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On October 17, 1989, at 5:04 P.M. (PDT), a 7.1 magnitude earthquake occurred in the Santa Cruz mountains. Movement occurred along a 40 km segment of the San Andreas fault from southwest of Los Gatos to north of San Juan Bautista. Measurements along the surface of the Earth after the earthquake show that the Pacific plate moved 1.9 m to the northwest and 1.3 m upward over the North American plate. The upward motion resulted from deformation of the plate boundary at the bend in the San Andreas fault. At the surface the fault motion was evident as a complex series of cracks and fractures.

This earthquake was not unexpected. During the 1906 San Francisco earthquake, there was only about one meter of movement on the Santa Cruz segment of the San Andreas fault, while farther north in the San Francisco area, there was more than 2.5 m of movement. This indicated that all of the strain had not been released in the Santa Cruz segment in the 1906 earthquake so this segment was likely to break before the northern segment.

Thousands of landslides occurred throughout the area blocking roads and highways, hampering rescue efforts and causing damage to structures. Landslides were particularly prevalent in the Santa Cruz mountains where they occur regularly even without earthquakes. These slides resulted in at least two deaths. One slump slide near Laurel took with it several dozen houses damaging them severely.

Thirty percent of the buildings in the Pacific Garden shopping mall in downtown Santa Cruz were damaged severely by amplified ground shaking and ground deformation. The mall lies on unconsolidated deposits. One hundred thirty buildings (many of which date from the last century) were damaged in this historic section. Several hundred houses were either severely damaged or destroyed.

The worst ground shaking appeared to occur in the Santa Cruz Mountains close to the epicenter where many buildings were damaged or destroyed by ground cracking and shaking and by landsliding. Scores of mountain homes were also destroyed. Initial damages were estimated at $350 million in Santa Cruz.

In Watsonville two adjacent buildings of a department store sustained extensive structural damage due to a weak first story, insufficient shear reinforcement of the columns, and possible pounding of the two structures. Recently constructed buildings with tilt-up walls performed well.

At the Stanford University campus, 30 miles northwest of the epicenter, 60 buildings sustained varying degrees of damage, with an estimated repair cost of $160 million.

Concrete sidewalks and curbs were systematically fractured and buckled on northeast trending streets throughout downtown Los Gatos. Hollister also experienced severe damage. Sand boils appear in irrigated fields near Hollister. Collapsed and damaged buildings were also reported from Gilroy and San Jose.

Boulder Creek, Redwood Estates, Los Gatos, Scott's Valley, Santa Cruz, and Watsonville all experienced strong ground shaking and had a high percentage of damaged structures. These towns were only 16 to 32 km from the epicenter.

The older structures in these towns were vulnerable for one or more of the following reasons:

(1) deterioration of the structure,

(2) lack of ties to the foundation,

(3) unreinforced masonry (brick or stone),

(4) lack of shear resistance in the ground floor,

(5) pounding of adjacent structures, and

(6) timber diaphragms not tied to unreinforced masonry walls, which allowed separation or pushing out of the walls.

In the epicentral area most of the damage resulted from the strong ground shaking and landsliding. Ground shaking primarily affected unreinforced masonry structures, and was enhanced in areas of fine-grained sand. Landslides occurred on steep slopes where ground shaking was most severe.