Trump's federal takeover is disrupting Washington, DC's ailing economy

CNN

19 hours ago

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Business has never been this slow for Jovan Richards, who sells shirts, hats and souvenirs emblazoned with the likeness of the nation's capital.
Every day for the past four years, Richards and her husband have set up a table to sell merchandise near the Washington Monument. Richards, 56, said she made made less than $100 in sales last week, when President Donald Trump announced plans for a federal takeover of the city's police force. On a good day of sales, she typically makes around $1,500.
'I'm not making any money, so I'm just sitting here wasting my time,' Richards told CNN on Sunday.
Federal troops have descended near tourist attractions and bustling neighborhoods in Washington, DC, on Trump's command to crack down on crime (which, according to police data, is down compared to recent years). In response, residents and visitors are hunkering down, directly cutting into the profits of businesses around the city.
But the takeover could have a more severe effect on Washington's ailing economy — already strained by mass federal layoffs — if convention planners pull the plug on future events.
'If there's a perception that DC is turning into a police state, then there's going to be some hesitancy to go out and explore the city,' said Adam Kamins, director of regional economics at Moody's. 'That would be true of visitors from overseas but also of local residents who just want to steer clear of all of this.'
'But the bigger concern if this persists for longer is if conference organizers start to look elsewhere,' he added.
Washington's streets have been quieter than usual over the past week.
Despite Trump's claim earlier this week that DC restaurants have been 'busier than they've been in a long time,' reservations tracked by OpenTable have been down recently. On August 11, when Trump announced the takeover, seated diners dropped 16% compared to a year ago. Two days later, when troops mobilized around the city, seated diners fell 31% compared to a year ago.
'Definitely a huge drop in our weekday business, for sure,' Patrick Marshall, assistant general manager of a popular sports and betting bar in Washington, told CNN. 'We used to see huge crowds walking by, but it's just been very, very quiet. People aren't coming out like they used to.'
And the takeover couldn't come at a worse time for DC restaurants. It's currently the district's annual summer 'Restaurant Week,' in which restaurants offer deals and special menus. Restaurant visits were down 22% compared to last year, as of Monday, according to OpenTable.
'We've already had a record number of restaurant closures happening this year,' said Shawn Townsend, president and CEO of the Restaurant Association of Metropolitan Washington, which organizes Restaurant Week. 'We are still grappling with pandemic-like issues that other industries have have been able to move past, and now there's this.'
And it's not just restaurants. Visits at various different kinds of stores in Washington have been down over the past week, according to data provided to CNN by pass_by, a retail technology firm.
In the week starting August 11, foot traffic was down about 81% of retail-store categories in Washington compared to data from a year ago, according to pass_by, with car dealerships, department stores, convenience stores and beauty-supply shops seeing some of the steepest drops.
'There are no lines on the street to get into clubs,' said Miguel Trinidade Deramo, an advisory neighborhood commissioner for a district in Northwest Washington. 'Everyday people just don't want to be out there when there are masked federal agents who refuse to identify which agency they're with.'
Several DC bars have detailed in media interviews how business has tanked since Trump announced his takeover. Mark Rutstein, a co-owner of Crush Dance Bar on U Street and 14th, a hub of DC nightlife, told WUSA9 that the gay bar just had its 'worst Friday in history.'
'We lost a little more than $15,000 that night,' he said. 'Three more weeks of this? I mean, we're talking about a couple hundred grand.'
Conventions play a crucial role in fueling Washington's hospitality industry, which employs tens of thousands of people. But the increased law enforcement presence has some organizers on edge.
The American Chemical Society, which held its annual fall conference this week, emailed attendees about Trump's attempted takeover of the city police department, several attendees told CNN. The organization said in a statement that it was trying to offer 'clear guidance to attendees to ensure a safe, respectful, and inclusive environment.'
Elliott Ferguson, president and CEO of Destination DC, the city's tourism marketing arm, said he has reached out to convention planners with upcoming events to tell them that the data doesn't back up Trump's claim that the city is experiencing a crime surge.
'Convention are extremely important because they're tied to the economics of our city,' Ferguson said. 'Now we're dealing with a depiction of Washington as a crime infested city, which is not accurate, and there was already a lot of hesitancy before that.'
Saifullah Omar Nasif, a PhD student from Australia, is visiting Washington for the first time to attend the ACS conference. He told CNN that he's uneasy about the increase in police presence, planning to only stay in his hotel and attend conference sessions.
'As a foreign citizen visiting here, I don't feel comfortable roaming around,' Nasif said on Saturday at the Walter E. Washington Convention Center while picking up his badge for the conference.
For now, the full economic impact of Trump's police takeover of Washington remains in up in the air.
'It's safe to say that the leisure and hospitality sector could be seeing signs of a slowdown with fewer international travelers, concerns about federal job cuts, as well as concerns about national guard personnel patrolling popular nightlife spots, but most evidence is anecdotal at best,' said Barbara Denham, a senior economist at Oxford Economics.
'But a continued or growing presence of (law enforcement) personnel could hurt the sector if they were to stay through the busier fall season when Congress is back in session and business travel resumes,' she added.
CNN's Brian Todd contributed reporting.