Yesterday's LA Times reports on the predictable fallout when the state makes an entire ethnic group feel unwelcome: sections of Phoenix are turning into ghost towns as businesses and tenants pick up and leave for more welcoming states before the law takes effect.

The trickle-down effect of kicking illegal immigrants is that businesses owned by legal residents get kicked too, either out of business or out of the state. For a state (and a nation) trying to get a recovery going, this can't be good.

Katchi's store isn't the only business suffering. The vast shopping center that holds his small shop is almost empty. The Food City supermarket closed this spring. Then the furniture shop. Then the pizzeria. The giant apartment complex across the street, once brimming with tenants, is two-thirds vacant. Katchi is behind on his rent. "The business is broken," said Katchi, who has operated his shop at this intersection for 14 years. "After the 29th of July, what happens? Maybe I have to close the store."

The Times article took a look at just one intersection and its surrounding businesses: 43rd and Thomas, in the heart of the Hispanic community. What they found starkly displays the real effect that Arizona's law is going to have — is already having.

Some of those leaving are U.S. citizens or legal residents who believe that all Latinos in the state are already being targeted by police. Vela, for example, said he had been stopped by police while driving to his restaurant "more times than I can count." Faviola Davenport, 42, owns 3Girlz Retail across the street from Vela's restaurant. Davenport, who emigrated legally from Mexico 23 years ago, expects she will close the shop next month. In the small space, crammed with phone cards, mattresses and purses, Davenport said that if the law takes effect she will probably abandon Arizona as well. Her three adult daughters and their families — all U.S. citizens — are thinking of following her.

Arizona has said "get off my lawn" to the Hispanic community, and it looks like the Hispanic community is getting out.

"They don't want Mexicans," she said. "So we'll leave."

UPDATE:

Arizona's loss may be California's gain. From the comments:

Not surprising (3+ / 0-)

I live in the east side of San Diego county. We too have a large hispanic population here. I've noticed many new residents in the past few weeks. Business is really picking up here too. by RMForbes on Fri Jul 23, 2010 at 03:22:01 PM PDT

UPDATE 2:

From Phoenix Woman in the comments, don't miss this earlier (and better!) report of the same story by the Guardian. Leave it to the UK to scoop the US press on this important story.

UPDATE 3:

Nope, not just some reporter's imagination:

The retail real-estate bloodbath in metro Phoenix continued in the second quarter with 211,000 square feet of space added to a staggering inventory of vacant storefronts. The additional space pushed the overall retail-vacancy rate to 12.2 percent, the highest ever in the area, according to CB Richard Ellis' second-quarter MarketView report. That's double the 6.1 percent retail-vacancy rate in 2007 and up from 10.5 percent a year earlier.

That's from The Arizona Republic.