . . . hmmm . . . politicallyattainable at the moment.”Gibbs’ explanation accounts for the

large, angled, curving swath of grassbetween the library and city hall, but heinsisted that opportunity of four decadesago had not been lost.“The structure to do the amphitheater,”

he said, “is still there.”It won’t be for long. The new civic center

is projected to be completed by 2019. Gibbsisn’t looking forward to the day the old oneis gone. But he insists he is looking forward.“Life goes on and you move on to other

things,” he says. “I’m going to have funwith that rather than getting into the fight.The question is, ‘When do you stop look-ing forward and start looking back?’ Theanswer for me is, ‘Not yet.’” �

Architect Don Gibbs(Continued From Page 1)

Donald Gibbs with hisson, Kurt, at their LongBeach Boulevard officein Bixby Knolls. (Photo by Tom Underhill)

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IN THE NEWSDecember 23, 2014-January 19, 2015 Long Beach Business Journal 17

New Resident DirectorOf Merrill Lynch Long BeachAnnouncedNathan Lee is the new resident director ofMerrill Lynch’s Long Beach office locateddowntown in the Landmark Square officetower. The position requires Lee to lead theLong Beach team of financial advisorswho provide integrated wealth manage-ment strategies to local families, individu-als and businesses. Lee, a resident of PalosVerdes, joined Merrill Lynch in 2004. Hereceived his master’s degree from TexasTech University in Lubbock. “Nathan’sproven leadership and outstanding reputa-tion make him the perfect candidate tolead our Long Beach local office,” saidNathan Crair, managing director WestLong Angeles complex, in a statement.“Nathan’s years of experience willenhance our ability to offer the highest quality of service and integrated solutions Long Beach’s sophisti-cated investors have come to expect from Merrill Lynch.” The global wealth management division of MerrillLynch is among the largest businesses of its kind in the world. Staffed with 14,000 advisors, it oversees$2 trillion in client balances. Global wealth management specializes in goals-based wealth management,including retirement planning, education, legacy and other life goals through investment, cash and creditmanagement. (Photograph by the Business Journal’s Thomas McConville)

Christmas TraditionContinues For Farmers& Merchants BankFor the 76th year, Farmers & MerchantsBank delivered apples to the chiefs of theLong Beach Police and FireDepartments – one for every member ofthe public safety departments to thankthem for their dedication and service tothe Long Beach community. At right, F&MChairman of the Board and CEO DanielK. Walker presents apples to the city’snew Chief of Police Robert Luna, andbelow to Fire Chief Mike DuRee, with anappreciate Santa looking on.(Photographs provided by F&M Bank)

officer at St. Mary for three years whenhe departed in 2007 for the University ofPittsburgh Medical Center (UPMC). Ahospital press release quotes him as“thrilled” to be back on the grounds ofthe iconic downtown campus, describingit as a “privilege.”“St. Mary’s tradition of caring for all peo-

ple in need . . . as well as its distinguishedreputation for quality and service made thehospital a true community asset,” Yuhas saidin a press release from the hospital.Yuhas gained lots of experience dur-

ing his eight years away from St. Mary’s.He spent two years as president ofUPMC Horizon Hospital, a 210-bedcommunity teaching hospital with twocampuses. For a year of that stint Yuhasstepped in as interim president at UPMCNorthwest, where he oversaw an acute-care hospital and a skilled rehabilita-tion/hospice/independent living facility.In 2009 Yuhas became president/CEO ofUPMC’s Beacon Hospital and seniorvice president of its international opera-tions, giving him responsibility for facil-ities in Ireland that included a 214-bedcommunity hospital in Dublin, a pair ofcancer centers and a half-dozen satelliteclinics. �

Moffatt & Nichol, aninternational engineeringfirm specializing in mar-itime-related projects,recently hired AlaedinMoubayed as bridge leadand senior

project manager based inthe company’s Long Beachheadquarters. In his newposition, he is overseeinglarge-scale transportationprojects. Moubayed has 26years of experience instructural and civil engi-neering, and has special-ized in transportation proj-ects such as freewayimprovements and widen-ing projects, and designingbridges. He holds a mas-ters degree in civil struc-tural engineering fromCalifornia State University,Long Beach and a bache-lor’s degree in the samefield from the UnitedStates InternationalUniversity. He is a memberof the American Society ofCivil Engineers and theConstruction ManagementAssociation of America. �

Wing Chun Temple, a new martial arts school that opened in Signal Hill in March, is holding its public grand opening onDecember 27 from 10:30 a.m. to 12:30 p.m. at 2601 E. 28th St., Suite 308. Owners Sifu Clark, left, the school’s instructor,and Jennifer Niu, administrator, are hosting the event. Clark’s philosophy for the school is built on a concept of well-roundedmartial arts education, which includes instruction in Buddhism, Confucianism and Taoism. According to its web site, “WingChun is known for its directness and deflectiveness, effecience and effectiveness, and economical of energies and motions,which makes Wing Chun Gung Fu System to be the most unique and lethal fighting system. For more information, visit:www.WingChunTemple.com. (Photograph by the Business Journal’s Thomas McConville)

New St. Mary CEO(Continued From Page 1)


PERSPECTIVE18 Long Beach Business Journal December 23, 2014-January 19, 2015

Society is slowlymoving away from

the idea that addiction isan individual problem,perhaps a problem ofsomeone who lacks willpower or self-control, andmoving toward viewingaddiction as a seriousmedical problem.Addiction has manyfaces and can affect any-

one regardless of age, race or income and itsconsequences are often far reaching. What is the impact of addiction?Family:Addiction affects the whole family.

Children who grow up around drug abuse aremore likely to abuse drugs themselves andbecome addicted. A 2012 study showed thatmore than 23.9 million Americans over theage of 12 had abused drugs. Youth are partic-ularly at risk for substance abuse, especiallythose who begin using at an early age. Costs to Society: Between medical costs,

crime-related costs and other associatedcosts, substance abuse costs our nation morethan $484 billion per year, which is nearlyfour times the amount of other chronic condi-tions, like diabetes.Mental Health: Addiction has a common

connection with mental illnesses often makingit more difficult to treat. According to theNational Alliance on Mental Illness, studieshave suggested that nearly one-third of peoplewith all mental illnesses and approximatelyone-half of people with severe mental ill-nesses also experience substance abuse. Inaddition, more than one-third of alcohol

abusers and more than one-half of drugabusers are battling mental illness. Crime: Many crimes are a result of drug use

and may even cause harm to others, such as driv-ing under the influence. Alcohol and marijuanaare the biggest contributors to driving under theinfluence. Drug abuse also is a contributing fac-tor to violent crimes including homicide, theft,assault, domestic violence and child abuse. Addiction and the Brain Addiction is a disease of the brain and body.

Over time it changes the way the brain func-tions and affects behaviors. Continued drug use alters the areas of the

brain that are responsible for simple functionsand behaviors. Since drugs are chemicals, theyinterfere with the body’s communication sys-tem. Drugs affect the level of dopamine foundin the limbic system of the brain that regulatesemotions and feelings of pleasure.When drugs enter the body, a surge of

dopamine is released, usually much higherthan an amount released during a naturalbehavior that causes pleasure, such as love.When too much dopamine is released, ourbrain begins to recognize that behavior as oneof pleasure and will begin to repeat it. It is a natural process of the brain to repeat

pleasurable behaviors like eating. Over time,the brain begins to learn to repeat these“unnatural” behaviors – leading to addiction. If the brain is constantly being hit with a

surge of dopamine, as a result of drugs, thebrain will naturally begin to produce lessdopamine or lessen the response to it. Withoutthe same response from the brain, that personwill need more drugs to induce the same levelsof pleasure or simply tolerance.

Treatment Addiction is a treatable disorder and it’s

approach varies. Detoxification from a drug isa process and it takes place in a wide variety ofsettings. Most detoxification will happen in anoutpatient setting, but other options include:• Physician office• Freestanding urgent care center or emer-

gency department• Freestanding substance abuse treatment or

mental health facility• Intensive outpatient and partial hospital-

ization programs• Acute care inpatient • Residential Detoxification is not the treatment, but the

first step toward long-term recovery.Successful recovery depends on the continu-ation of treatment after detoxification. Infact, the linkage from detoxification to treat-ment leads to an increase in recovery and adecrease in repeated detoxification, treat-ments and relapse. Recovery also leads toreductions in crime and expensive medicaltreatments. Overcoming addiction is not only a physical

process, but emotional. Therapy and behav-ioral treatments are just as much a part ofrecovery as detoxification and medicationtreatments, if not more important. There is no one size fits all treatment.

Each individual must receive a plan of carethat looks at each aspect of his/her health.Some people may need months or evenyears of treatment. Addiction is treatable;and as a community, it’s a treatment weshould invest in. (Mario San Bartolome, M.D., is the medical

director, Addiction Medicine Program,MemorialCare Center for Mental Health &Wellness, Community Hospital Long Beach.)

EDITOR & PUBLISHER

George Economides

SALES & MARKETING EXECUTIVE

Heather Dann

SALES & MARKETING ASSISTANT

Cori Lambert

OFFICE ASSISTANT

Larry Duncan

EDITORIAL DEPARTMENT

SENIOR WRITER

Samantha Mehlinger

CONTRIBUTING WRITER

Dave Wielenga

PHOTOJOURNALIST

Thomas McConville

COPY EDITORPat Flynn

The Long Beach BusinessJournal is a publication of SouthCoast Publishing, Inc., incorpo-rated in the State of California inJuly 1985. It is published everyother Tuesday (except betweenChristmas and mid-January) –25 copies annually. The BusinessJournal premiered March 1987as the Long Beach AirportBusiness Journal. Reproductionin whole or in part withoutwritten permission is strictlyprohibited unless otherwisestated. Opinions expressed byperspective writers and guestcolumnists are their views andnot necessarily those of theBusiness Journal. Press releasesshould be sent to the addressshown below. South CoastPublishing also producesDestinations and the EmployeeTimes magazines.

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Vol. XXVII No. 25

December 23, 2014-

January 19, 2015Now we know Santa

manages a large staffand produces a huge volumeof products. He is obviouslyvery skilled at producing theright culture and motivatinga very large workforce witha variety of talents. I’msure he deals with the budg-etary constraints that comefrom running a worldwideenterprise.

Yet there is also a great tip, not just for man-agers and leaders, but for each one of us indi-vidually. Just like Santa, each one of us mustprioritize if we are to navigate successfully.And what would that be? How about make alist and check it twice? Why? Because if youare wise, you’ll prioritize. And this is a greatway to set yourself up for the coming year!Here are four things we can learn from Santa.1. Make A “To Do” List. Like Santa, our

“to do” list helps us organize our daily activ-ities. When I say lists, I’m not just talkingabout “don’t forget to pick up the milk.” I’mtalking about seeing your list as a part of yourpersonal goals for living.2. Put Them In The Right Order. This

brings perspective and priorities to your list.Rather than see it as a “things to do,” see itmore as “things that have to get done.” Makesure you are doing the right things – thethings that are important to you.This is where the Pareto Principle comes into

play. The Italian economist Vilfredo Paretobrought to light a principle that helps everyoneachieve more with less effort. It’s been calledthe 80/20 Principle. Eighty percent of your pro-ductivity is brought about by 20 percent of youreffort. The percentages may change dependingon what you are doing, but the formula showsthe imbalance between what you do and whatyou get out of it. To look at it another way, mostof your efforts in achieving what you want areirrelevant to what you really want or value.As you make your list of things that have to get

done, take the time to prioritize them. It’s timewell spent. Remember these are goals and strate-gies for what’s important to you. So if you have10 things on your list and you only accomplishthe top 2, chances are you will have accom-plished 80 percent of what’s important to you.Not having them in the right order could result inyou accomplishing eight of the “to do’s,” yet onlydoing 20 percent of the important.The Pareto Principle is not a law of nature.

It is simply an observation. The point is thateffort and reward are not distributed evenly.This goes along with “The Law of

Diminishing Returns.” In other words, eachadditional hour spent usually results in accom-plishing less. I personally discover that at theend I am spending lots of time on minor details.Knowing how to prioritize and WHAT to

prioritize is the key. Knowing that we need ahorse and getting one is great. Knowing thatwe need a wagon and getting one is terrific.Yet if we place the cart before the horse we

will not be nearly as productive as if weplaced the horse before the cart.Having things out of order or sequence

results in wasted effort. Not understandingthe order of priorities in our lives results inless power to succeed.3. Make a “To Don’t” List. It might sound a

little harsh, but Santa figured out who not tovisit (naughty or nice). It’s easy for me to getdistracted and chase things – good things – butnot the best things. I have actually made a “ToDon’t” list. I look at those “wonderful” opportu-nities and then give myself permission not to dothem. We live in a target-rich environment. Somany things are distractions – and I’m not talk-ing about “naughty” things. Make sure your listincludes the things that are important to you. Ifit doesn’t, put those items on the other list!4. Stay The Course. Your prioritized Things

To Get Done list is both focused and concise.It’s your action plan for the day. Week. Month.Just like Santa, forget about managing time

and focus on managing priorities. Time takescare of itself when the right things get done.As Roy Disney once said, “When prioritiesare clear, decision-making is easy. (Mick Ukleja has co-authored several books

including Managing the Millennials. He helpsorganizations create environments in which all gen-erations can thrive. He is a keynote speaker andpresident of LeadershipTraq, a leadership consult-ing firm. His clients have included Fortune 500corporations and non-profit organizations. Checkhis weekly blog: www.leadershiptraq.com.)

� EFFECTIVELEADERSHIP

By Mick Ukleja

Santa Claus’ Secret For Getting The ‘Right’ Things Done

Impact Of Addiction

� HEALTHWISE

By Mario SanBartolome, M.D.,


PERSPECTIVEDecember 23, 2014-January 19, 2015 Long Beach Business Journal 19

Supply anddemand is a

pretty basic principleof real estate – andnowhere has this beenmore evident than dur-ing the past few yearsduring trying eco-nomic times when thedemand for propertiesslowed and, even with

little new development, the supply was out-stripping the demand.For the residential rental market – partic-

ularly apartment units – the decrease inconstruction and the increase in the num-ber of renters made this segment of themarket stronger than housing sales. Sincethe number of people able to afford to buyor to keep a home had dwindled, and mort-gage qualification standards became morestifling, the pool of renters over the pastfew years increased – thus creating moreconsumers in the market to rent with prettymuch a static supply of rental units.With a real estate slump going on more

than seven years and various market seg-ments experiencing peaks and valleyswithin that trough, it is interesting to notethat the increased development activityover the past couple of years has changedthis supply-and-demand dynamic.Now that there is an increased supply of

rental units, the run-up in rents thatinvestors had enjoyed over the past fewyears because of short supply is starting toreverse. Because construction on newapartments is back in full swing in manymarkets and vacancy rates are beginning to

trend upward, the robust rent increasesenjoyed previously by landlords in mostU.S. metro areas are expected to decelerateto below 2 percent in 2015 as the multi-family market shifts from full recovery intoan expansion phase. According to the com-mercial real estate information group,CoStar Group, and its panel of economists,apartment vacancy rates will rise in 46 ofthe 54 top U.S. metro areas over the nextyear due to the heavy increase in apartmentconstruction. Citing the group’s mostrecent analysis, the U.S. apartment vacancyrate will rise from the current 4.1 percent toover 5 percent by the end of 2015.Although a significant trend shift, apart-ment vacancies are still expected to remainnear 10-year lows across most of thenation, even with the addition of hundredsof thousands of new units.The report also noted that more than

220,000 new units were added during 2014and another 250,000 units are projected fordelivery in 2015, according to CoStarPortfolio Strategy’s Francis Yuen, referringto the recent CoStar Third Quarter 2014Multifamily Review and Outlook. “At thispoint in the cycle, we’ve seen supply takehold almost everywhere,” Yuen said.“Some late-recovery markets like LasVegas aren’t seeing vacancy increases yet,but even there, developers are beginning tofind opportunities.” Dallas, Washington,D.C., and Houston have each seen morethan 10,000 units delivered over the pastfour quarters, while apartment inventoriesin smaller markets like Charlotte andRaleigh have increased by nearly 5 percent.Denver and Houston, each with upwards of

20,000 units under construction, will seerecord deliveries over the next two years,Yuen added.Despite the expected impact on rents

from all the new construction, analystsnoted a widening affordability gap becausemost of the new building is for expensiveluxury properties. In the Oakland/East BayArea, for example, the average income hasrisen by about 15 percent to more than$75,000 in the strengthening economy.However, rents have grown by a staggering30 percent over the same period and nowrequire more than 25 percent of annualincome, Yuen said. “Lack of affordability is certainly some-

thing we are beginning to see capping rentgrowth, especially at the high end of themarket,” Yuen said. Meanwhile, concessions offered to

induce renters, which in the past have usu-ally increased quickly when supply acceler-ates, have so far remained below 3 percentand are mostly seen with new propertiestrying to lease up for the first time. “We’vebeen surprised by the low levels of conces-sions we’re seeing today, given the largeamount of new supply,” said Luis Mijia,CoStar’s director of U.S. research for mul-tifamily. But, with rent growth slowing fur-ther and more supply on the way, propertyincome growth is also expected to finallyslow down heading into 2015, which mayprompt investors to buy more office build-ings rather than apartments in search ofhigher yields, the analysts noted. Net operating income (NOI) for apart-

ments, which peaked at about 6 percent inmid 2012 and which was the only major

property type to show growth from 2010 to2013, is now the only sector to show year-over-year income deceleration. How muchof an impact all the new apartment unitswill have is still being debated. That’sbecause demographics and sagging single-family homeownership rates continue towork to the advantage of the rental apart-ment market. As renters follow jobs togrowing Sunbelt metropolitan areas,roughly 67 million Americans are in theprime renting demographic between ages20 and 34 – or about 7.5 million more thanin 2000.�Meanwhile, the rise in the numberof single-family home sales and in salesprices has slowed in recent quarters, andthe average U.S. homeownership rate con-tinues to drift downward, now standing at64.4 percent.�“Renters are still facing economic ambi-

guity, and the speed at which they are com-ing into the rental market is still greaterthan the rate that they are becoming homebuyers,” Mejia added. “The economy isstrong enough to push renters into therental pool, but not strong enough to pro-mote home ownership, a double benefit tothe apartment market.”Although not a strong enough trend to

worry most analysts yet, the increasingsupply of apartments does present a dangeron the horizon if this supply overwhelmsthe demand and starts to erode occupancyand rental rates in the future.(Terry Ross, the broker-owner of TR

Properties, will answer any questions abouttoday’s real estate market. E-mail questionsto Realty Views at [email protected] orcall 949/457-4922.)

� REALTY VIEWS

By Terry Ross

Apartment Construction Up, But Rents Down

If there is onetopic, when putinto print, that canraise more eyebrowsthan any other, itwould have to be anaccusation of bias.It’s that demonstra-tion of prejudiceby some, whetherfounded or not, whocreate a destructive

viewpoint that relegates people into abox. A prejudice at work also represents alimited ability to consider the merits ofconsidering an alternative point of viewabout “those people.”During a recent presentation to a group

of business leaders that offered a proposalfor how a nonprofit group could increaseservices and contributions, build a largercorps of active volunteers, and organizeitself for increased efficiency, the gale-force nature of bias bullied its way into theconversation.“You are thinking like a nonprofit per-

son,” are seven words that changed thetenor of the entire meeting. It also threat-ened to derail and dismiss six months ofcommittee activity, strategy testing andfacilitative leadership.There was clearly a difference of opin-

ion whether shaping the future of the non-profit rested in a project management

model used by large companies to solvebusiness problems or an organizationaldevelopment process involving volun-teers, discretionary charitable dollars, andstakeholder relationships as leveragedequity. Unfortunately, the point was lostwith the label.While questioning the best pathway for

any organization to chart a profitablefuture is vital and necessary conversation,discounting the work as a product of a“nonprofit person,” insinuated that a sub-class of inferior, if not faulty, thinkingwas at work.Unfortunately, this destructive bias exists

in far too many nonprofit boardrooms andorganizations which ultimately marginal-izes great leaders and stops promisingprocesses from moving forward. The term “nonprofit” actually refers to

a corporation that has a unique relation-ship with the Internal Revenue Servicebecause of a stated social benefit inten-tion. It was never meant to infer that thosecorporations were second-class citizens ortheir leaders were second-rate executives.If anything, the distinction was given withthe expectation of increased businessrigor as opposed to less.The destructive nature of prejudice

aimed at “nonprofit people” has been agut-wrenching and emotionally-ladenreality for the men and women who havechosen careers that demand overhead lev-

els unthinkable to most small businesses,rely on volunteers with expectations thatfar exceed those of many employees, andmust produce service results derived fromanalytics that aren’t rooted in consumersatisfaction.The nonprofit sector has a long history

of bias perpetuated by those who perceivetheir jobs are to rescue nonprofit organi-zations from the seemingly uninformedand inferior people who govern or runthem. Traditionally, “charity work” wasconsidered “woman’s work” and thestruggle for economic, political andsocial equality between the sexes aredeeply rooted in the employment, boardrelations and compensation practices ofthe sector. Many nonprofits first hired“secretaries” for their boards rather than“chief executives” for their institutions.The religious origins of many nonprof-

its f irmly positioned its leaders asinformed missionaries or practicingclergy. Their leadership, therefore, wasregarded as a form of conscience ratherthan construct.Regardless of the origin, nonprofits and

their leaders throughout history have foundthemselves standing in the middle of thecrowded intersection of bias as it relates tothe status of women, the organizing andadvancement of communities of color, therole of religion in society, and the per-ceived lax business practices of charity.

Despite all of this, the rate of businessfailure among nonprofits is lower than theprivate-sector. The numbers of corporatepeople desiring to move into nonprofitwork is accelerating. Interests in corporatesocial responsibility, social enterprisedevelopment, and socially-responsible con-sumerism is at an all-time high. And, ascorporations have emphasized diversitytraining amongst their ranks, it has beennonprofit leaders who have worked hand-in-hand with business giants to developmethodologies to reduce bias throughouttheir organizations.The time has come for each of us to ask

ourselves what is being insinuated when aperson, an organization or a process islabeled “nonprofit.” Creating social profits and financial

profits are equally essential to develop-ing communities and sustaining theirlong-term well-being. Until “nonprofit”is viewed as having mastered a uniqueand vital skill set that produces a uniqueset of results, communities are destinedto fall short. (Jeffrey R. Wilcox, CFRE, is president

and chief executive officer of The ThirdSector Company, Inc. He can be reachedat: [email protected])

The Nonprofit Label: A Threat To Community Progress?

� THIRD SECTORREPORT

By Jeffrey Wilcox

@LBBizJourn


december 23, 2014-january 19, 2015 section a

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