Decade in Review: Region's economic joyride couldn't go on forever
It was a decade of economic ups and downs, befitting a region that traditionally has ridden the fortunes of the submarine industry.
The region's economic roller-coaster ride began as the dot-com bust of 2000-2002 descended, affecting consumers' stock portfolios. But a boom at the area's two casinos, Foxwoods and Mohegan Sun, combined with the 2001 opening of Pfizer Inc.'s world research-and-development headquarters in New London, kept the unemployment rate at an astoundingly low 2.2 percent locally at the beginning of the decade.
The economy only gained momentum from there as the low unemployment rate and hiring at local casinos spawned a real-estate boom. Optimism reached its peak in the middle of the decade after the Naval Submarine Base in Groton - initially targeted for closure - was removed from the base closure list after intense local lobbying.
"Every Sunday I thank the Almighty for helping us to reverse the decision to close the sub base in 2005, because I think of what it would be like around here right now (if the decision had not been reversed)," said John Markowicz, who chaired the regional Subase Realignment Coalition that fought the closure.
Markowicz called the saving of the base "the pivotal event of the decade," a decision that likely saved 30,000 or more jobs locally. The jobs effect could have been even worse if the Electric Boat shipyard, which employs about 10,000, had decided to pack it up in the wake of a sub base closure, he added.
Still, according to Markowicz, the past decade saw the acceleration of a trend toward a less defense-oriented economy in southeastern Connecticut as the growing local casinos helped drive more visitors to the region, essentially creating two small cities that hadn't existed before.
"With the casinos, we thought we were immune from recession," said Steven P. Lanza, an economist at the University of Connecticut.
And the "recession-proof" label, Lanza said, proved correct in the downturn of 2001-2002, when the region's economy remained insulated from the worst effects of the financial fiasco. The region's economic resilience and rising real-estate prices eventually attracted an influx of big-box stores to the region, including the Best Buy electronics store, Christmas Tree Shops and the Borders bookstore chain.
But as the middle of the decade's overheated real-estate market collapsed suddenly late in 2007 and the local economy slid into recession, it became clear the casinos could no longer stem the tide.
Instead, Mohegan Sun put a major building project on hold and cut salaries while managing to avoid layoffs partly by shedding jobs through attrition. Foxwoods, which completed its MGM Grand expansion just as the recession hit, had a series of layoffs totaling more than 1,000 over the last two years of the decade and defaulted on some of its massive debt portfolio late this year.
At the same time, nuclear-submarine builder EB, which had long been shedding jobs, became a source of stability after Congress decided in 2007 to begin producing two submarines a year instead of the one that had become the norm.
Pfizer, the pharmaceutical giant that employs nearly 5,000 locally, saw a lot of comings and goings among its staff and contracting firms over the past decade as several promising new therapies didn't pan out and major mergers caused disruptions in its former R&D juggernaut.
The problems at Pfizer were capped by the announcement this fall that the company would be abandoning its nearly $300 million research and development headquarters in New London by 2011, though the firm expected to move most of its personnel to a research campus in Groton.
For many, Pfizer's bookend opening and closing of a major office complex seemed a perfect summary of the high expectations and bitter disappointments of the decade, a period in which the region learned that major gambles - whether made on the gaming floor or in a genetics lab - don't always pay off.
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