Fallout: The Financial Crisis

Recession is latecomer to Minn. suburb

Marketplace Staff Dec 3, 2008
Fallout: The Financial Crisis

Recession is latecomer to Minn. suburb

Marketplace Staff Dec 3, 2008


Kai Ryssdal:
As we learned yesterday, the official beginning of the recession was a year ago.
It seems longer than that, somehow.
And the effects of a slowing, or stopped, economy are hitting more people every day.
Over the next couple of months in a series we’re calling Close To Home, we’re going to take you to two very different communities to see how the recession is playing out.
Yesterday we visited Wildomar, California, a brand new city in the fast growing suburbs of the Temecula Valley, north of San Diego. Today it’s Edina, Minnesota.
The recession has been slow to arrive in the wealthy, mostly white-collar suburb of Minneapolis. But Minnesota Public Radio’s Annie Baxter reports even the most well-established cities can only delay a downturn for so long.

Annie Baxter:
You can learn a lot about Edina by standing here, at the corner of 50th Street and France Avenue. It’s a bustling shopping district, where green ceramic tiles crown the roofs of pricey boutiques and tony restaurants.
Downtown Minneapolis and St. Paul are just a few miles away–along with about 20 Fortune 500 companies. Many Edina residents work for–or even run those companies.
If you want to know how the residents of this affluent suburb are faring in a weak economy, just follow the red brick sidewalk into R.F. Moeller jewelry store.

Angela: I’m treating myself to some jewelry. Some bling.

That’s Angela. She preferred not to give her last name. And she’s buying herself a birthday present.
A $2,000 one.

Baxter: And is this something that you were kind of saving up for?

Angela: Oh no, spontaneous.

Her friend turns to me and shrugs.

Friend: We haven’t seen the recession.

The shrinking economy is still an abstraction in much of Edina, which has the wealthiest zipcode in the Twin Cities metro area.
Folks tend to move to Edina once they’re pretty stable financially–and they mostly stay a long time. One city official says that’s probably why foreclosure rates have stayed low, while rates in neighboring towns have skyrocketed.
Edina may have missed the collapse of the housing market. But it’s priming for part two of the downturn–starring wage and job cuts, and plummeting stock portfolios. And this time fewer people will be spared.

At Our Lady of Grace Catholic Church, pastor Bob Schwartz sees Edina’s more vulnerable residents. His church is one of the biggest congregations in town.

Bob Schwartz: The assumption that everybody has abundance is not true. There are certainly people who don’t, in terms of housing or jobs. And there certainly are senior citizens who are on very limited income here, and are really struggling at this point.

Even the high-priced executives are running into trouble.
Melissa Miller is the liturgical director at our Lady of Grace. She knows something about that trouble.

Melissa Miller: My husband is a financial executive and he’d been unemployed for several months and after a job search that was fairly exhaustive, he was able to find another comparable position in New York City.

In the meantime, Miller says her family cut back on expenses and canceled their vacation. They also burned through thousands of dollars in savings. Now she is stuck trying to sell their $725,000, four bedroom house while her husband pays New York rents for a studio apartment.
A version of Miller’s story is repeating itself all over town.

Miller: My best friend’s been unemployed for 18 months. Last night I spoke to a parishioner who’s self employed, and he said he’s got one gig, one sure fire gig for the foreseeable future. Another parishioner today told me that he’d been unemployed since July. So yeah, I’m hearing a lot of this.

Still, construction continues on apartments, condos, and retail projects around town And Edina residents are out and about, if not buying things at local boutiques, then at least window shopping.
At R.F. Moeller–the jewelry store–sales are flat so far this year. But manager Phil Korst has his own strategy for beating the economy.

Phil Korst: Our motto is, or mantra if you will, is really we’re not participating in any slowdown or any recession or anything. We chose not to participate. And we mean it.

But even though the recession has been late in coming, it’s gradually taking up residence here. And like it or not, Edina is now participating in the slowdown.

In Edina, Minnesota, I’m Annie Baxter for Marketplace

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