On Broadway : Fear of Immigration Law Among Some Latinos Spells Sales Slump for Downtown L.A. Merchants

In a surprising development, business along downtown’s Broadway commercial district--Southern California’s major Latino shopping area--has fallen dramatically amid confusion and fear over the implications of the new immigration law, merchants say.

Since May 5, when the landmark law went into effect, many businessmen complain that sales have plummeted, in some cases by as much as 40%. Affected have been retail outlets ranging from the huge Grand Central Market to small clothing, jewelry and stereo shops.

Economists as well as businessmen are surprised by this and theorize that it has been caused by some illegals fleeing the country, fewer arriving here, changes in shopping and buying patterns, as well as unfounded rumors of Immigration and Naturalization Service sweeps through the city.

In addition, some shop owners say undocumented immigrants are holding on to their savings because they are unsure about the cost of the amnesty process, which can run to hundreds of dollars for families, even without legal help.

Tracy Lyon, manager of the 70-year-old Grand Central Market, reported that business is off 30%. “The amnesty program has scared people away from the downtown area,” he said. “People are afraid to shop downtown for fear they’ll be picked up” by immigration authorities.

Merchants at many smaller shops report losses in receipts ranging from 5% to 25% since last November, when the new law was signed by President Reagan.

“Some of my customers have gone back to Mexico,” said Ramiro Salcedo, general manager of Victor Clothing Co., where he said sales have fallen off by 15%. “They’re writing to me saying as soon as the problems clear up, they’ll make their payments.

“I hope they’ll come back,” he added.

Some merchants also quote browsers as saying there are daily rumors of immigration sweeps along Broadway.

All Kinds of Rumors

“Immigration (the INS) has always been viewed with distrust,” said Carlos Carbajal, president of the Mexican-American Chamber of Commerce in Los Angeles. “There are rumors of all kinds of raids” by immigration authorities, Carbajal said. “Rumors of raids at 3rd and Broadway. Rumors that buses are being monitored (by immigration agents). There’s a lot of distrust of the INS right now.”

Merchants also cited the apprehension among their customers that families would be split up by the amnesty law. As a result, they say, some breadwinners have taken their families back south of the border.

“This is at the top of the list,” Carbajal said.

Peter Schey, director of the National Center for Immigrants’ Rights, said aliens who had been using Broadway as their commercial center have been moving “deeper underground and generally making themselves less visible.” The deluge of publicity about immigration reform has given undocumented aliens, especially those who do not qualify for amnesty, “a new sense of reluctance to expose themselves for potential apprehension,” he said.

Viewed as Risky

A trip to this shopping district, where the INS has in the past conducted street sweeps and other enforcement operations, could now be seen as a risky venture, Schey said. “People are less likely to go down to a large shopping area. They feel they shouldn’t be wandering about out there. They don’t want to risk it if the local corner market will do.”

Under the amnesty provision of the immigration law, illegal immigrants who have lived in the United States since before Jan. 1, 1982, are eligible to apply for legal residency in this country. The application period ends May 4, 1988.

Feeling the brunt of the business downturn is the colorful Broadway corridor, a bustling shopping street where an estimated 90% of the clientele is Latino. Recent surveys show that the busy street-level Broadway shops--apparel and shoe stores account for nearly half of them--command some of the region’s highest rents because of the heavy pedestrian traffic.

Another ramification of the drop in sales has been some layoffs and price-dropping to attract more customers, according to the Grand Central Market’s Lyon.

For example, Lyon said, half a dozen butchers at two of the food complex’s meat markets were laid off in recent weeks. On the price side, he said, many retailers “are lowering prices so that they can attract more people.”

Fears of Deportation

Mario Abiles, a salesman at Empire Wholesale electronics store, said many of his friends, who do not qualify for amnesty, have stopped shopping for expensive items for fear of having to pay custom duties to take the goods back to their homeland.

As a result, he said, there is hardly any interest in the television sets, cameras, small radio-cassette players and other electronic equipment. Empire’s business has fallen off as much as 40% since the first of the year, he said.

The decline among businesses catering to Spanish-speakers is not restricted to the Broadway strip. For example, business has dropped off at some retail outlets along Atlantic Boulevard in East Los Angeles.

“Our East Los Angeles store is also doing poorly for the same reasons,” said Alan Bernard, who manages a Fayva shoe store on Broadway. “The drop-off in business is the topic of conservation down here.”

Some merchants have noticed a shift in buying patterns on the part of some immigrants.

Things They Can Carry

“Our consumers are buying personal portable merchandise rather than making a long-term stationary investment,” said Don Hoffman, general manager of Central Furniture-TV-Appliances, a major downtown retailer that caters to Latinos.

“Our consumers are quite intelligent,” he said. “If they have to leave the country, they have items they can take with them.”

Because of the confusion that the new law has created, Carbajal said the Mexican-American Chamber plans to meet with INS officials and the consul-general of Mexico in Los Angeles next month with an eye toward disseminating information about the law to “calm people down.”

Broadway’s current economic woes not only caught merchants by surprise, but also some economists.

Larry J. Kimbell, director of the UCLA Business Forecasting Project, said he and other economic forecasters had not anticipated that the amnesty program would touch off financial havoc.

“We thought fewer people would leave and more people would come here,” said Kimbell, who likened the situation to the 1984 Summer Olympics. With the immigration law, he said, “the anticipation is also completely backwards. People are disappearing; they’ve anticipated something (an INS crackdown) that hasn’t happened.”

With the drop-off, the average day on Broadway for some merchants has turned into a challenge of combatting boredom.

With musica ranchera blaring in the background, Empire salesman Abiles said the downturn has left him and other employees with little to do but watch TV.

“It’s boring, but what else can I do?” he asked. “I just hope that things get better.”

Times staff writer Stephanie Chavez contributed to this article.