construction

At first glance, everything seems fine at the Eclectic Cafe on Lankersheim Boulevard in North Hollywood. The construction equipment and debris from the Red Line subway project that once clogged the street has been gone for a year, and the customer traffic is finally on the upswing, said Brian Sheehan, owner of the California cuisine eatery. Even Walt Disney Co. boss Michael Eisner stops in when he is working in the area. But Sheehan said there are lingering wounds from the MTA construction, which began in 1994 and continues on other areas of the boulevard. Perhaps the deepest such wound is the $90,000 he was forced to borrow in order to stay open during construction a loan he has yet to pay off. “The unspoken crime of all this construction is the trail of damaged businesses it’s left behind,” said Sheehan, who opened the restaurant in 1992 and said his business dropped by more than half during some construction periods. The Red Line construction along a 2.2-mile stretch of Lankersheim Boulevard between Universal Studios and Chandler Boulevard is scheduled for completion in the summer of 2000. And some businesses say that the work is leaving a trail of debt that the Metropolitan Transportation Authority has done little to alleviate. “A lot of people still avoid this area because they think construction is still going on like it was, and it takes time to bring people back,” Sheehan said. Sheehan plans to join 400 property owners and merchants who are suing the MTA in an effort to recover damages attributed to the construction. The suit, led by an organization called Hollywood Damage Control & Recovery, was filed in 1995 in L.A. Superior Court. In general, the claims pertain to lost business due to construction blockage or physical damage. “A lot of people are still being hurt by the construction,” said Jerry Schneiderman, a Hollywood real estate executive and chairman of Hollywood Damage Control & Recovery. There currently are about 100 businesses directly affected by construction activity, as opposed to about 200 businesses in 1996, an MTA spokesman said. Schneiderman said he launched the effort because he figured that a large number of the mostly small businesses would have a better chance of receiving compensation from the MTA if they banded together. He said he expects the outcome of the lawsuit to mirror that of a similar suit he organized by 1,300 property owners and merchants on Hollywood Boulevard, who claimed that the tunneling in the area hurt their businesses. Last October, MTA officials agreed to settle that lawsuit. So far, 12 property owners have accepted offers from the MTA for sums ranging from $375,000 to $1.2 million; 300 merchants on the boulevard have received between $10,000 and $100,000. According to Schneiderman, the properties in North Hollywood generally have a higher value than those on Hollywood Boulevard. As a result, he said, any settlements with the MTA likely will be larger on average. MTA officials say they are aware of the hardships that construction can place on a business. The agency has spent between $200,000 and $300,000 a year to help mitigate such problems since construction began, according to Mark Pattison, assistant manager for community relations for the North Hollywood Red Line extension. The money has gone mainly to put up signs around the construction areas to alert passersby that the businesses are open, and to pay for advertising in area newspapers. Chris Ashworth, vice president and general manager of Toyota of North Hollywood, said the MTA has paid for some advertising during construction a pittance, he maintains, compared with what’s needed to keep up the dealership. “We’ve spent 30 percent more on advertising than we used to,” said Ashworth, who said sales have been flat since 1994. “The money from the MTA has been a fraction of that.” A total of 1,223 liability claims have been filed regarding Segment Three of the Red Line, which will run from the Metro station at the corner of Hollywood Boulevard and Vine Street to the corner of Lankersheim Boulevard and Chandler Avenue. Almost $40 million had been paid out in claims since construction began in 1994. But Schneiderman charges that the MTA has done an inadequate job of alerting businesses about the option of filing an insurance claim. He also said that the payments have been small considering the amount of economic or building damage sustained by many business or property owners. “I would have gladly filed an insurance claim if I thought it was a fair process,” Schneiderman said. Harold Kutrosky, an optometrist whose office is on Lankershim, is one of the claimants in the suit. Kutrosky, whose building still opens on a construction site, said no MTA official ever informed him of the option of filing an insurance claim. He said his business has suffered by as much as 20 percent a year since construction began in 1994, mainly because of street blockages and parking inconveniences. He said he has borrowed about $100,000 in order to stay in business. “Maybe someday, having the Red Line station in the area will help business,” he said. “For now, it’s a matter of staying in business from 1994 through 2000.” Kutrosky also owns his company’s building, which he said has suffered due to the tunneling beneath. “Every six months one of my four plate-glass windows spontaneously breaks,” he said.