City Approves Issuing Bonds to Reinforce Old Buildings

Building owners facing wallet-thinning repair bills to comply with local earthquake standards got a little help from the city this week.

The City Council approved a proposal to create a special assessment district under which the city would issue bonds to provide financing for seismic repairs required under city law.

Property owners in need of money to pay for the earthquake repairs would join the assessment district and pay both the interest and principal on the bonds, in much the same way as they would pay off a mortgage.

The council also approved a similar bond issue to help the residents of two downtown condominium buildings plagued by extensive structural flaws.

With the 1991 deadline for earthquake reinforcement fast approaching, there are still about 564 buildings in the city that need to be strengthened. The costs of bringing the pre-1934 structures into compliance with the city’s strict earthquake standards have been a major concern to owners, who will be told to demolish their buildings if they fail to reinforce them.

More than 100 property owners facing repair costs totaling more than $20 million have indicated their interest in joining an assessment district, according to city officials, who held two public meetings on the matter last winter.

“We were hoping people would come up with financing without the city, but that hasn’t really happened very much,” remarked Councilman Evan Anderson Braude, who represents the downtown district where a number of older apartment buildings need earthquake repairs.

In both bond issues, the city is merely acting as an agent and would not be responsible for the bond debt. Property owners will have to list their buildings or condominium units as security on the bonds and make regular payments. Interest rates are expected to be about the same as those for a conventional mortgage. The earthquake bond will be repaid over a 20- to 30-year period, and the condominium bond, expected to be about $1 million, will have a term of five to 10 years.

The city’s earthquake ordinance requires that all non-wooden buildings constructed before 1934 be reinforced to withstand earthquakes. Structures built after the destructive, 1933 earthquake in Long Beach are not included because they had to meet stricter codes than those built earlier.

The Oceangate and Golden Gate condominium complexes in the 700 block of West 4th Street both need shoring as a result of design flaws that left the buildings structurally unsound. The buildings were approved by city inspectors, but the structural problems were not discovered until after residents moved in and started noticing cracks in the walls, and doors that would not close properly.