Bearish in Cowtown
Don’t seek to know for whom the recession bites. It’s growling at thee.
By Fort Worth Weekly staff
A lot of local business news stories in recent months have emphasized the North Texas silver lining to the national recession’s frighteningly dark clouds: Unemployment figures here aren’t as bad as in the rest of the country; the Barnett Shale boom is providing insulation against the downturn; things aren’t so bad.
All true. But don’t pack away your umbrella quite yet.
Bankers, builders, economists, and employment experts are warning that Tarrant County is not going to survive the country’s deepening economic crisis without taking some hits. While we may be insulated somewhat on measures like unemployment and home mortgages, the credit crunch is likely to hit home here as hard as it does elsewhere, making it difficult for businesses to get the loans they need and therefore to hire or keep workers for the to-be-financed projects. National retailers’ woes will be felt. Several major local employers were experiencing problems before the recession settled in. Projects have been pushed back, and condo sales are wobbling. And the problems of the poorest North Texans, already severe, are only getting worse as jobs dry up and charities’ resources get stretched further.
How deep the hits will be — and how long the recession lasts — will depend greatly on what kind of decisions President Barack Obama and a Democratic Congress make next year. But it may also depend on another range of more regional factors: how skillfully business leaders read the tea leaves, what happens to the price of natural gas, whether local governments are willing to embrace some new strategies — and whether the leaders at both 1600 Pennsylvania Ave. and 1000 Throckmorton St. heed the predictions of a far-seeing North Texas economist. The best news may be that homegrown banks and companies may prove stronger than the country in general.
In Fort Worth, which has been undergoing a boom in the last several years, retrenchment has already begun. Hold onto your hats, umbrellas, 401(k)s, and maybe that already-paid-for junker. Things are likely to get a lot worse before they get better. And part of the problem will be in putting back together a system that a prominent former U.S. senator from Texas was instrumental in taking apart.
During the Great Depression of the 1930s, bankers got a bad name. Movies portrayed them as heartless bureaucrats showing up at the doors of poor families with eviction notices and sheriff in tow to kick them out onto the street. In that era, the banks were nearly always local and the community folk were on a first-name basis with their banker who, in good times, made loans on a handshake. But when the times turned dark and townsfolk lost their money because dust storms took the land away or the cotton gin shut down, the friendly banker became the villain. He took family homesteads, but often could resell them for only a pittance or not at all, and soon the financial institutions themselves were going broke, with frequent bank “runs” as people literally ran to draw their unprotected money out and put it under their mattresses.
Then along came President Franklin D. Roosevelt, who helped bankers reclaim their good name by imposing tough new regulations on how they did business, most significantly through the Federal Deposit Insurance Corporation that protected bank deposits up to a certain amount as well as providing other financial underpinnings for the average Joe and Jill homebuyer.
One of those measures was the 1933 Glass-Steagall Act, designed to separate Main Street’s commercial banks that focus on consumers from Wall Street’s investment banks, which deal with speculative trading and mergers. It prohibited the two from merging into giant trusts and maintained local banks’ presence in the communities they served. That protection held until 1999, when Texas’ then-U.S. Sen. Phil Gramm completely gutted the act and got the votes to replace most of its components with the new Gramm-Leach-Bliley Act that allowed commercial banks, investment banks, and insurers to merge. The loosening of 66 years of consumer protections led to the mergers of banks and investment houses with assets (on paper) in the megabillions — and corporate offices far from their customers. Worse, their unregulated and reckless lending practices ultimately led to the crash of 2008, with many of the best known Wall Street giants going bankrupt, being bailed out by the taxpayers, or being bought at bargain basement prices by former competitors. So far this year, there have been 24 bank failures nationwide, none of them in Texas — yet.
Bruce Davis, president of Southside Bank on Magnolia Avenue, acknowledged that Texas hasn’t suffered as much as many other places from the national financial problems “because the state’s economy is still strong.” But he doesn’t expect that rosy picture to last.
Here, drilling in the Barnett Shale, which has been one of the engines driving the economy, is facing a slowdown. “The price of [natural] gas is falling,” he said, “and the national economic problems will eventually depress our local economy.” He thinks that this area is in for a rough ride, exacerbated by fear. More and more people are having trouble with their cash flow, he said. “They are afraid to borrow money now, afraid they may not be able to pay it back.” Davis said the local banks will be able to ride it out, but not necessarily the big guys.
And there are more and more of the big guys in town these days, at least for now. When the gas boom heated up, national banks that had not had a big presence in the city, such as Wachovia, began to open branches in just about every strip shopping center around town.
Wachovia’s sudden arrival in a former video store in the little bedroom community of Forest Hill surprised many residents, who’d been served for years by a single bank — a branch of Chase — less than a mile from the new Wachovia shop next to a grocery store. When one resident stopped by to inquire why a second bank was opening in such a small community, bank employees said their company was taking advantage of the expected long-term financial boom from gas drilling.
And indeed, rigs were springing up all around Forest Hill then. But by September, the activity had slowed to a crawl — and Wachovia was in deep trouble with federal regulators for overextending its resources and over-reporting its assets. Financial journalist Jonathan Weil wrote in Bloomberg News that the North Carolina-based bank had likely been cooking its books, claiming net assets far in excess of their actual value, forcing the bank to accept a buyout by Wells Fargo Bank or go under. The fate of its many branches here is unknown.
The good thing is that the bank’s depositors are still protected under the FDIC, no matter which name the bank survives under — and as part of the $700 billion bailout package passed by Congress last month to rescue some of the biggest banks in the country, deposits are now protected up to $250,000, an increase over the former cap of $100,000.
Tougher regulations were also part of that package. Davis is one banker who doesn’t object to increased regulation, but he said that lack of oversight isn’t what got most banks in trouble. “There were regulations and guidelines in place, but they were ignored by the companies that rate banks. They were putting out false ratings.” There is plenty of blame to go around for the crisis the country is in, he said. “It was corporate greed mixed with consumer greed, and that’s what got us here.”
Banks that are not in trouble seem to be the local ones not owned by the large corporations. “We don’t hold a lot of mortgages,” Davis said. “Those are held by the big investment banks. … And we are pretty conservative in our lending practices.”
His bank was started with local investors and is now owned by a statewide bank based in Tyler. Davis said that the Tyler company bought the Fort Worth bank two years ago because of its “good earnings and good growth.” But Davis said that if small banks can stay healthy — and that means the big banks that are getting the bailout billions will have to start lending it to the smaller banks — the home-town banks can play a significant role in alleviating fear in the marketplace.
Davis said he’s optimistic that the country will survive without a depression of the magnitude of the ’30s, but “This is a crisis that isn’t going to be over anytime soon.”
One of the enduring images of the current economic crisis will be that of Lehman Brothers’ employees, boxes in their arms, filing out of the company’s New York office in September, after the firm went bankrupt. Laid-off employees of financial giants Merrill Lynch and AIG were soon to follow. While that day may have made the crisis very real in the minds of the bewildered public, the unemployment lines, here and around the country, had been growing since the first of the year.
That same month, the U.S. Department of Labor reported that the national unemployment rate had risen to 6.1 percent, the highest in five years, with 605,000 jobs lost thus far this year. The International Labour Organization, a UN agency, predicted that by the end of 2009, world unemployment will top 200 million for the first time ever.
In September the Texas unemployment rate increased to 5.1 percent, well below the national rate, but up significantly from the state’s September 2007 figure of 4.3 percent.
Ann Hatchitt, a spokesperson for the Texas Workforce Commission, said the important number to look for is initial claims for unemployment benefits. The September numbers look big because of a combination of claims from Hurricane Ike and the economic crisis. But even the August 2008 claims were up by almost 10,000, compared to the previous year.
“It’s worth noting, but I don’t think it’s huge,” she said about the rise in initial claims. “It’s all relative. In 2003, after the tech boom, five percent would have looked awesome.” And the figures confirm that Texas has been cushioned from the worst of the economic fallout. “We have been watching unemployment figures go up nationally, and we [in Texas] have been very resilient,” she said.
The idea that the Texas job scene isn’t all that bad is a tough sell at the Fort Worth Day Labor Center. Warren Harris, coordinator of the center, said he’s seen at least a 20 percent rise in the number of people looking for work since September. Among the new faces are many coming from office careers. “There are a lot of different people from a lot of different backgrounds,” he said. “People come to me that are used to white-collar work. They’re willing to do some day labor just to keep things going.”
Some of Fort Worth’s major employers were already showing signs of stress before the national economic downturn. Pier 1 Imports sold its headquarters to Chesapeake Energy for $104 million this summer and built up its cash reserve, but recently saw its retail sales plummet by more than 10 percent as the stock market fell and the credit crunch grew. Downturns in the housing market seldom bode well for home furnishings retailers, and Pier 1 is no exception. Still, it’s doing better than some in the industry — American Home and Wickes Furniture filed for bankruptcy this year, and others, including Linens ’N Things, are going belly-up.
The besieged RadioShack Corp. has been limping for several years, selling its downtown headquarters in 2005 and laying off more than 500 employees in 2006. Consumers’ move toward digital TV converter boxes helped increase profits for the company in recent months, but CEO Julian Day released a statement in October acknowledging the “challenging retail environment” that lies ahead.
Bell Helicopter announced 300 job cuts in January and another 500 in October after losing a $5 billion defense contract and seeing its stock price totter. Most of the cuts were at its Fort Worth plant. The company doesn’t anticipate any more cuts in the near future, spokesman Greg Hubbard said.
“We’re sort of early in this economic cycle, and we don’t know long-term what the credit crunch will do, but we have a strong backlog, a strong product line, and the demand has remained pretty constant,” he said, while acknowledging that the crunch could hurt the company if commercial customers have trouble getting loans.
Helicopters, unlike many small fixed-wing aircraft, are purchased for utilitarian jobs by law enforcement, ferrying services, and emergency operations and are not usually considered a luxury item, Hubbard said. Demand for them usually remains strong even in a down economy. Also, Bell’s product lines are split between military and commercial customers.
“We’re in a good position, we’re about a 50-50 split [in customer types], and that gives us a good balance,” he said. “To date we haven’t seen any cancellations due to the recent financial situation.” Military project funding is “pretty much fixed for the length of those contracts,” he said.
Potential cuts to defense spending could wreak havoc at some of Tarrant County’s other big employers, such as Lockheed Martin, which announced in January it would cut about 650 jobs at its Fort Worth assembly plant this year.
The F22 Raptor program, considered by some critics as expensive and outdated for a modern war on terror, “is key to Lockheed’s existence,” said economist Bernard Weinstein, head of the Center for Economic Development and Research at the University of North Texas. “That program could be killed or modified, and that could have serious economic implications … because they are a major employer, pay very good wages, and do a lot of local procurement with subcontractors. We could see a repeat of what happened in the late ’70s and early ’80s when there was big downsizing in defense spending that really hit Fort Worth hard.”
He’s more worried about falling natural gas prices and defense spending cuts by a new president than about the credit crunch and other aspects of the national recession. But these are potential problems, he added, and the area’s generally high employment rate will help North Texas weather the storm. “I’d rather be here than anywhere else in the country to ride out the recession of 2008-2010,” he said.
Weinstein pointed out that falling energy prices, which have already reduced drilling in the Barnett Shale, could lead not only to less “mailbox money” for leaseholders, but also to job cuts and dwindling tax income for cities. In other words, regardless of how Fort Worth weathers the national downturn, it may have it own bust-of-the-boom to deal with as well.
“It’s already affecting the tax receipts of cities and school districts that have been getting a lot of money,” the economist said. “If the price goes down to $5 [per thousand cubic feet of gas], nobody is going to be drilling. In the last year the price has gone from $14 to about $7.” The realities of drilling in the Barnett Shale are that most wells are only profitable when gas prices are in the $7 to $9 range. At the current price, drilling is a very risky business.
Stock prices for gas companies have also been falling, a problem that peaked for Chesapeake Energy recently when CEO Aubrey McClendon was forced to sell off huge amounts of his company stock — bought on credit — when the lenders looked at the market and called in the notes. The company has also sold off about $12 billion in assets, including property and lease deals in shale areas in other states.
Chesapeake has scaled back its rig count in North Texas, and the locally based Quicksilver Resources announced in October that it was dropping five of its 14 rigs. Overall, the Barnett Shale rig count is expected to drop between 10 and 20 percent over the next year.
Gasfield workers, who have been riding high in recent years, haven’t felt the bite yet. Workers and managers said they’ve heard of no layoffs in the industry locally, and they’re betting on the idea that they will just move with the rigs, to whatever area of shale play is still hot.
“I know some companies are planning to move some of their rigs to other parts of the state or other states, but the roughnecks and service providers will just move with them. That’s the oil business,” said Shannon Swanson, a yard manager for Shale Tank Truck in Jacksboro.
Clint Stephens, 23, is a former Marine, an Iraq War vet, and a current gasfield worker. He said the dropping rig count in North Texas hasn’t been a problem for crews yet. “Quicksilver released three rigs in Johnson County recently, but those were snapped up by other gas companies. And the people who work those rigs work for Patterson Drilling, and every one of them kept their jobs and just moved with the rig.”
Organizers of a Barnett Shale job fair this week said the continuing high level of interest in their event is an indication that energy companies are actually looking to add, not reduce jobs.
So far, so good — unless gas prices continue to drop. In which case, a lot of workers with shiny new trucks, recently acquired houses, and the loans to go with them may find themselves joining the long line of borrowers in trouble.
The housing market in North Texas is in much better shape right now than in the rest of the country. Home prices here have fallen slightly, only 2.7 percent from August 2007 to August 2008. Compare that to a drop of more than 30 percent in home prices in Phoenix and Las Vegas and numbers in Miami and Los Angeles that are almost as bad.
Still, the dark clouds are gathering here, with bad weather likely to hit early next year. Through October, foreclosure postings were up 20 percent from a year ago. But the storms may be very selective, in a pattern that’s the reverse of what would have happened even 10 years ago: There’s more trouble in Fort Worth’s farther-flung suburbs than there is downtown.
Big developments along the West 7th Street corridor are adding central-city housing units and retail and office space at record levels. Out in the exurbs, however, new housing starts are declining significantly. A sign of that decline: Fort Worth-based home building giant DR Horton last week announced it will likely lose up to $900 million in the fourth quarter of this year.
“I don’t think we are immune to the economic realities affecting the country,” said Fort Worth real estate developer Tom Struhs. “But it is obvious we are not as bad off. I just think we need to be wary and cautious.”
Struhs’ company is overseeing a housing and retail development along Samuels Avenue northeast of downtown. More than new 300 apartment units are occupied, but a high-end condo property — Villa De Leon, to be completed in April — is not doing so well. Just six of the 23 condo units have been sold.
“I think this recession is going to affect the high-end buyers much more than the lower end,” Struhs said. “People with money tend to sit back and wait. We are not dead in the water with [Villa De Leon sales], but we are somewhat disappointed.”
Rob Sell, a partner in Village Homes, which builds new houses and town homes in inner-city neighborhoods, thinks the market in those places will not take as big a hit as places like far north Fort Worth near Alliance Airport.
“I think the economic meltdown has affected us, but to a much lesser degree than in other markets,” Sell said. “There are definitely fewer buyers out there, but the market is not dead. In the last few years, builders have been flooding the market with spec homes, and quite frankly, the market has been overbuilt.”
Sell said his company is pulling back a bit. A new town home development on Tulsa Way in the city’s Cultural District is not dead, but Village Homes will wait throughout next year to determine whether market conditions justify starting construction.
“The inner-city housing market will absorb the new developments, but it will just take longer than we all had anticipated,” Sell said. “The general tightening of credit restrictions will have an effect on buyers. But eventually, people will realize the market has bottomed out at some point, and they will start buying again because the investment potential will be very good.”
Because of Fort Worth’s great job growth in recent years and the Barnett-Shale boom money that’s flying around, national retailers have seen Cowtown as a great place for expansion. But that will slow down during the next year. Getting credit to open new stores will be part of the problem.
“We will not be immune,” said James Blake, a senior advisor with Sperry Van Ness, a commercial real estate company. “But once again, it depends on what part of the city we are talking about. I think the developments along the Seventh Street corridor will be unique and will [fill] their retail space, though not as fast as they thought when they started the projects. But standard cookie-cutter shopping areas in the suburban locations will be affected. What we are seeing is that the second and third phases of development are being put on hold.”
“You just have to look at stores like Circuit City” (which filed for bankruptcy on Monday), Blake said. “That affects demand here.”
Michael Berry, president of Hillwood Properties, which has built 2.5 million square feet of industrial, office, and retail space near Alliance Airport, was quoted recently by an online business publication as predicting that that there will be little or no new Hillwood construction for the next 12 months. “Even in our market, I can’t imagine you’re going to see much new construction,” he told the local chapter of the Building Owners and Managers Association.
That will affect Alliance Town Center, which has 500,000 square feet of retail space that is 85 percent leased. But the next phases, which will add a million square feet, have been put on hold, according to several sources. “If we were trying to do that project today, we wouldn’t be building it,” Berry said at the meeting, according to GlobeSt.com.
Kipp Whitman, president of Rland Properties, which is developing several retail projects in north Fort Worth, said tenants aren’t pulling out of leases, “but they are pushing back their move-in dates. … It is too early to tell what will happen.”
The Museum Place and West 7th developments west of downtown lined up their investment credit years ago, so the credit crunch won’t affect them in that way. But national restaurant and retail chains are finding it much harder to borrow right now, in order to be able to finish out their spaces and open new stores that had been planned for those projects.
Kirk Williams, vice president for development of Cypress Equities, the developer of West 7th, admitted there are “challenges in front of us” that weren’t there when plans were laid a few years ago. “I’m not saying we could not do it if we were starting now, but it would be quite challenging,” he said. “The magnitude of the credit problems would add quite a bit of complexity.”
Williams said he expects the Cypress Equities development to get through the tough times because of its location and mix of retail, office space, and apartment units. “We are banking on the fact that this all-inclusive development, where people can work and live and be entertained, will be unique for Fort Worth and draw the crowd that makes it successful,” he said.
He said two decisions made years ago are looking particularly wise right now: The group decided against including high-priced condos because the market was getting saturated. And they went after regional retailers and restaurants, mostly based in Dallas, that were looking to expand west. “The large chains are the ones being most affected by the economic crisis right now,” he said. “The companies we targeted … know this climate, and how to operate in North Texas.”
Reece Pettigrew, chief operating officer of Museum Place, said that project is “generally on schedule” though there have been some delays due to the economy and “the complexity of street and utility construction in an urban environment.”
Leasing of the buildings already under construction is “meeting our expectations,” he said. But Museum Place has delayed the start of two 250-unit apartment blocks, though Pettigrew said work on them should start very soon.
If high-end condos aren’t the hottest item on the Cowtown development table right now, the situation for some of the folks on the low end of the economic ladder is also looking grim. Spokespersons for several major charitable organizations that deal with the poor said they can’t tell yet how much the economy will hurt donations to their causes — but that demand for their services is certainly rising. And the outpourings for victims of Hurricanes Gustav and Ike have made it harder to see what the picture will be like once those donations dry up.
United Way courts donations at the workplace, particularly through payroll deductions; fewer jobs could mean fewer contributions. Nancy O’Malley, senior vice president of marketing and communications for the United Way in Fort Worth, said it’s too early in her organization’s annual campaign to say whether the economic climate and rising unemployment will affect them.
“We are certainly aware that companies are not going to be able to give as they have in the past,” she said. “But some companies have really stepped up, such as Alcon, who understand that our needs are going to be greater this year.”
Andrea Helms, a spokeswoman for the Tarrant Area Food Bank, said that the number of households served by their partner agencies is up by a shocking 49 percent compared to last year, and that very few of those new households are related to the hurricanes.
“Our partner pantries have been seeing more new people, and some of their usual patrons [are coming in] more often. People who had gotten back on their feet and hadn’t been back for a long time were back again,” she said. The food bank is receiving more food donations than last year, due in part to a recent federal farm bill that allows USDA to buy food (part of an effort to keep overall food costs down). Those purchases are in turn donated to charities.
Patricia Tomson, CEO of the American Red Cross’ Chisholm Trail Chapter, said that June and July of this year marked record lows for donations locally, but that once hurricane season hit, the money poured in. In fact, she said, at the moment, the Fort Worth chapter has received more money and volunteer offers than by this time last year.
Ravi Batra, the Southern Methodist University economist and author whose long-range predictions have been startlingly accurate over several decades, usually looks at the biggest picture — the interplay of global economic, political, environmental, and societal factors in shaping our shared future. But he’s also looked around at what’s happening in North Texas, and he agrees with the partly sunny/partly cloudy forecasts — with a twist.
Batra thinks that if local business leaders and governments set their minds to it, this region could become a model for the country in how to climb out of the recession.
“North Texas will not suffer as much as the rest of the nation” in the coming recession — and possibly, depression — he said, “because our housing ‘bubble’ was not as bad,” and so home values won’t fall as mfar. Unemployment rates also won’t rise as high here as elsewhere, he said. “But the credit crunch is going to affect the whole nation, the whole world, and it will hurt North Texas.”
He believes that the federal government should initiate a major public works program, as Franklin Roosevelt did in the 1930s, to provide news jobs at good wages, and should also provide financial help directly to homeowners who are in mortgage trouble. Local governments, he said, could and should launch similar efforts on a smaller scale.
Projects, probably funded with bond money, to build and repair roads and bridges and do other public works, offering wages higher than current rates, could help solve the problem of crumbling infrastructure while also providing people with money they can spend — thus driving up demand, which will help bail out local retailers, Batra said. Water-supply projects could be part of that picture, he said, and the “green economy” — supporting sustainable development projects and those that help the environment — could be “a very big factor” in helping North Texas get out of or stay out of a depression. Further development of natural gas as an alternative fuel should be a priority, he said.
Local governments don’t have the resources of Washington — “they have to live on balanced budgets” — but they could start pilot projects here, the economist said, “to show the county how to get rid of the nasty recession we’re in.”
If public works projects, mortgage woes, and bank retrenchment are the “ant” side of North Texas’ current economic tale, there’s still the “grasshopper” side to consider — that is, no matter how bad the economy gets, your friendly neighborhood publicans and liquor store owners are going to be there to help you get through to a brighter day, even if it is via domestic beer instead of Dom Perignon. And new clubs are still opening around town, particularly in the West 7th Street corridor and on and near Magnolia Avenue in the Hospital District.
“When people are happy, they want a drink. When they get a raise, they want a drink. When they lose their jobs, they need a drink,” said Vernon Russell, owner of Two Bucks Beverage Center on the South Freeway.
Ryan Duncan, manager of the 8.0 Bar and Restaurant downtown, said that his bar receipts shot through the roof on the day the stock market dropped 700 points. Serving alcohol, he said, “is a safe industry to be in.”
On the other hand, Russell said he’s already seeing some of his normally high-end clients, the ones who purchase the expensive tequilas and vodkas, at least occasionally switching to less-pricey products.
“Let’s face it,” said another Fort Worth liquor store owner, who asked not to be identified. “Some of what we’ve got on the shelves is so overpriced — not by us, but by the companies that make them — that if a really serious recession, or God forbid, a depression hits, well, you’ll see things like Patrón drop from $100 a bottle to $30. They’ll have to, or they’ll go out of business.”
At The Bronx Zoo just west of downtown Fort Worth, owner Tommy Gallant agreed that bars are essentially recession-proof. “That doesn’t mean we don’t get hit,” he said. “Already we’ve seen the price of food and beer kegs go up in the last couple of months. But I’ve got local customers, and I can’t just double the price of a beer because the beer price [to the bar] doubled. So places like mine, mom-and-pop bars and restaurants, we make less profit. If we don’t want to lose customers, we have to accept that. If we go up too high, customers will just go to the liquor store and drink at home.”
Where a deep recession is more likely to be felt, Gallant said, is at high-end bars and clubs. “If this thing gets much worse, you’re not going to see a lot of $12 martinis or $15 fancy mixed drinks. Nobody will be able to afford them.”
Some higher-end restaurants are also feeling the pinch. Lambert’s on White Settlement Road won’t be open for lunch anymore — manager Aaron Williams said it took a whole week’s worth of lunches to equal one night’s business. At Ruth’s Chris Steakhouse, they’re not exactly switching over to fries and burgers, but they are offering a new prix fixe dinner for $40 to $50 — with a substantially lower profit margin but, manager Lisa Lavender hopes, a broader appeal. “It allows us not to exclude any part of the market,” she said.
Lance Yocom, owner of Spune Productions, handles local bookings for a long list of clubs in Dallas, Denton, and Fort Worth. He said it’s hard to tell whether the economy is affecting people’s willingness to go out and spend money to listen to live music.
“I do think the state of the economy has prevented some people from making the drive to other cities for the shows … because of how expensive one night out can be with gas, tickets, food, and drinks,” he said.
“If Obama can really ‘change’ things and bring ‘hope’ to America,” he said, “let’s hope somewhere in there he can get more people to shows.”
Some local waitstaffers said tips have definitely dwindled in the last few months. Even the strip joints are beginning to feel the pain. A dancer who works several area clubs said her clients are holding onto their drinks longer, ordering more beer and fewer shots — and trying to talk her into charging less for dances.
“I tell ’em things aren’t that tough yet,” she said.
Staffers Gayle Reaves, Peter Gorman, Jeff Prince, Dan McGraw, Betty Brink, Eric Griffey, and Anthony Mariani and freelance writer Laurie Barker James contributed to this report.
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