Sen. Kent Conrad, D-N.D., met with local business and city leaders Tuesday and discussed the seriousness of the nation's financial situation as well as Congress' recent economic rescue package during a roundtable discussion at the Grand Forks Corporate Center.
Conrad stressed the importance of the legislation. He said he was told by financial experts that without the rescue bill the nation would surely slip into a deep recession, the stock market would collapse and millions of jobs would be lost.
"This situation is far more serious than anything we've faced since the Great Depression," Conrad said.
Conrad said the bill approved by Congress gives taxpayers an equity stake in the companies seeking aid, doesn't allow for lavish golden parachutes for Wall Street executives and comes complete with an independent oversight board.
He said that while North Dakota banks did not take part in some of the risky lending practices that contributed to the making of the financial crisis, there likely will be some local impacts from what happens on Wall Street.
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"We need to be concerned about the downward spiral that's already started," Conrad said. "We're not an island."
Local business and community leaders at the roundtable discussion were fairly upbeat about the strength of the local economy, but expressed concerns about how Wall Street's performance could impact local businesses.
Economist Ralph Kingsbury of Kingsbury Applied Economics said he expects to see a decrease in sales tax collections and building permits.
UND President Robert Kelley worried that the financial crisis might affect some of the university's revenue streams. Conrad said with the nation's ballooning national debt and the financial crisis, discretionary government spending likely will be reined in, which he said could affect colleges.
Jim Galloway, a principal in JLG Architects, said staffing at JLG's Grand Forks corporate headquarters office is down about 25 percent in the past year as the national economy has continued to soften. Galloway said this will be the first year in the firm's history that it falls short of its historic annual growth rate of about 18 percent.
Galloway said there is less work to go around as potential projects that in the past might have been put on hold for a few months have begun piling up, creating a backlog of projects being put on hold indefinitely. Housing developments and retail projects that require investors have begun to dry up.
"We're feeling it now," Galloway said, adding that JLG is keeping some positions open.
But Galloway remained positive and said JLG will survive.
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He added that when financial and market conditions improve, JLG and other firms will have plenty of work waiting for them.
Nick Hacker, business development manager with The Marcil Group, added during the roundtable discussion that the challenging national economy and several individual retailers' struggles will put the clamps on any significant retail big box expansions in the short term.
City Council President Hal Gershman, who owns the Happy Harry's Bottle Shops, said he expects the recent slip in the value of the Canadian dollar will have some impact on the city's sales tax collections. But Gershman said he expected that Canad Inn would continue to draw a significant number of Winnipeg-area travelers.
"The Canadians may slow a little bit," Gershman said. "But they are still going to need to take vacations."
But Randy Newman, chairman and CEO of Alerus Financial, said the local regional com-munity banking industry is solid.
Newman said Alerus Financial is expecting the second-best year in the bank's history.
Schuster covers business. Reach him at (701) 780-1107; (800) 477-6572, ext. 107; or send e-mail to rschuster@gfherald.com . Read his business blog at www.areavoices.com/bizbuzz
