LOUIS H. MASOTTI, Visiting professor of urban development, UCI

The recent Los Angeles riots could haunt the entire Southern California economy, including Orange County’s. Louis H. Masotti, visiting professor of management and urban development in UCI’s Graduate School of Business, studied the economic effects of civil violence for the city of Chicago while teaching at Northwestern University. He has written numerous books on urban problems, including “Riots and Rebellion” following the upheaval of the 1960s. Masotti recently spoke with Times staff writer Susan Christian.

Q. Will the rioting in Los Angeles have an impact on the economy here, despite the fact that most of the violence occurred at least 30 miles away from Orange County?

A. Both nationally and internationally, Orange County is perceived as part of one Southern California marketplace. I’m a relative newcomer here, and I’m not sure if I can tell you where the line is between Orange County and Los Angeles County--somewhere around Long Beach, I don’t exactly know where.

Economies are not fixed in space. To many outsiders, Los Angeles is Southern California--and to some people, it’s California. Now Southern California will be perceived by investors and business owners as a place where they should think twice about expanding or relocating.

Q. On the other hand, might Orange County actually benefit from the riots if industries begin to view it as a more attractive area for business than Los Angeles?

A. Orange County to the south and Ventura County to the north have always been the beneficiaries of the migration out of Los Angeles. Businesses that want to stay in the Los Angeles metropolitan area might perceive Orange County as the better place to be.

There is a model for this in other cities, where the traditional business center loses its hegemony to a suburban focus. There is an office complex outside of Detroit--not unlike Irvine’s--where the growth companies are located. They don’t want to be downtown, which is seen as unsafe. Chicago has an area around the O’Hare airport where a lot of companies have moved from downtown.

I think we’re going to see more of that in other cities. Irvine has the potential to become that kind of focus, partially because of the riots. There will be some relocations, and to that extent Orange County could benefit--if it can disassociate itself in the minds of potential investors as separate and isolated from Los Angeles.

Q. How could the county deliberately go about doing that?

A. Not very easily. Not without coming off as racist at worst and elitist at best.

I don’t think Orange County can publicly begin to advertise that businesses ought to move here because in a sense, we’re all in this together. It may be that the dynamics between Orange County and Los Angeles County are not at issue here. What’s more important is how Southern California pulls itself together and represents itself to national and international investors as a place they can find a safe haven and prosperity.

So Orange County could only market itself subliminally. The Irvine business complex could crank up its advertising: its competitive pricing, its amenities, the John Wayne Airport. It could say, hey, you can fly here and be at your office in a few minutes rather than hassling with Los Angeles traffic.

Q. Already, Southern California was beginning to lose businesses to other states. How can we differentiate between that unfortunate trend and the direct effect of the riots on the economy?

A. Every time you pick up the newspaper, you read that there was a dip in employment levels, or that more firms are leaving the state and fewer are entering. The signs have been around for a while, but not everyone was listening. What the riots did was turn up the volume and ring people’s bells loud and clear. In effect, the riots said, “Wake up, everything is not rosy here.”

Since the 1960s, California has been seen as a growth machine. It didn’t have to do anything, things just happened: companies came, people came, investments were made. Military bases, the aerospace industry, the computer industry--they were all here. Not many people thought that would change, yet it did.

But California is not suffering anything different from what the rest of the country is suffering. It has caught the cold that the rest of the nation has. It used to be said that if New England sneezed, California didn’t pay any attention. Now it’s clear that California has the same disease; California is subject to the same forces of nature. It is not a special case. California has joined the Union economically.

Q. Will the Los Angeles riots have economic repercussions on other urban areas as well as Southern California?

A. The impact of those riots will be felt throughout the nation. The amount of news coverage and the vividness of that coverage conveyed to everybody that something significant is going on here. It was the worst civil unrest in the United States since the Civil War.

There is an apprehension that the same problems exist in other cities that exist in Los Angeles--pockets of poverty, gang activity. If (rioting) can happen there, can it happen anywhere?

Q. How badly will the riots hurt tourism in Southern California?

A. Decisions were made overseas to cancel thousands of Japanese and Korean tours. But that doesn’t even begin to speak to Oklahomans, who think of Disneyland as being in the center of Los Angeles. People who don’t live here don’t make those fine distinctions as to where the boundaries are.

Q. What’s the shelf life of this anxiety?

A. That depends on whether we see a reignition of violent activity.

Q. Barring that possibility?

A. Six months--if people see that Los Angeles has settled down and stabilized. The way to watch this is to watch tour bookings to Southern California and ticket sales at Disneyland.

On out-of-state companies’ impression of the rioting...

‘The vivid news coverage made people think twice about whether Southern California would be a safe place for their employees and their business facilities.’

On the riots’ effect on other cities...

‘I’m not sure Los Angeles is the loser so much as cities are the losers; people in Chicago and San Francisco are saying, “That could have been us.” ’

On the importance of a city’s crisis management to business...

‘A major factor in the relocation of companies is how police departments and other public offices function in a complex urban environment.’

On the threat of mob violence as well as earthquakes...

‘Every geographical area has its own natural threat; social disorder is more damaging because it is a reflection of underlying social malaise.’