PPEEEERR

2002 PEER Annual Meeting

Lessons from the Nisqually Earthquake for PBEE

Stephanie E. Chang

PBEE Premise

• “Performance-based earthquake engineering implies design, evaluation, and construction of engineered facilities whose performance under common and extreme loads responds to the diverse needs and objectives of owner-users and society. PBEE is based on the premise that performance can be predicted and evaluated with sufficient confidence for the engineer and client jointly to make intelligent and informed decisions...” (Krawinkler, 1999)

Nisqually Earthquake Study

• 2 business districts• “Complete” sample

– 107 businesses in 62 bldgs.

• In-person, structured interviews:– business info – damage type / cost– financing repair – business interruption– mitigations

Pioneer Square

SoDo

Costs and Stakeholders

Type of Cost Who bears the cost?

Structural repair cost Building owner

Non-structural repair cost Building owner -windows, light fixtures, etc

Business owner – inventory, machinery, furnishings

Lifelines

Building owner, Local Government, and Utilities

Revenue Loss

Business interruption

Loss of customers

Business owner

1. Hidden costs and consequences are very important.

Damage Type Count

Business closure (temp.) 81

Short-term revenue loss 54

Structural damage (bl.) 53

Damage to inventory 50

Non-str. dmg. (windows,…) 32

“Lifeline” disruption 21

Long-term revenue loss 14 (~25)

Damage to furnishings 8

Damage to equipment 5

Injury to employees 0

What kinds of impacts…? (N=107)

89% because of “lack of customers”;87% are retail

93% because of “loss of customer base”;86% are retail

46% had no structural damage

Hidden costs (cont’d)

How will you pay for…?…damage

(N=67)

…business interruption loss

(N=63)

Insurance 6 % 5 %

SBA loan 9 % 10 %

Commercial loan 3 % 5 %

Business reserves / self-insured 51 % 55 %

Out-of-pocket 28 % 22 %

Unsure 3 % 5 %

Building

Damage

Yes No No, w/response

costs

Not yet reopen

Total (no.bus.)

Red tag 60% 20% 0% 20% 100% (10)

Yellow 39% 54% 0% 7% 100% (28)

Green 52% 44% 4% 0% 100% (54)

Not inspected

57% 43% 0% 0% 100% (14)

2. Structural damage is a very imprecise predictor of business impacts.

Short-term revenue loss?

Damage as Predictor (cont’d)

Sector

Yes No No, w/response

costs

Not yet reopen

Total (no.bus.)

Retail 57% 29% 0% 14% 100% (14)

Manuf. or service

23% 77% 0% 0% 100% (13)

Short-term revenue loss?

Yellow-tag building occupants only:

3. Externality effects can be a major source of loss.

A. Own-business problems– Financing (11)

– Permits for repair (5)

– Dislocation (3)

_____

19

B. Externality-type problems– Customer loss (11)– Street closure – parking

(11)– Media perception (6)– 1st Ave. parking lane (4)– Return to status quo

(parking/attitudes…) (2)– Ongoing Repairs in area (6)

_____ 40

Most important recovery problem?

Pioneer Square (Jackson St./Fenix Bl.)

SoDo (buslane)

Lessons for PBEE

• Selection of appropriate decision variable(s) (e.g., annual loss, exceedance of limit states) is highly complex and ambiguous.– Multiple relevant categories of loss– Difficult to predict & loosely correlated with

structural damage state– Different stakeholder perspectives

Lessons (cont’d)

• Need to recognize high degree of uncertainty.– As important for DV as for damage and

intensity prediction.– Need much more empirical data, model

validation.

Lessons (cont’d)

• Divergence between public and private objectives should be considered.– Impacts of performance decisions on neighbors,

local area.– Role of public sector?