Behind shiny facade, North Carolina boom town feels the recession pinch

By Allen G. Breed, The Associated Press
Friday November 30, 2001

MORRISVILLE, N.C. — The Babymoon Cafe has witnessed an unhappy miracle of sorts: The recession has turned wine into water. 

Customers are not only drinking fewer $28 bottles of Chianti, says owner and head chef Joseph Leli. They are also ordering more of the $5.75 grilled vegetable sandwiches on focaccia and less of the $17.95 filet mignon whiskey tarragon. 

“Like some of these people that worked for the dot-coms or what-have-you last year, they would come in here for lunch, and four guys would spend $80,” he says. “Where now, first of all, you don’t see those four guys.” 

When federal economists declared last week that the nation was officially in recession, and had been since March, the announcement was no surprise to Leli. Nor was it news to other business owners and workers in Morrisville, a community of 10,000 that provides an apt prism for viewing the effect of the recession on many U.S. towns and cities that benefited from the long boom preceding it. 

Leli could see it in the empty dot-com headquarters in nearby office parks. Companies that used to cater big bashes for out-of-town execs were either gone or cutting back. 

“There are some companies that are doing no catering at all,” the 35-year-old Long Island transplant, who opened his business 18 months ago, says during a break from the burners. 

Morrisville sits off Interstate 40, on one of the vertices of North Carolina’s vaunted Research Triangle. Until the 1980s, it had been a farm community with a population of just a couple of hundred, but the dot-com and biotech booms sent it soaring to just shy of 10,000. 

Its corporate address book grew to contain names like Nortel, Bristol-Myers Squibb and Midway Airlines. 

“Most of the stuff has been high-tech,” says Mayor Gordon Cromwell, a retired engineer with a farmer’s bone-crushing handshake. “And it’s been sort of immune to the problems that manufacturing has had.” 

But the immunity didn’t last. 

Leli says business was off $20,000 in October — or 15 percent compared with last year. He is cutting back on some purchases, including Italian bread from Manhattan Bakery next door. 

Mahmoud “Mac” Abdallah, a Palestinian emigre from Jerusalem, says his bakery business usually slows down during the summer. But he had every reason to believe it would pick up again in September. 

Then came the terrorist attacks. 

“And we had all this mess, and it slows down with the hotels,” he says. 

Bagel and Danish orders from the hotels that line both sides of Airport Boulevard dropped 30 percent to 40 percent. That is because there were fewer people standing in line for the complimentary continental breakfast. 

Jared Reed, general manager of the Fairfield Inn in Morrisville, says occupancy is down 10 percent over last year. Reed has laid off five of his 30 employees since taking over in July. 

“We’ve been hit quite hard, actually” Reed says. “A lot of our biggest accounts are freezing travel, big companies like IBM.” 

Tom Calise, owner of The Coachman Valet dry cleaners, says fewer hotel guests mean less business for him. He has dropped his membership in the Morrisville Chamber of Commerce to save on the dues. 

Calise has also reduced two of his seven employees to part-timers. Still, he thinks it is almost unseemly to complain after what happened on Sept. 11. 

“I keep thinking about 5,000 people, how each one must equate to 15 people in mourning at least — and with Christmas coming up,” he says. “I mean, we just lost some business. It’s like, who the hell are we to complain?” 

Back at Babymoon, Leli is whipping up a pan of Fussili alla Nona (pasta like grandma’s) and thinking about how rosy things looked just a couple of months ago. Midway had just opened an account, and he was doing sit-downs for 50 people at the airline’s training center in Morrisville. 

Then it all fell apart. 

Midway sought bankruptcy protection in August, citing a huge decline in business travel. After the terrorist attacks, Midway shut down altogether, immediately dropping local air traffic by 30 percent and leaving Leli as just another name on a long list of unsecured creditors. 


“The first payment we received was a bounced check,” Leli says. “We got left with about $3,000 of outstanding debt from them.” 

There are signs that things will get worse before they get better. 

Bristol-Myers is closing its Morrisville plant early next year and laying off 110 workers. The Nortel building across from Leli’s restaurant is still vacant, as are several other commercial spaces around town. 

Town Manager David Hodgkins expects revenue to flatten out after a straight decade of exponential growth. 

In the meantime, Leli is watching mozzarella prices on the Internet, rearranging schedules to avoid layoffs and waiting for another miracle to turn that water back into wine.