Firms Pledge to Rebuild Shattered Areas of City
Several major Los Angeles businesses jumped in Monday with a range of plans to help rebuild riot-torn areas of the city, while criticism continued to mount against the embryonic redevelopment efforts headed by former baseball Commissioner Peter V. Ueberroth.
Actions ranged from a $25-million loan program from Bank of America and aid programs by African-American and Korean-American owned banks, to the formation of an investment group by retired basketball star Earvin (Magic) Johnson aimed at spurring minority businesses.
Most businesses, however, held off major aid efforts and confined their initial actions to food drives and other disaster relief.
Ueberroth flew to Chicago on Monday to meet with potential investors, said Joel K. Rubenstein, a partner in Ueberroth’s Orange County investment firm, the Contrarian Group. Ueberroth was scheduled to return to Orange County later Monday for at least one other meeting.
Rebuild L. A., Ueberroth’s extragovernmental task force, has yet to name a board of directors, select permanent staff or pick a headquarters site. Close associates of Ueberroth conferred with attorneys, architects, land-use experts, real estate executives and others in Los Angeles to define the scope of their group’s enormous task.
But the Rev. Jesse Jackson criticized Ueberroth’s appointment as sending the wrong message, and at least one local community leader called for him to step aside.
Clyde Johnson, president of the Black Employee’s Assn. in Los Angeles, a 6,000-member labor and community group, said: “He doesn’t have a history of doing things to benefit minority people. Blacks didn’t do very well in the Olympics, and he didn’t enhance black management when he was commissioner of baseball.”
Meanwhile, as companies pledged aid, community activists stepped up their calls for a new type of revitalization for South Los Angeles that would be a marked departure from the past and ensure that people who live there had a bigger stake in its economic future.
Commitments for loans, investment and other support came from banks, venture capitalists, investors, developers and wealthy individuals.
Hoping to generate private sector support, Gov. Pete Wilson met Monday with 16 California corporate executives in Los Angeles--including representatives of four major financial institutions and three major supermarket chains.
Wilson announced that Bank of America, Wells Fargo Bank, First Interstate Bank and Home Savings of America have pledged to help finance new enterprises and existing businesses in distressed areas.
Bank of America said its $25-million program was aimed at financing the rebuilding of small businesses. The bank said it will spend up to $100,000 per business and consider becoming an equity partner with some of those businesses affected.
Union Bank Vice Chairman Richard C. Hartnack said his bank is considering three immediate responses: boosting its Small Business Administration-related loan programs, offering mortgages at below-market interest rates for people whose homes were destroyed, and offering low-interest home improvement loans for people whose homes were damaged.
Wilson added that companies that operate the Vons, Ralphs and The Boys and other supermarket chains plan to repair and reopen supermarkets damaged during last week’s disturbances.
“I was enormously cheered by what I heard,” Wilson said at a news conference after the private meeting. “These companies are entitled to the kind of support that they didn’t receive during (last week’s) tragedy.”
At the same time, Magic Johnson announced the formation of his investment group, which is to include other wealthy sports and entertainment figures, to build new businesses and employ young people in the community, said Lon Rosen, Johnson’s agent.
For the most part, however, Los Angeles businesses said it is too early to say how much financial help they will be able to offer. They said they will wait for direction from Ueberroth or city officials.
Those companies concentrated their early efforts on disaster relief. Utility companies were offering discounted rates and emergency service to displaced residents.
Emergency food relief was available from several supermarket chains, such as the operators of Alpha Beta, The Boys, ABC, Viva and Food 4 Less stores. But they declined to say whether all of the 40 or so stores burned or looted in the rioting will be rebuilt.
Atlantic Richfield Co. said it will rebuild five of 11 Arco service stations burned during the rioting, but was less committal about long-term financial aid.
In the affected communities, three black-owned financial institutions--Broadway Federal Savings & Loan, Family Savings Bank and Founders National Bank--announced plans to cooperate to provide loans to rebuild old businesses and finance new ones, said Wayne-Kent Bradshaw, president of Family Savings.
“We can get more leverage by combining some of our resources,” Bradshaw said.
Lance E. Drummond, the black chief executive officer of the Economic Resources Corp. near Watts, and other black venture capitalists said they sense a lot more interest among African-American and some pension fund investors in investing in minority communities.
“We are talking to people who earlier said ‘no’ that now are saying ‘maybe,’ ” Drummond said.
At the Los Angeles office of the New York investment house of Bear, Stearns & Co., broker Lemuel Daniels said he is getting calls from African-American professionals interested in investing in enterprises that serve minority communities.
The Korean-American business community, meanwhile, rallied to its redevelopment challenge: aiding businesses, including hundreds of members of the Korean American Grocers Assn., which were destroyed by looters and vandals.
David Kim, president of the grocers group, has helped establishan emergency relief organization designed to help merchants in various industries and others who suffered losses during the disturbances.
Late Monday afternoon, the heads of both locally based and Korea-based banks serving the Korean-American community met to assess the situation of their customers, but most said they were still gathering information on what kind of help the small merchants will need.
John Britt, president of United Citizens National Bank, an institution founded three years ago by local Korean businessmen, said his bank will be willing to defer interest and principal payments on outstanding loans for six months or more, depending on need.
As the aid came in, several black business leaders raised concerns about the direction of the city’s main redevelopment efforts. Some recalled similar promises made after the 1980 Liberty City riots in Miami, when the local business community sought to pull together a public-private economic development response for the inner city.
Although committees were formed and some small development projects begun, the area’s woes were not seriously addressed. Miami was hit by other riots in the 1980s.
Jackson said in a meeting Monday with editors and reporters at The Times that the choice of Ueberroth to lead the city’s Rebuild L. A. task force sends the wrong message to the mostly black and Latino communities hit hardest by the destruction.
“It doesn’t look good,” Jackson said. “It’s like sending in another white man to save us and help us rebuild.”
Community leaders called for fewer liquor stores and shopping centers and more investments in manufacturing and other enterprises that would create meaningful jobs and economic opportunities for local entrepreneurs.
Jackson notwithstanding, Ueberroth does have significant support, particularly among the city’s older, more established black business leaders.
“I don’t have those concerns” about Ueberroth, said Larkin Teasley, president and chief executive officer of Los Angeles-based Golden State Mutual, the nation’s third-largest black life insurance company. “I think the thing I’m most concerned about is the success of the undertaking” of rebuilding the city.
Times staff writers James Bates, Susan Moffat, Michael Parrish, Jonathan Peterson, James Risen and George White contributed to this report.
