Well-Connected Company Dominates Riot Cleanup : Rebuild: More money is spent on firm’s management than on demolition. Officials say program is beneficial.

Times were so tough for demolition contractor Andrew Wingfield that for years he had no full-time employees and rented his trucks to other outfits. Then came last year’s riots.

Wingfield hauled in about $30,000 as one of about 50 small contractors who were paid $4.1 million by the government to raze dozens of businesses gutted after police officers were found not guilty in the first Rodney G. King beating trial.

“I’m not saying (the riots were) a good thing,” Wingfield said, but “the riots really helped me out. They helped a lot of people out.”

Among the biggest beneficiaries were members of a politically well-connected partnership that is receiving $6.3 million to manage the city-run cleanup. That amount, including a guaranteed profit, is more than the entire price tag for demolishing the buildings and recycling the rubble.

The work, now four months behind schedule, is taking twice as long as projected, even though fewer than half of the targeted buildings were demolished at government expense.

Federal and state officials who approved the program expressed surprise when they learned from a reporter that administration is costing more than cleanup.

“We’re looking at the cost-effectiveness of it,” said Daryl Wait, a regional disaster manager with the Federal Emergency Management Agency, which is footing most of the bill.

The management team, known as the Los Angeles Community Partnership, consisted of Cordoba Corp., owned by George Pla, a longtime Latino community ally of city Councilman Richard Alatorre; Pacifica Services, headed by Ernie Camacho, a former Alatorre campaign official in the 1980s; Jaykim Engineers, owned by freshman Rep. Jay C. Kim (R-Diamond Bar), the state’s first Korean-American congressman; Construction Control Services Corp. of North Carolina, owned by African-American Ron Rohadfox, and the Anglo-owned architectural firm of Daniel Mann Johnson & Mendenhall (DMJM) of Los Angeles.

In the last decade, the companies and their officers have donated more than $80,000 to the campaigns of Mayor Tom Bradley and City Council members, records show. DMJM and its officials have donated more than $45,000.

All of the companies previously have been awarded city contracts. DMJM had done work on the Hyperion sewage treatment plant. In addition to city contracts, Cordoba Corp. has landed contracts with the Los Angeles Unified School District and the Southern California Rapid Transit District.

“I don’t think you can find another project in the rebuilding process that has done as much as this (demolition and cleanup) did,” said Pla, speaking for the partnership. “This approach was different and it works--and it ought to continue with the reconstruction.”

The management costs were so high, he said, because the team had to plan for the demolition of all 450 to 500 heavily damaged buildings, even though more than half were torn down by the owners, using insurance money or other private funds.

Officials had hoped that the program would benefit small, minority-owned demolition companies; create jobs for unskilled workers, and avoid a repeat of the aftermath of the 1965 riots in Watts, when some scarred shells of buildings stood for years. About 40 building permits have been taken out to reconstruct buildings destroyed in last year’s riots.

The total cost of the demolition program is projected at $13.4 million, including $1.5 million for the recycling of debris and $1.5 million for workers’ compensation and liability insurance for demolition crews and the partnership.

Completion is expected before the first anniversary of the riots, which started April 29. The original deadline was last Oct. 29.

City officials and project leaders attributed part of the delay to building owners who were slow or reluctant to seek government help.

Nonetheless, officials said, the program has been beneficial. All but four of the demolition companies hired to tear down the remains of 185 shops, swap meets and mini-malls are owned and operated by minorities and women.

The project also provided temporary jobs to about 130 laborers from the surrounding neighborhoods, where one out of three males were out of work. Two men found permanent work, although one recently was laid off, according to his employer.

Russell Lane, Los Angeles’ chief building inspector, said: “I feel (the partnership) did a good job, but I’m not sure it was cost-effective.”

The rioting struck more than 1,000 buildings across the city, from Watts northward to the edge of Beverly Hills, leaving almost half destroyed or seriously damaged.

After the unrest, city fire and building officials drew up a list of buildings that suffered destruction of 25% or more. County hazardous materials experts cleared out dangerous chemicals, asbestos and other hazardous materials. City crews knocked down walls and overhangs that were in danger of falling.

Under an emergency ordinance, the city sought proposals for a contract to manage the remainder of the cleanup. To save time, the normal bidding process was suspended. Six firms applied, and the Los Angeles Community Partnership was selected by a committee of City Hall officials who met with each bidder.

Andres Santamaria, Department of Public Works managing engineer, said there were no written evaluations of the bidders, but the partnership offered the best plan for the cleanup. Records show that cost was the least important selection criterion, ranking below experience, performance and use of minority subcontractors.

The contract, ratified by the City Council and mayor, provided a fixed profit of $716,000, on top of management costs such as salaries, public relations and video equipment to take pictures of building sites. The partnership was responsible for arranging demolition bids, screening bidders, awarding contracts and inspecting work.

But 60% of the building owners decided not to participate. As a result, there was far less demolition work than projected, causing a 40% reduction in those costs.

Management costs, meanwhile, fell only 12%. “The fees were based on the assumption that we would get over 500 buildings,” Pla said. “The fact that it never met the expectation is not something within our control. It would be inaccurate to say we charged too much for what we did. We’re willing to stay on the job (at the same price) if they’re willing to give us more buildings (to demolish).”

To encourage minority participation, the partners set up a pool of neighborhood laborers who would be paid the prevailing wage of about $14 an hour. They also adopted a bidding procedure designed to benefit small, often inexperienced demolition companies.

Unlike the usual government competitive bidding rules, the special system allowed managers to bypass contractors who had substantial work and choose someone else. Officials said that occurred only once.

Still, the bid procedures upset contractors who feared that they were being denied work and union officials who were concerned that their members were not getting the jobs.

“If any other public agency did this, they would be hung,” said Ron Kennedy, executive secretary of the Los Angeles County Building and Construction Trades Council. “The procedure is to take the lowest qualified bidder. That’s the procedure for handling public monies.”

Most of the winning bidders had been in the demolition business for years but worked as subcontractors to larger firms. Many had little experience in getting their own government contracts. They had names such as Ground Zero Demolition and Quality Wrecking.

The average contract price was about $25,000 for jobs that generally took two or three days, sometimes as long as two weeks. Most contractors won two or three contracts; a few received a dozen.

The partnership actively recruited minorities. Tino de la Cruz said his $2.5-million-a-year construction company had not done demolition work until representatives of Cordoba and Pacifica came to his office and encouraged him to get a license and bid on cleanup projects. He won three contracts, one worth $100,000 in Pico-Union.

Kimberly K. Penman, president of All Contractors in Moorpark, usually has six to 10 employees. “I’ve gotten five jobs out of there,” she said. “I’m not complaining.”

Edward Dickens, a Louisiana native who moved to Los Angeles just before the Watts riots, has been in the demolition business 12 years. He grossed about $100,000 on seven contracts with the partnership and made a profit of about $15,000. “It made my business a little stronger,” he said.

Immediately after last year’s riots, Andrew Wingfield put hundreds of flyers on burned-out properties, seeking demolition work. He received a number of jobs from owners with private insurance, in addition to work for the partnership. His company provided one of the two permanent jobs resulting from the city program.

However, now that the demolition is almost complete, Wingfield has had to lay off his permanent worker and is again renting his trucks to other outfits.

The federal government often provides emergency cleanup funds to remove health and safety hazards after natural disasters and civil disturbances. In Los Angeles and Oakland, funds also were sought to erase reminders of fires, lift community morale and encourage reconstruction.

In Oakland, after an October, 1991, fire destroyed 2,300 homes, officials contracted with ICF Kaiser to manage removal of debris and stabilization of hillsides.

The Oakland program was considered a success, but it alerted disaster officials to a number of potential problems.

Management costs were higher than expected. Administration amounted to 29% of the $14.5 million spent in Oakland--compared to 47% in Los Angeles--but it still alarmed Kaiser and city officials there.

Far fewer homeowners than expected--only about half--used the Oakland program.

The others wanted to arrange for demolition themselves, said Polly Quick, community relations manager for ICF Kaiser. “Some of that psychology is good old U.S. anarchy: ‘Don’t tell me what to do, it’s my property.’ ”

The Oakland cleanup took six months instead of the anticipated three months, in part because of inclement weather.

Los Angeles officials were briefed about Oakland’s experience but did not factor the problems into their planning, according to interviews and records. Los Angeles projected 100% participation by owners of demolished buildings, although some owners had begun their own cleanup work by the time the city program was launched in July.

Many property owners had their own insurance or wanted more extensive demolition and clearing than the government would provide. Others were suspicious of the program, Pla said. “I think there’s something in our society that says you don’t get anything for free.”

Oakland officials recovered about $5 million of the demolition cost from insured homeowners. Virtually no insurance reimbursement is expected in Los Angeles, officials said, because most of those participating in the program were uninsured or their insurance companies had financial difficulties.

Only 19 of the 185 participating building owners said they had demolition insurance. And officials said only one has collected--a $5,000 payment that he plans to turn over to the city.