Up and Down on Main Street
Merchants on a Historic Road in Fairfax City Express Resilience and Show Pockets of Pessimism

By Alejandro Lazo
Washington Post Staff Writer
Monday, October 27, 2008

Paula A. Crouch still uses a traditional gray typewriter to clack out the civil bonds she sells from a tidy storefront office in downtown Fairfax City. Her Roseberry & Foster Bonding Co. originally sold jail bonds, though she left that business in the 1990s. Her mainstay in recent years has been selling surety bonds to mortgage brokers and home builders, though that work is also quickly drying up with the real estate bust and credit-market freeze.

Crouch is preparing for some lean times on Main Street. Two of her biggest clients, both home builders, went bankrupt this year. She expects things to slow even further in December, when many of her mortgage-broker clients in Maryland and the District will probably drop their annual insurance, she said.

"These are pretty scary times for a lot of people," she said. "They are scary for me."

In the halls of Congress, in presidential debates and among Wall Street executives, there has been much talk about how the financial crisis plaguing Wall Street is spilling onto Main Street. Just 20 miles from the nation's capital, however, a walk down Fairfax City's historic Main Street reveals a more nuanced picture. Some, like Crouch, are feeling the hit, and many others are concerned about what the future might bring. Nevertheless, some see a disconnect between the pessimistic financial news that has dominated national news and their own daily realities.

Specialty shops, restaurants, law firms, gift stores and the like line a two-block stretch of Main Street from Chain Bridge Road to the west, near Crouch's business, and Old Lee Highway to the east. The businesses share the street with some of the city's oldest structures, including the town hall and the Ratcliffe-Allison House, built in 1812. A stopped-in-time aura permeates the place, with its red brick sidewalks, old-fashioned store signs and black lamps that bring a soft yellow glow come evening.

Michael Hensley, a former industrial designer, bought Victoria's Cakery in 2002 from his mother, Victoria Eustice. He occupies the west side of the building that houses Crouch's bonding company. He can be found most days taking orders, mixing batter or applying icing to his finished treats. Hensley said sales have held up despite the financial crisis. He was optimistic that his business would survive, though he was concerned about how bad the economy might get with global stock markets plunging and major U.S. industries scaling back. If things slow down too much, he will have to cut employees' hours, he said. And he's upset about the largess and speculation of Wall Street through the last boom.

"My bailout is: I have to close the doors, which I hope never happens," he said.

A few stores down, Becky and Matt Stoeckel, owners of the Executive Press printing company, harbor sharper opinions. They founded their business in the late 1980s in the same, cluttered storefront; a plaque tells passersby that at one point it was the town's Hay and Grain Store.

The place these days is a local hub for political activity, as Becky Stoeckel chairs the Republican Party in the 11th Congressional District, printing stickers and posters for Sen. John McCain and his running mate, Alaska Gov. Sarah Palin. Even on Friday, with stock markets around the globe plunging, Stoeckel asserted that the sky was not falling and predicted that her printing clients would continue to need her services.

"If people would stop and take a breath and think rationally, and not have these knee-jerk reactions, the markets would not be so volatile," she said. "I should be fine."

A few doors away, Poppy Tsaderakis of the Havabite Eatery, a cramped restaurant with checkered red-and-white tablecloths and place mats emblazoned with Greek maps, is not so confident. She and her husband, Mike Kappatos, have been serving Greek and Italian specialties made from scratch since buying the business in 2003.

As recently as last spring, Tsaderakis said, she was considering expansion, pushing back her kitchen to open more seating in the front of the restaurant. She said she tried getting a small-business loan from Wachovia but could not secure it without using her home as collateral, a line she did not want to cross. Now she is relieved she did not take on that debt.

"If I were to start my life anew, I would not start a small business," Tsaderakis said one recent afternoon, after the lunch rush had abated. "I am worried about what is going to happen if the economy is going to be unstable. I am worried if I am going to make it."

The commerce at Main streets has come to the fore in the recent turmoil. President Bush invoked the concerns of small-business owners when urging Congress to pass the $700 billion bailout package last month. More recently, Sens. Barack Obama (D-Ill.) and McCain (R-Ariz.) have clashed in the presidential campaign over their tax plans, with McCain accusing his Democratic rival of promoting a policy that would hurt small-business owners such as "Joe the Plumber." Obama has argued that more Americans would see their taxes cut under his proposals.

Richard Dickson, owner of a two-man real estate brokerage, leasing and management firm called the Dickson Co., said that in his 30 years working in downtown Fairfax, he has seen many title companies, builders, developers and law firms give way to the specialty retail stores and restaurants of today. A mixed-use development called Old Town Village, one block away from Main on North Street, opened earlier this year, featuring a plaza, fountain, office condominiums and shops such as Panera Bread and Potbelly Sandwich Works. Many of the business owners on Main whom Dickson works with, and counts as friends, have seen sales declines in recent months between the added competition and the economic downturn, he said.

"It's been a double-whammy with the economy and a triple-whammy with the cost of gas," Dickson said.

In a modest, two-story building on the corner of Old Lee Highway and Main, at the end of the little strip, sits the Rust & Rust law practice. The Rust family has practiced law and community banking on or around Main Street for three generations since the early 1900s, John H. Rust Jr. being the latest heir in that tradition. He is the founding chairman and current vice chairman of McLean-based Cardinal Financial, a community bank with 25 branches in the Washington area.

Rust draws a contrast between the plodding nature of community banking and that of the complicated and risky financial machinations executed on Wall Street. Cardinal's loans have held up strong in the downturn, with no non-accruing loans on its book, the bank reported last week. But its mortgage-banking subsidiary, George Mason Mortgage, has been taking losses, showing that even community banks have not been immune to the downturn. Rust said he supports the government's interventions and worries about the interconnectedness that, while perhaps not always in plain sight, exists between Main Street and Wall Street.

"We have a dependency on the larger financial system that we cannot control," Rust said. "If it continues," he said of the financial crisis, "you will see a real downturn and a real impact and real economic loss."