Quake Leaves a Legacy of Violence, Loss and Courage : Recovery: Six months later, the government, businesses and residents continue the struggle to rebuild.

By DOUG SMITH

July 17, 1994 12 AM PT

It began with a region rising from a night of death and cataclysm and fear, binding the wounds and taking the first steps toward recovery.

Soon the tales of heroes and rescues were replaced by a litany of mounting damage and disturbing questions about the safety of the buildings in which we sleep, work and park.

Today, six months later, the most destructive earthquake in U.S. history leaves a legacy of momentous violence, staggering loss, awesome compassion and courage, and of great achievements.

It also represents an uncertain future of faltering insurers, a federal government struggling under the burden of the costliest domestic disaster in United States history, and a state and city without the resources to repair and rebuild businesses and housing.

Scientists still cannot agree on where, exactly, the Jan. 17 Northridge earthquake struck. And there is hardly any more sense of resolution in the numbers rising out of the damage inflicted from the Eastside and Glendale to Ventura County.

In Los Angeles, 20,089 dwellings remain vacant, and almost 30,000 more may be abandoned. Some 86,393 structures were damaged.

Half the 200,000 Southland applicants for the main federal rebuilding program have been turned down.

Hundreds of steel frame buildings, which before January were thought relatively invulnerable, have yet to be inspected for the sort of cracking discovered after the quake, mystifying and alarming engineers.

In the hard-hit San Fernando Valley, 84% of all residents report some quake damage, and 30% say they have suffered financial reverses because of the disaster, according to a Times poll conducted earlier this month.

It has taken most of the first six months merely to understand the scope of the quake, and restore utilities and public transportation. The hard part is just beginning.

“The earthquake aftermath is characterized in two phases,” said Los Angeles Mayor Richard Riordan. “Response--that time immediately after the disaster--and recovery, which is everything from now on.”

“In a sense, we’ve just begun the long road to recovery.”

It was four months before what may become this earthquake’s signature phenomenon was identified: “ghost towns,” areas where destruction was so concentrated that vandalism and decay threatened to wreck what the earthquake had left.

Amid all that has been rebuilt, the most disquieting image may be the 164-unit Northridge Meadows apartments--still drawing the curious who peer into the crushed living spaces where 16 tenants died. Survivors were given until last Friday to remove their belongings, and demolition is about to begin. But the litigation over who is responsible for the collapse will go on for years.

The end is too far in the future to see, and the cost still anyone’s guess.

The federal government has allocated $12 billion to cover everything from cash grants to individuals to reimbursing local and state governments for repairs to public facilities such as freeways. Local and state officials are still desperately lobbying for more.

One of the biggest victims may turn out to be the insurance industry. From an estimate of $4.5 billion in April, insurance carriers have increased their projected losses to $6 billion. And that could climb, posing a potential crisis in the availability of earthquake and homeowners insurance across the state.

Losing nearly two-thirds of its operating surplus in projected payouts of $600 million, Valley-based 20th Century Insurance Group announced it would stop selling earthquake insurance immediately and phase out all homeowners coverage over the next two years.

Farmers Insurance Group, Allstate Insurance Co. and many smaller companies have also cut back on selling earthquake insurance, and tightened up on selling new homeowners policies. Price increases are almost certainly on the way.

Thousands of earthquake victims still await word on their requests for Small Business Administration loans. And thousands of others have been denied assistance, because of their weak financial condition. The rejection rate for SBA loans has been close to 50%, higher than for either Hurricane Andrew or the 1989 Loma Prieta earthquake.

The SBA’s strict eligibility requirements mystify property owners such as Ray Shouhed, an Iranian immigrant whose $500,000 investment in a half block of Reseda Boulevard storefronts turned to dust Jan. 17. Shouhed said that after generating a foot-thick application and waiting six months, he saw his SBA loan application turned down last week because the federal agency said his cash flow was insufficient. The previous owner has initiated foreclosure.

“It’s all over,” Shouhed said with a self-conscious smile. “What can I do?”

And then there are the costs not yet imposed, such as the price tag on future seismic safety requirements.

This week, the Los Angeles City Council will consider ordering the owners of about 600 steel-frame buildings in the San Fernando Valley and Wilshire Corridor to inspect for damage. Meanwhile, repairs continue on dozens of damaged buildings despite experts’ doubts that the methods are effective.

The potentially life-threatening failure of several concrete parking garages built under the latest seismic requirements is forcing building officials and structural engineers to re-examine previously accepted construction methods.

A seismic retrofitting program to be announced soon could require costly improvements to thousands more steel, wood-frame and concrete structures, said Nicolino Delli Quadri, earthquake spokesman for the Los Angeles Building and Safety Department.

For tourists and commuters, the picture is not nearly so bleak as it remains for others.

Hoping to lessen a drop in tourism that has hit $308 million, the Los Angeles Convention & Visitors Bureau has launched a multimillion-dollar television and print advertising campaign called “Play LA.”

“It’s designed to tell people that we are OK,” said Gary Sherwin, spokesman for the bureau.

That image of a city reacting quickly was bolstered by the extraordinary repair of Southern California’s world-famous freeway system.

Fears of up to a year of commuter horrors were put to rest by an incentive program rewarding speedy work.

The reopening of the Santa Monica Freeway in April, two months early, earned a $15-million bonus for contractor C.C. Myers. The ramps which remain closed on that freeway will be reopened Friday, four days ahead of schedule, Gov. Pete Wilson recently announced. In May, the contractor on the downed Golden State Freeway over Gavin Canyon also finished more than a month early, restoring Southern California’s commercial lifeline to the rest of the state. And key portions of the interchange between the Golden State and Antelope Valley freeways were reopened earlier this month.

Only the Simi Valley Freeway, whose old surface is still being ground into a mountain of rubble as cars squeeze by in three lanes, remains to be fully restored.

In Ventura County, which suffered more than $700 million in damage, hundreds of homes and businesses in Fillmore and Simi Valley have been repaired and reoccupied. But Fillmore lost one-third of its vital business district. Piru’s tiny downtown remains fenced and dark. And hundreds more property owners are grappling with repair bills reaching six figures--some weighing whether they should fix up or walk away.

The identification in May of 13 ghost towns in the San Fernando Valley and Hollywood may have ended expectations of a quick recovery among the majority of Southern Californians not personally touched by the quake. These areas, where there did not appear to be enough money or will to rebuild, raised the specter of large pockets that could become intractable villages of scavengers, vandals and blight.

City and law enforcement officials moved quickly to clear out trespassers, erect fences and hire security guards. Owners and lenders were contacted. One of the most endangered ghost towns, a row of abandoned apartments on Hubbard Street in Sylmar, was heading en masse into foreclosure, said city housing consultant Rich Wallach. Hoping for city intervention, the lenders have agreed to work with all but one of the owners to restructure the debt and rebuild, Wallach said. City officials expect the rebuilding to last up to two years.

Though perhaps the most dramatic example, ghost towns represent only a small fraction of the damaged and endangered housing.

The 20,089 dwellings still vacant because of quake damage are down from 33,033 on April 1, the city reported last week. So far, 26,841 building permits have been issued.

In Santa Monica only one in four of the 1,900 housing units rendered uninhabitable have been repaired.

Those trying to fund repairs who have been turned down by SBA have a last resort: the Los Angeles Housing Department, which has cobbled federal grants and bond financing into a fund that could reach $200 million to work with the toughest cases. State and local officials had planned a program three times that large until Gov. Wilson canceled it after California voters rejected a proposed bond issue for quake relief last month.

Also to aid those turned down by the SBA, Riordan said the federal Economic Development Administration will soon announce a $30-million loan program.

Santa Monica officials are also seeking more federal help to assist businesses and to shore up the bluffs along the ocean.

Some things will never be the same.

Department of Veterans Affairs officials have decided against rebuilding the crippled hospital in Sepulveda. Such trendy Ventura Boulevard spots as Johnny Rockets and Cafe Cordiale in Sherman Oaks will not reopen, at least in their old spots. One of the most seriously damaged hospitals, St. John’s Hospital and Health Center in Santa Monica, will have only about half the 501 beds and half the 2,000 employees it had before the quake when it reopens Oct. 3. Trish Bartel, a spokesperson for the hospital, said the downsizing likely would have occurred anyway because of changes under way in the health care system.

But plenty of others are coming back stronger despite the quake. County health officials say they believe much of the estimated $400 million in federal earthquake repair funds they expect to receive will be used to build a new, $1.3-billion hospital to replace County-USC Medical Center.

Outside the Valley, the most expensive earthquake repairs are at the Los Angeles Memorial Coliseum. The cost to fix a deep crack around the upper concourse, the weakened historic peristyle and the wrecked press box will run between $50 million and $60 million. Enough of the work is expected to be completed by the end of the summer to allow the Raiders and USC to play football in the stadium this fall.

The pace of school repairs has been nowhere near as fast.

Students across the region will return in September to barricades and yellow tape, cracks in ceiling and floor tiles and possibly unusable gymnasiums and auditoriums.

Damage at schools ranged from that which caused the complete relocation of Van Gogh Elementary in Granada Hills to minor cracks in ceilings and walls at other campuses across the massive Los Angeles Unified School District.

Soon after the earthquake, Supt. Sid Thompson said he wanted the 160 damaged schools--with total damage expected to be between $300 million and $600 million--to be either completely or partially repaired by January. But it appears that goal will not be met.

Hoping to make the repairs without dipping into the school system’s own coffers, the cash-short district has delayed the work while it pursues federal and state aid.

The district has so far received about $70 million from the Federal Emergency Management Agency and has spent about $17 million on building repairs, safety and structural inspections and the replacement of lost or damaged textbooks, supplies and equipment.

It will be years before Cal State Northridge picks up the pieces from $350 million in damage, the greatest loss from a natural disaster ever suffered by a U.S. university.

Although desperate preparations got the campus open only two weeks late for the spring, enrollment was down to 24,813, the lowest since 1974.

Campus officials anticipate more enrollment decline this fall despite harried efforts to ready student housing and other buildings for the first day of classes.

Most classes will take place in several hundred portable classrooms. Construction, fueled by $163 million in federal assistance so far, will continue for years to come.

Looking into the future, economists see the earthquake as a minor irritant along Southern California’s long road back to economic recovery.

“This seems to be coming in as a very small event,” said Larry Kimbell, director of UCLA’s Business Forecasting Project. “I haven’t seen any sign the quake has had a big impact” despite the billions of dollars of aid. He said the quake’s long-term net economic effect will be only slightly negative.

Compared to some 800,000 jobs lost statewide since 1990, UCLA forecasters see a net loss of 30,000 attributable to the earthquake.

Retail workers were hard hit because several large shopping centers and department stores were too damaged to reopen immediately. Overall, 9,400 retail jobs have been lost since January. But as malls and shops gradually reopen, many of the unemployed are returning to work.

Conversely, according to the U.S. Bureau of Labor Statistics, almost 5,000 new construction jobs were created in Los Angeles County between January and March.

The hardest hit mall was Northridge Fashion Center. Workers recently completed the removal of asbestos and will soon begin structural repairs. The mall is due to reopen in mid-March, although its six anchor stores are expected to reopen at various times between November and August, 1995.

All four of its parking structures will be rebuilt, including one that collapsed in the quake and three others that were damaged.

At the state level, politicians have yet to find a way to fund California’s share of the cost of rebuilding.

Unlike after Northern California’s Loma Prieta quake, when the governor and legislators quickly settled on a temporary gasoline tax increase, jittery politicians passed the buck to voters this election year.

The defeat of the earthquake bond proposal means California is left with no new source of funding to cover the 10% of the repair costs (the federal government pays the other 90%) to build highways, schools and colleges.

Surprisingly, the most extensively measured earthquake in history has given scientists almost as much to debate as politicians.

It is not settled, for instance, whether the earthquake occurred on a thrust fault branching off from the Elysian Park system, or on a hitherto-unknown easterly extension of the Oak Ridge fault from Ventura County.

The shaking intensities seemed among the highest ever recorded, until some scientists suggested a reason: No such recordings were taken at all in most previous big quakes. That debate may compound the difficulty of rewriting seismic safety codes.

Most people relate earthquakes to comfort and safety, not science. And on that score, the overriding lesson has been that quick reaction paid off.

Frank Kishton, coordinating officer for FEMA and a 22-year veteran of disaster relief, said he has never seen a better blending of federal, state and local efforts.

“In a matter of days, a multibillion-dollar corporation was established with a 500,000 customer base . . . over 10,000 federal, state and local employees . . . 80 offices. That got set up in a matter of a week or 10 days,” Kishton said. “You look at Kmart or Sears. They spend years putting stuff on the drawing board.”

The Quake by the Numbers

The numbers are staggering, running into the billions. A total of 597,000 applications for assistance have been received by the federal government. (The previous record was 304,000 after Hurricane Hugo in 1989.) Here is a sampling of the costs, damage and aid requests from the quake.

Small Business Administration

* 196,946 applications submitted

* 88,556 approved for $2.7 billion; 79,734 declined

* 14,726 pending, 13,929 withdrawn either by SBA or filer

* 400 to 500 applications still being received daily

Federal Emergency Management Agency

* 466,879 applications for disaster housing assistance

* 376,693 housing assistance grants totaling $947.5 million

* Grants totaling $83.8 million given through joint federal and state Individual Family Grant Program

* $714 million obligated for public facilities and projects

Housing and Urban Development Department

* $250 million given to local governments for affordable housing and community development