L.A.’s Quake Aid Plan for Firms Stalls : Assistance Teams, Hot Line Expected by September

Six months after the Northridge quake hobbled hundreds of businesses, the city of Los Angeles has yet to deploy business assistance teams and begin a hot line for quake information, measures promised in a disaster recovery plan adopted five days after the quake.

But advisers to Mayor Richard Riordan, who is also the head of the emergency operations panel that adopted the plan, say the city has taken steps to fulfill the promise by getting federal funding for the teams and the hot line. Both should be in place by September, they said.

“We are gearing up to hire eight to 10 staff people for two years to provide business and technical assistance to businesses affected by the earthquake,” said Mary Leslie, deputy mayor for economic development.

However, some City Hall officials and business owners say that will be too late and blame Riordan for allowing the initially strong momentum of the recovery effort to wane.

City Controller Rick Tuttle said a September starting date for the assistance measures may be too late, noting that the deadline for businesses to submit Small Business Administration loan applications is Sept. 17.

“This all needs to move faster,” he said. “It seems that a process that doesn’t start until September is too late.”

The most critical help the city can offer, Tuttle said, is to contact and provide help to those quake-damaged businesses that have not turned in loan applications or have been denied a loan.

Tuttle has been doggedly pressing Riordan to take stronger action on the recovery.

In a Feb. 9 letter to the mayor, Tuttle stressed the need for the business assistance teams. And in a June 29 letter to Riordan and City Council President John Ferraro, he suggested they invite President Clinton, Gov. Pete Wilson and other top officials to a “summit meeting” in Los Angeles to discuss the next steps in the quake recovery process.

“Los Angeles cannot afford to continue losing businesses, watch homes and multifamily housing units disappear and not see recovery from this natural disaster,” Tuttle said in the June 29 letter.

Tuttle and others say the need for assistance is apparent in the gap between the number of SBA loan applications issued to business owners and the far lower number actually filled out and turned in.

About 135,000 applications for business loans were distributed by the SBA as of July 17 but only about 43,600 were filled out. So far, the overall approval rate is at about 50%, lower than the approval rate after Hurricane Andrew.

A Ferraro spokesperson said the councilman is trying to arrange a meeting with the mayor and Tuttle to plan a summit meeting with federal and state officials. But Ferraro stopped short of criticizing the mayor’s efforts, saying only that he would “like to see this whole process expedited,” the spokesperson said.

The city’s disaster recovery plan, which was being drafted months before the quake but was approved Jan. 22, calls for the mayor to establish assistance teams and a hot line to provide quake-damaged businesses easy access to information on loans, permit applications and engineering work, among other things.

Michael Ourieff, owner of Michael J’s pizza in Sherman Oaks, said he could use such help in his effort to relocate his business after it suffered about $20,000 in quake damage.

He said he spent about a month getting an SBA loan approved to pay for the repairs and is now frustrated because he can’t persuade the SBA to let him use the money to relocate instead of rebuild.

“If I don’t get some help or if I don’t get lucky, I’m going to put 30 people out of work,” he said. “I wish there was some place I could go where I can explain my situation and get some help.”

Dr. David Young said he needs help now that the SBA has rejected his loan application to pay for about $700,000 in damages to two Valley-based clinics and an apartment complex he owns.

The 50-year-old physician said SBA told him he did not have the income to pay off such a loan, an assessment Young called “ludicrous.” He said he tried to get help through a Valley business group but was simply “shuffled around and pushed through the cracks.”

But some city officials and business leaders praise the city’s quake recovery efforts and say the business assistance called for by Tuttle has been offered by other groups and government agencies.

Jerry Curry, president of the United Chambers of Commerce of the San Fernando Valley, said his group and other Valley business organizations have been providing business owners with assistance for months.

“I didn’t think the city needed to do that because it was essentially being done,” he said.

Councilman Hal Bernson, whose Northridge-based district sustained the most severe quake damage, said Riordan “has been on the stick from the beginning” and called Tuttle’s criticism “political posturing.”

He said the city already has a task force that is looking for untapped funds for business and home owners who did not qualify for SBA funding.

Bernson added that the city’s ad hoc recovery committee, which he chairs, has already invited state lawmakers representing Los Angeles to meet Aug. 1 in City Hall to discuss possible legislation to help the rebuilding process.

“I think everybody has done everything they can,” he said.

Leslie, a former administrator for the Small Business Administration, defended the city’s recovery efforts, saying assistance to businesses is provided through four “business assistance centers,” partially funded by the city, and seven state-funded “small business development centers.”

The assistance centers give business owners information and technical help in getting recovery loans or grants, either through the SBA or some other agency, she said.

The assistance teams that were promised in the recovery plan will be hired by Sept. 1 and will be funded through a $1.8-million grant approved last week by the federal Economic Development Agency, Leslie said.

The team members will contact those businesses that either did not submit an SBA application or were denied a loan. The teams will attempt to give the help businesses need to get back on their feet, she said.

Another key effort by the city, Leslie said, will be to provide matching funds to those businesses interested in taking advantage of the $30 million in additional quake aid that the Clinton Administration released last month for small businesses.