Bouncing back from the Great Recession.
The 17th street types climbed the stairs of Jennifer Jasinski’s new hotspot Euclid Hall Bar and Kitchen one evening a couple of months ago. The event was the fifth anniversary of St. Charles Capital, a Denver boutique investment banking firm whose partners have been central to Colorado’s financial community for years. • The guests munched on oysters on the half shell and Chateaubriand; St. Charles—whose clients are in banking, health care, technology, and manufacturing—was generous, but not conspicuously so. “Managing director Wes Brown told me he thought it had been awhile since anyone had thrown a party in this town,” one attendee said.--David Milstead
With good reason. Colorado went through a wrenching economic downturn from 2002 to 2003 that was more pronounced than the national recession. We had just bounced back, it seemed, when we found ourselves down and out, yet again, with the Great Recession of the past couple of years.
For now, there are signs that, like five years ago, we will climb out more slowly than other parts of the country. Even as economists have pronounced the national recession over, Denver and Colorado are still losing jobs, albeit at a slower pace than before. And Coloradans’ personal income fell in 2009 for the first time since the Great Depression. “We just have not come back out of the hole we’d been in,” says Patty Silverstein, chief economist at Development Research Partners Inc.
And then there is real estate. Although Denver and Colorado have avoided some of the horror stories of Western neighbors Las Vegas and Phoenix, the foreclosure phenomenon that wracked Denver’s poor communities and the outlying suburbs two years ago has now been infecting more established urban neighborhoods. Scores of Denver homeowners find they can’t sell their current homes for enough to avoid cutting into equity and sometimes even have to bring money to their closings.
Amy Shonstrom, a Realtor with Perry & Co. who focuses on real estate in central Denver, estimates she’ll end 2010 doing 11 percent fewer deals than in 2009—and 30 percent fewer than she closed in her peak year of 2007. She remains hopeful, however, that the Federal Reserve’s continued attempts to stoke the economy “will give people optimism. We’ve got to change the attitude, especially with the [record-low] interest rates.” After all, the economy is the product of attitude, of billions of actions by millions of people who buy, sell, and transact. If more people believe things will get better, and then act on that belief, the more likely things will actually get better.
The St. Charles Capital party may have been the first in recent memory for the 17th Street bankers, but more broadly, among Denver’s entrepreneurs—the businessmen and women who are starting new ventures and seeking ways to celebrate it—well, the grand opening party feels like it’s right around the corner.
“In my universe, there’s absolutely an uptick in the economy,” says Wendy Aiello, Denver’s doyenne of such celebrations, who estimates she’s seen a 27 percent increase in events in the fourth quarter of 2010 compared to the same quarter of 2009. “You should always use public relations and marketing agencies as your measuring stick, because we’re the first to see it on the way up, and the first to see it on the way down.” Silverstein adds that the renewable energy and bioscience sectors, while small in Colorado, have been expanding, and health care never seems to shrink.
It is these success stories that are providing hope that better times lie ahead. Entrepreneurs have to be an optimistic lot—nobody succeeds in business expecting to fail—and most of this activity must be born of the hope that things simply have to be getting better. And, in many ways, they are, given how far the national economy fell. But it’s still a long way back to normal. —David Milstead