RIOT AFTERMATH: GETTING BACK TO BUSINESS : Valley Firms Assess Financial Impact of Riot Losses : Disasters: Insurers begin to process damage claims from citywide destruction. Banks check on clients’ losses.
Many San Fernando Valley-area businesses affected by the rioting of the past several days tried to assess the financial impact Monday and organize efforts for a smooth transition back to normal operations.
Local banks began contacting business customers in affected areas to offer assistance in seeking financial aid to recover from the damage caused by fires, looting and vandalism. Insurance companies started processing claims and sending adjusters to inspect damage. And property owners and managers met with tenants to discuss needed repairs and ongoing security needs.
The impact to Valley-area businesses paled in comparison with the damage in other hard-hit areas in Los Angeles. But local companies were not untouched by the violence.
Rioters last week descended on the Vannord Shopping Center in Panorama City, for instance, breaking windows and looting. About 25 small businesses operate in the center, including hair salons, pharmacies, clothing stores, restaurants, doctors and dentists.
Russell Friend, supervisor of commercial property for George Elkins Co., manager of the shopping center, said damage from the vandalism is an added blow to many businesses that were barely surviving in tough economic times. To help the Vannord tenants recover, Friend has offered to pick up any costs of repairing shattered windows that aren’t covered by tenants’ insurance.
Despite the violence, Friend said he doubted that any of the mall’s businesses would move out. “Those tenants are pretty much used to any vandalism that goes on in that area,” he said.
Richard Thaler, owner of Valley Food Warehouse in the Vannord Shopping Center, said there was little damage to his store other than a broken-down front door, largely because he had prepared in advance with extra security guards. “We potentially had a big problem,” he said.
But Thaler said locating the store to another area was not under consideration. “It’s a great location for us,” he said.
Meanwhile, local insurers Monday began to tally the impact of the citywide destruction as damage claims poured in.
At property-casualty insurer Transamerica Insurance in Woodland Hills, 31 claims had been filed by businesses in Central and South Los Angeles as of Monday morning. Estimated losses for those claims totaled $10 million, with individual claims ranging from $1,500 to $4.8 million.
Transamerica spokesman Richard Griebel said many more claims are expected to be filed as business owners assess their damages. The insurer is preparing to hire independent adjusters to pick up the extra workload and process the claims “as quickly as possible,” he said.
Unico American in Woodland Hills, which insures many small businesses in areas with heavy damage from the riots, said in a statement that its Crusader Insurance Co. subsidiary had received a substantial number of damage claims. It expected the losses to be “very material,” although it said that the extent of the losses hadn’t yet been determined and that it anticipated many more claims would be filed.
The news unsettled investors, however, as Unico’s stock fell $1.125 to close at $3.50 per share Monday.
American Pacific State Bank in Sherman Oaks, the nation’s sixth-largest lender of federal Small Business Administration loans, said it has 24 loans to businesses in the most severely damaged areas of Los Angeles. Those businesses include retailers, a laundry equipment rental company, a furniture store and auto mechanics.
The bank has organized a task force to contact those businesses, find out if they suffered any damage and assist the affected businesses in applying for low-interest disaster relief loans from the SBA.
James Degnan, executive vice president of American Pacific, said he believed that “the financing is going to be available” for businesses in need of assistance.
Degnan said he expected American Pacific’s exposure to losses because of the riots to be minimal. “If we didn’t do anything, I think it would have hurt us,” he said. But if the bank helps its clients work out their problems, “that will help us pick up additional SBA business.”
