Black Firms Missing Out on Rebuilding : Unrest: Ueberroth faces conflict between residents of riot area and property owners who want work done quickly.

A bitter dispute over the lack of construction work awarded to residents of riot-scarred Los Angeles neighborhoods is presenting Peter V. Ueberroth, head of Rebuild L. A., with a crucial test of his ability to reconcile disparate business and community interests.

Minority contractors and community groups say reconstruction work arising out of the riots is being funneled to outsiders rather than to residents of South Los Angeles, where it is estimated that 50% of the men are unemployed.

But insurance companies and property owners--some of whom say they support local hiring--say they want to make sure that their properties are rebuilt as quickly and efficiently as possible, social concerns notwithstanding.

The conflict over who gets hired to help rebuild the estimated 500 structures that suffered more than $750 million in damage during the uprising goes to the heart of the economic alienation that many experts believe fueled the devastation, which left at least 45 people dead and about 5,000 out of work.

In recent days, angry groups of demonstrators from the Brotherhood Crusade community group and the newly formed United Minority Contractors of Los Angeles have picketed several work sites, claiming that lucrative demolition and construction jobs are going to firms whose headquarters are as far away as Santa Fe Springs and Santa Ana.

In the wake of the protests, state Insurance Commissioner John Garamendi is planning to meet Friday with more than 100 minority contractors in an attempt to resolve the concerns.

But Ueberroth, a former major league baseball commissioner who lives in Laguna Beach and operates a Newport Beach investment firm, has not publicly addressed the issue and would not respond to repeated written and telephoned requests for an interview on the subject by The Times.

Instead, he released a statement saying only that Rebuild L. A., the task force that he heads, “is concerned that the cleanup and reconstruction in the neglected and devastated areas are coordinated with full representation from community resources.”

With work under way on many construction projects, some business owners and community leaders have faulted Ueberroth for what they called his lack of initiative in bringing community residents into the rebuilding process.

“Somebody should be standing on the desk of every major insurance carrier in the country and saying, ‘Tell me what your policy is about hiring minority contractors,’ ” said John Bryant, a black Los Angeles businessman who is chairman of the Bryant Group Companies Inc. and who has launched private efforts to help South Los Angeles businesses rebuild.

Although many property owners say they are sympathetic to the idea of hiring locally, some say they are not knowledgeable about minority contractors in South Los Angeles and therefore rely on insurance companies or traditional business contacts to find help. Other property owners find that the rush to reopen as quickly as possible can thwart efforts to be sensitive to community needs. Still other property owners say they should be free to choose whomever they want to rebuild.

“I understand they want blacks to get the work and they want new jobs in the community but people should be able to hire whoever the hell they want to,” said Ben Bernie, a Los Angeles real estate investor who lives in the San Fernando Valley and owns a 40,000-square-foot building on 88th Street and Western Avenue, which housed a supermarket and swap meet that were torched during the rioting.

Like many property owners, Bernie said he has no quarrel with the idea of building contracts going to minority-owned firms. But the issue of allowing local residents to participate in the reconstruction projects is a more complicated one to resolve.

Although demolition and construction work provide some unskilled jobs--someone to direct heavy equipment around job sites, for example, or keep work sites damp to quell dust clouds--construction experts say it may be impossible to use local residents to fill such skilled positions as heavy equipment operators or to perform tasks specialized such as masonry or asbestos removal.

“It’s not like these companies who are doing the work are from Oregon or somewhere,” said Bernie, who is using Kenco Construction Inc., a Glendale firm, because it was recommended by his insurance company. “If they’re saying you can only hire people on one block or that a black contractor from Downey can’t work in South-Central--well that’s stupid.”

Although much of the riot damage occurred in neighborhoods that are predominantly Latino, there has been no organized effort to steer construction jobs to Latino residents, though several Latino-owned firms have joined the fledgling United Minority Contractors.

“We don’t exclude anyone,” said Robert Gore, vice president of the Assn. of California Insurance Cos., a Sacramento-based group that represents about one-third of all the major commercial insurers in the state. If minority contractors want to be included, “like any aggressive business person, they should call the insurance company and get on their list” of recommended contractors, Gore said.

But several black contractors who have called on insurance companies say they have been rebuffed.

Clarence R. Clemons, who owns an Inglewood construction firm that specializes in repairing fire damage, said he has been rebuffed by insurance firms whose claims adjusters steer construction work to favored contractors by promising policy holders “less hassle and paperwork if they let the insurance company handle things.”

Vanessa Jollivette, a construction management consultant in Los Angeles, said it is often difficult for property owners to assert their independence from insurance companies.

“Most (property owners) lack the administrative expertise to manage construction work,” Jollivette said. “From a business standpoint, you want to make sure that you optimize your insurance proceeds” by hiring an experienced construction firm.”

Brotherhood Crusade director Danny Bakewell, likened the community outcry over local hiring to the public furor that arose when the Los Angeles County Transportation Commission in January awarded the Tokyo-based Sumitomo Corp. a $122-million contract to build Metro Rail cars at a time when the recession was throwing tens of thousands of U. S. workers out of jobs. The commission eventually revoked the contract.

“If these companies want to help and be a part of the rebuilding, they need to hire black contractors and local people from the community,” Bakewell said. “We are not asking them to hire people that are unqualified. . . . But it is simply unacceptable for outsiders to come in and take jobs when we have people in our community with no work.”

Bakewell said his group has compiled a list of minority contractors and community residents who have called the organization expressing an interest in doing construction work He said he will make that list available to interested insurance companies and property owners.

But in the rush to rebuild, even some well-meaning companies have drawn the ire of residents.

The Irwindale-based thrift Home Savings of America, for example, was one of the first big companies to offer its help after the riots. It donated a 36,000-square-foot, modular office to temporarily replace the fire-damaged branch of the black-owned thrift, Broadway Federal Savings and Loan at 4501 S. Broadway.

But because Broadway wanted to quickly reopen, Home Savings did not advertise for contractors. Instead it hired a firm that had previously done work for the thrift and specialized in erecting modular structures. The firmdid not hire any black subcontractors for the estimated $80,000 job and thereby angered community residents.

“When these things happen it sends a message to the community . . . that (some people) are totally insensitive to the plight of African-Americans,” said the Rev. Frank J. Higgins, a Baptist minister who convened a meeting with Broadway and Home Savings to urge them to hire minority contractors. Both thrifts now say they intend to use minority contractors in rebuilding their branches.

Similarly, few new construction jobs emerged for local residents after a Fedco store at La Cienega Boulevard and Rodeo Road was damaged in the rioting. Fedco relied on the store’s 750 employees and hired Driver-Eddy, a Santa Fe Springs-based construction firm, as the general contractor to repair the 180,000-square-foot facility.

Edward L. Butterworth, president of Fedco, said he has since become more sensitive to the issue of hiring locally, after speaking recently with minority contractors. He said Fedco has already hired an African-American to do some electrical work on the store and is looking for minority contractors to do roofing and framing work on a fire-damaged tire store adjoining the Fedco supermarket.

Even before the protests, a few businesses had pledged to seek out minority contractors to repair their facilities. On May 4, Lodwrick Cook, chairman of Atlantic Richfield Co., told his board of directors that the giant oil company would seek out minority contractors to help rebuild the 12 company gas stations damaged by rioters. Arco estimates it will cost $5 million to $7 million to repair the stations.

And the city of Los Angeles put its clout behind the effort last week when the Board of Public Works awarded a multimillion-dollar contract to five companies--four of them minority-owned--to oversee the demolition and cleanup of about 80 buildings that were damaged by the riots and that may qualify for federal and state clean-up funds.

“My office has heard these same complaints about minority contractors not being hired,” said Bob Hays, a spokesman for the board of public works. “We are trying to sensitize the insurance companies about this whole process of rebuilding.”

But, he said, city officials “are very worried . . . about what might happen if things don’t change.”