Route to Recovery

A trip through the epicenters of the recession

Have politicians abandoned rural America?

Nov 6, 2009 20:46 UTC

BULLHEAD CITY, Arizona — One of the hardest choices Jack Hakim says Bullhead City has had to face since the property market went south and gambling profits fell across the river in Laughlin, Nevada, was having to lay off city employees.

“Many of the people we had to let go had been with us for decades, so it was far from easy,” said Hakim, mayor of this city of more than 40,000 people. Fresh cuts in funding from state cut government have left Hakim worried and angry that more people will lose their jobs.

The city’s payroll has already been cut to 318 people from 357. Further layoffs have been avoided so far by suspending cost of living adjustments and through furlough days, or unpaid days off. A sign on the public entrance to city hall announces that due to tough economic times the next furlough day will be on November 11.

“Our people have made some incredible sacrifices just to keep their jobs,” Hakim said.

The mayor worries that more layoffs may have to come soon as the state has announced that it will cut funding to the city by $1.2 million. Bullhead City has already cut its budget for the current fiscal year to $82 million from $89 million.

“We’re down to our bare knuckles as it is and we can’t live with more cuts,” he said.

Hakim said the cut in funding for Bullhead City is the sort if thing that makes him angry because he feels state and national politicians have abandoned small town USA for years.

“Rural communities are the forgotten areas of America,” he said. “The only time communities like ours hear from state or national politicians is when they need us because there is going to be a close election and then we don’t see them again for a few years.”

“Politics is about serving people,” said Hakim, who came out of retirement to serve as mayor. The job pays $250 per week and Hakim said he usually works about 60 hours a week. “Our state and national politicians just don’t seem to get that basic principle. But, come on, how simple is that?”

Hakim and a handful of other mayors in Arizona are trying to form a mayor’s association bringing together mayors of smaller communities to work closely together.

“If we try to fight on alone it will be really tough,” he said. “But if rural communigties stand together we’re going to make it.”

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COMMENT

I notice that there aren’t any stops to the west, like Utah or New Mexico, or Arizona or Oregon. Is there a reason?

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After seven months out of work, a return to self-esteem

Nov 6, 2009 14:14 UTC

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BULLHEAD CITY, Arizona – The past seven months have not been easy for Eric Musser.

In March, Musser lost his job as a blackjack dealer for the second time in six months. The first time was in September last year, when casinos over the river from here in Laughlin, Nevada, were hurting as the economic downturn led to fewer gamblers. Musser, 27, was taken back in December, with fewer shifts and less money, before he was laid off again.

“It’s been a tough time for us,” he said. His girlfriend is studying to become a dental assistant and they have a three-year-old son, so the loss of income has been hard to come to terms with. They have had to live apart in rented rooms because they could not afford to live together.

But trying to find a job has been even harder.

“I applied everywhere for a job – Del Taco’s, K-Mart, Pizza Hut, Domino’s, Lowe’s,” he said, rattling off a list of retail and fast food establishments. “But I never got a single call back.”

“I never had trouble finding a job before,” he added, standing outside the mobile home where he rents a room with his dog Lady, a midsize brown mutt with a dusty coat and good nature. “When you keep trying like that and can’t find a job, your self-confidence and self-esteem start going down the drain.”

A week and a half ago Musser got an audition at the Riverside Casino, where staff observed him as he manned blackjack and roulette tables with real customers. He was hired on the spot at $7.55 an hour.

“It feels really good to be back at work.”

Musser said the Riverside is the best casino in town with the best tips – he made $350 in his first three days there.

“Now I’m going to save up and if everything goes well in January I’ll find my own place to rent so we can live together as a family again,” he said.

Photo of Eric Musser by Lucy Nicholson

For more stories from the Route to Recovery, click here

Despite two foreclosures, Bob is still singing

Nov 6, 2009 13:44 UTC

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BULLHEAD CITY, Arizona – Talking to Bob Kriegh you’d never guess that he had to foreclose on the two homes that were meant to pay his mortgage.

Kriegh is 84 but looks younger. Prior to his 30 years as a computer programmer, he was a singer, including he says with the Washington Opera Company in the 1940s. His business card says “Singing Bob.”

With a chiseled face, pale blue eyes and an unhurried, gravelly voice, Kriegh proved his singing capabilities with an impromptu show tune, though he said his advancing age had robbed him of the ability to commit new songs to memory.

“I’m just a wrinkled old prune,” Kriegh said, standing in the empty living room of one of the homes that went into foreclosure in July. “But God has taken care of me despite all that I’ve done to myself over the years and will take care of me now.”

Kriegh bought a mobile home on this lot 10 years ago for $17,500 when Bullhead City was experiencing rapid growth. Foreclosures and job losses amid a hard recession and housing crisis have brought that growth to an abrupt halt – for now at least – shaving more than 50 percent off median house prices hereabouts.

In 2005 he sold the home to a woman for $35,000 and financed the loan himself. She tore out the mobile home and built this house. But she never made a single mortgage payment to Kriegh, who started foreclosure proceedings in February of this year.

Now he has it on the market for $69,900, which he said would take care of the legal fees and other expenses he has incurred on the property over the past four years.

“This home will sell eventually,” Kriegh said. “I may not make a profit out of it, but I will at least get my money back.”

Just a stone’s throw from this house is another home that he sold for $50,000 in 2007. Again, he acted as the bank on the deal. But the buyer took six months’ rent on the property from a tenant and, after making a couple of interest-only payments, he stopped paying.

The house was foreclosed on in July. The tenant has lost his job at one of the casinos over the river in Laughlin, Nevada, and is working part-time jobs until he finds a new one, so Kriegh is letting him stay there for now.

“He’s a good man and he’s trying hard to find a job. I’ve taken it easy on the rent because he’s finding it hard to make ends meet. I’ll wait a while before I try to sell that house because I can’t throw him out, not while he’s down on his luck.”

Photo of Bob Kriegh by Lucy Nicholson

For more stories from the Route to Recovery, click here

Arizona town feels a double blow after the boom

Nov 5, 2009 17:14 UTC

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BULLHEAD CITY, Arizona – Not so long ago this town on the Nevada border was in full boom mode.

It was a magnet for people coming to work in the casinos across the Colorado River in Laughlin, plus Californians looking to retire here or have a second home at a fraction of the cost in their own state. Construction workers flocked here to build homes and roads.

All told, successive booms turned Bullhead City from a fishing village just a few decades ago to being a city of more than 40,000 people.

But America’s housing crisis and the most severe downturn since the 1930s stopped the city’s boom dead in its tracks.

“We had booms in the 1980s and the 1990s, but in 2005 and 2006 things went absolutely nuts,” said John “Mac” McCollum. “Then in 2007 all of a sudden the lights went out.”

Many of the construction workers have gone, as have a lot of people who have been laid off at Laughlin’s casinos. Nevada’s casinos have had 20 consecutive months of declining gambling profits.

“Unemployment is on the rise and we’ve had quite a few foreclosures,” said Bullhead City Mayor Jack Hakim. “Families are leaving because there’s no work to be had.”

“It’s going to be tough for a while around here,” he added.

Unemployment in Mohave County where Bullhead City is located is around 10 percent. The median house price here has fallen from nearly $190,000 in January 2006 to less than $93,000 now, a drop of more than 50 percent.

Around 60 percent of McCollum’s sales now are foreclosures.

“Many of the other sales we handle are people trying to avoid foreclosure or at least break even,” he said. “Either way, right now foreclosures are pretty much the only game in town.”

John McCormick of McCormick Development helps run a number of family businesses – a water company, a construction company, a land development company and a real estate broker’s office – and says that many of the people walking away from homes here are either speculators or Californians who bought a second home here.

“If they end up in trouble, it’s so much easier to walk away from a second home than a primary residence,” he said.

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The McCormick clan’s land development business has laid out a subdivision north of Bullhead City with 141 empty lots, complete with roads and water mains. But although there have been plenty of people looking, no one is buying right now. The family business owes the bank $8 million on the development, plus has to pay $160,000 annually in property taxes while the subdivision remains empty.

“There’s money out there but a lot of people won’t let it go,” McCormick said. “They just waiting to see if prices will go lower.”

For Bullhead City to come back, both McCormick and McCollum agree that casino business needs to pick up again but – even more importantly – California’s economy needs to recover.

“If California’s market is in the tank, we ‘re in the tank,” McCormick said. “I think we may be past the worst of it now. But nothing big is going to happen any time soon.”

COMMENT

Bullhead city rules! It’ll never become a ghost town, too much fun to be had there! Take one big lake, one big river, beautiful desert canyons and mountains, shake it all up and add a dune buggy, a jet boat, a kayak and a waverunner. Add tons of weekly happy hours and a Sunday live music jam that rocks this world. Broil it under a hot sun, sprinkle it with fiestas sponsored by the casinos across the river. Hang out in Bullhead for a while and find out just how much fun life can be!!

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