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QUAKE RECOVERY : Surrender : Rebuilding Efforts Are a Study in Frustration

October 25, 1994|GREG MILLER | TIMES STAFF WRITER

Across Lassen Street from Karraa's building, the Northridge Oaks apartment complex, and the fern, sit silently. Howard and Beverly Sachar built the 97-unit complex in 1979, and collected profits exceeding $100,000 a year during the mid-1980s. When the quake hit, the Sachars were among the few who had quake insurance, but their rebuilding plans were entangled and finally suffocated in a web of red tape.

Their insurance company didn't pay its first visit to the property until nearly two weeks after the quake, Howard Sachar said, and didn't produce a damage estimate until May. Even then, the Sachars and the insurance company remained widely apart on how to go about repairing the building, and how much it would cost.

The insurance company said the building could be repaired without demolition, and offered $2 million, Sachar said. But the Sachars, who had consulted their own structural engineer, believed the building needed to be demolished, and suspected replacement costs could total $5 million.

The Sachars, who still own five other apartment buildings in the county, also became concerned with the liability risks of patching up the quake-damaged structure in Northridge. "If something goes wrong with that building, you're responsible," said Howard Sachar, 67, a former executive with TRW Inc. "Why would you want to risk your future?"

"And your children's future, and their children's future," added Beverly. "It goes down to all your heirs."

Meanwhile, the Sachars grew increasingly frustrated in their attempt to secure a $1-million SBA loan. By June, they had dealt with six different SBA loan officials, each of whom asked for a different batch of information. The last straw came when the Sachars, who live in Redondo Beach, were summoned to a meeting with a loan official staying at the Ritz-Carlton resort in Marina del Rey, accommodations the Sachars judged a bit pricey for a government worker.

"In June, I told the SBA to write me a letter and tell me what the hell they wanted so we could process this loan," Howard Sachar said. "I never heard from them."

Lacking financing to tear down their building and start over, and exhausted from haggling with their insurance company, the Sachars surrendered. They took the insurance money, paid off the mortgage, and sold the complex for less than half the $5 million the property might have fetched five years ago.

"We gave up," Beverly Sachar said. "We just gave up."

The new owners, a partnership headed by real estate developers McCormack Baron & Associates, said the Northridge Oaks will be demolished in February, and they hope a new building will be finished by the end of 1995.

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