Shaken and Stirred : The Quake Jolted Business for Some Shops Near Epicenter, While Giving Others a Boost

There’s an easy way to tell how the small businesses along one block in Northridge are faring six months after the earthquake ravaged the area. Just look at the shopkeepers’ faces.

Laura D’Angelo is the owner of the Kids at Heart gift shop in the Northridge Garden Center strip mall on Reseda Boulevard, just north of the Northridge Meadows apartment complex, where 16 people died in the quake. But the usually upbeat D’Angelo--who has done everything from hosting art fairs to adding trendy new items to her carefully honed line of gifts--is showing signs of stress.

“I’m knocking myself out trying to survive,” said D’Angelo, but her sales are still 20% off normal levels. “I’m in a burnout period.”

At a strip mall down the street, dry cleaner Gianni Fontana di Trevi looks grim. In the past few months he has taken in just $100 a day in gross receipts, not enough to cover his expenses. Fontana di Trevi hasn’t applied for a Small Business Administration loan because, with business so bad, he sees no way to make loan payments. “I’m thinking I’ll stay another month or two to see what happens,” he said. In the meantime, his wife’s salary from an outside job pays the bills.

But at Coco’s Restaurant and Bakery, next to Kids at Heart, general manager Nancy Hazelzet flashes a somewhat embarrassed smile as she admits that her restaurant business is booming, with sales up $1,000 to $2,000 a week over this time last year. Many regular customers have returned, she said, along with construction workers, geologists and architects who are working on earthquake rebuilding in the area. “This has become a gathering place,” Hazelzet said.

For these small business owners in three strip malls surrounding the destroyed Northridge Meadows apartments, about a mile from the epicenter, the six-month anniversary of the earthquake holds widely diverse meanings.

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To some, it commemorates their will to endure as their sales slowly creep back. For others it’s a glaring reminder of how arduous their recovery has been, leaving them to wonder how much longer they can hold on with sales sometimes less than half the usual volume. Yet others find themselves in the surprising position of seeing business improve even beyond pre-quake levels.

The businesses suffering the most tend to be those that rely on clientele from the immediate neighborhood. Roya Saberzadeh, owner of Rochie’s Greek Row, specializing in clothing and memorabilia for Cal State Northridge students, is struggling to stay afloat; her sales are off 50%. Not only is enrollment down at the quake-damaged university, she said, but most of the students who usually continue living nearby during summer break have moved away while apartment buildings are rebuilt.

She is still waiting for word on her SBA loan application, so Saberzadeh borrows money from her father to get by. Staring down into a glass cabinet, she said quietly: “I’m going to owe him into the next lifetime.”

Jackie Jones, owner of the Jones Coffee Co. boutique, just received word that her SBA loan application was approved. She doesn’t know how much she’ll get, but she hopes it will go a long way toward replenishing the $64,000 she spent from her savings to replace broken porcelain plates, glasses and coffee grinding equipment.

It’s a gamble for Jones, whose sales are also off by half. Her clientele consists mostly of local homeowners, many of whom are only now starting to receive insurance money and begin repairs on their homes. Jones is betting that her customers will be settled back in their houses and ready to buy dishes and decorative items during the critical Christmas buying season.

One problem that continues to dog local merchants is that the area still looks wrecked. Northridge Meadows and many other collapsed apartment buildings remain in a shambled state, with demolition proceeding slowly. At the Northridge Garden Center strip mall, half the shops are vacant, with “For Lease” signs posted in the windows. The mall’s current owner, Phoenix Home Life Mutual Insurance Co. in Hartford, Conn.--which assumed ownership in March, averting a foreclosure--said that structural repairs at the mall have been completed and this month it will begin charging tenants rent for the first time since the quake.

But patching, plastering and ceiling work both inside and outside the shops remains to be done. At one end of the mall, a gaping hole in the outside wall of a restaurant is large enough for a person to walk through. Nearby inside Giulianos delicatessen, which hasn’t reopened, a large refrigerated case remains toppled, insulation material is piled to one side and canned goods lie on the floor.

Adding to their desperation is that many merchants have been turned down for the SBA loans they had hoped for to help turn things around.

At his strip mall office, dentist Alexander Bondar sits at the reception desk, ready to greet the patients that never come. His examining room is empty. “I’m open,” he said, “but I’m still closed.”

Bondar was denied an SBA loan. So he tried to sell his practice, but there are no buyers. He pays his bills from his savings, and spends his time calling former patients. “They moved to a different area,” he said. “They say they’re scared of this area.”

Walter Zipusch, owner of the Intrigue hair salon, whose sales are down 70%, said his loan request was denied because the SBA doubted he could repay the money. With local apartments deserted, depriving him of his former customer base, Zipusch said he needs the funds to help pay for advertising. The only way he can survive, he said, is with drastic reduction in his $2,700-a-month rent.

Jo-Anne Leventhal, a spokesman for Phoenix Home Life, the landlord, said that rents at the center would not be lowered. She added that the insurer plans to keep the strip mall and is marketing the empty stores to prospective tenants, though none have signed leases. “We’re very optimistic. We think it’s a good property.”

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Another landlord, Bill Matthews, who manages the other two strip malls that his family owns in this block of Reseda Boulevard, has reduced the rent for many of his tenants--despite paying an extra $900 a month in interest for loans he took out to cover repairs and lost income. Mostly Matthews worries about securing a new mortgage when $2 million in mortgage loans on the properties come due in December. Roger Olson, chairman of Dwyer-Curlett Inc., the Los Angeles mortgage-banking firm that represents the lenders on Matthews’ strip malls, said the lenders have “every incentive to work things out. They don’t want to foreclose.”

Landlord Matthews also applied to the SBA for refinancing assistance, but his request was rejected.

Diane Brady, a spokeswoman for the SBA disaster division, said that earthquake damage must be equal to at least 40% of the value of a building for the owner to qualify for refinancing. As for merchants whose loan requests were denied, she said, the SBA considers only cash flow generated before the earthquake. “Unfortunately, a lot of businesses are being turned down because they weren’t making it before the quake.”

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So far, Brady added, the SBA has approved 56% of the Northridge earthquake-related loan applications from businesses, for a total of $743 million.

Not everyone needs help, however. Some small businesses along this Northridge block have enjoyed surprisingly brisk sales.

Howard Kuebler, owner of My Hero submarine sandwich shop, has seen sales increase 5% to 10% over pre-quake levels as longtime customers pack the lunch counter next to construction workers that he believes are working at CSUN. After 30 years in business, Kuebler said, he and his wife are “going to start living a little.”

At the Cameramart International photo supply shop, owner Nubar Costantian said that business has improved from a year ago, when sales were off because of the recession. Costantian speculated that he’s benefiting from other camera stores remaining closed and customers repairing and replacing damaged camera equipment. Also working in Cameramart’s favor is that his customers come from all over the region, not just the hard-hit Northridge area.

Sales have also returned to normal levels at the Record Trader Outlet, where collectors come from miles away to search for deals among the shop’s used CDs, records and videocassettes. “We get a lot of bargain hunters,” said manager Russell St. Charles. “A lot of customers come in every day, or a couple times a week. We don’t make a lot of money, but we’re making money.”

Scott Caruthers, co-owner of the Exotic Fitness gym and adjacent tanning salon, said he’s encouraged by a new marketing strategy that seems to be paying off.

He raised his gym prices--he now charges $600 to $700 a month, compared to about $150 previously--and began advertising in upscale neighborhoods such as Encino to attract a higher-income clientele. The change has been enough to return sales at the exercise boutique to near-normal, although his tanning salon business remains nonexistent. So Caruthers is considering converting that to exercise space.

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And at the Northridge Sports Collectibles shop, sales are rebounding, in part because a new silent auction for customers to bid on sports cards has proved popular, said manager Bobby Curtis.

The store has also begun selling POGs, the colorful cardboard bottle caps that are the latest craze among school-age kids. World Cup soccer POGs have been hot sellers.

At gift shop Kids at Heart, POGs have also been a temporary salvation for owner D’Angelo: She sells the POGS for 15 cents to $2 apiece--along with thicker discs called “slammers” that are used to play a tiddlywinks-type game with the POGs.

D’Angelo admits that they don’t exactly fit in with her usual line of rubber stamps, wrapping paper, stationery and hand-painted gift items in her tastefully decorated store. But a sign out front advertising POGs for sale, she said, “is what’s going to get me through the summer.”