What Recession? : Factory Outlet Mall Is Helping the Desert Community of Barstow Boom
No matter how thin their wallets, most desert travelers stop at an oasis. Particularly one selling Ralph Lauren golf shirts at 70% off.
The proof is in Barstow, a no-frills rest stop halfway between Los Angeles and Las Vegas. Barstow has been doing well in an otherwise miserable Southern California economy. Mayor Mal Wessel, a bulldog of a town booster, invokes the mantra of real estate brokers to explain why.
“Location, location, location,” chants Wessel, a retired FBI agent turned laundromat owner.
In 1885, the Santa Fe Railroad built a two-story restaurant and hotel on this major connecting point on its transcontinental rail line. Barstow has been a transportation hub ever since. Now not only trains but 18 million cars and trucks a year pass through the heart of the town at the junction of I-15 and I-40--almost a quarter of all traffic in and out of California. State Highway 58, formerly Route 66, also feeds into Barstow, as does state Route 247.
Barstow’s economy has long profited from its 30 gasoline stations, 1,400 motel rooms and 77 restaurants--including a McDonald’s that just a decade ago was rated No. 1 in sales volume in America, No. 2 in the world. (McDonald’s says it doesn’t have records to confirm the village lore.)
But the town is no longer content to shelter and feed. Barstownians have lately become wayside traders.
Four years ago, the Factory Merchants Outlet Plaza opened on the town’s western outskirts and quickly became a success. A new Kmart and Wal-Mart open in November. And Barstow just got the nod as the site for a California veterans retirement home that will bring in $31 million in construction funds and 250 permanent jobs.
This hasn’t come to pass merely from the good fortune of geography, Wessel insists. Civic leaders’ efforts have been a key. Of the 19 towns vying for the veterans’ home, he recalls, only Barstow attended every project meeting, wherever it was held in the state.
“Nothing beats persistence,” says Wessel. “Talent doesn’t do it, and genius doesn’t do it. There are plenty of geniuses out there who can’t pound sand into a rat hole.”
Whatever, or whomever, deserves the credit, the town has reason to brag. With annual population growth at a modest 2%, Barstow’s taxable sales more than doubled from 1980 through 1990--to more than $278 million. Even in the past two recessionary years, Barstow has shown solid increases in several key indicators.
Revenues from sales taxes are up 2%; the bed tax on motel rooms, up 10%; construction permit fees, up 27%; new business licenses, up 5%. “We put one foot in front of the other,” beams the mayor. “We have money in the bank.”
Barstow’s 23,000 residents also enjoy a milder climate than most give it credit for--cooler than Palm Springs--as well as a 1990 median home price of $70,000 and a crime rate lower than the Los Angeles basin.
Almost 10% of Barstow’s $6.5 million in annual tax revenue comes from the Factory Merchants mall. Just how well the 53 stores are doing is closely held information in a trade as much resented by normal-price retailers selling the same brands as by their competitors. But it’s an open secret that the place is a gold mine.
As one merchant who wanted to remain anonymous explained: “The outlet business is the one safe haven in retail, because people are still attuned to a good deal.”
The only outlet in the state for discontinued lines and seconds of Lenox China is here. So is Ralph Lauren Polo, Coach, Izod/Monet, Jones New York, Royal Doulton, Hartmann Luggage and Fieldcrest Cannon.
“This is what’s happening,” says Hank Bryan, manager of the Coach store, which opened last April. “When you mention Barstow, it’s what everyone knows in our business.”
More than 2 million shoppers will stop at the outlet stores in 1992, up from 1.8 million in 1991, mall manager Scott Doksansky estimates. The number of tour buses that pause on their way to Las Vegas, the Grand Canyon or Utah will jump to 2,500 from the 500 that stopped last year. And Doksansky hopes to add another 140,000 square feet to his 30-acre domain.
“There is certainly demand to expand,” Doksansky says. “We are doing very, very well. Considering the economy, we’re doing outstandingly.”
Smaller Barstow businesses have not been as fortunate. Yet few are succumbing to the economy. Barstow’s tree-lined main street, out of sight of the freeway, lacks the “For Lease” signs that decorate so many downtowns.
Karen Broach manages the local cable TV company, part of Warner Cable Communications Inc. She says her business has felt the pinch, one measure being loss of about 1% of her revenue from people who can’t pay their bills.
“That’s directly from the economy,” Broach says. Yet her subscriber list is growing comfortably, and she says her office is in much better financial shape than others in Southern California. Broach figures that her business is off 5.5%, compared to 12% or more at many cable companies in urban areas.
Morgan Ray, owner with his wife, Donna, of the Idle Spurs Steak House, hasn’t laid anyone off, though he says his business is down 30% in the last two years.
“We’ve been marching in place,” Ray says.
But lately he thinks that the march may be picking up pace. His restaurant is where many locals take out-of-town guests. So as the advance deal-makers for development schemes hit town, his business picks up. He knows who they are from 14 years on Barstow’s planning commission.
“We’re seeing a lot of them right now,” Ray says smiling. “Maybe something will happen.”
Others aren’t waiting for better times. The local Ford/Chrysler/Nissan/Toyota dealer opens a $2.5-million expansion of his sprawling complex in three weeks. Some civic leaders are lobbying to bring card games to town. The mayor talks of building a sports complex and a golf course and widening the off-ramps to the factory outlets mall.
Dale Ream, president of the Chamber of Commerce board and owner of Dream Detailing & Autobody, is building a new office. “It’s a little risky, but what better time to do it than when things are a little slow?” Ream asks. “We’re looking toward the future.”
Just two months ago, Candy Clare and her boyfriend Ty Engelhart opened the Main Street Gym. They plunged into business faster than they had planned when a downtown furniture store became vacant. And they moved in with Barstownian practicality. They bartered workouts for remodeling help.
One fireman put up a wall in exchange for aerobics classes for his wife. Painters and baby-sitters in the gym’s child-care room traded for their services. Once Clare settled on Barstow--rather than big-city--prices, customers signed up. There are no other workout emporiums in town.
“The franchises won’t come here because we don’t have 100,000 people,” Clare says. But customer response to the Main Street Gym has been “fantastic,” she reports. “Now if we can just keep ‘em.”
