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City's Promise of Quake Recovery Plan Unfulfilled : Bureaucracy: Assistance teams, hot line are due to be set up in September. Critics say that is too late.


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 assistance information--measures that were promised in a disaster recovery plan adopted five days after the quake.

Advisers to Mayor Richard Riordan, who is also the head of the emergency operations panel that adopted the plan, contend that 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 quake-damaged businesses that have not turned in loan applications or have been denied a loan.

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 that 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 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 about 50%, lower than the approval rate after Hurricane Andrew.

A Ferraro spokesperson said the councilman is trying to arrange a session 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 Jan. 17 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 frustrated because he cannot 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.

Some city officials and business leaders praise the city's 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 owners with assistance for months. "I didn't think the city needed to do that because it was essentially being done," he said.

Councilwoman Laura Chick said she was shocked at the news that the assistance measures promised by the city will not be in place until nine months after the disaster. "How can we think that something that starts nine months later is going to work?" she asked.

Deputy Mayor Leslie, a former administrator for the SBA, defended the city's recovery efforts, saying assistance is provided through four centers, partially funded by the city, and seven state-funded centers. The centers give business owners information and technical help in getting recovery loans or grants, she said.

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