A potential upside to last week’s brutal fires: a rebuilding uptick, particularly important for the hard-hit construction industry.
Much of the rebuilding is set to take place in San Diego County, as Orange County got off light by comparison.
Local homebuilders, contractors and retailers could see business across the Southland as insurance money starts to flow and homeowners and businesses look to rebuild.
“What you spend will generate twice more,” said Chapman University economist Esmael Adibi, who lives a mile from where the flames burned in Lake Forest.
“Thankfully the damage in the county is limited,” he said.
The thinking is that money for rebuilding will spread not only to construction workers but also to appliance and furnishing stores, material providers and even restaurants.
Rebuilding work in San Diego could lure OC companies, though they’ll be competing with counterparts in San Diego.
Who gets work could come down to insurers and what companies they refer work to, said Betty Lynn Senes, a vice president with San Diego-based Roel Construction Inc. and head of its Irvine office.
The rebuilding is “an opportunity to get people back to work,” she said.
“If there is a fire, it’s better it comes now than during a (building) boom because there are resources available,” Senes said.
Rebuilding after the fires could bring work for big homebuilders such as Irvine’s Standard Pacific Corp. But it is more likely to boost smaller contractors rebuilding on a case by case basis, according to some observers.
The opportunity for bigger homebuilders is likely to come from areas such as Rancho Bernardo in north San Diego County, where as many as 400 homes were burnt, including entire blocks.
Apartments, already holding up well in the real estate downturn, could see a lift as displaced homeowners rent units as their homes are rebuilt, according to Adibi.
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Fire near Oakley’s HQ: company shut down for a time |
As of late last week, about 20 homes had been burned or damaged from the 26,000-acre Santiago fire in the hills above Tustin and Irvine.
The damage was far more extensive in San Diego County. As of late last week, fires there had burned at least 1,100 homes and 327,000 acres.
Many seeking refuge from the fires found their way to OC hotels, according to local operators.
The St. Regis Resort in Dana Point Resort said it got a lot of inquires about rooms from evacuees last week, including some from San Diego.
The Hilton Costa Mesa filled “quite a few” rooms with evacuees, said Dan Fitzgerald, director of sales, who said all Costa Mesa hotels had filled up with people from fire areas.
Across the county last week, companies saw lost work hours, tougher commutes and slow business in the case of retailers and restaurants.
“We can’t quantify just how things were affected until it’s all over,” Adibi said.
Some OC retailers and restaurant operators closed up here and in San Diego last week. Tourism businesses may have seen lost sales as some visitors stayed away, Abidi said.
Manufacturers usually are able to recover from lost hours over time by increasing productivity, he said.
Oakley Inc., the sunglasses maker based in Foothill Ranch, shut down early last week, sending workers home. Things were back to normal at the company later in the week, according to an employee.
Past fires in OC, such as the one in Laguna Beach 14 years ago that took 400 homes, have shown the county’s resilience, said Lucy Dunn, chief executive of the Orange County Business Council.
A large mix of industries makes it hard for any one thing to wound the county’s economy badly, she said.
“We’re probably the most diverse county in the Southland,” Dunn said.
The temporary shutdown of the San Diego (I-5) Freeway between OC and San Diego County last week showed the need for extending the Foothill (241) Toll Road through South County into San Diego, she said.
At Roel’s Irvine office, employees who live in northern San Diego County had to leave work last week to check on their homes, Senes said. Some couldn’t get back to work when the San Diego (I-5) Freeway was closed for a time last week, she said.
The company’s San Diego headquarters operated with a “skeleton staff” for much of the week, according to Senes.
Sandi Cain and Michael Lyster contributed to this story.
