Torrance Bonds to Help Owners Renovate Quake-Prone Buildings

After crafting a novel plan to assist property owners, the Torrance City Council has unanimously adopted a measure that requires the upgrading of unreinforced masonry buildings within four years to reduce the risk of death or injury in a major earthquake.

The earthquake safety ordinance won approval late Tuesday night after merchants in the old downtown area endorsed it and a companion financing program that city officials believe is the first of its kind in the state.

Veteran Torrance City Treasurer Thomas C. Rupert told council members that he and the city’s bond counsel devised a plan to use a city bond issue to raise the money needed to make the renovations.

Special Assessment District

The bonds, which do not require voter approval, would be repaid by property owners who renovate their buildings in a new special assessment district to be created in the city’s old downtown area.

Torrance building inspectors have identified 48 apartment and commercial buildings in the area that are potentially hazardous and could be subject to “extreme damage and even collapse” in a major quake.

An estimated 200 to 300 people occupy the buildings during the day and as many as 500 people live there at night, according to Ralph Grippo, director of the Torrance Building and Safety Division.

Many of the buildings suffered major damage when a serious quake struck Torrance in November, 1941, sending bricks and cornice work crashing to the ground.

All of the structures were built before a devastating quake hit Long Beach in March, 1933. That quake prompted adoption of tougher building codes.

Such unreinforced masonry buildings suffered major damage in the Whittier earthquake in October, the temblor that devastated downtown Coalinga in May, 1983, and the quake that rocked the San Fernando Valley in February, 1971.

Torrance Mayor Katy Geissert said the recent Whittier quake spurred action on the earthquake safety measure. “The knock on the door was there, pretty hard,” she said.

The stumbling block to upgrading such buildings has always been the cost of major structural improvements, which require bolting the exterior walls to the floor and roof and installing interior bracing.

Rupert said his approach marks the first time that a California city has used the combination of bonds and a special assessment district to help finance the upgrading of buildings that are unsafe in an earthquake.

“It’s not a gift,” Rupert said, because property owners who repair their buildings will be paying the interest and repaying the bonds.

Property owners told city officials they have had difficulty obtaining second mortgages for the work because banks do not consider strengthing buildings to withstand earthquakes to be something that adds value to the property.

“You can guess what the interest rate would be,” said Paul Kasper, representing the Downtown Merchants Assn.

Instead, property owners will pay a lower interest rate because the city will issue the bonds and loan the money.

Interest paid to bondholders would be exempt from state but not federal taxes. “I don’t think we will have any problems selling the bonds,” Rupert said.

Rupert estimated that a $3.1-million bond issue may be necessary to cover the cost of repairs, but conceded that the bond issue ultimately could be for twice that amount.

The financing concept was warmly received by downtown merchants who had feared the city might require the repairs without providing financial help.

Kasper said building owners like the financing package since it would be cheaper and easier than going to a bank.

“No one has to qualify for this,” he said. “It allows the merchant to get the loan. That was the biggest problem: how to get a loan.”

Kasper, the owner of an auto parts store in business for 53 years, said the financing plan also will allow “a lot of people with ties to this town” to stay in business in Torrance.

Thomas Tobin, executive director of the state Seismic Safety Commission, said in Sacramento that he believes the Torrance plan is the first of its kind.

“It’s exactly what’s needed,” Tobin said. “I strongly believe that strengthening these buildings is in the public interest.”

Tobin said the history of California back to the 1868 earthquake that leveled Hayward and the 1906 earthquake that devastated San Francisco shows that unreinforced masonry buildings are “the first type of building to fail.”

State law requires cities to identify all pre-1933 unreinforced masonry buildings by Jan. 1, 1990 and develop plans to reduce the hazard, Tobin said.