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Yreka's shopping dilemma Photos by Jim Craven Tom Vaughn, of Greenview, Calif., shops for the first time at Yreka's J.C. Penney, which the city is paying $2,000 a month to stay in town. Vaughn believes subsidizing the department store is a bad idea. City subsidizes big chain By DANI DODGE YREKA, Calif . -- Cash registers hummed brightly at J.C. Penney Co. Monday morning as a steady stream of customers rang up purchases. It was cheery Christmas commerce, but it could have been a closing sale. Since J.C. Penney announced several months ago it was shutting down its small Yreka outlet after 72 years, the City Council and community have persuaded the company otherwise -- not by begging or pleading, but by offering up some cold hard cash. The council is paying $2,000 a month for the next three years to keep J.C. Penney in town -- $72,000 total. The council wants to keep the 27 jobs, $30,000 a year in sales taxes and the draw for Northern California shoppers that J.C. Penney brings to the community. Melissa Dotson, who owns The Wardrobe, a women's discount clothing store in town, says the city should not subsidize a nationwide chain store while local merchants are suffering from sluggish sales. "Penney's is a cornerstone for shopping in Yreka," said Mayor Grace Bennett as she stood outside the store Monday. "I really feel like if Penney's doesn't have something someone wants, they'll go downtown, but if we don't have a Penney's, they won't even stop." But Melissa Dotson, owner of The Wardrobe, a women's discount clothing store, feels betrayed that the city would spend big bucks to keep a corporation alive while she and other downtown merchants suffer sluggish sales. "If they are going to do it for one business, they should do it for all of us," she insisted. She scoffed at the argument that losing Penney would mean fewer jobs. "If J.C. Penney's closes, my business might increase," she pointed out. "And I'll have more positions in the next year: That's free enterprise. "I can't believe they did this." But Bennett, owner of Cozy Corner Hair Styling, said she and the council did the best thing for Yreka, population 7,100. There's not much in the way of national chains here: only a Wal-Mart and a Sears that limits sales to tools, electronics and appliances. And at the south end of town, in a shopping center that also hosts a $1 store and an Army recruiting office, J.C. Penney sells clothes and shoes and underwear. Stuffed animals that play "Rudolph the Red-Nosed Reindeer" and gold jewelry. Pajamas. All in one big room. Still, for years, that hasn't been enough. Many people who live in Yreka drive 54 miles over the Siskiyou Summit to Medford's Rogue Valley Mall to do their "big shopping," they say. Lured by the absence of sales tax and the wider consumer choice, the Northern Californians let their dollars do the walking right over the border. Over the past few years, sales were dwindling at Yreka's J.C. Penney. Additionally, corporate policy is to close stores not supported by urban areas of more than 80,000 population, said city attorney Larry Bacon. There's only a little more than 40,000 people in the whole county, Bacon said. On top of that, Yreka's economy was slower than molasses on a cold day. Timber production declines this decade hit Yreka hard, and in the last two years, a lumber company and a wood products company closed down. The city lost 230 jobs. While the rest of California is hovering around a 4 percent unemployment rate, Yreka faces 12 percent. Bennett describes the economy as "dragging." So when J.C. Penney announced its departure in October, the council asked the city staff what it could do to hang on to the anchor store. City officials negotiated with the landlord at the shopping center -- Western Properties Trust -- until they hammered out the current deal. In addition to the city chipping in $2,000 a month, Western Properties discounted their lease rate, Bacon said. "We don't consider it a subsidy, but a move to retain jobs and sales tax and to retain the national reputation of a Penney's in our town," Bacon said. "Penney's generates for the city approximately $30,000 per year in sales tax. So the amount we are committing to keep Penney's here is less than the revenues we receive from Penney's." J.C. Penney store manager Jan Peterson said it's a rare thing for a Penney's to change its decision on a closure. "Usually, when they decide to close it's a done deal, but all the support from the community -- the cards, the e-mails, the faxes and the phone calls -- had an effect," she said. "We've been here many years and want to continue to be here for many years." But even some people who were shopping in J.C. Penney Monday morning didn't cotton to the idea of a subsidy. Tom Vaughn, a retired ranch hand from Greenview, was following his 15-year-old granddaughter around as she picked out clothes for her Christmas presents. It was the first time he'd even been in the store, he said. "I don't think it's wise to subsidize," he said. "It's not smart for the taxpayers. We just go to Redding or Medford anyway." But on the other side of the store, teacher Robyn Vandiver praised the council for its commitment to economic development. Vandiver noted several of her former students were working as clerks in the store -- instead of being forced to leave town for jobs. "In a community where so many people are unemployed, keeping the economy up is a priority," Vandiver said. "It's a good investment." At Grandma's House Restaurant -- where chicken and dumplings are the special and a green Jell-O mold is among the offerings at the salad bar -- the subsidy has been the talk of the town. "J.C. Penney is a corporation, and the little people are really upset," said waitress Janet Garrigan, who wore a button proclaiming, "Tip me or die of thirst." But Garrigan said she can see both sides of the issue and has certainly heard all the arguments as she's poured coffee for the local patrons. "It's a small town," she said. "We need all the industry we can get." Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA