Panel to Study Quake Upgrade Incentives

Businesses and homeowners who are struggling to pay for seismic upgrading may get financial incentives to do the work, including breaks on business taxes or low-interest loans, the Los Angeles City Council decided Wednesday.

The council called for the formation of a task force made up of city department heads to come up with possible incentives to help property owners pay for myriad upgrades adopted by the council since the Northridge earthquake on Jan. 17, 1994.

Those upgrades range from the anchoring of walls in tilt-up buildings to the installation of automatic gas shut-off valves.

The resolution adopted by the council said the recession and lingering repercussions from the quake have made it difficult for many businesses and homeowners to pay for upgrades, some of which can cost thousands of dollars.

“There are still a lot of people who have not resolved earthquake-related issues,” said Councilman Richard Alarcon, the San Fernando Valley representative who proposed the incentives. “We are trying to get ahead of the curve.”

He said he realizes that the incentives could take money out of the coffers of the cash-strapped city but said the city would also lose money in tax revenues by allowing businesses and homes to sit idle because the owners cannot make the upgrades.

“It may not be financially healthy for us to let them dwindle,” he said.

In addition to a possible business tax break, Alarcon suggested the task force consider providing grants from the Federal Emergency Management Agency or low- interest loans from the city. The task force has 60 days to draft a report.

“I think it’s a great idea,” said John Rooney, president of the Valley Economic Development Center, a nonprofit business assistance agency in the San Fernando Valley. “There are many businesses that have faced this problem.”

He said he most often hears complaints from the owners of steel-frame buildings who must pay for expensive inspection and repair jobs.

In February, the council adopted an ordinance that gave the owners of steel-frame buildings three years to inspect and repair cracks in the welded beam connections.

The inspections alone could cost from $1,500 to $3,000 per connection. Repairs could cost an additional $15,000 to $22,000 per joint.

There are at least 755 steel-frame buildings in the Valley and in West Los Angeles that will require inspections. An aide to Alarcon said there are probably “thousands” of other buildings that will require other types of seismic upgrading.

Rooney said the only other agency providing help to make such upgrades is the Small Business Administration, which can provide business loans for such work.

Some Valley business owners are still more concerned about financing basic quake repairs than they are about making seismic upgrades to buildings that did not sustain major damage.

Bob Scott, a co-chair for the Valley Industry and Commerce Assn., said he still hears business owners complain about the cost of quake repairs and he rarely hears complaints about the cost of seismic upgrades. But he criticized the proposal to give businesses a tax break because he said it would only take away from vital city services. Scott said the city would be better off simply offering low-interest loans.

Since the quake, the council has adopted several new seismic upgrading regulations and is slated to adopt more in the near future.

For example, soon after the quake, the council required the immediate installation of specially engineered metal anchors on masonry chimneys that sustained more than 10% damage to keep them from collapsing in a future quake.

In June, the council required the owners of so-called “tilt-up” commercial buildings and warehouses to anchor the masonry walls to the floors and ceilings.

Effective July 1, a quake-inspired ordinance took effect that requires the owners of all new and renovated buildings to install valves that automatically shut off gas mains during an earthquake to reduce the chances of fire.

Following the January quake in Kobe, Japan, Councilman Hal Bernson, the author of the measure, sought to expand the requirement to all existing buildings. But that proposal was tabled by a council panel, pending further study.

More are on the way. The council on Wednesday also instructed the Department of Building and Safety to develop additional seismic retrofitting standards for several types of structures, including masonry buildings built after 1976, concrete parking garages and hillside homes, among others.

In a related action, the council voted to ask the California State Department of Insurance to direct insurance companies to provide rate breaks to certain building owners who make seismic upgrades to strengthen their buildings.