Congress’ rejection of a $700 billion bailout of Wall Street financial firms on Monday and the resulting financial tsunami likely, will have a ripple effect on business here in the mountains, according to local experts.
  Already, the worsening credit crunch is making it tough for some businesses to make payroll and other day-to-day operating expenses and slowing new con­struction to a trickle. “If we don’t have a rescue package, it could result in a liquidity freeze and a crisis to rival 1929,” when the markets crashed and the country entered the Depression, said Bruce Fleet, a Frisco town council member and former Wall Street broker.
  “Our financial markets are absolutely hemor­rhaging. This could have a crippling effect on the economy,” he said.
  Impacts vary, depending on how businesses oper­ate, Fleet said. Those that use a revolving line of cred­it to manage cash flow could feel the pain quickly. Some businesses use such short-term credit to meet day-to-day operating expenses, covering the cost of purchasing inventory and even payroll.
  “Some could have their credit lines cut off. … It could put some of them out of business,” Fleet said.
  Katie Roberts, executive director of the Summit Independent Business Alliance, said the resort areas are not completely insulated from the financial storm. “People all around us are running into trouble get­ting lines of credit,” she said.
 Varied impacts
  Local impacts from the national financial woes won’t be uniform.
  The Credit Union of the Rockies, for example, is not seeing any issues so far, said marketing and business­development director Juan Evans.
  “We’re seeing an influx of people running from banks to credit unions,” Evans said.
Similarly, one of the area’s largest car dealers is finding oppor­tunity in the current challenges.
  “Our lenders have assured us that we can secure all the funding we need,” said Robert Farnett, gen­eral manager of Vista Auto Group in Silverthorne. “I think consumer confidence has been shaken, but there is plenty of money to borrow.” Farnett added that hefty rebates make it a good time for consumers to buy, if they can afford it.
  Area home builders already have taken a hit, said Dave Koons, president of the Summit County Builders Association.
  Koons estimated that housing starts locally are down about 30 percent for the year, although he said he’s been busy with remodel­ing projects, helping to compensate for the drop in new construction.
  “In my personal business, I didn’t start a single new home in 2008,” he said. The drop is consistent with a trend found in other election years, but has been exacerbated by the national economy, he added.
  “The absence of liquidity hits everybody,” he said.
  Hardest hit may be the specula­tive segment of the building mar­ket. As so-called “no-doc” loans popular among builders have dis­appeared, it’s become almost impossible for speculative builders to find financing, he explained, expressing concerns about a “downward spiral.”
 Real-estate repercussions
  On the other hand, Koons said the Summit County market is unique, and there are still people out there willing to invest their cash in the attractive resort real-estate market.
  “An economic downturn will be truly unfortunate for certain neigh­borhoods in and along the Front Range,” said Frisco real-estate bro­ker Dennis Flanagan in an e-mail.
  Sales volumes likely will decrease in Summit County, he said, but some of the decline could be off­set by international investment.
  “Congress’ inability to issue much-needed liquidity to Wall Street today is unfortunate,” Flana­gan wrote. “Legislative indecisive­ness will continue to destroy U.S. companies’ equity in all sectors of the market.”
  Even the big players on the Summit County development scene could be affected.
  Alex Iskenderian, vice presi­dent of development for Vail Resorts, on Monday, denied that the company’s One River Run project, near the new Keystone gondola, is on hold after a Key­stone real-estate broker circulated an e-mail to that effect.
  Iskenderian said Vail Resorts is keeping a close eye on market con­ditions, but that no final decision on the timing for the project has been made.