Whittier’s Landlords Still Feeling the Aftershocks : Economy: A high vacancy rate plagues Uptown’s business district two years after the earthquake.

Repairing his commercial building in Uptown Whittier after it was damaged in the Oct. 1, 1987, earthquake was easy compared to what Robert Klein says he is going through now.

Klein and scores of other landlords in Whittier’s Uptown business district say they are struggling to find merchants to move into the buildings they spent thousands of dollars to rebuild after the 5.9-magnitude earthquake struck the community.

“I figured that once I rebuilt it, I would have no trouble renting it. I never had before,” Klein said.

Not so. The 10,000-square-foot building, like many others in the area, is 50% vacant.

The unusually high vacancy rate, landlords and city officials say, is primarily due to expansions of some of the reconstructed buildings, rent increases to help pay for costly earthquake repairs and new city restrictions on the types of tenants that can locate on the ground floors.

Consequently, there is more commercial space available than ever before in the Uptown area, which serves as the city’s downtown business district. Before the earthquake, there were few vacancies in commercial or office buildings.

Despite vacancies in 43 buildings, another half a dozen retail and office buildings destroyed in the quake are scheduled to be rebuilt in the Uptown area, according to Planning Commission President Larry Haendiges.

Another problem, landlords say, is that they were forced to nearly double monthly rents to pay for loans to make earthquake repairs. Before the quake, space in the Uptown area rented for an average of about 50 cents a square foot, relatively cheap for the Los Angeles area. As a result, the Uptown district, made up of older, unreinforced brick buildings, had been surviving with small businesses on shoestring budgets.

After many of the older buildings were reduced to rubble, 10% of the small businesses went under. Some of the businesses could not get loans to keep going, while some tenants could not afford the increased rents.

“The mom-and-pop renters were squeezed out,” Klein said.

The city in June approved a redevelopment plan that prohibits certain non-retail businesses, like accounting and law firms, from locating on the first floor in the Uptown business area. City officials say they want to maintain shops on the ground level, where people can walk from store to store.

Klein said two accountants have approached him, asking if they can rent the 3,000-square-foot space on the first floor of his building. He had to say no. It was like throwing money away, Klein said, adding that he barely makes enough money in rent to cover the $2,000 monthly payment for his earthquake repair loan.

“I’m angry and I’m frustrated,” Klein said. “They (the city) encouraged us to stay and rebuild after the quake.”

They ought to make allowances for the ones who stayed, Klein said.

Mayor Victor Lopez agrees that the non-retail businesses should be allowed in.

“We’ve gotten ourselves against a wall, and we can’t get out of it,” Lopez said at a recent City Council meeting. “It’s a mess.”

But the consensus of other council members is to stick with the plan.

“I really believe we should give the plan a chance,” Councilman Gene Chandler said.

Haendiges, also president of the Whittier Uptown Assn., said the association hopes to attract tenants by aggressively marketing the area. He has gained city approval to hire an outside firm to come up with and implement a marketing plan.

“The landlords all want quality tenants and they want (their buildings) filled right now, and we share that goal,” Haendiges said.

Calling Uptown one of the city’s best-kept secrets, he said officials need to better publicize the area. “Marketing is the No. 1 issue right now,” he said.

But many of the businesses in Uptown are doing better than ever, Haendiges said. According to the city comptroller’s office, sales tax revenues in the area are up.

The high vacancy rate will soon pass, many officials say. It is just another hurdle Whittier must overcome in the lengthy process of recovering from the earthquake, they say.

In the meantime, “For Rent” signs appear in many store windows.

Tom Theisen, an Uptown landlord, said he is concerned that problems will force some owners to go under. Theisen added an extra floor when he rebuilt his building but now has an occupancy rate of about 50%.

“There’s a lot of square footage out there,” he said. “And the marketing plan will take time to take effect. It may be too late for some.

“They encouraged us to rebuild. Now it’s too late to go back.”