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Wildfires May Add to California Economy Woes

A fast-moving wildfire north of Los Angeles could be another blow to California’s faltering economy, but many major malls stayed open.

A wall of flames in Acton, Calif.

A fast-moving wildfire north of Los Angeles that has burned more than 85,700 acres could be another blow to California’s faltering economy.

This story first appeared in the September 1, 2009 issue of WWD.  Subscribe Today.

“It’s more bad news on top of bad news,” said Jack Keyser, chief economist for the Los Angeles Economic Development Corp. The latest natural disaster, along with rising unemployment, plunging real estate values and a hemorrhaging state budget, is “very reminiscent of the early Nineties, when we said, ‘What’s next?’”

Two firefighters have been killed by the Station Fire, which is the largest of at least eight blazes and has more than doubled in size since Sunday. More than 10,000 homes have been evacuated.

Four major shopping centers are located south of the Station Fire: Glendale Galleria and The Americana at Brand in Glendale, Westfield Santa Anita in Arcadia and Paseo Colorado in Pasadena. All remained open on Monday.

A spokeswoman for Westfield Santa Anita, an enclosed mall, said there were close to double-digit traffic increases over the previous weekend, most likely because of people seeking air-conditioned refuge from the triple-digit temperatures and smoky air.

“With the combination of smoke and heat, people are probably looking for escapes, though it’s unclear how many of those are looky-loos and how many are shopping,” Keyser said. He noted that business could be “gone” for retailers that depend on shoppers who have evacuated their homes.

Because of the intensity of smoke and soot, public health officials warned the public to avoid outdoor activities. The Los Angeles Department of Water and Power also asked residents to conserve electricity because a key transmission line was in jeopardy.

The Los Angeles County Fire Department estimated property damage at almost $8 million and rising.

Firefighters on Monday were struggling to save a key communications site atop Mount Wilson that includes a cluster of more than two dozen transmission towers for the metropolitan area’s television and FM radio stations and cell phones. The site also includes the Mount Wilson Observatory, which houses multimillion-dollar astronomy centers for the University of California, Los Angeles; the University of Southern California, and the University of California, Berkeley, as well as a $20 million facility for Georgia State University.

Damage to the towers could disrupt cell phone service. TV and radio users who get signals via the airwaves rather than cable or satellite might lose their connection.