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L.A. riot touches B.E. 100s, spurs mass rebuilding effort.

Black-owned companies did not escape the devastation of rioting that erupted after the acquittal of four white Los Angeles police officers in the savage beating of black motorist, Rodney G. King. But despite the disastrous effects on black business, the five days of unrest in Los Angeles have become a catalyst for efforts to rebuild and to develop new strategies to rejuvenate America's urban centers.

At press time, the Los Angeles County Sheriff's Department attributed 58 deaths, 2,383 injuries and 11,656 arrests to the rioting. The department also estimated property damage in Los Angeles and surrounding areas at $717 million.

Most BE 100s companies in the Los Angeles area were untouched by the riots. However, the main branch of Broadway Federal Savings and Loan Association, ranked No. 13 on the 1992 BE FINANCIALS LIST, was burned to the ground. President and CEO Paul C. Hudson has vowed to rebuild.

Also, Westside Distributors and Beauchamp Distributing Co., ranked No. 25 and No. 29 on the 1992 BE INDUSTRIAL/SERVICE 100, will indirectly lose revenues due to the rioting. Many of the stores destroyed in the riot bought their beer and other beverages from Westside and Beauchamp.

Victor E. Fiss, general sales manager for Beauchamp, says that 186 customer stores were burned to the ground and another 230 were temporarily closed due to looting. "We're probably looking at a $12 million loss," says Fiss. "We were planning to do about $40 million in sales this year, so you're talking about over 25% of our business."

Fiss also says that about 10 jobs have been lost due to layoffs and the decision to delay new hires. Westside is facing similar losses.

Other local businesses were devastated as well. Michael Stennis, president of the Golden Bird Fried Chicken chain of fast food restaurants, saw two of his 12 stores burned to the ground, and another nine looted.

In May, Los Angeles Mayor Tom Bradley appointed Peter V. Ueberroth to head "Rebuild L.A.", a committee that will coordinate efforts to revitalize the affected areas. Ueberroth, who organized the 1984 Summer Olympics in Los Angeles, has emphasized long-term corporate commitments as his primary focus. Since Rebuild L.A. will be funded entirely by the private sector, he is urging corporations to locate factories and stores in the community, rather than give one-time financial contributions. Tom Sayles, California corporations commissioner and state liaison to Rebuild L.A., says he and Ueberroth are working quickly to arrange joint-venture projects between minority and majority businesses and banks. "We don't want to lose the momentum," says Sayles. "If these conditions stay around long enough, they become normal. We don't want that to happen."

The African American Entertainment Coalition is attempting to raise a $500,000 capital fund to invest in the devastated areas and supplement funding of local groups. Nina R. Shaw, an entertainment lawyer who helped organize the group of more than 15 entertainment industry organizations, says, "Everyone here is moved to get something of substance done. We're trying to channel that and trying to make an impact on the images and perceptions of minorities in the media."

Feeling pressure, President George Bush has approved $600 million in loans and grants from the U.S. Small Business Administration (SBA) and the Federal Emergency Management Agency to aid the rebuilding. SBA public affairs officer Mike Stamler estimates that the agency will make between $300,000 and $400,000 in disaster loans to businesses, homeowners and renters. And he adds, "We are also working on a plan for regular delivery of SBA programs to that area, because we realize that simply repairing the damage and putting things back the way they were before the riot started will not really be enough."

Bush is also trying to revive an "enterprise zones" proposal from the 1980s, which would provide tax incentives and other relief to businesses that open in specially designated areas. However, many critics say that the plan is flawed (see, "Whatever Happened to Enterprise Zones?", BE April 1992).

"What we need is a national policy for our inner cities," says James H. Johnson Jr., director of the UCLA Center for the Study of Urban Poverty. Johnson says the riots were largely the result of "the way the economy has restructured itself, and the large number of plant closings in in-ner-city communities that have drained the life blood from these neighborhoods."

He advocates a massive public works program aimed at retraining low-income city workers to help redevelop the nation's infrastructure.

"Once you begin to rebuild the infrastructure," Johnson asserts, "then private businesses will start to think about coming back into inner-city communities."
COPYRIGHT 1992 Earl G. Graves Publishing Co., Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Los Angeles, California Riots, 1992; Black Enterprise 100s companies
Author:Wilson, Julia
Publication:Black Enterprise
Date:Jul 1, 1992
Words:773
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