Latino Landscape

Special Feature

Down and out in Denver

By Dick Woodbury Down and Out in Denver

Who among us hasn't felt pain and discomfort from the economic chaos sweeping the land? But some are taking it on the chin much harder than others. A prime case in point is the business community serving the sprawling Latino neighborhoods of the metro area.

Talk about an economic tsunami! Where small markets, specialty shops and ma-and-pa stores used to thrive along main drags like Federal Blvd. and East Colfax, there now lie empty stretches, pockmarked with closures and the myriad signs of retail despair.

No one keeps reliable stats on abandonments and foreclosures when it comes to panaderias and peluquerias. Chambers of commerce don't like to talk about urban vitality when it is on the wane. But a stroll through urban Denver will confirm the obvious. For every shuttered storefront, there is another local outlet barely hanging on. Barrio merchants are hurting. Big time. Victims of the economic crunch.

Of course, this should come as no surprise. It's an obvious consequence of urban demographics where the underclass suffer the hardest. Latinos workers are concentrated in construction, landscaping and hospitality - among the first sectors marked for layoffs. Then add in other sizable numbers of workers, who by their undocumented status, make them vulnerable.

These ranks of newly unemployed make for a severe drain on retail sales. And all the more so when they, consumers all, are burdened with back mortgage payments and consumed with worries over possible home foreclosure.

Now there is an added whammy aggravating the severity of this downturn. Shoppers today aren't merely buying less, they are disappearing from Denver. Latinos in uncertain but significant numbers have been packing it up and quitting town to return home, to Mexico or elsewhere in Latin America. The loss of jobs suddenly gives many workers less of a reason to remain here, and the tug of family is strong.

The outflow is draining the lifeblood from a cross-section of retail emporiums and local gathering spots like El Cuscatleco, a Salvadorean and Mexican eatery on South Federal. There, in a mini-strip mall, proprietors Daniel and Marcia Pena are trying to hang on despite a 60 per cent drop in business. They have laid off most of their staff and Marcia is doing the cooking and waitressing. "Every day we're coming out negative," Pena laments. "The problem is customers with less money and out of work. And now they are going home."

Across the way at V's Check Cashing, the scene is similarly bleak. "No construction means no labor," complains manager Nam Yoon. "We're cashing $100 to $200 checks instead of ones for $700 and $800. "Fewer people are working," he explains. "A lot of my customers are going back to Mexico. They just say it's cheaper to live."

Though reliable figures on the worker drain are hard to come by, the Mexican consul's office in Denver is processing a steady flow of reverse migrants. "People are looking for honest work, and some of them now see better opportunities back home, or at least a situation that is not as bad as it is here," points out Eduardo Arnal, consul general.

One key indicator of the outflow, the money sent home by Mexican migrants, fell last year for the first time on record, according to Mexico's central bank. Remittances, which are Mexico's second largest source of foreign income, skidded 3.6 per cent, a nearly double drop from official predictions.

Of course, an economic rebound could turn these departees around in short order. But for the moment, this exodus combined with layoffs and cutbacks are having a severe impact on businesses across the board.

"Everyone to some extent is being impacted," observes Mark Martinez, regional president of Lakewood's Solera National Bank, which focuses on the Hispanic market and has been thriving. Because it opened just 18 months ago, Solera is unburdened with the toxic assets that are hurting many of its competitors, Martinez explained. "The phone is ringing off the hook here, our loan value has gone up dramatically in the last six months."

While investors may be chomping to do new projects, he and others worry that consumers are getting more serious about saving, "and that's a double-edged sword with a consumer-driven economy. There's a fear factor that has a domino effect."

Even chain food stores such as Azteca Ranch Markets are feeling the pinch as more cautious shoppers bypass fancier cuts of meat and pricier labels to save a dollar. Azteca is responding with more tortilla, hot wing and chorizo promotions, among others. For its part, Rancho Liborio says its five Colorado stores are employing more aggressive pricing practices.

Of course, the retail blues are not, by any means, just an Hispanic problem. Many barrio merchants are Asian, prominent among them Korean-born Jeremiah Kong, who operates a mini-mall of 14 vendors under a cavernous roof on East Colfax. A stroll through the near-empty mart supports Kong's assertion that today is Denver's bleakest sales climate in 30 years. "Everyone's hurting," he says. "Taxes, garbage, insurance--they've all gone up, but our business is down by half from 2007."

Over at Rainbow Liquors on Federal, proprietor Jin Ye is feeling the pain, like most other merchants in the Brentwood Center. He dismisses the notion that drinkers don't change their habits in bad times. "People are drinking less," he declares, "and it's cheaper wine, cheaper beer."

Weathering the downturn best are spunky retailers with a niche product or service like pawnbrokers. In fact, at Pasternack's Pawn Shop, a Colfax fixture for nearly 40 years, there's scant time for complaining because business is so brisk.

Shoppers pick among the mishmash of bicycles and snow blowers, tools and TVs, even as others are unloading their jewelry, exercise gear and lawn mowers for pawn or sale. "People are desperate, they're scraping the barrel," owner Mona Pasternack says. "They're bringing in more family heirlooms, firearms, grandma's ring--you name it."

Down the street at the Mexican Dollar Store, one of the better sellers has been luggage, reflecting the departure of migrants.

With Hispanic jobless predictions as high as 17 per cent by year's end in Denver, few barrio businessmen are sanguine about the coming months. But many of them have already proved they have the grit and determination to survive. Certainly, it will take an extra measure of fortitude this time, as Jeff Campos, Denver Hispanic Chamber president, points out.

"Most small business owners are adapting," he said. "Those who thrive amid today's economy are those who are prepared."

Dick Woodbury is the former Denver bureau chief for Time magazine. A staff reporter for Time and Life magazines for over 30 years, Woodbury also served as an editor of the Denver Post.

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