Yuba City businesses surviving recession

While the recession has staved off some new development in Yuba City, not all businesses are being deterred by the sour economy.

Grocery stores and restaurants, fitness centers and drug stores continue to carve out new toeholds in the community — an optimistic lining behind the business closures, stalled projects and high unemployment that have plagued the region in the last year, said Darin Gale, Yuba City's economic development manager.

"There was more hot than not," he said. "We lost our furniture store McMahan's, but within a few months the 99 Cents (Only) store took over. We lost Gottschalks, a huge blow to a key retail need in our community, but within a few months, Forever 21 opened."

Plans for a Popeye's Louisiana Kitchen and a Fresh & Easy market have dissolved or are on hold, but other developments are moving forward.

Sacramento-based Taylor Properties is progressing with the Mid-Valley's fourth Walgreens and a small shopping center at Lincoln and Walton, and private investors started shoveling this week at the future site of New Earth Market and River Valley Family Fitness on Butte House Road.

WinCo is expanding, renovations recently began to turn the former YMCA on Colusa Avenue into a pharmacy, and Casa Lupe has pulled permits to build a Hispanic grocery store on Sunsweet Boulevard. Wendy's on Bridge Street is also expanding.

The recession has not been a deterrent for New Earth Market, said Yuba City resident Kevin Cotter, one of eight family partners in the natural grocer. The economy has actually been on the new business's side, influencing favorable construction pricing, eligibility for a Small Business Administration loan and additional financing through a state bond program.

"I think it's an ideal time for businesses to be doing this," he said. "If you can get the funding and have a good idea, I think it's a good time to make the leap."

New Earth Market will be one of the first local businesses to take part in the Statewide Community Infrastructure Program, which enables developers to pay most of their impact fees and public improvement financing through tax-exempt bonds. In the market's case, it will delay the $300,000 it would otherwise need to pay in fees before it has any revenue or cash flow coming in.

"That's a big part of the financing for making the numbers line up," Cotter said.

A July construction start pushed back the store's opening date from this fall to Jan. 1, but a website should be live in a few days to keep residents apprised of the store's progress, he said.

"Walls should start going up soon," Cotter said. "It's an exciting time for our market and the community." Construction of the 84,000-square-foot River Valley Family Fitness facility should start at the end of this year with an opening in summer or fall of 2011, said club partner Pete Bakis.

Business openings in Yuba City actually outpaced closures in the last 11⁄2 years, with new businesses replacing empty storefronts on Plumas Street and a cluster of development near Bogue Road and Garden Highway.

But some food-related businesses that planned for Yuba City openings remain far-off dreams.

"As for Northern California, things are still on hold," said Fresh & Easy spokesman Brendan Wonnacott. "We have no announced time frame for stores to open north of Fresno at this point."

Wonnacott said last spring that the British-based chain originally planned on a surge in summer 2008 but decided the economic climate dictated slower-paced openings.

A map of stores on the Fresh & Easy website is dotted with icons of future regional locations, but no icon in Yuba City.

The store was planned to go into a new shopping area at Lincoln Road and Walton Avenue.

Franchisee Sunny Ghai scrapped plans for a Popeye's on West Onstott Frontage Road because it did not look to be financially viable, he said. Instead, he has plans to open another franchise restaurant, Wingstop, within six months in the Walmart shopping center on Colusa Avenue.

"They want chicken, and we'll give them chicken," he said of local demand. "We'll bring back Popeye's, but it will be sometime when the economy pops back up."

The recession has not been easy on restaurants, as people seek out bargain dollar meals and make their own side dishes and drinks at home, Ghai said.

"Times are bad, people don't have money in their pocket and we don't blame them," he said.

Gale doesn't see the lack of further business expansion as a reflection on the region, since other parts of the country are suffering similar problems. But residents must have faith in the local economy, he said, because they are the ones driving new businesses like New Earth Market, River Valley Family Fitness, Casa Lupe and others.

"It's not an out-of-town corporate," he said. "Although we love national chains, we love to see local investors filling a niche."