Border Businesses Suffer in Mexico, United States

By Minerva Canto

The Orange County Register

January 3, 2002

ROSARITO, MEXICO — Lupe Perez built his restaurant from the ground up, using his keen business sense to convert a food stand with no running water into one of the most popular eateries in Rosarito, offering fine fare such as venison and quail.

Today, El Nido restaurant stands as a symbol of how the city has matured from a quiet fishing town to a full-fledged tourist destination.

El Nido sits on the main drag, Bulevar Benito Juarez, its subdued dining rooms beckoning travelers looking for relaxation away from the hustle and bustle of the sun-drenched tourist strip. For 30 years, El Nido has depended on its U.S. clientele to continue growing, but now that success is threatened by the economic fallout of long waits to cross the U.S.-Mexico border because of increased security measures.

"People are afraid to come because they think they will have to wait a long time at the border," Perez said.

Wait times to return to the United States have decreased since the first few weeks after authorities stepped up security after the Sept. 11 terrorist attacks. But the news has been slow to reach tourists and shoppers, whose reluctance to venture across the border is causing an economic ripple that is growing into a wave of losses for border-area businesses in Mexico and the United States.

It's a phenomenon that has served as a harsh reminder of the growing interdependence of each country's economy.

Mexican businesses suffering from the dearth of U.S. tourists are reporting losses of as much as 75 percent, prompting some to close and to lay off workers. U.S. businesses that rely on the thousands of dollars in sales to Mexican shoppers who have been staying away the past few months will be able to take advantage of loans offered by the U.S. Small Business Administration beginning this week.

"We know that our friends in the United States have also been suffering, so we're working together, supporting each other and seeing what can be done to lessen waits at the border," said Hugo Torres Chabert, president of the city's Business Coordinating Council and general manager of Rosarito Beach Hotel.

Rosarito is more dependent on tourism than any other town in the region, according to a December report conducted by the cross-border think tank San Diego Dialogue. About half of its residents are employed in the sector's 350 businesses, which cater primarily to visitors from Orange, San Diego, Riverside, San Diego and Los Angeles counties, Torres said.

This means the city's economy is more prone to be affected by unpredictable waits at the San Ysidro border crossing.

"I don't know what's going to happen. We all worry about losing our jobs, said Julio Cesar Rosas, a young man who scanned for potential customers and better days on the two-lane highway in front of Arte y Diseno Calderon in Rosarito. He pointed to an ornate wrought-iron gazebo outside the store.

"We made that, but even that has failed to draw more customers."

Rosas, who helps manage the furniture store, distributes the work among the 13 workers at the shop owned by Melaneo and Heliodoro Calderon, taking care to ensure each one has something to do. The heavy sounds of soldering fill the work area behind the shop, where workers hand-craft dining tables, chair sets, benches and bed frames.

Heliodoro Calderon sighs deeply as he talks about the 50 percent drop in sales since Sept. 11. Like many business owners, he relies on repeat customers, but he has been shipping most orders to his U.S. clients, who placed orders before the United States was attacked by terrorists.

"When they come pick up their orders, they see other things they like, they order more," he said. "But if they don't come in, then they don't do more business with us."

Across the street at La Iguana, Armando Chavez greets visitors with a warm smile and his best-selling creation: a lizard crafted from sheet metal that sells for $25. His unique sheet-metal creations draw curious onlookers, but Chavez said business these days comes mainly from wholesale clients.

"Maybe all this means we'll have to rely more on wholesalers, who have been doing more and more business here," said Chavez, wearing tattered work gloves as he hammered a tiny $4.50 lizard into shape. "You know, we don't rely as much as we used to on the American tourist. It used to be 90 percent, but it's less than that now."

Tales of woe can be heard aplenty in the heart of the city, with its boutiques and hotels, whose lifeblood is tourism.

U.S. tourists routinely ask hotel clerks for the best times to cross the border. Many businesses are shuttered. Others stand empty as staff members clean counters over and over again to keep busy. Patio furniture in many eateries are upturned, the upsides dusty from non-use. Pharmacies try to draw U.S. dollars with ads for tablet-filled bottles of ciprofloxacin, "the antibiotic remedial for the treatment of anthrax."

Perez, the owner of El Nido restaurant, said most of his employees are veterans he would never think of firing.

"I still have some of the original four workers who started with me," he said. "They're like family. I could never get rid of them. You know part of the success of business is having good people around you and treating the customer with the best quality."

Lupita Martin, a saleswoman at the Casa Torres gift and housewares shop, believes the downward trend won't last.

"It was really horrible at first, but I see things beginning to pick up little by little," said Martin, who frequently crosses the border to visit relatives in Los Angeles County and San Diego.

"The wait times are not that bad," she said. "I always travel by car, and the waits have ranged from 15 minutes to 40 minutes. It's just not as bad as people think, and I think people will discover that pretty soon."

The stories of empty stores and plummeting sales are the same at San Ysidro, which depends heavily on Mexicans who like to take advantage of the variety of merchandise not available south of the border.

"It's cheaper," Torres said. "And they can buy merchandise from the Far East. We can't sell these because we don't have a treaty with those countries."

Attempting to defy the odds, a new outlet mall is banking on this. The Shops at Las Americas, within walking distance of the San Ysidro border crossing, is the brainchild of a developer with grand ideas for the crowded area near the crossing. The mall is the first phase of a project that proposes to include a pedestrian bridge linking Mexico and the United States.

On a recent weekday, parking spaces were hard to come by as an even mix of vehicles with California and Baja California license plates filled most nearby lots. Shoppers thronged stores such as The Gap and Crown Books.

Tim Barone, the "chop-chop guy," said he wasn't finding it too difficult to sell about 20 minichoppers of vegetables a day.

"People are just telling me, 'I don't care what the waits at the border are like, I still need to buy my things,'" Barone said, demonstrating how the "chop-chop" device produces the ingredients for salsa in less than a minute.

Others see similar glimmers of hope.

Restaurant owner Perez, a stocky man with an easy, wide grin, talks almost nonstop about his plans for expansion, to mirror his success with a new restaurant in Imperial County in the United States.

The reduced tourist traffic meant a 50 percent loss in sales for him, but he's optimistic the downturn, which he considers is the worst in 10 years, won't last long. After all, he says, he has withstood 30 years of the ups and downs of business.