Mike Lawrence: The 7-year ditch?
October 9, 2009
This recession has drawn many comparisons to the early 1980s.
When the subject came up in a few conversations last week, it made sense to brush some cobwebs off the archives from two-plus decades ago.
The similarities are eerie.
On July 29, 1982, a headline in Thursday’s weekly Steamboat Pilot read, “Local governments look to cutbacks” and “City and county economy hit by the recession.”
City finance director Chuck Gubisch explained that after booming tax years from 1979 to 1981, in the winter of 1981-82 “tourists didn’t come to ski, and building activity didn’t pick up the slack. We’re now experiencing no growth in either.”
Sales tax dropped $78,000 for the year by August 1982.
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In September, the Steamboat Springs City Council reviewed a proposed 1983 budget of $6.9 million – half the budget for 1982.
“All departments are being asked to budget against the deficits,” Gubisch told the Pilot. “Sometime in the future, we’re going to have to find new ways to fund capital improvements.”
On Tuesday, the current City Council reviewed a proposed budget based on a 28 percent reduction in sales tax revenues during the past two years, with cuts in nearly every department. Capital project funding is slashed for 2010.
More comparisons between then and now are easy to find.
As there is today, 1982 saw local concern about urban sprawl; development in West Steamboat, with the new $1.75 million Riverside Center; a City Market workers’ strike; and construction at the base of Steamboat Ski Area where work was under way on projects including Torian Plum and Eagle Ridge.
Each of those topics is back in the news.
There’s also bigger-picture similarities, like, say, the size of the global recession.
“The first half of the ’80s was the Savings and Loan Crisis,” Steve Downs, of Steamboat Village Brokers, said this week. “There were a lot of loan defaults and that sort of thing. : Obviously prices went down here, but they didn’t collapse, though, just like now. And, just like now, there was certainly a number of foreclosures but not a huge number in the local market.”
Downs has worked in local real estate since the summer of 1975. He’s seen the ebb and flow.
“As far as the scope and magnitude of that situation compared to now, that was far less than what we’ve gone through in the past year,” Downs said.
Don Valentine, who moved here in 1963, also has floated the tides of Steamboat’s markets.
Last week I foolishly asked him if he “remembered” 1982.
“Do I remember it?” he asked incredulously, eyes popping wide. He then backtracked a year. “In the third week of September 1981, real estate in this town ended. It was just like it hit a brick wall. I was building Whistler Meadows subdivision at the time : and it just ended. Nothing in this town was built – except the Ironwood condominium out at the mountain – for seven years. Nothing.”
Longtime local Audrey Enever said interest rates shot to 22 percent in 1982. She said it took Steamboat’s building and real estate markets a long time to rebound.
“It was ’89 before anything started to happen : that’s seven years,” she said. “You try to see what was built between ’82 and ’89, and you’ll only find things that were being completed because they were already out of the ground, which is what we’re seeing now.”
That kind of talk is ominous as Ski Time Square sits vacant. Are we in for a seven-year ditch at our ski base?
“This time it’s going to be bigger,” Valentine said.
“I’ve seen four of these things, and I can name every one of them – ’66, ’74, ’82 and now. This will be the worst of all.”
Downs, however, remains more optimistic.
“We’re a year into this, and we’re already starting to see encouraging signs that we’re coming out of it,” he said Thursday, citing new real estate sales around Routt County.
“The early ’80s was this downturn, and then things started stabilizing and started growing in 1985, and they continued unabated through 2007.
“Once that initial downturn was dealt with : the market stabilized and started its upward motion for all those many years,” he continued.
But “I don’t predict anything. I leave that to fools, or to government.”
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