Headway Made in Reviving Quake ‘Ghost Towns’ : Quake: City, federal, private agencies are expected to fund repairs of 80% of the pockets of damaged housing. Progress is partly attributed to one-of-a-kind loan program.

Nearly a year after the Northridge earthquake created pockets of vacant, heavily damaged “ghost towns,” city and federal agencies have provided enough loans to repair about 60% of the empty units and approximately 20% are expected to be repaired with private insurance, according to housing officials.

The 80% funding level is a signal that significant steps have been taken to clear away a problem that many experts predicted would be one of the most stubborn legacies of the Jan. 17 quake, according to the officials.

“Progress is really being made,” said Councilman Hal Bernson, whose northwest San Fernando Valley district includes five of the city’s 15 ghost towns. “It’s not as fast as I would like, but we’ve had a lot of obstacles to overcome.”

Housing officials attribute part of the progress to a one-of-a-kind city loan program that offers zero-interest funds to financially troubled landlords who are rejected by the Small Business Administration or other lending institutions.

Bud Goldshine is one of the building owners to benefit from the program.

Three months ago, he had given up on his 35-unit apartment building in Granada Hills that had been turned into an empty, crumbling shell by the Northridge quake and then stripped of all valuables by marauding scavengers.

Rejected for a loan by the SBA, Goldshine had resolved to let his bank foreclose on the building. “There was nothing we could do at that point,” he said.

But things turned around when the city offered him a zero-interest, $1.2-million loan. “Things are looking up,” he said.

Within the 15 ghost towns in the San Fernando Valley, Hollywood and the Mid-City areas, 315 buildings with 7,510 units were left vacant by the quake, according to housing officials.

City and SBA loans will repair 163 buildings with 4,651 units, or 62% of all the vacant units. Another 58 buildings with 1,618 units, or 21% of all the vacant units, are expected to be repaired with private insurance funds, city officials said.

The ghost towns became an immediate problem for city officials as the vacant buildings began to decay and provide havens for drug dealers, transients, prostitutes and gang members. Rats and cockroaches began to multiply as they fed off rotting food left behind in abandoned kitchens.

Fearful that the ghost towns would create a festering urban nightmare, city housing officials formed the Ghost Town Task Force in July to broker deals between lenders and landlords to help financially troubled owners get a break on mortgage payments so they can rebuild.

When banks are willing, the city has offered zero-interest repair loans from a $310-million pool of federal disaster aid. So far, the city has committed $61.3 million in loans for ghost town properties.

To qualify for a city loan, landlords must first be rejected by the SBA and traditional lending institutions. Once a city loan is approved, however, no payments are due for five years and if the building is sold, part of the loan is forgiven, depending on how long the landlord made payments.

The SBA moved in June to do its part by vowing to quickly process loan requests from ghost town property owners.

But the work is far from over. With most of the funding in place, city officials must now begin in earnest to process permits to let owners make repairs. Housing officials have yet to calculate how many owners have already begun.

“The real job now is to get them rebuilt and reoccupied,” said Robert Moncrief, who heads the Ghost Town Task Force.

An even greater dilemma for city officials will be getting owners to repair the remaining 20% of the empty units--those hard-hit structures whose owners are still trying to obtain funding or have given up entirely on their buildings.

Borris Tsurif is in the latter category. He owns a six-unit apartment building on Zelzah Avenue in Northridge that suffered $80,000 worth of damage and was “yellow tagged” by city inspectors, meaning entry was limited.

Although the SBA offered him a loan, Tsurif said he rejected it because he could not be sure that his tenants would ever return. He decided to let his bank repossess the structure.

“Nobody knows if I can fill it up again,” he said. “What can I do?”

Such buildings are likely to sit idle for months as foreclosure proceedings drag on and banks try to find new owners.

In an effort to quickly move new owners into such buildings, Moncrief said the city has another program that provides low-interest loans for investors interested in buying and repairing ghost town buildings.

In addition, he said the city will hold a meeting Jan. 12 at USC to provide developers with listings of quake-damaged properties in hopes of encouraging them to buy and rebuild the structures.

As part of the city’s multi-pronged approach, officials have also used federal disaster aid to fence and board up about 100 vacant buildings and hire private security guards to patrol the ghost towns.

Police and city officials believe such efforts have helped reduce the crime problem that plagued ghost towns in the months immediately after the quake by keeping trespassers out of the empty units.

“Burglaries and vandalism have substantially decreased,” said Los Angeles Police Capt. Vance Proctor, commanding officer of the LAPD’s Devonshire Division, which patrols several ghost towns.

He attributes the decline to the city’s security measures as well as extra patrols by police and beefed-up surveillance by volunteer citizens.

Moncrief believes the 80% funding level and the drop in crime will provide a powerful combined force toward getting other owners to rebuild.

“I think the momentum that has been generated will encourage owners that have not participated to make the decision to reinvest,” he said.