Yakima's retailer exodus: Penney's, Nordstrom, and now the Bon are fleeing downtown
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YAKIMA - They are two very different communities set in entirely different parts of the state. But in the past few weeks, Yakima and Seattle have been going through a remarkably similar crisis of confidence brought on by the departure of a long-respected company.
Just as Seattle has struggled to come to grips with the loss of Boeing's corporate headquarters, so has this city been trying to figure out what is happening to its beloved downtown - made all the more vacant by the recent closure, after 41 years, of the Nordstrom store.
Already gone are two furniture stores and J.C. Penney, which left last summer and has yet to decide whether it will reopen in one of the regional malls. Soon to follow them out of town is The Bon Marché. Eighteen months from now it will move to neighboring Union Gap's Valley Mall, which is undergoing a $40 million renovation.
Nordstrom explained that it closed the company's smallest full-line store because of a 34 percent decline in sales since 1994. After assessing Central Washington's economic potential, the company determined the population wasn't large enough to justify relocating. Penney's decision to abandon its store - while continuing to pay rent for the remaining 15 months of the lease - was for similar reasons.
For the better part of three decades, this city defied national trends and maintained a bustling downtown shopping district. But now, as its retail base slips away, residents are left to ponder questions that extend far beyond downtown to the city's dependence on agriculture, its changing ethnic makeup and the annual loss of many of its brightest, most ambitious young people for lack of non-farming jobs. A number of civic leaders are looking for ways to diversify the economy.
"The closure of Nordstrom is devastating," says Joe Morrier, a hop farmer and owner of downtown's Yakima Mall. "But it wakes a lot of people up and forces them to ask, `What do we need to do we haven't done before?' It's a changing environment that's happening in every city."
An agricultural powerhouse
For those unfamiliar with the more bucolic parts of the state east of the Cascades, Yakima is a surprisingly urbane small city in the midst of one of the most productive agricultural areas in the world. More than 222,000 people live in the county, about 72,000 of them in Yakima itself.
Last year, 78 percent of the nation's hops and 46 percent of its fresh apples were grown here. Fresh apples alone pumped nearly $750 million into the county's economy. Fresh pears accounted for an additional $33 million, followed by cherries, grapes, corn and mint.
Twenty-nine wineries are here, not to mention an untold number of cattle.
"You can't be the fifth-largest agriculture entity in the country and not recognize its importance to the region," said Gary Webster, chief executive of the Greater Yakima Chamber of Commerce.
Even in a depressed farm economy, where last year's bumper apple crop sold for about $13 a box, a price farmers call break-even, an air of prosperity remains.
Downtown Yakima is the financial, governmental and cultural hub of Central Washington. Despite the retail departures, the city still boasts a nice downtown, several exceptional restaurants and an ever-expanding convention center.
The region's ties to agriculture, though, are never far from view. Apple Tree Golf Course winds its way through manicured orchards where, in season, signs urge players to pick the fruit. Gated communities of $500,000 houses abut hop-processing plants. And on the steep, brown hillsides overlooking it all are the multimillion-dollar mansions owned by some of the richest families in the state.
'The city's becoming brown'
The problem facing downtown merchants is that the people living in those expensive homes have increasingly driven over the mountains to do their shopping in Seattle and Bellevue, while the workers in the fields and processing plants frequent the new Costco in Union Gap and the Wal-Mart store on the edge of town.
"Yakima used to be pretty much white majority," says Guadalupe Gamboa, state director of the United Farm Workers of America, AFL-CIO, based in Sunnyside. "Now the city's becoming brown, and Latino farmworkers don't shop at Nordstrom."
Hispanics make up a third of the city's population, according to the 2000 census, up from 7 percent in 1980.
As for why more-affluent shoppers stopped going there, Frank Gutierrez, a former restaurant owner and member of the U.S. Hispanic Chamber of Commerce, offered this reason.
"The quality merchandise wasn't there," he said. "Nordstrom was using the Yakima store as a dumping ground. ... When I shopped at Nordstrom I'd go somewhere else - Spokane, Portland or Seattle."
Nordstrom spokeswoman Anna Kim said the company didn't keep track of the demographics and ethnic makeup of its customers in Yakima, and she denied it treated the store any differently from other full-line stores.
Just the perception that the company was snubbing Yakima brought out some deep-seated insecurities.
Residents may be quick to espouse the wonders of the region, and point with pride to the fact it took just four days to raise the money to rebuild the historic Capitol Theatre when it was destroyed by fire in 1975.
But just beneath the surface is a feeling of second-class status, made more acute by the fact that as downtown Yakima empties, the Tri-Cities, Moses Lake and the closer towns of Union Gap and Sunnyside are adding businesses and growing by leaps and bounds.
Years of trying to diversify
The recent losses have intensified Yakima's campaign to reinvent itself. Without turning its back on agriculture, the city is attempting to diversify its economy by adding manufacturing and high-technology jobs.
It has been pursuing those things for some time now, without much success - until recently, when ClientLogic concluded that downtown Yakima was the perfect place to put a call center that could eventually employ 400 people.
ClientLogic, which provides technical support and customer service for clients such as Microsoft and Zale's jewelry, is the most visible accomplishment of an economic development effort that's been under way since the 1960s but really got serious in the mid-1980s. That's when Republic Airlines shut down and an assortment of manufacturers left, putting 1,500 people out of work.
"In '85 a couple of us set out to diversify the community and create jobs," said Bob Hall, owner of Sunfair Chevrolet.
"Early on we addressed the question of job retention. We formed the Yakima County Development Association and we've been maturing and learning ever since. We are sitting today with our leadership unified as to what we need to do to change the fabric of this community, because there is no stable community here if you're really honest with yourself."
The need to diversify is driven by three forces: the ups and downs of the farm economy; a permanent and growing Hispanic population, many of whom are no longer looking to work in the fields; and the desire to retain the city's young people after they graduate from high school.
"My four children all graduated from the UW and there's nothing here for them," says Gutierrez. "Yakima has got to become more global, more broad-based. I've always been a proponent of agriculture, but what's happening is that none of our kids want to return to the fields. Our kids aren't going to come back here because there's nothing to come back to."
Changing that has proved to be more difficult than anyone ever imagined.
Calls for public investment
In 1979, Hall, the Chevrolet dealer, bought 55 acres with the intent of developing it for new business. Twenty-two years and a couple million dollars in improvements later, he has managed to sell only 33 acres.
"That's long, long-term investment," he said. "To expect private enterprise to be able to do it all is unrealistic."
To assist in the effort, Yakima's business and political leaders have twice asked voters to approve creation of a port authority, a special taxing district with the power to assemble and develop land for sale or lease to companies looking for a place to do business.
Both times - in 1968 and again in 1988 - voters rejected the concept. Last time the campaign to defeat the measure was financed by a collection of wealthy businessmen, farmers and fruit processors.
Supporters of the port authority widely believe farmers opposed it for two reasons, both rooted in self-interest: opposition to higher taxes and fear of losing its cheap labor force to higher, competing wages.
"Did ag defeat it last time around?" says Hall, repeating the question. "Yes. Surely. But it didn't take a lot to convince people of no new taxes in 1988."
For real-estate developer Jim Smith, whose company, J.L. Smith, contributed $2,500 to defeat the measure, nothing has happened since then to change his mind.
"There's no question Yakima needs an economic shot in the arm, but too many times ports lead to the types of businesses and jobs that don't improve the quality of life," said Smith. "When you bring in companies looking for low-cost facilities and low-cost labor, you wind up with a tax burden that never goes away.
"There are those here who think we just need to grow. Well, bigger is seldom better. Bigger usually means more poverty and more crime."
Others, though, have had a change of heart. One person who regrets her "no" vote is Yakima Mayor Mary Place, who says, "I didn't know the issues. I would certainly take a different vote today."
She may get that chance.
A collection of business, civic and political leaders is gearing up to ask voters to support creation of a port district in and around the city. The issue may not get on the ballot his year, but already it has the tentative endorsement of state Sen. Alex Deccio and Yakima County Councilman Jesse Palacios, both Yakima Republicans.
"We've seen tremendous growth in the Sunnyside and Grandview areas," said Palacios. "The Port of Sunnyside is a big factor in why it is doing so well. I think Yakima would benefit from having a port, but that's up to the people. Some people don't want to see anything change. They have a fear their taxes will go up. They are more interested in keeping their taxes down than creating jobs."
For all of the wrenching changes Yakima is going through, Hall said he has seen worse. On the day in 1975 that he and his wife decided to build their Chevy dealership, at a time of high energy costs and interest rates, he counted 34 vacant storefronts in downtown Yakima.
"Drive that area today and the number is in the midteens," he says. "We are in transition. It isn't Rome, but we are having a rebirth."
Robert T. Nelson can be reached at 206-464-2996 or rnelson@seattletimes.com.