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From a strictly grammatical point Lauren's answer is right -- you're talking about something that happened in the past, so "that was" is correct. However, dialogue is often more colloquial and a first-person narrative can be more like dialogue than strict narrative. If you're trying to evoke the feel of the narrator actively telling a story to a room-full ...


I would always use "that was," because to my ear, "that's" always implies "that is," and your sentence is in the past tense.

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