Despite closures, Chico pushes forward
With the economy in flux, city plans for things to get better
The past few years have seen businesses in Chico come and go. Recently, however, it seems more are going than coming.
Back in early 2007, with the housing crisis taking hold, furniture stores began to close. There were Austin’s Home Furnishings and Viking Sleep Center, to name two. Now McMahan’s Furniture is shutting its doors.
Two years ago, Copeland’s Sports went out of business. Its vacancy is still felt at the Chico Mall. On Jan. 1, 2009, the Black Crow restaurant in downtown Chico shut after 11 years, just one of a string of local restaurants to call it quits in this down economy.
Recently, Chico saw the downfall of the large, corporate-owned Linens ‘N’ Things and Mervyn’s. Now it’s bracing for the liquidation of Circuit City. While all this may not spell disaster for local businesses, it still means job losses and a slide in sales-tax revenue for the city.
“Whether it’s a small closure or a large closure, we’re very concerned,” said Martha Wescoat-Andes, the city’s economic-development director. “What we’re trying to do is, where we can, earlier on, try to see if there are any things that can be done to try to help facilitate a business’ expansion or to try to retain them in the area.
“We want to get the message out there to support our local retailers and really keep our dollars within the community to support those retailers.”
When the closure is due to a national company’s bankruptcy, however, there’s little the city can do to alleviate the loss. The city’s only hope, she said, is that the money residents would have spent at Linens ‘N’ Things, for example, will now be spent at other local retailers. That way the impact on sales-tax revenues is not quite so large.
So, how is Chico doing financially? Should we be worried that Gottschalks might close? What about the future of the mall, what with its owner, General Growth Properties, in deep with creditors?
“Many of the closures that have occurred over the past year have been because of national issues. But they’ve been affecting the local economy and Chico residents,” said Wescoat-Andes, quickly adding, “Chico still has a very, very strong retail base.”
While the future is uncertain for Gottschalks, which last week filed for bankruptcy and is currently in a state of reorganization, Wescoat-Andes seemed optimistic about the Chico Mall. General Growth Properties recently brought forth plans to the city to expand the site by 80,000 square feet (plus demolish the former Troutman’s and reuse that space).
“They are completely through our process. We were able to get them through so there is no obstacle to investment in terms of the process. They were very pleased with that,” Wescoat-Andes said. “The Chico Mall is a very successful mall for General Growth Properties.”
That should bring some sighs of relief. However, GGP is up to its eyeballs in debt—$2 billion in loans coming due this year, according to the Wall Street Journal, which quoted one analyst who predicted bankruptcy in the company’s future.
“Anybody who says they know what the future holds is probably guessing,” said Bob Linscheid, president and CEO of the Chico Economic Development Corp. “What we’re doing is focusing on what we can do in the local economy … doing whatever we can to build prosperity, create opportunities for job creation and job growth.”
CEPCO has its eyes set on businesses it sees have potential for growth, particularly in the technology industry. The corporation also is working to attract Chico State grads as well as people who may have moved away from Chico but have businesses or ideas that could grow here.
The Chamber of Commerce and city of Chico have similar goals.
“We’re trying to really hustle to capture interested investors and help the Chico businesses to expand,” Wescoat-Andes said of the city’s goals. Speeding up permit processes is only one part of the solution. She said she’s also actively approaching businesses looking to move to California from out of state and even out of the country. For example, a Japanese company is interested in the building by the airport left vacant by Koret.
“We’re also positioning ourselves to apply for economic-stimulus money,” she said. That funding, which would come from federal coffers, would go to improve infrastructure such as roads or bridges. By getting the plans in place, she hopes the city will be in a strong position to get approved before other, less organized towns.
The state, with its budget woes, is not in such a spot to be handing out money, however. In fact, more than $38 million in state bond money earmarked for Butte County projects has been frozen. For instance, Chico Unified School District was expecting more than $2.5 million and Catalyst Domestic Services $1 million for construction of its new facility.
Some of the other projects affected are for low-income housing, parks, Sacramento River access and Chico State upgrades.
The hope is that the state will get its act together, either on its own or with help from the federal government, and that bond money will be unfrozen. Until then, the city is remaining cautiously optimistic.
“We are concerned. but we are trying to work as much as we can to help investment in the local community,” Wescoat-Andes said.