Red Ink to Force L.B. Chamber to Seek Loans

Chamber of Commerce officials are preparing to seek a series of bank loans to overcome what they describe as a significant and surprising $150,000 operating debt triggered mostly by a decline in membership and cost overruns.

But in disclosing the debt during an interview Tuesday, officials also laid some of the responsibility at the feet of George Economides, the chamber’s former executive vice president who resigned last November.

Board Chairman Christopher R. Pook stressed that he was not accusing Economides of any wrongdoing. But he criticized the former administrator for allegedly failing to exercise caution in some financial matters, for not keeping chamber leaders adequately informed and for sometimes presenting overly optimistic figures.

Revenues Had Slumped

Although chamber revenues had slumped, “we were spending our (projected revenue) goals,” instead of amounts more in line with actual income, added Rolfe G. Arnhym, who was hired in May as the chamber’s chief executive.

Economides responded to the chamber announcement by saying that any effort to link the financial deficit with his administration would be “off base.”

“I think I did a good job for the organization,” Economides said. “There were no secrets. They can go back and look at all the financial records they want and they won’t find a problem.”

Joe R. Saucedo, who served as chamber president during Economides’ final year, defended the former executive.

“I thought the highest of George and his administrative skills during the period,” said Saucedo, who is president of the Queen City Bank. “I certainly do not feel that there would be any problems that could be pointed out prior to his leaving.”

Nevertheless, chamber officials said the organization’s current financial trouble began with a $17,000 loss in the 1983-84 fiscal year and grew worse just after Economides left. When the 1984-85 fiscal year was recently audited, Pook said, a $105,000 operating deficit was discovered. Part of that was a $5,000 cost overrun incurred after the chamber-sponsored Holiday Gift Mart exhibition last December. Pook said the chamber fell another $35,000 in the hole after sponsoring the Pacific Rim Exposition and Forum, a world trade show conducted in May.

The combined debt, still building daily with ongoing expenses, is expected to reach the $150,000 range by the time bank loans can be obtained in the next few weeks, Pook said. He said he believes the chamber will be able to pay off the debt in about three years.

Curtailment Unforeseen

The shortfall is not expected to curtail any major services supplied to the roughly 2,500 businesses that make the Long Beach chamber the state’s fourth-largest, officials said. But belt-tightening measures are already being put in place. While the chamber anticipates drawing more members this year, the budget was prepared as if revenues were expected only to reach last year’s $849,000 total.

“We have now got control of our chamber,” said Pook. “We can manage and rectify the problem.”

“I don’t want to be made a scapegoat for other people’s mistakes,” Economides said.

Economides--a nine-year chamber employee before he resigned--said he had opposed the Pacific Rim Exposition because he anticipated that costs would be high. “If they didn’t want to pay attention to my advice, then they didn’t need me,” he said.

But Economides said he resigned primarily to enter business for himself. He is now publishing a new magazine, South Coast Business, that is expected to compete with a similar chamber publication.