Rebuilding Decision Is Complex for Property Owners : Building: Loss of rents, plunging real estate values, lack of building inspectors bedevil the process. ‘It’s a domino effect,’ one businessman says.

With more than 1,100 buildings declared uninhabitable, property owners across Los Angeles began to make wrenching decisions Friday about whether to rebuild earthquake battered houses, apartments and businesses.

A Northridge landlord said he might declare bankruptcy and demolish two apartment buildings, rather than try to rebuild with no insurance, problematic financing and slumping real estate values. In Westwood, the owner of one half of a commercial strip decided to rebuild and make a go of it, while the owner of the other half planned to apply for a demolition permit. And a South-Central Los Angeles apartment owner was already lining up for a building permit.

As owners made their assessments, an expanded force of more than 600 inspectors continued to survey the damage. Officials said they might have to check as many as 25,000 buildings for safety problems.

Only a fifth of that number had been inspected by the end of the week, and city building and safety officials said they were prepared to work 12-hour shifts through the weekend in hopes of completing their task by the end of next week.

A preliminary report showed Friday that 1,175 structures are uninhabitable, including more than 4,800 housing units. With little more than half of the 5,000 building assessments by city building inspectors tabulated, damage reached $373.5 million.

Owners are expected to take the initiative to repair their buildings once they have been tagged with with red “unsafe” or yellow “limited entry” placards. They must hire engineers or architects to submit plans to the city for all but the most cosmetic repairs, officials said.

By the end of Friday only a handful of owners had applied to rebuild.

Officials said they have plans to expeditiously handle the applications when they come in. Under an ordinance to be weighed by the City Council next week, earthquake repair applications would be moved ahead of all others within the city bureaucracy.

“There’ll be a lot of vacant lots unless there’s some sort of federal tax relief or some other loopholes to get through,” said David Harper, a principal in two Northridge garden apartments, one condemned and the other extensively damaged.

Harper said he would probably need a second mortgage to rebuild, but cannot afford it. And if his first mortgage is forgiven, he said he would not be able to survive the hefty tax bill for his capital gain.

“There’s financial and tax problems in addition to the physical problems,” Harper said.

A mini-mall owner in Northridge feared that he also would have to shut down because his lender was not willing to let him defer payments while his mom-and-pop retail tenants are out of business.

A dry cleaner, barbecue stand and camera shop are all shut down and not paying rent after the quake, so owner William W. Matthews said he cannot afford to make payments either.

“It’s a domino effect,” he said. “No rents means no money means no mortgage; it’s just that simple.”

At twin Westwood retail buildings, the question of whether to rebuild was answered with a split decision. The owner of one of the buildings on Westwood Boulevard was preparing to reopen for a picture framing store and a window repair shop. But his neighbor, who shared a common wall, was applying for a demolition.

“He’s just decided that it’s not worth it,” said contractor Frank Erichson, who was arranging the tear down, as well as the reconstruction.

In South-Central, building owner Lee Linden said structural engineers were seeking permits Friday to rebuild his damaged apartment building on Martin Luther King Jr. Boulevard. The four-unit structure was deemed unsafe earlier this week. It has cracked walls and was moved several inches from its foundation.

Outside, about 20 residents were camping under a lean-to of tarps and sheets.

Linden said workers will reinforce and rebuild damaged sections as soon as the city issued permits. “It’s up to building and safety. Nothing can be done until they issue a permit,” he said.

At 4500 S. Broadway, a five-unit apartment building had been declared unsafe. Across the street was a reminder of a previous disaster: a lot that once housed a strip mall burned during the riots.

Building owner Norman Unis, whose furniture store sits underneath the apartments, said a structural engineer was already drawing up repair plans. Total cost would be about $25,000 and take two to three months “if we’re lucky,” Unis said.

Along heavily damaged Hollywood Boulevard, many property owners were still trying to assess the damage and decide whether it was feasible to make repairs. If that turns out to be impractical, they will have to decide if it is worthwhile to rebuild at a time of falling real estate values and many vacancies in office buildings and apartments.

“That’s the biggest problem--all that has to be analyzed,” said Ted Romano, a periodontist, who watched from the street while workmen cleaned up the fallen bricks from a row of his father’s two-story storefronts.

“We don’t know right now (what we will do),” Romano said. “We’re just waiting for the engineering reports.”

Another Hollywood Boulevard structure that suffered heavily was a four-story commercial building at Western Avenue.

A red notice posted on a badly cracked pillar proclaimed the building “unsafe,” but the Bargain Saver novelty store on the ground floor remained open for business Friday. Few ventured into the shop, which sells tapestries of Elvis and Marilyn Monroe, watches, socks, cologne, phones and bean-bag chairs.

Shop owner Ben Chinitz, a tenant for 18 years, said inspectors told him they would not be enforcing the “do not inhabit” orders for at least a week. Meanwhile, his landlord had sent a contractor to City Hall to fight some of the inspectors’ reports, saying that a nearly completed earthquake retrofitting has made the building safe.

“If I thought the building was unsafe, we would not be talking inside the building,” Chinitz said.

Along Corona del Mar in Pacific Palisades, where multimillion-dollar homes are imperiled by landslides, the decision on where to go may have been made for owners.

A half-dozen homes on bluffs overlooking the beach have either been declared unsafe or safe only for limited entry.

Others had made their decisions.

At Kaiser-Permanente Medical Center on the Westside, a damaged parking structure was coming down Friday. The hospital chain also applied for a demolition permit to remove its damaged five-story medical office building in Granada Hills. But no decision has been made on whether to rebuild the facility, said spokeswoman Maria Lengerke.

Elsewhere, the city was moving ahead to clear buildings that posed an imminent danger.

Crews were removing the remains of three homes on Buena Park Drive in Studio City. Building officials also had ordered the demolition of a medical office building on Olympic Boulevard on the Westside. And inspectors Friday said an employee parking structure at Cedars-Sinai Medical Center might also have to come down.

City officials said that if owners cannot afford to pay for demolitions, they will do the work free of charge.

The city’s Board of Public Works approved a program Friday, to be in place by late February, to demolish the most seriously damaged buildings at no cost to owners.

But Mayor Richard Riordan said that was not soon enough. “Can’t we move more quickly?” Riordan asked at a meeting of the city’s Emergency Operations Board. Riordan noted the long delays in clearing much of the wreckage after the 1992 riots.

Requests for more inspections continued to pile up Friday.

Widespread Damage

The City of Los Angeles has declared hundreds of buildings uninhabitable because of earthquake damage. That number is likely to grow substantially as additional inspections are performed. The dots indicate unsafe buildings; clusters may understate the actual number where there are multiple structures in one block. The area is divided into City Council districts.

Source: City Council, City of Los Angeles Department of Building Safety

Researched by RICHARD O’REILLY, Times Director of Computer Operations