Restaurants Near the Pentagon Feel the Hurt

Now that the Super Committee has failed to come up with a plan to cut the deficit, some in Congress want to spare the Defense Department from automatic spending cuts. The Pentagon faces additional cuts of about $500 billion over the next 10 years. It's clear those cuts would have an impact on the Defense Department. But they could also have a ripple effect. They could hurt the stores and restaurants near the Pentagon that cater to a military crowd.

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The World's Jason Margolis reports from Crystal City, Virginia, a neighborhood in the shadow of the Pentagon.

Hamburger Hamlet has been grilling up burgers and steaks in Crystal City for 27 years. District manager Steven Korbett knows who pays the bills.

Steven Korbett: "It's probably 80 percent contractors, defense contractors, military, and government employees."

When I asked Korbett if he was worried about the Pentagon losing another 10 percent from its budget, his answer, well, not exactly surprising.

Steven Korbett: "Absolutely."

What else would he say?

At this point, I thought I knew this tale already: Another story about local businesses getting hurt by government cuts.

Then I started to encounter people like David Anderson. He's the general manager of Jaleo, a trendy tapas restaurant. I asked Anderson if he was worried about cuts to the military budget.

David Anderson: "I mean it's great. We have a great story to tell here in Jaleo. And we are really excited for the opportunity of new companies and people to come to the area. And it's actually kind of exciting."

I repeated the question, thinking maybe he'd misunderstood me.

David Anderson: "Like I said, we have a great story and we're optimistic so it's exciting to have new people, fresh faces and new companies come to the area."

I thought Anderson was just putting on a positive face even when confronted by the bleakest of economic news. But then I spent some time walking around Crystal City with Angie Fox. She's president of the Crystal City Business Improvement District. Her job is to be optimistic. And she is.

Angie Fox: "We are changing the way people see, perceive, and experience Crystal City. A lot of repositioning, a reinvention, a transformation, those are words that we like to use."

Crystal City has been dealing with a shrinking military presence for a while now. In 2005, the Base Realignment and Closure Commission, better known as BRAC, decided to move 13,000 jobs away from the area. It's been a long, slow departure that's still ongoing. The bright side is that it's given civic leaders a long time to rethink Crystal City.

We stopped in front of a 1960's-era government building. I saw ugly architecture. So did Fox, but also mixed with potential.

Angie Fox: "So it still feels very much like that old concrete brutalist architecture; it is a phenomenal place for a farmers market."

And now, there's a weekly farmers market right in front. They also have a new performing arts theatre, outdoor movie night, and lots of public art. It's all part of a bigger plan to make Crystal City a neighborhood where people live and play, and not just work.

Angie Fox: "In the winter, we are doing a 1k wine walk and a 1k beer walk, so basically you have seven or eight stations, almost 30 different wines. And people literally get race numbers and they kind of walk from station to station, we call it a sip and stumble."

Community leaders are hoping their strategy works. But defense analyst Loren Thompson with the nearby Lexington Institute says there's no way around it. This is a military town.

Loren Thompson: "If there was a substantial cut in weapons spending, there would be a major local impact, it wouldn't make the people here poorer then the rest of America, but it would make them a good deal less affluent."

Still, Thompson says it's hard to feel too bad for the people in Crystal City, and the Virginia and Maryland counties that neighbor Washington. It's been a good run. The defense budget has basically doubled in the past 10 years.

Loren Thompson: "If there is one good thing, one benefit that could come out of a defense downturn in Washington DC is that maybe the people who live here could have a little more empathy for the rest of the country. This really is like a bubble here. People don't understand what it's like in most of the country because it is so affluent here and so much money comes here from other places."

Maybe so. But that's cold comfort to some. The walls of the Crystal City Sports Pub are plastered with decades of sports memorabilia. I asked owner Art Dougherty if he followed the deliberations of the Congressional Super Committee.

Art Dougherty: "I've been listening in, but to be honest with you, you're already so disgusted with the whole economy as is, and everything. I don't know. I think a lot of people are very turned off by this government. Like I said, there are definitely going to be businesses going to be failing because of this. There's no question about it. You just hope you're not the one."