SAN FRANCISCO -- On the 10th anniversary of the earthquake that rocked San Francisco on Oct. 17, 1989, the financial community has found an unlikely ally in getting prepared for the next one: Y2K.
"We're better prepared because we've been thinking about these things for the past year," said Peter Hill, chief investment officer of Bailard, Biehl & Kaiser Inc., San Mateo, Calif.
By "these things" he means all the problems an earthquake could affect, including telephone, electricity and computer outages -- also big Y2K concerns.
Kent Newmark, a director and vice president of Loomis, Sayles & Co., based in the San Francisco office, agrees that getting ready for Y2K has helped San Franciscans to be ready should a major earthquake hit.
"The same preparations are applicable to both Y2K and earthquakes," he said. "The difference is you know when Y2K is coming and you don't know when the next earthquake will hit."
Mr. Newmark's firm has put a lot of effort into preparing its computer systems for Y2K. "From a technology standpoint, we're as prepared as we can be," he said.
Mr. Hill said his firm now has plans in place to deal with power, phone and computer outages. "We have some computer information stored (in outside computers)," in case the firm's computers crash because of a Y2K problem.
Such preparations could also pay off if an earthquake disrupted power or damaged the firm's computers.
And the proliferation of cell phones in the past 10 years improves chances that business could continue if another big earthquake hit.
1989 memories
The 1989 quake, which had a 7.1 magnitude, was the second most powerful to hit the city this century.
Mr. Newmark remembers that he drove on the Cypress overpass structure about 10 minutes before the earthquake caused the structure to collapse, killing about 50 people. He was sitting by the pool at his apartment complex when it actually hit, waiting for the World Series to start. A man sitting next to him, who had just moved to San Francisco from New York, became so fearful after the earthquake that he decided to move back to New York. Mr. Newmark never saw him again.
Mr. Hill recalls crawling under his desk during a board meeting when the earthquake hit. "A television fell off a table, but the walls didn't crack," he said. "For a while (afterward) I was concerned about driving under concrete bridges."
Occasionally when he's in a tall building or there's a natural disaster elsewhere, he'll think about the earthquake, but, "I don't think about it often," he said.
The next one
But his firm now has plans ready in case an earthquake hits. For example, the firm has phone ties set up. "Each senior person knows the people he has to contact if there's a disaster," he said.
Loomis also has a disaster plan, Mr. Newmark said. "We have procedures in place so in the event of an act of God, if our office building was closed for a long period of time we could do business," he said.
The Pacific Stock Exchange, San Francisco, has plans in place to airlift market makers to other exchanges in the event of an earthquake that knocks out its trading systems, said spokesman Dale Carlson. That plan worked well 10 years ago, despite skepticism about it, he said.
The exchange also has backup generators in case power goes out.
He agrees that planning for Y2K has helped earthquake preparedness. "It doesn't matter what the cause of the problem is in operations if the computers are down and the power is out," he added.
Harry Smith of money manager Harris, Bretall, Sullivan & Smith LLC, San Francisco, pointed out that most of his firm's business practices and preparations are different now from 10 years ago because it now has $5 billion under management, as opposed to about $1 billion when the earthquake hit.
Now the firm has backed up all of its computer data and has a system in place so people can access data from remote locations, in the event they can't get to their offices.
"It's just good business practice to make sure business goes on in case of an unexpected event -- it doesn't matter if it's an earthquake, a flood or a bomb in the parking lot," he said.
Real estate boom
The region's high-tech boom has also boosted the real estate market in San Francisco since the earthquake, meaning lower-quality structures that suffered damage in the quake have been rehabilitated and are bringing in high rents as office space.
"There are a lot of startup companies that need places to work," said Mr. Newmark.
Many of the new entrepreneurial firms are leasing space "south of Market Street, which had been considered a very undesirable area with dirt-cheap rents," he added.
Many of the firms want this space because they don't want to be associated with the financial district or anything that has the trappings of big business. There's huge demand by Internet and high-tech companies for the "brick and timber older buildings," said Frank Fudum, senior vice president, Collier's International, San Francisco.
These buildings are being rehabbed and given seismic upgrades because the building code requires it, so now "the Internet guys are paying Class A rents for former Class B and C office buildings," he said.
Times have come full circle for Mr. Fudum, who recalls doing a booming business immediately after the earthquake, moving tenants of class B and C buildings -- many of which sustained major damage -- into Class A office buildings, which withstood the shock.
