George Boardman
Columnist

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March 17, 2014
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Is Grass Valley Mayberry with money? Stay tuned for future developments

You can tell a lot about a community by looking at its retail lineup. If the roster includes Whole Foods, Nordstrom and Restoration Hardware, you can safely assume it’s a high-income area.

On the other hand, if the area features a Grocery Outlet, Kmart and — coming soon — Dollar General, then it could be Grass Valley, which is apparently positioning itself as the down-market alternative to Auburn. (“Auburn too expensive? Shop Grass Valley!”)

While there’s nothing wrong with any of these stores, the retail situation reflects the economic malaise that has afflicted Nevada County since (some would argue) the bloom went off the Gold Rush. Gone are the gold and timber. Now we depend on building homes and selling real estate to retirees moving here and a tourist- and recreation-related service economy that pays low wages and offers little chance of advancement.

The result is what you would expect: The population is aging as young people go elsewhere in search of jobs. Nevada County residents are better educated than the average state resident — just what the knowledge economy requires — but we don’t have the jobs that utilize their skills.

But we do have plenty of jobs for counter attendants, concessions and coffee shop employees, food preparation workers, hotel desk clerks, recreation attendants and restaurant workers in a county where seven of the top nine employers are six ski resorts and a hotel.

These rank among the 10 lowest paying jobs in the state, and you only have a job if the tourists keep coming and the weather cooperates. Like the fictional Blanche DuBois, Nevada County’s economy depends on the kindness of strangers.

But there are people who think there’s plenty of opportunity to grow the retail pie in western Nevada County, including the Grass Valley City Council and developer Russell Jeter, which is why he’s proposing to build a 215,000-square-foot shopping center on Dorsey Drive at the Highway 49 interchange.

The way Jeter sees it, there’s a need for retail space that can accommodate growing local businesses and “a wide mix of smaller-sized businesses” that residents have indicated they want in past surveys.

Meanwhile, Grass Valley has begun the process of annexing the Berriman Ranch property south of McKnight Way for development that would include more retail space than Jeter is proposing.

Skeptical residents look at vacant store fronts and ask if we really need any more retail businesses, but the real estate market tells a different story: We apparently don’t have enough good retail sites.

Statistics compiled by Sperry Van Ness, a commercial real estate firm, show that median retail rent in western Nevada County increased by roughly 22 percent in 2013 while rental rates for office and industrial space were down more than 6 percent. The value of retail property shot up 27 percent during that period.

This is not a new trend, according to Lock Richards of SVN: “Our local ‘retail’ market has consistently been the highest over the years, primarily due to the dearth of good expansion retail sites.”

(By the way, anybody who read Richards’ Jan. 20 column in The Union learned the following: “However, with 26 acres available at the southwest quadrant of the new Highway 49/Dorsey interchange and the large Berriman Ranch annexation just south of McKnight Way, we will likely see some significant changes in the retail market very soon.”)

Jeter cites Grass Valley’s community retail survey of 600 residents when he talks about the kind of chain stores he would like to attract. That may not duplicate the rosy scenario the retail rent story provides.

Big box stores favored by those surveyed — Target, Wal-Mart and Costco — won’t come to Grass Valley if they already have stores in Auburn. That includes midsized retailers, like Ross, that were mentioned in the survey. Trader Joe’s, everybody’s favorite, figures to open a store in Auburn before it ever considers Grass Valley.

The withering of America’s middle class and the increased popularity of online shopping is putting pressure on the midsized retailers that have been the backbone of the shopping center industry. Retail is moving toward the high end and low end, with stores like JC Penney and Kmart feeling the heat and retailers like Radio Shack and Staples shrinking their store count.

But maybe Jeter and the Grass Valley council are right. Maybe these developments can stem the flow of retail dollars out of the county and show that we are actually a Mayberry with money.

Maybe the Economic Resource Council’s new business development plan will land the kind of jobs that can support the shopping centers when they open for business.

The community will have plenty of time to debate the issue because the ribbon cuttings won’t be any time soon. Just ask developer Fred Katz, who’s been trying to build the 60,000-square-foot Higgins Marketplace on Highway 49 near Combie Road since 2003. He needed a ruling from the U.S. Ninth Circuit Court of Appeals last year to start building. Now he just has to find a new anchor tenant to replace the one that got tired of waiting.

George Boardman lives in Lake of the Pines. His column appears in Monday editions of The Union.


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The Union Updated Mar 23, 2014 03:09PM Published Mar 17, 2014 12:06AM Copyright 2014 The Union. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.