GRAND JUNCTION, Colo. - In April 1982, the Grand Valley was turning lush, as it does every few decades, not with new spring growth, but with the expectation that the dusty clay and alkali soon would start to shimmer with the color of money.
Expectations for oil shale were gilding the dusky gray cliffs of northwest Colorado, from Rangely to Parachute, in golden dreams.
Multinational corporations were gearing up to dredge out a stubborn treasure tucked into the Western Slope of the Rockies, especially Colorado and Utah. They were going to put fire to the rock to boil off petroleum that they could use to fuel the U.S. economic engine.
Instead of fanning the flames of prosperity, however, the dreams of many Grand Valley residents were about to go up in smoke.
The federal government, eager at the time to find an affordable, reliable petroleum supply, set up the Synthetic Fuels Corp., whose job it was to subsidize private companies' efforts to turn rock like shale and coal into consumer petroleum products like gasoline.
Congress had authorized the SynFuels Corp. to spend up to $88 billion on the job.
The world's largest corporation, Exxon, moved to town with a vengeance, taking over the Colony Oil Shale Project in nearby Garfield County from another oil giant.
There, Exxon planned a $5 billion oil-shale project, and for many in western Colorado, it seemed the stars finally had aligned for one of the last regions of the United States to be opened for settlement.
On the last business day before May 2, when Exxon announced it no longer would tend the oil-shale home fire, company executive Charlie Pence spoke to Realtors from around the Grand Valley at a monthly luncheon at Harry M's, the emblematic watering hole, gathering place and boom-time dealmaking den.
Pence was well-liked, trusted and respected, said Robert Bray, one of those Realtors.
Pence was assuring and confident, Bray said. Exxon was a big company, it was there to stay, it had no need for federal subsidies or guarantees, is the message Bray recalls.
When Pence was done, "Everybody felt so good about it," Bray said.
Pence was busy that Friday.
"I remember Charlie Pence quite well," said Herb Bacon, who headed IntraWest Bank.
"A nice guy. He was in the bank, I think, the Friday before Black Sunday, and he indicated things were going great."
In fact, Pence told Bacon as he was leaving, he was to take a delegation of Japanese businessmen to the Colony site on Sunday.
"And I never saw him again," Bacon said.
Pence had no idea, said Bacon and the many bankers, developers and others who remember dealing with him, that Exxon was on the brink of shutting down the Colony project.
Actually, the Exxon board voted April 28 in New York City to get out of the western Colorado synthetic-fuels business while the getting still was good.
Pence now is the chairman of Jefferson Development Co. in Texas.
Paul Brown, now the Mesa County public trustee, said he was most likely the first person in the county to learn of the pullout.
He was working in his garage that Sunday afternoon when his boss, a vice president with Exxon's partner company, TOSCO, called to tell him Exxon was pulling out and that he'd have to turn in his company car.
He and his Exxon counterpart in governmental relations and public affairs were delegated to present the news release announcing the shutdown to the Garfield County commissioners.
"And you don't think that was fun," Brown said ruefully. "That was the longest afternoon I ever spent in my life."
When the announcement rolled out on May 2, 1982, it put more than the 2,100 people working on the Colony project out of work.
Suddenly 7,500 support workers found they had no project to support.
Bankers and barkeeps, real estate agents and restaurateurs, physicians and salespeople, contractors and carpenters, just about everyone felt the collapse, if not immediately, then soon enough.
In one respect, Bray said, the collapse should have come as no surprise.
Natural-gas drilling, which was driving the economy before shale began to boom, slowed down in the months preceding the bust, Bray recalled.
"Nobody noticed," though, "because Exxon was pumping $1 million a week into the mine and that new community," he said. "All eyes and ears were on what was going on up the valley."
Actually, said Brown, the numbers were more along the lines of $2 million a day.
The day Exxon dropped the shovel and walked away, people recognized it as a severe blow, but hardly a knockout.
"There was a lot of us saying they'll slow down, but it won't be too big of a bust because they have too much invested in Grand Junction, Colorado," Denny Granum said. "Everyone had too much invested."
Granum, then president of the Grand Junction Chamber of Commerce, was one who had "a lot going on," including a restaurant opening that June, which proceeded. The business survived the bust.
"I went broke, but I didn't go bankrupt," Granum said.
Exxon said at the time that it was walking away from $700 million invested at that point, but the amount might have been as high as $920 million, according to Forbes magazine later that month.
The boom, the bust, they're "forever burned in my mind," said Harry Mahleres, proprietor of Harry M's, the boom-time place to be.
"I'm still kind of bitter with Exxon over that," said Mahleres, now a Denver businessman.
Harry M's offered fine dining upstairs, where oil mixed with everything and everyone.
"I don't know how many times I had Armand Hammer" in the restaurant, Mahleres said, referring to the chairman of Occidental Oil Co., a man whose business ties crossed oceans and thorny political barriers such as those between the United States and Soviet Union. "We did lots of expense-account business."
Downstairs, the bar and disco were routinely packed, and "there was always a line out the door," he said. "It was rockin' every night."
After the bust, things never were the same, and Mahleres said he sold out to partners a year and a half later.
Money flowed everywhere, or, as Mahleres put it, "You could get a loan at a 7-11 in those days."
For Eric Alpha, a Grand Junction periodontist, May 2 heralded "a hellacious seven years."
Alpha and other dentists, physicians and health professionals had the disposable income to invest in the boom. Many joined forces to venture into construction projects: apartments, office buildings, subdivisions and so on.
"People say there was a lot of greed," said Alpha, who now is retired. "It really wasn't greed."
The idea was to plow money into western Colorado to build homes, apartments, businesses, all the things that would be needed for the nation's new energy storehouse and their hometown, he said.
In any case, western Colorado had all the trappings of a rock-solid investment.
"Even President Reagan said we needed investors to build the infrastructure for energy independence," Alpha said.
Grand Junction looked like good business to everyone, said Dr. Bill Merkel, who, like Alpha, saw his investments as participating in his community.
"The companies were saying Grand Junction would be the size of Salt Lake City in 10 years, that was back in '79-80," Merkel said.
"We were all blown away and started imagining all kinds of things that were going to happen to sleepy little Grand Junction."
What happened, of course, was a crash of monumental proportions.
By some estimates, the Grand Valley's population was decimated; 10 percent of the people left soon after Black Sunday.
They left homes and businesses behind at a stunning pace as the bust grew.
Even by 1983, the worst had yet to hit. The Mesa County Public Trustee's Office logged 465 foreclosures that year.
Then the cascade began. Foreclosures jumped to 1,010 in 1984, and leaped again the next year to 1,600. In 1986, things improved marginally, to 1,400 foreclosures, then 947 in 1987.
At the bottom of the pile were people like Alpha and Merkel, struggling through, working out of deep debt.
"I refused to go bankrupt," said Alpha, who finally worked out of his debts in 1991.
In a strange twist, he said, the bust that flattened him financially also did him a professional favor.
Some days after the bust, Alpha remembered, he had a patient who listened to his professional recommendation, then asked, "Don't you realize there's been a bust?"
Suddenly, Alpha said, he realized that he had to change, so he ordered his staff to spend more time with patients and learn more than their needs. Once word got around, "We got so busy," he said. "My practice just boomed."
It was enough that, once clear of his bust debts, Alpha, 65, could afford to retire early.
Black Sunday hit Merkel slowly, he said.
"I recall hearing the news on our way to church," he said. "We didn't really fully fathom what the news meant for the future."
Months later, though, the picture was clear.
"We literally saw tumbleweeds in the streets," he said. "It was really quite a grim scene."
The Sentinel printed lists of bankruptcies, "and the list kept getting longer and longer," Merkel said.
He kept his own name off that list, though.
"We decided early on that we would live through it, work through it," Merkel said. "We got an education in banking finance and deficiencies and things we never knew about, but by default learned a lot about them, and became a little bit wiser."
Mike Clayton back then worked in mining supplies, and the big customer was Exxon.
As it happened, he said, "We had a pretty good boatload of stuff for delivery to Exxon. We took it up that Monday and got it delivered and signed for."
His company, though, got stuck with "several thousand hard hats" in a variety of colors.
Exxon had a pecking order, he said, that was reflected in the color of hard hats.
"The pink hats and the black hats, those were not easy to get rid of," Clayton said. "They may still be here somewhere."
There was nothing humorous in the bust for those who saw their dreams of long-term investment and growth in the boom shattered beyond recognition.
"It was the most challenging situation I had ever been in," Bacon said.
He had dismissed the first news of the Colony closure as "absurd," he said.
Then the absurd went to the surreal.
"I saw a lot of businesses fold up, and it was tough to watch it happen," Bacon said.
Bill Sisson was brought in from the Glenwood Springs office of Colorado National Bank to help clean up the bust.
"It really was nasty and sad," said Sisson, now western Colorado region chairman for American National Bank. "We were getting stacks of bankruptcy notices every day. You just wondered where the bottom was."
About four years away, as it turned out, he said.
For Ed Gardner of Whitewater Building Materials, it also took a while for the bust to sink in.
"It didn't slow down for us for almost a year," Gardner said. "Then the reality set in. Our volume sales dropped somewhere in the area of 75 percent."
He had to trim his payroll from 70 to 25, and it wasn't until Sundstrand announced in April 1985 that it would build a manufacturing plant in Grand Junction that "we got our first breath of fresh air and glimmer of hope," Gardner said.
The best barometer of the recovery, Merkel said, was Christmas lights. Those first bust Christmases were dark - "We went from Black Sunday to Black Christmas" - but as people's fortunes slowly recovered, they put up Christmas lights, he said.
"They were a sign of economic recovery," Merkel said.
Now, the economy has come full circle, and the valley's institutional memory is fading.
"What's astounding is how many people here today have no idea what we went through," Granum said. "I'm doing very well, incidentally, but I go into meetings these days with people and I'll raise my hand and say, 'Wait a second, guys. Remember, things can happen."'
The bust eventually resulted in the establishment of the Mesa County Economic Development Council, which marketed the Grand Valley as a retirement haven and lured several businesses to the area. The council now exists as the Grand Junction Economic Partnership.
"We weathered it, but it wasn't easy," Bacon said. "Hopefully, we're diversified enough" to survive another such powerful blow.
The last thing anyone wants to see is a May like the one 25 years ago, said Gregg Cranston, who sold investments during the boom and now real estate and likes what he's seeing now.