The King of Beers’ Saves Millions with Earthquake Retrofit

The King of Beers’ Saves Millions with Earthquake Retrofit

By Ali Sahabi, Chief Operating Officer, Optimum Seismic, Inc.

After the Anheuser-Busch brewery in Van Nuys suffered significant damage in the 1971 Sylmar earthquake, the company invested $11 million to retrofit structures to withstand the next major temblor – which struck in 1994 with the Northridge quake. Even though the brewery was located just a few miles from the epicenter of the devastating 6.7-magnitude Northridge temblor, none of the retrofitted structures in the compound was damaged. The brewery was quickly returned to nearly full operations following minor cleanup and repairs.

About $750 million in direct and business interruption losses was the estimate of what Anheuser-Busch would have suffered from the Northridge earthquake without the retrofits, the Seismic Safety Commission reported after the fact. This averted damage was more than 60 times the actual cost of the brewery’s retrofit program. Businesses are extremely vulnerable to the risks presented by earthquakes — and this in turn threatens the life, livelihood, and well-being of the communities those businesses serve.

Imagine if your building collapsed or was red tagged after an earthquake. You might still be responsible for paying on your loan without any revenue coming in from tenants to cover those expenses. Liability costs would most certainly “max-out” your insurance deductible – and if you don’t have earthquake insurance, you’d be entirely on your own. Knowing this, business leaders have joined forces with government to raise awareness of society’s shared need for building safety.

“If everyone does their part, Los Angeles will be more prepared – better equipped to emerge from any challenge, better than before,” said former Los Angeles Mayor Eric Garcetti during a recent episode of The Resilience Advantage, a webinar series sponsored by Optimum Seismic that brings experts from all fields together to discuss earthquake threats and solutions. At that point, the nation’s most sweeping seismic retrofit ordinance that Garcetti signed into law in 2015, had led to the retrofit of more than 7,000 vulnerable apartment buildings out of more than 12,000 identified in a city report. “In Los Angeles, we understand that the decisions we make today are going to shape the lives of our children and grandchildren,” he said. “That’s why we’re working to build a more resilient and prepared city.”

Maria Salinas, president and Chief Executive Officer of the Los Angeles Area Chamber of Commerce, agreed. “During the last year, as we’ve faced the challenges of the pandemic, we’ve learned much about our communities, our economies, and our institutions,” she said at the time. “Angelenos have always known the danger of events – from wildfires to earthquakes and everything in between. And as we emerge from the pandemic, the need for greater resiliency is evident.”

The Aftershock of Economic Devastation

Media reports of the Northridge quake focused on the dramatic visuals —the flattened apartment buildings, collapsed freeway overpasses and grotesquely twisted steel-framed structures — all of which showcased the extent to which an earthquake can damage a structure. But these images did little to illustrate the magnitude of widespread suffering caused by the quake.

More than 6,000 commercial and industrial structures were damaged, and more than 36% of all businesses surveyed said the Northridge quake caused them to lose an average of $85,000 in 1994 dollars. A year and a half later, 25% of the businesses reporting damage from the quake said they never recovered. Risk analyst Barbara Stewart called the over-arching economic impacts of a major earthquake “The Ripple Effect.” “A catastrophic earthquake will have a national impact, and there will be national damage,” she wrote in a report for the National Academies of Science. She summarized those impacts in three categories: (1) disruptions to supply lines, (2) shocks to financial markets, and (3) drain on the insurance system. Ms. Stewart further stated: “There has been very little study of these consequences for obvious, very understandable reasons,” Stewart said. “It is quite human to focus on the suffering and physical damage that occurs immediately after an earthquake. The problem is that it is unknown, other than estimates of the physical damage, just how bad the general economic damage might be — and that uncertainty is a problem in itself.”

If you own a building that you believe may be vulnerable to damage – or if you live or work in one – it’s important to educate yourself on cost-effective measures that can be taken to save lives, protect your assets and property, and preserve the well-being of the community-at-large.

Recently appointed to Los Angeles Mayor Karen Bass’ transition team, Ali Sahabi, a licensed General Engineering Contractor (GEC), is an expert in seismic resilience and sustainability. He is Co-Founder and Chief Operating Officer of Optimum Seismic, Inc., which has completed more than 3,500 seismic retrofit and adaptive reuse projects for multifamily residential, commercial, and industrial buildings throughout California. Contact Optimum Seismic today at (833) 978-7664 or visit optimumseismic.com to arrange a complimentary evaluation of your building today.