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Management of High-Rise Denies Blame

San Diego County Business Editor

Saying its problems were as unavoidable as those caused by earthquakes and other “acts of God,” the management of the Great American Building denied Thursday that it was at fault for the fire, power outages and series of evacuations that have plagued the building over the last month, costing many tenants thousands of dollars in business.

The building’s owner also announced that it will offer tenants a month’s free rent, but served notice that it will not give in to tenants’ demands that they be reimbursed for lost business or expenses incurred by having to set up temporary offices elsewhere after the building was shut last week.

Colin Stillwagen, who manages the tower for Kowa Real Estate Investments of Japan, said at a Thursday press conference that the building’s problems have been traced to a faulty “sandwich joint” connecting the -inch by 4-inch copper buses, or bars, that, standing eight in a row, conduct electricity up and down the 24-story building.

‘Don’t See Negligence’

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“I don’t see negligence on anyone’s part,” said Ken Kimball, president of Chula Vista Electric Co., the electrical contractor brought in by Kowa on Sept. 29 to make repairs when the building’s problems first surfaced. “This is a material failure that was not predictable.”

The high-rise, which Kimball said is now the “safest building in San Diego,” was scheduled to reopen at 6 a.m today after being closed since Oct. 20. The shutdown was ordered after an electrical fire forced an evacuation of the building. The fire was caused when electricity arced over a loose bus joint, sending sparks through a ventilation hole and igniting a rubber safety blanket, Kimball said.

Kowa has installed temporary cables costing $300,000 to replace buses on four floors. On Wednesday and Thursday, the building was run at 125% of its normal power load to test the temporary wiring. More than 3,500 electric circuits were tested in recent days and a permanent electrical system costing $2.5 million or more will be installed in coming months.

Kimball’s assessment of blame is disputed by the federal Occupational Safety and Health Administration. OSHA area director John Hermanson, who also attended the press conference in the deserted bank building’s third-floor cafeteria, hinted that human error could be involved.

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“I wouldn’t sit here and say it was an act of God,” Hermanson said. “There are some preventive maintenance procedures that would have alleviated the problem.” Without being specific, Hermanson said his inspectors had turned up signs of safety violations that could lead to fines against Kowa or related parties.

Possible Violations

Hermanson said that, among the possible violations being looked into is exposure to asbestos by electrical workers repairing the damage.

Another dispute is likely to arise over Kowa’s offer, presented Thursday by Stillwagen, to compensate tenants for time out of the building. Stillwagen said Kowa will offer tenants a rent abatement totaling a month’s free rent, to be taken as a 34% discount off November rent, then in 6% reductions monthly over a 10-month period beginning in January.

Kowa attorney Bob Walker of San Francisco said his client will not, however, reimburse tenants for business losses or out-of-pocket expenses stemming from having to set up temporary offices after being locked out of the building this week. Kowa executives were in San Diego this week but did not attend the press conference.

Walker described the rent-abatement offer as “generous” because the owner’s maximum liability under most of the leases is for only five days’ free rent--for the five working days that the building has been shut down. “The building (management) has gone to enormous expense to correct in a few days what normally takes several weeks,” he said.

‘Duty to Compensate’

But attorney Ken Turek, whose law firm occupies half of the 21st floor in the Great American Building, responded: “That sounds low, that sounds inadequate. Our position is that the landlord owes us the duty to compensate us for our losses.”

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Howard Levenson, chairman of tenant Western Financial Corp. securities brokerage, said before the press conference that “the big issue is the loss of income, not rent abatement. We are in a commission business, and that has disappeared over the last week.”

The closure has cost Great American First Savings, the building’s largest tenant, about $250,000 to set up temporary offices in seven locations, spokesman Brian Luscomb said. The S&L; said it expects to recover most, if not all, of those costs through insurance.

The 14-year-old building, the workplace of 1,200 office workers, was closed after the fire raised questions about its safety. The building has experienced six power outages or evacuations since Sept. 29. Kimball said increased loads contributed to the problem but that, even at peak usage, the building’s electrical system was never beyond capacity.

Stillwagen said the building is now equipped with battery-powered lighting in its stairwell. The stairwell lights were off during the Oct. 20 evacuation because an emergency generator system was switched off, leaving many employees to descend the smoky stairs in total darkness.


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