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BuSINESS
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T H U R S D A Y , D E C E M B E R 1 8 , 2 0 1 4 :: L A T I M E S . C O M / B U S I N E S S
DOW 17,356.87 ▲ 288.00 S&P 500 2,012.89 ▲ 40.15
NASDAQ 4,644.31 ▲ 96.48
GOLD $1,194.50 ▲ 0.20
OIL $56.47 ▲ 0.54
EURO $1.2342 ▼ 0.0169 U.S. T-NOTE (10-yr.) 2.14% ▲ 0.08
Businesses
hail Cuba
decision
PRO PE RTY R E P O RT
Telecom, banking and
technology industries
may all benefit from
normalized relations.
By Andrew Khouri
Christina House For The Times
CLARION PARTNERS Vice President Khalid Rashid is flanked by two buildings his company is remod-
eling. The complex, built four years ago, is already out of step with changing tastes, a design director says.
Remake pays off for
Playa Vista project
2 new buildings are reconfigured for creative tenants
By Roger Vincent
A large office complex in Playa
Vista that has been vacant since it
was completed during the last real estate downturn is finally roaring to life
with a dramatic $8-million makeover
intended to enhance its appeal to
firms in creative industries.
The unusual move of breaking
apart and reconfiguring a 4-year-old
office complex appears to be paying
off for new landlord Clarion Partners,
which just signed two big tenants and
is in final negotiations with a third.
Clarion said it is renting space in
the complex it now calls i|o at Playa
Vista to video media firm Fullscreen
Inc. and media investment company
GroupM.
The new leases and dramatic
property makeover underline the
emergence of Playa Vista as a choice
address for businesses in technology,
media and
[See Property, B3]
Kilograph
A RENDERING shows planned changes, including balconies, exteri-
or stairs and individual front doors instead of a common lobby.
Investors remain
loyal to Nazarian
If the entrepreneur’s
ventures keep making
money, his partners
won’t flee, experts say.
By Hugo Martin
Los Angeles hotel and
nightclub mogul Sam Nazarian lost day-to-day control of his Las Vegas hotel,
but so far his investment
partners are sticking by him.
Wealth gap is
at a record high
The upper-income
median is seven times
higher than that of
middle-income
households, according
to a new report. B2
Coming Sunday
A 29-year-old graphic
designer, fearing he
won’t be able to retire
until age 87, learns
how to set reasonable
financial goals.
Dilbert ....................... B2
Market Roundup ... B5
Business Briefing . B4
Classifieds ............... B6
Nazarian’s rapidly expanding empire suffered an
unexpected setback Tuesday when the majority
owner of the SLS Las Vegas
announced that it was taking over day-to-day control
of the hotel after embarrassing details about Nazarian
surfaced during a routine
vetting for a gaming license.
But experts said that as
long as Nazarian’s hotels,
clubs and restaurants keep
making money, his admitted
drug use and payments to a
twice-convicted felon won’t
have much of an effect.
“I think investors will still
work with him in the future,”
said Robert La Forgia,
founder of Las Vegas-based
Apertor Hospitality, an asset management and advisory firm specializing in hotels and gaming. “I don’t see
that this hiccup will be a
long-term issue for Sam.”
Through his company,
SBE Entertainment, Nazarian oversees dozens of restaurants and nightclubs,
plus six boutique hotels
across the U.S., with plans to
open eight additional SLS
hotels by 2016. The new hotels include projects in New
York, the Bahamas and Beijing.
The Nevada Gaming
Commission is expected to
decide Thursday whether to
[See Nazarian, B4]
President Obama’s decision to start normalizing relations with Cuba gives
American business a fresh
opportunity on an island
once known as a travel hub
for the U.S. jet set.
The policy changes,
which may foreshadow the
end of a half-century of gridlock, could benefit a litany of
industries, chief among
them banking, finance, technology and telecommunication.
U.S. financial institutions
will be able to open accounts
at their Cuban counterparts. U.S. travelers can use
their debit and credit cards,
instead of stacks of cash.
And businesses can expand
their exports of software and
telecommunication
systems.
Business groups cheered
the changes.
“We deeply believe that
an open dialogue and commercial exchange between
the U.S. and Cuban private
sectors will bring shared
benefits, and the steps announced today will go a long
way in allowing opportunities for free enterprise to
flourish,” U.S. Chamber of
Commerce CEO Thomas J.
Donohue said.
Telecom companies will
be allowed to establish infrastructure to enable phone
and Internet service.
The market is almost entirely untapped: Only about
5% of the Cuban population
has access to the Internet,
according to the White
House. As of last year, there
were only about 18 cellphone
subscriptions per 100 Cubans, according to the International Telecommunication Union.
The administration also
seeks to boost travel to an island that, before the Cuban
Revolution, was a destina-
Snapchat’s strategy is
aired in leaked emails
Its CEO’s correspondence is
released as part of fallout from
cyberattack on Sony Pictures.
By Paresh Dave
and Andrea Chang
Months after a leak of salacious
emails from his Stanford University fraternity days embarrassed Snapchat’s
young chief executive, the unauthorized
release this week of a more recent set of
emails offered a mostly positive glimpse
into his broad ambitions.
The correspondence reveals Evan
Spiegel’s frustration with the dynamics
of the tech industry, explains his desire
to quickly turn Snapchat into a revenue
generator and teases his efforts to expand the app beyond a place for friends
to trade photos and videos of their lives
into a major distributor of user-created
and professionally produced content. It
was much better than the talk leaked in
May of Spiegel trying to get sorority sisters drunk.
Still, Spiegel, 24, expressed anger in a
note to his staff Wednesday about the
public airing of business details such as
employees’ stock options and the company’s acquisition of several smaller
start-ups.
“It’s not fair that the people who try
to build us up and break us down get a
glimpse of who we really are,” he wrote.
“It’s not fair that people get to take away
all the hard work we’ve done to surprise
our community, [See Snapchat, B6]
Michael Kovac Getty Images for Vanity Fair
SNAPCHAT CEO Evan Spiegel
expressed anger in a note to his
staff Wednesday about the public
airing of business details.
tion for American travelers
and gamblers. The U.S. already allows Americans to
visit the communist island
for 12 specific purposes — including education, humanitarian projects, family visits
and professional research —
but that travel will be expanded and made easier
under new rules.
And as long as Americans visit Cuba legally, they
can now bring back $400
worth of goods. That includes cigars, although alcohol and tobacco imports will
be capped at a combined
$100.
Agriculture exports also
will be streamlined, a move
hailed by California farm interests.
[See Cuba, B4]
Retailer’s
shares
surge on
takeover
rumors
Early tenure of new
American Apparel
CEO could determine
fate of struggling firm.
By Shan Li
A day after the firing of
Dov Charney, American Apparel Inc.’s stock jumped
amid fresh speculation that
the apparel company is ripe
for a takeover.
Shares of the Los Angeles
retailer shot up nearly 19% to
69 cents Wednesday following Charney’s ouster and the
appointment
of
Paula
Schneider as the new chief
executive starting Jan 5.
Charney had been working as a consultant to the
company during his suspension from the CEO job.
American Apparel said
Tuesday that an investigation into misconduct allegations, including inappropriate behavior with employees, led the company to
the determination that
Charney shouldn’t be reinstated as CEO or continue
as an employee.
The next few months
under Schneider, an experienced clothing executive,
could determine the future
of American Apparel, industry experts said. A major operational rethink could lift
the retailer out of the doldrums, or a buyer may come
in and make an offer.
“There’s always going to
be someone that is going to
look at an asset like this as a
challenge and see if they can
turn it profitable,” said Ronnie Moas, founder of Standpoint Research, a market research
firm.
“Stranger
things have happened.”
Throughout the months
of turmoil surrounding
Charney’s role with the company, American Apparel executives have strongly denied interest in selling the
company.
Allan Mayer, co-chairman of American Apparel,
declined to comment on
takeover rumors. In an interview, Schneider said she
planned to quickly get up to
speed on American Apparel
and then decide on a strategy to turn around the company’s fortunes.
“You go in and find out
what’s going on and what’s
[See Apparel, B4]