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Think a pandemic hurt the economy? Experts warn the ‘big one’ would cost billions

Think a pandemic hurt the economy? Experts warn the ‘big one’ would cost billions

Southern California is already grappling with wildfires and a worldwide pandemic, but a coalition of experts warned this week that a major earthquake could cause massive disruption to the region’s economy unless commercial and apartment buildings are seismically braced.

How big a disruption?

USC researchers estimate the eight-county region could suffer property damage of $ 113 billion in a major quake, with additional business-related impacts of $ 68 billion or more.

In a press conference held Wednesday in Los Angeles — the week of the 13th annual California ShakeOut — representatives from Optimum Seismic., the California Earthquake Authority and other organizations stressed the importance of being prepared.

“When the big one hits, the impacts on our infrastructure, our communities and our businesses are going to be profound,” said Evan Reis, executive director of the U.S. Resiliency Council. “We know that earthquakes are inevitable in California, but they don’t have to become disasters.”

  • Glenn Pomeroy, CEO of CA Earthquake Authority speaks as state and Los Angeles area leaders came together during the week of the Great California Shakeout to encourage businesses and Angelenos to get prepared by acting now to improve resilience and reduce earthquake damage at the Chamber of Commerce in Los Angeles on Wednesday, October 14, 2020. (Photo by Keith Birmingham, Pasadena Star-News/ SCNG)

  • Ali Sahabi, COO of Optimum Seismic speaks as state and Los Angeles area leaders came together during the week of the Great California Shakeout to encourage businesses and Angelenos to get prepared by acting now to improve resilience and reduce earthquake damage at the Chamber of Commerce in Los Angeles on Wednesday, October 14, 2020. (Photo by Keith Birmingham, Pasadena Star-News/ SCNG)

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  • ASM. Adrin Nazarian, Representing District 46 speaks as state and Los Angeles area leaders came together during the week of the Great California Shakeout to encourage businesses and Angelenos to get prepared by acting now to improve resilience and reduce earthquake damage at the Chamber of Commerce in Los Angeles on Wednesday, October 14, 2020. (Photo by Keith Birmingham, Pasadena Star-News/ SCNG)

  • Glenn Pomeroy, CEO of CA Earthquake Authority speaks as state and Los Angeles area leaders came together during the week of the Great California Shakeout to encourage businesses and Angelenos to get prepared by acting now to improve resilience and reduce earthquake damage at the Chamber of Commerce in Los Angeles on Wednesday, October 14, 2020. (Photo by Keith Birmingham, Pasadena Star-News/ SCNG)

  • Tracy Hernandez, Founding CEO of BizFed speaks as state and Los Angeles area leaders came together during the week of the Great California Shakeout to encourage businesses and Angelenos to get prepared by acting now to improve resilience and reduce earthquake damage at the Chamber of Commerce in Los Angeles on Wednesday, October 14, 2020. (Photo by Keith Birmingham, Pasadena Star-News/ SCNG)

  • Ali Sahabi, COO of Optimum Seismic speaks as state and Los Angeles area leaders came together during the week of the Great California Shakeout to encourage businesses and Angelenos to get prepared by acting now to improve resilience and reduce earthquake damage at the Chamber of Commerce in Los Angeles on Wednesday, October 14, 2020. (Photo by Keith Birmingham, Pasadena Star-News/ SCNG)

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The next big one?

Experts say it’s not a question of if — but when.

The U.S. Geologic Survey estimates there’s a 99% chance of another Northridge-size quake occurring in California within the next 30 years. That 1994, 6.7 magnitude shaker left 60 people dead, displaced more than 50,000 and resulted in more than $ 50 billion dollars in damage.

Even more dramatic is the likelihood of a magnitude 7.5 quake or greater in the next 30 years. Recent estimates put damages caused by a magnitude-7 earthquake on the Puente Hills fault running through downtown Los Angeles at more than $ 252 billion with thousands killed and hundreds of thousands displaced.

Widespread impacts

Ali Sahabi, chief operating officer and co-founder of Optimum Seismic, a Vernon-based earthquake retrofit company, said the impacts of a major earthquake can be far-reaching.

“If businesses stop operating because our buildings are damaged, people won’t have jobs,” he said. “People can’t put food on the table … they can’t make payments on their home mortgages. That’s why it’s important that we bring attention to our business community.”

Earthquake bracing only adds 2% to 3% to a new building’s overall cost, Sahabi said, and the cost to retrofit an existing building is about the same.

A retrofit cost analysis

A newly released report from Optimum Seismic and the U.S. Resiliency Council lays out a cost analysis for retrofitting a 10-unit, soft-story apartment building in Los Angeles that was built in the 1960s. Soft-story buildings are characterized by open parking on the ground floor with dwelling units built above.

Assuming each unit was valued at $ 250,000, the total value of the building would be $ 2.5 million, the report said, and a retrofit would cost $ 75,000. But that investment could save the owner $ 1.2 million in potential losses.

The Northridge Meadows apartment complex, which collapsed in the 1994 Northridge earthquake killing 16 people, was a soft-story building.

“Businesses have to be prepared to pay attention,” Sahabi said. “Don’t look at seismic retrofits as an afterthought, but as part of the business planning. Whether you are an owner or a leasee, you should know what kind of building you are occupying and what could happen.”

State Treasurer Fiona Ma, who attended Wednesday’s event, said recent quakes should make the issue “top of mind.”

“Last month we had a 4.5-magnitude earthquake here in Southern California, as well as 20 small earthquakes in the Imperial Valley,” she said.

A new series of earthquake preparedness webinars for California businesses was announced at Wednesday’s press conference. The programs are sponsored by Optimum Seismic, in cooperation with Los Angeles Area Chamber of Commerce, Los Angeles County Economic Development Corp., BizFed, and the U.S. Resiliency Council.


Press Enterprise