NPR Visits with Thompson Lange

It's a new day on the Central Coast - March 25, 2009

In Carmel, Bailout Money Makes It To Main Street

by Carrie Kahn

It's sometimes hard to tell whether the federal bailouts are having an impact. But in Carmel, Calif., it's easy to see how money from the government's Troubled Asset Relief Program that went to one local bank trickled down into the community — and helped save some jobs and small businesses along the way.

Thompson Lange is a self-described optimist. He's a fitness buff; he talks fast; and he frequently tosses his brown bangs off his brow. The only time he ever seems to get the "blues" is when he's singing them in four-part harmony.

But late last year, Lange was so consumed with worry that he nearly gave up his singing. He was about to lose the home and garden business he's owned for more than a decade in downtown Carmel. Lange's bank informed him that it wouldn't lend him any more money.

"We had business lines of credit that were being squeezed — not canceled, but it was like, 'OK, we are lowering your credit limit to what you owe.' And that's a very scary thing," he said.

That meant Lange wouldn't be able to restock his store for the Christmas season, and with declining sales, he was falling behind on bills. Making matters even worse, Lange was, at the time, president of Carmel's Chamber of Commerce. He was terrified he'd have to shut down the store while serving as the public face of Carmel's business community.

"The day that I handed the gavel over in December — this sounds so traumatic — I literally had to go lay down because I was so relieved that I had made it through to the end," he said.

Lange and his brother, Beau, who co-owns the store, muddled through the winter, which is always slow in tourist-dependent Carmel. Then, last month, the brothers received a call from a loan officer at a local bank. Did they need help?

"We asked, 'Why do you have money to loan?' And they said they had received some TARP money and they were taking it seriously, getting it out to the community," Thompson Lange said.

The brothers qualified for a loan from Pacific Capital Bancorp, which had received $180 million from TARP.

"Our funding is getting to Main Street," said spokeswoman Debbie Whiteley, who wouldn't say exactly how much of the federal funds had been loaned out. But she did say that Pacific Bancorp originated nearly $200 million in loans in the last quarter of 2008. Most of it went to small businesses along California's Central Coast.

"Supporting those businesses with capital when the credit environment is very tight like this is what's going to help improve our economy," Whiteley said.

With the loan in hand, the Langes paid off vendors and jumped at an opportunity to open a second location at one of the town's most prestigious retail centers. Thompson Lange was able to keep his five employees and hire two more for the new shop. But Pacific Bancorp's loan reached out even further, trickling down to other parts of the community.

When the Langes decided to expand their business, they went to Bob Goode, owner of the Pot Shop, a sprawling pottery story along a busy stretch of Highway 1 in nearby Moss Landing.

Goode will supply pots to the Langes' new garden shop.

"It's exciting to have a new customer," Goode said. "We love our pots, and it's exciting to have other people sharing our pots, and our love of pots and gardening."

In Castroville, Robin Stockwell's business will also reap some benefits. Stockwell, a specialty succulent grower, has a nursery with about two-and-a-half acres of plants.

His succulents will fill many of those new pots in the Langes' garden shop. He's glad the local bank loaned money to the Langes. But, like many, he thinks federal bailouts help Wall Street more than Main Street.

"I hope that there are more banks that are helping people like that, but we'll see," he said.

Stockwell may be skeptical about a loosening of the credit crunch, but Lange isn't.

"I do see that those of us who have made it through this part, there is going to be the ability to take a deep breath and go, OK, I think we can now continue forward," he said.