Ueberroth Will Direct City Rebuilding Effort

Peter V. Ueberroth, who guided the city through one of its greatest modern triumphs--the 1984 Los Angeles Olympics--has agreed to take charge of the city’s efforts to recover, materially and spiritually, from the holocaust of the past week.

Flanked by Mayor Tom Bradley and Gov. Pete Wilson at a City Hall news conference Saturday, Ueberroth announced he would accept Bradley’s invitation to head what the mayor’s office described as an “extra-governmental task force” to rebuild the city.

Following a helicopter tour of the devastation, Ueberroth vowed to make the city’s reconstruction effort “a blueprint for revitalizing inner cities” across the nation. “I wouldn’t take the job if I didn’t think it had long-term value as a national prototype,” he said.

As the unpaid czar of the city’s recovery program, dubbed “Rebuild L.A.,” Ueberroth said his goal was to make the ravaged parts of the city much better than they were before the disturbance.

“We were supposed to revitalize after 1965,” said Ueberroth in reference to the Watts riots. “But we didn’t.”

Ueberroth said the difference between the rebuilding of Watts and what must take place now is going to be the reliance on financial assistance from the private sector. Ueberroth admitted he faces “a massive undertaking.”

At the same time, he said his acceptance of the job was conditional upon receiving commitments of assistance from the private sector, from officials at all levels of government and from leaders of the city’s ethnic communities.

“I am not going to take this job unless I get commitments,” he said during an interview Saturday afternoon in Bradley’s office with the mayor sitting beside him.

“The most important commitment I can get is from the black, the Asian and the Latino communities, especially in those areas that were predominantly affected,” Ueberroth said. “It won’t be a success without them.”

Ueberroth also said he would ask for pledges of support from President Bush as well as from presidential candidate Bill Clinton and potential candidate Ross Perot.

At the news conference, Wilson noted that Bush had declared Los Angeles a disaster area, clearing the way for the U.S. Small Business Administration to make low-interest loans to qualifying businesses, homeowners and tenants. “The SBA will be the most prominent federal vehicle for recovery,” said Oscar Wright, regional administrator for the agency.

City leaders were generally enthusiastic about Ueberroth’s role, but some warned that the massive task will be far more difficult than putting on the Olympics and wondered if anybody has an answer for a crisis that has threatened the viability of the city.

“I am thrilled that someone like Peter has stepped forward,” said Nelson Rising, a prominent real estate developer, civic activist and former top aide to the mayor. “But this is a real, fundamental challenge. Our society isn’t working. The slender thread that holds us together broke, and we all watched it.”

Councilman Zev Yaroslavsky said that Ueberroth’s leadership could “help Los Angeles turn the psychological corner. He’s associated with one of the city’s greatest successes. But Yaroslavsky warned: “This is different. It is going to last longer than 12 days. There’s no profit to be made, and you can’t sell advertising for it.”

As head of the Los Angeles Olympic Organizing Committee, Ueberroth was a dramatic success, enlisting big corporations to put up amounts unprecedented in Olympic history for commercial sponsorships and for the construction of athletic facilities.

But unlike a riot-torn city, the Olympics had a golden image. One market survey after another showed that association with the Games was a tremendous boon for a product or corporation.

At the news conference on rebuilding Los Angeles, Ueberroth did not map out a recovery strategy nor did he elaborate on what he intended to request from various groups.

However, during the interview, he said: “I am going to ask for fairly broad and blanket commitments. I want an assurance that they will do everything in their power to make the effort successful. . . . From religious leaders I would ask them to exercise the power to influence people and to exercise the power of prayer. From lending institutions, obviously I would ask for something different.” And from the ethnic communities, he said, “I would ask for their unrelenting efforts to make things better than they were before.”

From city government itself, Ueberroth may not be able ask very much. Los Angeles officials, facing a deficit of nearly $183 million, so far have been able to identify only small potential sources of reconstruction funds.

Some expect the cost of recovery to exceed $1 billion once the price tag for lost merchandise and jobs is added to the cost of destroyed buildings. Controller Rick Tuttle has identified about $90 million that could be diverted to pay the overtime bill for police, fire and other emergency services during the riot, providing the City Council agrees. And the Community Redevelopment Agency has made available $20 million for rebuilding.

With damage estimates already exceeding $550 million, Ueberroth did not say how much he thought the recovery would cost but he made it clear that help was needed from companies here and abroad.

“One of the things I can assure the global corporate side is that if they make a commitment to providing jobs and assets, it won’t be wasted,” he said.

Ueberroth said the recovery task force will be a nonprofit organization that will be formed Monday in order to move quickly to make an impact. He declined to say what kind of action he anticipated taking initially but indicated that creating jobs was a high priority.

“The looters looted jobs,” he said. “The impact was far worse on the jobs than it was on the merchandise.”

Deputy Mayor Mark Fabiani said that part of Ueberroth’s job would be to “cut through the red tape” that traditionally has tied up commercial development, to “streamline the planning process” so that projects won’t bog down in lengthy environmental reviews and “to mobilize the private sector” where much of the money will have to come from to pay for the recovery.

But business and government experts painted a daunting picture of reviving a city already mired in a crippling recession. With the flight of jobs and the middle class from the city likely to be exacerbated by the rioting, Ueberroth will have to act quickly to prevent a hemorrhaging of the local economy, experts warn.

“The first thing it will take is some way to secure the confidence of capital, and that will take some massaging,” said Robert Edelstein, co-chairman of the Center for Real Estate and Urban Economics at UC-Berkeley.

But while the long-term need is economic, said Edelstein, in the short run the city faces a crisis of confidence.

“This is a political, psycho-dramatic problem. The economics will flow if people are confident,” Edelstein said.

“We’ve gotta convince people we can come back,” said Dan Garcia, a senior vice president for real estate at Warner Bros.

This will be the second time Los Angeles has had to rebuild from the ashes of civil disorder, and while Ueberroth vowed to do a better job than was accomplished after the Watts riot, he will have less to work with this time.

This recovery will have to take place in an economic climate far different than the era of plenty and federal largess that helped cities hit by riots in the 1960s. Gone is the War on Poverty and its wealth of housing, job training, economic development and educational programs. Now there is a $400-billion federal deficit as well as red ink at the state and local levels.

“The business Establishment was already paralyzed and pessimistic before all this happened. Rebuilding investor confidence won’t be easy,” said Joel Kotkin, a visiting fellow at Pepperdine University who writes frequently about the local economy.

“The critical thing now is to hold onto the base of Asian, Mexican, Latin American and European investors, to keep them from bolting now.”

And even with the resources available in the 1960s, it took almost two decades after the Watts riots for a modern shopping center to be built there. Last week, every store in that center was looted or vandalized, according to officials of the Community Redevelopment Agency, which owns the center.

“The emphasis is going to have to be on self initiative. That’s the watchword. We in government can’t build something for everybody. We just don’t have the money to do it,” said Linda Griego, deputy mayor for economic development.

Alexander Haagen, the developer of the Watts shopping center, insisted that South Los Angeles will continue to lure private investment.

“The people must eat, get medicine and have clothes,” said Haagen, who revitalized the Baldwin Hills Crenshaw Shopping Center with massive financial help from the CRA.

“South-Central is one of the biggest consumer marketplaces in the world. It is not going to be forgotten or overlooked by the business community,” Haagen said. While refusing to discuss details, the developer said his own company is currently planning new investments in the area. “And the disturbances won’t stop us,” he said.

With the SBA relief triggered by Bush’s declaration, disaster recovery loans for as much as $500,000 at 4% interest are available to businesses that have fewer than 500 employees and are independently owned and operated. Additionally, loans of up to $120,000 are available on similar terms to homeowners to pay for home repairs and the financing of personal property losses.

Additional money to finance rebuilding could flow soon to the area from a consortium of banks that were previously working with city officials to fund the expansion of small businesses and provide seed money to new businesses in South Los Angeles.

Karen Wegmann, who as Wells Fargo Bank’s executive vice president for corporate community development is working on the program, said the goals may now be shifted because of the riot damage to fund rebuilding of businesses rather than expanding them. But she said the program is still being developed, with no specific amount of money officially set.