Carlsbad Hit Hardest by Marines’ Gulf War Deployment : Finance: City saw 5.1% drop in sales tax revenue during Operation Desert Storm, while Oceanside saw only 4.8% dip.

It turns out that Oceanside, despite its reputation as a Marine town where businesses rise or fall on Camp Pendleton’s payroll, wasn’t the biggest economic loser during the massive deployment for Operation Desert Storm.

Carlsbad was.

Although downtown Oceanside’s small merchants suffered while 21,000 Marines were away, it was neighboring Carlsbad that took the heavier blow as the military largely abandoned that city’s shopping mall and automobile row.

State Board of Equalization figures show that during the fourth quarter of 1990, when the deployment was in full swing, Oceanside’s taxable sales from retail stores dropped 4.8%, contrasted with 5.1% in Carlsbad. That’s more than double the countywide drop of 2.5%. Statewide taxable sales actually rose 1.6% during that time.

“We’re hostage to the defense dollar,” said Lee Bohlmann, executive vice president of the Carlsbad Chamber of Commerce.

After years of living in the shadow of revenue-rich Carlsbad, Oceanside officials feel the war showed that Marines have a broader economic presence in North County that dispels Oceanside’s narrow stereotype as a garrison community.

“Oceanside has grown beyond simply being a community that’s adjacent to a Marine base,” said Larry Bauman, a city spokesman.

Yet figures show that the economic damage of the deployment didn’t end when the troops returned earlier this year. The recession has taken over where the war left off.

During the first quarter of 1991, taxable sales from retail stores were off 10.2% in Carlsbad, 6.5% in Oceanside, 7.7% throughout San Diego County and 4.5% statewide. Figures from the State Board of Equalization are contrasted with the same period in 1990.

In the second quarter of 1991, the latest period for which figures are available, taxable sales were down 7.4% in Carlsbad, 1.6% in Oceanside, 3.6% in the county and 2.8% statewide over the second quarter a year earlier.

“Now the troops are back and we’ve seen little or no recovery,” said Jim Elliott, Carlsbad finance director. “There’s no (economic) point where we can say, ‘Here, they came back.’ ”

And there are signs that things might not get better in the future, as the Marine Corps, along with other branches of the military, cuts manpower under orders from Congress.

“The downsizing, we really can’t say what effect it’ll have,” Elliott said. “It’ll obviously have some.”

When the first Persian Gulf-bound Marines shipped out from Camp Pendleton in August, 1990, the most immediate and dramatic effect was that downtown Oceanside became virtually dormant.

Eateries, barber shops, dry cleaners and other businesses that catered to Marines reported that sales plummeted 50% or more.

There was also a decline in Oceanside’s hotel-motel bed tax revenue as fewer out-of-town relatives came to visit servicemen. And landlords complained of higher vacancy rates as some military families packed up and moved back home during the deployment.

In retrospect, however, while the economic plunge was more visibly concentrated in downtown Oceanside, from a sales tax standpoint it was felt more keenly in Carlsbad.

Although downtown Carlsbad, known as “the village,” isn’t a haven for young Marines, military personnel normally throng to Car Country Carlsbad off Interstate 5 and to Plaza Camino Real just south of California 78.

“Car sales people were significantly hit,” Bohlmann said. “We have lots of young servicemen and women who like to drive lovely cars. Our car dealers do a lot to cultivate that market.”

Vehicles are big-ticket items, which meant the absence of military buying was vividly reflected in Carlsbad’s sales tax revenue--more than in Oceanside, where there are few car dealers and Marines usually buy less expensive goods such as clothing.

“One car not purchased is equivalent to an awful lot of jackets not purchased,” said Jeff Reynolds, chief of the research division for the State Board of Equalization.

Views differ on how extensively the deployment reduced sales tax revenue from the sprawling Plaza Camino Real mall.

Sandra Schmidt, finance director for Oceanside, believes the departure of thousands of Marines took a big bite out of mall revenue.

“When they’re spending off base, they’re going to be spending down at the mall,” said Schmidt, a former assistant finance director for Carlsbad.

Elliott agrees the deployment probably hurt mall revenue. “It wasn’t just the troops leaving. A lot of families went home. You lost thousands of troops, but also wives and children, and their spending power went away,” he said.

However, Belinda Naylor, marketing assistant for the mall, discounts the overall significance of the deployment.

“During the whole deployment, our sales were still up, although not as much as we hoped,” she said.

According to Naylor, the loss of military personnel and their families was offset by new customers from Vista and San Marcos, two fast-growing communities.

Yet she noted that some mall specialty stores favored by Marines--such as jewelers, electronics stores and men’s Western apparel shops “were hit very hard when they were gone.”

At any rate, some Oceanside officials privately voice little sympathy over Carlsbad’s wartime economic woes. After all, Oceanside had vied for Plaza Camino Real and lost. And Car Country Carlsbad enticed many auto dealers to move from downtown Oceanside.

Oceanside Mayor Larry Bagley said it’s been to shake the city’s image as a boisterous bastion of misbehaving young Marines.

Until the early 1960s, Oceanside relied heavily on military spending, and its identity as a Marine town stuck during the Vietnam era, when some Marines returned from the war, left the service, and wandered around downtown Oceanside with drug, alcohol and psychological problems.

“They liked to come downtown and tear it apart,” Bagley said. “We received a lot of adverse national press.”

Meanwhile, over the past 15 years, Carlsbad has built its reputation as a serene coastal resort where tourists can browse around the village with its boutiques and antiques.

“They get better publicity than Oceanside does,” Bagley said.

Now Bagley hopes the war has demonstrated that both Oceanside and Carlsbad depend on Camp Pendleton, and that his city can finally shed its Marine-based reputation.