Even if O'Fallon, Mo., is stable, big and small businesses and individuals are feeling the pinch
This article first appeared in the St. Louis Beacon, June 15, 2009 - George Richardson woke up on a Tuesday, nervous and happy. The tools he's collected over years of work sat in the back of his truck, ready to move on with him.
The nerves -- those came along because it was Richardson's first day in a new job. And the happiness -- Richardson spent two months on unemployment after being laid off at the end of March.
With all of that, he left his O'Fallon home and headed back to work.
AFTER THE BOOM
Today, businesses spread across the city of O'Fallon in a quilt, from Highway 40 toward Interstate 70.
There are the big patches -- Citigroup, MasterCard, MEMC. There are little patches -- strip malls, cafes, restaurants, shopping areas. And then there are the stitches that hold it all together -- the people.
Regardless of their role, though, all have felt the impact of the down economy, but O'Fallon's still attracting new businesses away from St. Louis County.
Currently, the city has 1,400 businesses and 70 retail centers. O'Fallon's unemployment rate in April was 7.0 percent, down from 8.2 percent in March, according to the U.S. Department of Labor's Bureau of Labor Statistics. The state of Missouri's unemployment rate in April was 7.7 percent, down from 9.1 percent in March. While O'Fallon's unemployment is lower than the state average, it is higher than in previous years. The unemployment rate in 2008 was 6.3 percent. In 2007, that number was 4 percent, and in 2000, 2.4 percent.
"I think O'Fallon in general is doing fine," says Dan Kenkel, owner of Kenkel Construction, a developer and the owner of a retail center in O'Fallon.
But once the pieces of the quilt are separated, it's easier to see that businesses in O'Fallon haven't been immune to economic woes.
Major companies in O'Fallon won't share numbers on layoffs. But compare the job numbers, which include full- and part-tme workers, the city reported in January 2008 and January 2009. (The numbers are estimates by the city using sources such as business licenses. In 2008, the city estimated that Citi employed 4,500 people; in 2009, the number was 3,500.
In 2008, O'Fallon estimated that MasterCard employed 2,200; in 2009, the number was 1,700.
Like most businesses, MasterCard has tightened its belt on travel and using outside consultants, says James Whalen, senior vice president. And while their first-quarter earnings were down from the year before, they still beat analyst expectations.
Currently, about 400 people "telework" at MasterCard, shifting from days at home to days in the office due to space constraints.
And Whalen's not ruling out the possibility of more expansion in O'Fallon.
"MasterCard is doing well as a company," he says. "This is a location we like, so we'll just leave it at that."
Currently, about 300 of MasterCard's employees live in O'Fallon.
Like the big guys, some smaller businesses in O'Fallon have had troubles, especially those that sprung up to serve the needs of a booming community.
From 2000 to 2005, O'Fallon added 3,463 homes, according to a 2006 article in the St. Louis Business Journal.
In 2004, O'Fallon gave 1,108 single family and villa permits. In 2008, that number shrunk to 394, the lowest in four years, according to the city. The commercial building permit numbers shrunk, too, with 236 given in 2004 and 198 in 2008.
"It's been tough, it's definitely been slow," says Kenkel, who owns a construction company.
He figures the construction end of his business is probably down between 60 and 70 percent. In mid-March, he says, business started picking up again, and now he has some smaller jobs.
Kenkel keeps a thin staff and works out of his home to keep his expenses down.
But while many once profited from the boom, not every business was happy to see it. Vicki Schneider's family has been in the home-building industry since the 1970s, and her father-in-law was an O'Fallon builder before that.
"Actually, we did better before all the growth was here," she says.
With an influx of builders, Schneider, with Schneider Custom Homes, made the transition to real estate. "I figured I might as well sell the land to the builders who were coming out here," she says.
Now, her business is working government jobs, building pavilions in St. Peters and additions for water districts. The six people working for Schneider Custom Homes are still employed, and sales are up, Schneider says, but profits aren't.
"What we're doing is just tying to keep the door open," she says.
MOVING ON, AND IN
Despite the competition that's changed her business, Schneider says the growth in O'Fallon has been a good thing.
The former state rep for District 17 says that now, O'Fallon has movie theaters, doctors, shopping and restaurants. There are options, and that's great for her city.
And despite bad times in the economy, companies are still choosing O'Fallon.
Herndon Products, in the aerospace and defense business in Maryland Heights, will move to a 77,000-square foot building in O'Fallon this summer.
"We chose O'Fallon because of the location and the size of the building," says Fallyn Light, supply chain manager. They currently employ 73 people and will be adding between 10 and 15 jobs with the move, she says.
Another relocation from St. Louis County -- Fireman's Fund Insurance. By year's end, the company will leave their Earth City location for O'Fallon.
"O'Fallon offered an area with growth potential and a good location given our employee demographics," Janet Ruiz in media relations wrote in an e-mail. "We were looking for large blocks of contiguous office space and O'Fallon has these available. We are building our new office to accommodate growth over the next three years."
On his first day back on the job, Richardson, the diesel mechanic, got his tools organized and fixed a couple trucks. Then, he returned home to O'Fallon.
Richardson isn't putting all his faith in his new job, or in his city, just yet, though.
After working for Metro for six years, Richardson was among those laid off when Proposition M failed. He knew it was coming and saved up vacation time to get a lump sum of money and saved the money from his tax return. Still, it's never taken him so long to find another job.
As he searched, Richardson was on unemployment. Now, he's back at work with a small company in St. Louis County, has taken a $6,000 pay cut and his health insurance isn't as good as it once was.
Richardson moved to O'Fallon 10 years ago from Florissant. Overall, he says, things in O'Fallon aren't too bad. Shopping at Aldi has gotten busier, he's noticed, and there are a few vacant homes in his neighborhood.
"Seems like everyone's doing all right."
But Richardson doesn't think O'Fallon's safe just yet. "I think there's a lag," he says. "I think it's gonna catch up with them, and I don't see anything good happening in the near future."
His near future, at least, is a little more solid -- tools in the truck, a commute to work and money to pay the bills. His first day, with the nerves and happiness, ended.
And, he says, "it wasn't too bad."