The January fires that devastated the communities of Altadena and Pacific Palisades have caused billions of dollars in damage and economic impact on a scale not seen in this region since the 1994 Northridge earthquake.

But according to a recent report from the Los Angeles County Economic Development Corp., how much impact the fires will have on the region’s economy will depend on one key factor: the speed of the recovery and rebuilding process.

The damage from the fires is mind-numbing: more than 16,200 structures destroyed, including roughly 11,000 single-family homes, 230 multifamily buildings, 200 commercial buildings and dozens of churches, schools and other institutional properties. Another 2,100 structures were damaged. And then there was the human toll, with 29 people killed in both fires.

On the business front, the report said 1,863 individual businesses were destroyed in both fires, with a cumulative employment total of about 9,600 people and total sales of roughly $1.4 billion.

Damage toll varies with recovery pace

The LAEDC report gave a range for the economic output loss from the fires: $4.6 billion and 25,000 job-years lost on the low end to $8.9 billion and 53,000 job-years lost on the high-end. For the overall economic impact, including property losses, the report gave a preliminary range of $28 billion to $53.8 billion for both fires.

Rapid progress through the debris removal, permitting and rebuilding phases would result in substantial recovery by 2028 and in the economic output loss figures toward the low end of the $4.6 billion to $8.9 billion range, the report said. But a process riddled with delays, conflicting directives and other disruptions could put off substantial recovery until 2034, driving the economic and job costs toward the upper end.

“Speed matters greatly in the recovery process,” said former California Gov. Gray Davis, co-chair of the Southern California Leadership Council, the business-sponsored public policy partnership for the region that commissioned the report.

Stephen Cheung, chief executive of the LAEDC, elaborated on this in a subsequent interview with KNBC Channel 4’s News Conference program, stressing the vital importance of speed through the first year of recovery.

“If we’re able to stick with the FEMA (Federal Emergency Management Agency) recovery period of about one year, that means we can start rebuilding next year,” Cheung said. “That (in turn) means the economic damage is going to be really significant at over $4.3 billion.”

However, he added, “If you delay that point by over a year or even two years, that (economic damage) number goes up to over $8 billion. So, the faster we’re going to be able to recover, the less money it’s going to cost us.”

Speeding up recovery on the ground

On a recent tour of the commercial district of the Palisades fire burn zone, developer and civic leader Steve Soboroff, whom Los Angeles Mayor Karen Bass appointed in January as the city’s chief recovery officer, gave his impression of the immensity of the task at hand and put forward ways that the process can be sped up during this crucial first couple years of fire recovery.

Already, much of the hazardous material – especially electric vehicle batteries – has been removed from the burned parcels. But debris removal had barely begun as of early March, with only a handful of properties seeing removal crews.

“(We’re looking at) 150,000 truckloads of debris,” Soboroff said. “That’s 500 truckloads a day if it’s done within one year. This community has never seen 100 truckloads in a day, under any circumstances.”

When debris removal is complete, it will be time to get permits for the rebuilding, Soboroff said. And that will be another massive task.

“We’re looking at 6,000 building permits – maybe more than that,” he said. “There’s no city in America that’s ever had to handle 6,000 permits in a year. Last year in this council district, there were 400 permits issued.”

Once these hurdles are crossed, Soboroff said the biggest challenge is likely to be bridging the gap between the insurance and government money available for the rebuilding and the actual cost to rebuild. Some residents may choose not to rebuild.

Soboroff said local leaders will have to think outside the box – and go against conventional practices. He suggested making available thousands of prefabricated modular-style homes – mostly assembled offsite – with a set of pre-selected options for colors and front facades to differentiate them.

“You change the exterior a bit so it still fits in, and it can cost half” of the typical ground-up construction process – and take much less time to build, he said “There may be pushback on this approach, so education will help with that.”

Days after the tour, Soboroff unveiled a “builders alliance” to streamline the rebuilding effort.

The initiative formalizes the prefabricated construction approach with customized options and would set up a single office that combines financial aid, assistance in obtaining insurance payouts and expedited permitting.