TOPICS > Economy

Economic Bust Strikes Colorado ‘Boom Town’

December 10, 2009 at 12:00 AM EST
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As part of the Patchwork Nation series, Ray Suarez travels to Eagle, Colo., where the real estate boom of earlier this decade has culminated in an especially painful bust.
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TRANSCRIPT

JIM LEHRER: And finally tonight, we continue on the economy with part four of our Patchwork Nation series. That’s an on-air and online collaboration with The Christian Science Monitor that explores how different communities around the country are performing during the recession.

Tonight, Ray Suarez looks at the country’s boomtowns with this report from Eagle, Colorado.

RAY SUAREZ: Adam’s Rib Ranch stretches over 1,600 acres of spectacular rolling terrain, ringed by snowcapped mountains. There’s an 18-hole golf course, a luxurious 40,000-square-foot clubhouse, surrounded by 99 home sites, each costing $1 million to $2 million just for the land. The only thing missing? Buyers.

JOHN HELMERING, salesman: But we have definitely seen a downturn from the, you know, spiraling years of 2006-2007 growth.

RAY SUAREZ: Like most boomtowns all across America, this development was planned in a euphoric era, when the mantra was, build it and they will come.

Now salespeople like John Helmering are struggling to make a sale. So far, just one house has been purchased, and only 11 of the 300 available golf course memberships sold. Still, Helmering remains cautiously optimistic.

JOHN HELMERING: I think it’s going to take a shorter time for this valley to recover than some of the others, but I would still put it on a three- to five-year timeline.

RAY SUAREZ: Come down Broadway, Eagle’s main commercial strip, and you can’t really see that anything is wrong. There aren’t rows of abandoned buildings or derelict properties. Things look pretty good. But what a TV camera can’t show you is all the things that aren’t happening, the condos that were supposed to be built, the buildings that were going to be redeveloped. The drawings and the business plans were ready, when the crisis hit.

DOUG SEABURY, real estate agent: So, inventory is high on the market right now.

RAY SUAREZ: Real estate agent Doug Seabury took me through the neighborhood of Eagle Ranch, a middle-class housing development started in 1998. The plan was for 1,300 housing units. About 800 have been built, but many are now sitting empty.

DOUG SEABURY: If you look at what Eagle’s population does for a living, a large percentage are builders, there’s no doubt about it, in the construction trade. They were doing the two-year flip, so, tax — you know, save tax money. Someone else would move in. They would build another house, and continue that cycle.

The people that have been really hurt were the ones that were in that cycle, did not — next thing you know, they own two homes, a couple lots, can’t afford the payments, can’t sell the homes.

RAY SUAREZ: So, that was one of those situations where you needed that kind of economy to keep on going.

DOUG SEABURY: Absolutely. They just built too many homes too quick, and then too many people got stuck with holding more than one home for themselves.

RAY SUAREZ: The crisis is also taking a huge toll on businesses and people in related fields. Ray Perez is a mechanic who fixes engines on construction equipment. His work virtually disappeared this summer. We met him at a dinner the Methodist Church holds every Monday to help people in need.

RAY PEREZ, mechanic: It’s been a struggle. I have kind of resorted to mowing lawns, to tree trimming. Today, I was painting.

RAY SUAREZ: So, I guess coming here helps?

RAY PEREZ: Oh, absolutely. It has helped. Being able to come here has been a great help.

RAY SUAREZ: Cynthia Sibley helps coordinate the dinners, which serve about 50 to 60 people a week.

CYNTHIA SIBLEY: It’s surprising a lot of us. And all of us here are feeling it in one way or another. And we know people who have lost their homes, lost their jobs. It’s — you know, it’s shaking us to the core.

RAY SUAREZ: Eagle, like other boomtowns across the country, had been a comfortable place to live. The tony Vail resort is just 30 miles away, and, in 2000, the median household income in Eagle County was $20,000 higher than the national average.

TRAVIS BARTON, former operations manager: Did you get it from grandpa?

BOY: And gram.

TRAVIS BARTON: And grandma?

RAY SUAREZ: But that’s changing as more and more people have lost their jobs. Twenty-eight-year old Travis Barton had a promising career as the operations manager at a local lumberyard. A father of two young children, he and his wife were planning to buy a house when the bottom fell out. In March, the lumberyard announced it was going to shut down. Barton was out of a job.

TRAVIS BARTON: It’s been a tough time. And we’re all just trying to get through it. And the thing is, it’s not like you can get up and move, because the whole country, I think, is this way right now.

RAY SUAREZ: Barton worked diligently to find another job, and got one with Orkin Pest Control Services. He says he loves the work, and is happy to be out of the boom-bust cycle of construction.

TRAVIS BARTON: Actually, I had a job offer the same day I got the job offer from Orkin for a job, similar pay, about the same benefits. But that one, I knew, was in construction here. And it was in a material supply company. And I just was like, you know what? There’s always going to be bugs. People are going to have this. I think I’m going to be smart here and take this job.

ERIN SEABURY, business owner: How are you?

RAY SUAREZ: Even businesses far removed from construction have been affected. Erin Seabury, real estate agent Doug Seabury’s wife, owns a women’s clothing store. She says she has had to make changes to her business, since people have less money to spend.

ERIN SEABURY: I started looking for things that people could still pick something up, but let’s say they were in the $20 to $30 range, so that people could still buy something, but not have to spend $100, let’s say.

RAY SUAREZ: Seabury says, her family has made some changes as well, which has helped them weather the economic crisis.

ERIN SEABURY: We simplified our life probably two years into the store. We moved into a smaller house. That change was pre-recession. And we got lucky. But we will never go back to a different way of living, where we wanted a bigger house.

RAY SUAREZ: It’s likely that many people in boomtowns will be making similar changes, says Dante Chinni, director of the Patchwork Nation project.

DANTE CHINNI, project director, Patchwork Nation: Eagle is — and the boomtowns in general are kind of a symbol of the exuberance in the economy for the first half of this decade, where everything was going great guns. It seemed that the — you couldn’t see the downside ahead.

RAY SUAREZ: Were they built too much on the idea that there were enough buyers for high-end homes with very expensive and luxurious finishes and appliances and all of that?

DANTE CHINNI: Right, at every — for every home a granite countertop. Yes, I think that was the — I think that was the thinking.

And I think — look, it’s too early to say where we are going to end up when everything shakes out and the recession is done and we have moved forward. But it does seem like that concept of American life even is going to change somewhat.

RAY SUAREZ: Cynthia Sibley says, one silver lining out of all this is a strengthened sense of community that is emerging, one that was missing when the town was expanding at such a fast rate.

CYNTHIA SIBLEY: Our church is growing. And I think that we are providing a little bit of that extended family atmosphere.

RAY SUAREZ: Eagle County’s boom was built on recession-sensitive businesses, housing and the resort industry. It’s unclear whether Eagle and towns like it have learned anything from this downturn and can grow other industries to avoid the boom-bust cycle in the future.

JEFFREY BROWN: Tomorrow night, Ray wraps up the Patchwork Nation series with a report from Lincoln City, Oregon.