Health Net HMO Decides to Stay in Warner Center

Health Net, one of California’s top health-care providers, said Thursday that it--and its 1,800 employees--will stay in the city of Los Angeles, ending a flirtation with Thousand Oaks and other cities.

The company said it will remain in the Warner Center area of Woodland Hills. It has narrowed options for its corporate headquarters to its current high-rise at 21600 Oxnard St. and the former Prudential site at Canoga Avenue and Burbank Boulevard, about half a mile away.

Health Net has been based in Woodland Hills since 1984. With the lease set to expire at its 20-story glass-and-steel home at the end of the year, the company began scouting for a new site. Thousand Oaks, Santa Clarita and Burbank were among the locales considered.

“We just determined that staying in our area is the right decision for Health Net,” said Brad Kieffer, a company spokesman.

Kieffer cited the potential drain of a longer commute for employees, the ease of doing business at Warner Center and access to transportation as factors in the decision.

“People have already built their lives around where they work,” he said.

Health Net, a subsidiary of Foundation Health Systems, serves nearly 2.2 million people in California, according to the company. It is affiliated with nearly 45,000 doctors, more than 400 hospitals and 4,300 pharmacies. The company’s revenues are expected to approach $3.8 billion this fiscal year.

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The decision to remain in Woodland Hills marks the second time in recent years the HMO has decided against leaving Los Angeles. In 1997, Health Net and four other health-care companies threatened to depart the city if their tax burden was not substantially reduced.

Led by Valley Councilwoman Laura Chick, the Los Angeles City Council amended the tax code the following year to exempt HMOs from paying taxes on income from work done by doctors and clinics outside the city.

On Thursday, Chick said she was thrilled that Health Net had decided to stay in the West Valley.

“I’ve got an ear-to-ear grin,” she said. “It’s a relief. There was a long and complicated and arduous struggle to straighten out the business tax issue for HMOs, and for a while we weren’t sure we would have any of them staying.”

Brad Rosenheim, executive director of the Warner Center Assn., said Health Net is one of the five biggest employers in Warner Center. Most of its employees live in the San Fernando Valley, according to Kieffer.

“Their impact is significant,” Rosenheim said. “Many of those employees shop and dine and seek entertainment in the area, whether they live here or not.”