El Paso's Downtown Sinks With the Peso

Mexican shoppers no longer frequent US border city stores, pick Sam's Club instead

RICHARD AHN wiles away hours of unwelcome quiet by dining on plates of almond chicken and broccoli beef in his empty restaurant. ''I should have a lot of customers right now,'' says Mr. Ahn, pointing to the vacant booths that line the Eagle Buffet, where $4.99 pays for all you can eat.

Ahn, like many restaurant and shop owners in downtown El Paso, caters to shoppers from Ciudad Juarez, Mexico, who kept the area bustling until the Mexican peso crashed last December.

That decline, another tumble this month, and the absence of signs of economic recovery, are hurting retailers in US cities up and down the border. But perhaps none have been hit harder than merchants in El Paso, a city of half a million residents whose origins as a trading post with Mexico are still evident.

Within walking distance to Ciudad Juarez, merchants here sell goods ranging from the sly ''105 Jeans'' that more or less resemble Levi's 501s, to the sublime - 100 percent silk shirts for less than $10. Between 60 percent and 90 percent of their sales are to Mexican nationals.

In its heyday, the downtown bazaar was thick with shoppers. But since last year more than 60 downtown businesses have closed their doors. Border vendors, accustomed to cyclical changes in the Mexican economy, say this crisis is worse than any they've seen.

The Popular, a venerable 93-year-old department store that sold supplies to both Pancho Villa and Mexican Army officers during that country's revolution, went out of business earlier this month. Smaller stores have followed like dominoes.

Other merchants are concerned that a Christmas nonrush will force them out of business after the holiday season. ''People are keeping what little money they have,'' says Grace Barajas, owner of a jewelry store. ''They hear rumors that the peso is going to fall to 12 to the dollar by Christmas, so they're not spending.''

Ms. Barajas says her sales have dropped by 90 percent in the last year. ''We're praying to God on behalf of the Mexican government,'' she says.

Some, though, credit the slowdown to shifts in shopper attitudes rather than a collapse of El Paso's economy.

More affluent Mexican consumers, who still cross the border to shop, are going to the new Sam's Club in Cuidad Juarez or driving to the malls on the outskirts of El Paso. ''The parking lots out there are full of cars with license plates from Chihuahua,'' says Tanny Berg, spokesman for the South El Paso Retailers' Association. ''It's not so much that the shoppers aren't coming, but that the business is dispersed.''

But Sue Patten, a vice president of the El Paso Chamber of Commerce, says announcements of the city center's demise are premature. ''The downtown isn't dying, it's evolving,'' she says.

Ms. Patten envisions a downtown with upscale stores catering to tourists where the wares might include Christmas lights shaped like chili peppers and statues of howling coyotes in place of the bulk packages of tube socks currently on display.

''There were 3,000 people here last week for a convention, wandering around looking for something to do, and I could just hear cash registers ringing in the future,'' Patten says.

The recent openings of an espresso bar and a nightclub have sparked hopes that the area could become an arts and entertainment center. The city plans to spend $50 million to renovate a warehouse district a few blocks west of downtown and model it after Dallas's West End.

Patten noted that the crisis hasn't meant a loss in retail dollars for the city overall. But others mourn the loss of something they describe as unique among Southwestern cities - an old-fashioned, commerce-centered downtown. ''What we have here isn't a corporate vision,'' says Richard Baron, an El Paso photographer. ''It isn't fake cowboys doing shoot-'em-up for tourists. It's small independent shop owners providing the stuff that people really need. It gives the city a unique flavor.''