So far, business owners say, Baker County has avoided the worst effects of the national economic downturn
The recession of 2008 appears to be more talk than substance, according to some local business owners.
Ryan Chaves, owner of Kicks Sports Wear in Baker City, holds a Christmas ornament that shows the building where his business is located. Chaves contends businesses can thrive even during recessions if they stock merchandise that local customers want. (Baker City Herald/Ed Merriman)
“Baker City is really fortunate in that we haven’t been hit near as hard as bigger communities because we have that home town feeling. We try to help each other,” said Ken Gross, manager of the Home Furnishings Liquidator store in Baker City.
While sales are down a little this fall, Gross said business at the furniture store always drops off this time of year and then picks up again between Thanksgiving and Christmas.
“A lot of people in this community own their own businesses or work for locally owned businesses,” Gross said.
He pointed out that tax revenues that fund schools and government services also start with local businesses and multiply through the economy.
“As long as we are mindful of that and support each other, it makes it easier on all of us,” Gross said.
Debi Bainter, executive director of the Baker County Chamber of Commerce, said the chamber is encouraging residents to help sustain a strong local economy during these uncertain times by promoting the “Shop Where Your Home Is” campaign, adopted from the Shop Local Alliance.
“We know the recession hasn’t necessarily hit here, but we want to get the message out that if we shop at home, we keep the dollars circulating locally,” Bainter said. “It’s a way to make sure our town never does experience the recession to the degree as some other places in the country.”
Baker City merchants Tom Kulog, an owner of Betty’s Books; Barbara Ackerman, an owner of the Barb and Betty’s Hallmark Shop; and Marilyn Shollenberger, owner of Marilyn’s Music, said business was a bit sluggish earlier this fall, but sales are picking up with the holiday season.
“From what I’ve heard, sales are down a little with pretty much everyone, but business has picked up the past few weeks,” said Shollenberger.
“Marshall guitar amplifiers have been selling like hotcakes the last couple weeks. We ordered more, and they’ll be in next week,” she said.
Sales of a new line of Godin electric guitars built in the USA, and well as the company’s Canadian-made Seagull acoustic guitars, are also picking up with the holiday season approaching, said Shollenberger.
Her store also sells keyboards, drum sets, PA systems, violins and band instruments, sheet music, CDs, harmonicas, bongo drums and musical accessories.
“As a business owner I want to greet customers with a smile,” Shollenberger said.
However, she said the bombardment of media stories about the economic crisis creates a lot of stress that can be hard to overcome.
“It puts pressure on business owners to hear all that bad news every day,” Shollenberger said. “There ought to be some good news out there.
“I know it’s important to report what’s going on, but it’s all they talk about,” Shollenberger said. “I wish we could have one day a week where all the media reported was good news. That would probably do more to improve the economy than anything.”
She believes the barrage of bad news has a similar effect on the public, creating a negative mindset, just as negative parenting can have on children.
“If you have a child who gets positive encouragement all the time, they are going to be positive, outgoing and successful people. A child who gets negative feedback all the time is more likely to become withdrawn and anti-social, and they are more likely to fail,” Shollenberger said.
Kulog said sales at Betty’s Books have fluctuated this year.
“We were up earlier this year. Business dropped off a little this fall, but nothing terrible,” Kulog said. “Things are a little slower because people are being careful about their spending, and they should be. It’s right for people to be cautious.”
Ryan Chaves, an owner of Kicks Sports Wear in Baker City, said business has been going strong ever since he and his wife, Kaylin, opened the store earlier this year.
“We opened the store in March during the downturn, and this store is doing just fine. I see no indication of downturn from the way this store is going,” he said.
Chaves said the key to successfully operating a business in a small town during good times and bad is to do the research to find out what local people need and what will sell.
For Kicks Sports Wear, Chaves said that means stocking a full line of athletic wear for a variety of sports, including Rome snowboards, boots, bindings, gloves and ski jackets, and the Hot Chilly lineup of “green” undergarments and Merino wool socks.
Chaves, Shollenberger and several other downtown business owners said their items are priced at or below Internet prices as part their efforts to get people to shop local.
“There’s no need to drive 50 or 150 miles to buy something when you can get it here for the same price or less,” Chaves said.
Now that gas prices are down more than $2 per gallon from July’s record highs, Chaves said he and other downtown merchants are seeing some unanticipated benefits.
“When gas prices were up around $4 a gallon, people started shopping locally more often, and they discovered they can find almost anything they want or need right here in Baker City,” Chaves said.
At the Barb and Betty’s Hallmark Shop, Ackerman said that while card sales are down a little, sales of Hallmark Christmas items are starting to pick up, including the popular Hannah Montana ornaments.
“Ornaments are our bread and butter this time of year,” Ackerman said. “About three-fourths of our Christmas ornaments are Hallmark.”
In the industrial sector, Ted Hausotter, an owner of Natural Structures in Baker City, which builds water slides and other pool and outdoor play equipment, said after reading stories in USA Today during a week-long trade show and sales trip to some southern and southeastern states hit much harder by the recession than Oregon, “I came back so negative I could have sold the place for a plug nickel.”
However, once he arrived back at the company’s manufacturing plant in Baker City, Hausotter said he saw that his sales team had written enough orders to create a backlog through the first quarter of 2009.
“I felt like I had been sabotaged by the media,” Hausotter said. “I came to the conclusion that the economy is what you make it.”
He said a recession should not be viewed as such a negative thing.
“It is just something that has to happen from time to time to separate the wheat from the chaff,” Hausotter said. “There is still plenty of opportunity right now for those who are producing the best products and provide the best customer service, at an affordable price.
“What’s making this very interesting is the political aspect,” Hausotter said. “Unfortunately President-elect Barack Obama doesn’t inspire businesses to make money. He is inspiring businesses to lose money.”
Hausotter said Obama’s plan to raise taxes on businesses and on individuals who make more than $200,000 a year has stymied manufacturing companies like his because there’s no incentive for businesses to expand and grow their businesses if the government is going to take the additional income through higher taxes.
“We have a very strong push for companies to go broke due to the current tax structure, and it gets even worse if Obama changes the tax structure like he’s planning,” Hausotter said.
If Obama wants to bring manufacturing jobs back to American communities like Baker City, Hausotter said raising taxes will have the opposite effect.
While the local economy is doing fine so far, Julie Zaccone, manager at Old West Federal Credit Union, said she is concerned that lagging consumer confidence could trickle down to Baker City and other small towns.
“Some people tend to listen to the national media too much. They paint such a doom and gloom picture. I think we need to keep upbeat and positive,” Zaccone said. “Look around and see how fortunate we are in Baker County.
“We’re not seeing a bunch of people come in who have lost jobs. We don’t have many members who have been affected that way yet,” she said.
To help make sure that doesn’t happen, Zaccone said the credit union is participating in the shop local campaign and other efforts designed to create a sense of unity in the community, including efforts sponsored by the Chamber of Commerce, Historic Baker City, Inc., and economic development groups promoting Baker City and Baker County.
“I think the shop local campaign is awesome,” Zaccone said. “At the credit union, we have a special shop local loan. If someone is shopping local, they show us the receipts and we drop the interest rate to 3 percent.”
Unlike some other parts of the country where housing prices have dropped 20 percent to 30 percent, Zaccone said banks around Baker County steered clear of the controversial lending practices that led to the housing decline. As a result, foreclosure rates haven’t gone through the roof here as they have in other areas, including parts of Oregon.
At the same time the credit union is encouraging folks to look on the bright side, Zaccone said now is not the time for people to be making “instant gratification” purchases.
Denzil Robbins of Robbins Farm Equipment in Baker City said his business is doing so well he is hiring more employees, expanding his shop in Baker City and opening a new branch of the farm equipment sales and repair business in La Grande.
“For us, it looks like 2009 will be better than 2008,” Robbins said
Even though cattle, hay and wheat prices are down somewhat this fall, Robbins said the area’s agriculture industry — the largest sector of Baker County’s economy — remains strong.
Robbins said repairing and maintaining farm machinery is at the heart of his business, so he expects it to do well in good times when farmers and ranchers are buying new machinery, as well as in bad times, when he helps them keep their older equipment running.
“I started in 1983 when it was the worst economy we had in years. We survived it then, and we can all survive it if it happens again,” Robbins said.
“Agriculture is stable. It has its ups and downs, but it is stable. They can’t just quit farming. People will always need to eat,” Robbins said.
He said he’s also optimistic about steps being taken to develop a new wood products industry in Baker County.
As with most local business owners around Baker City, Robbins said he believes the national media is fanning recession fears.
“I may be overly optimistic, but right now the downturn is not affecting us,” Robbins said. “The kind of chuckle around here is that everybody ought to turn off the TV and not listen to the gloom and doom.
“We had a sales meeting the other day. I told the guys to go out with a positive attitude,” Robbins said. “I encouraged them to help the farmers and ranchers do what they need to do to stay in business.”