When the national news media reports on the economy, the words
they use include recession and stimulus. The recession is reflected
in company layoffs, stale stock prices and vacant real estate.
Stimulus is a group of ideas and proposals offering different kinds
of tax cuts and job programs.
When the national news media reports on the economy, the words they use include recession and stimulus. The recession is reflected in company layoffs, stale stock prices and vacant real estate. Stimulus is a group of ideas and proposals offering different kinds of tax cuts and job programs.
The recession is hard to miss. Hardly a day goes by without hearing of new layoffs, plant closings and companies running out of money and shutting down. We see the impact close to home. Check with your neighbors. Some of them are out of work. Some have sold their homes and headed off to greener pastures.
One of the most frustrating things about a recession is that there is no singe act, no magic bullet that will make it go away. Things have to get bad. And if they’re already bad, they have to get worse, before they start to get better.
The news that K-Mart will be closing its store here in Morgan Hill is an illustration of things getting worse. K-Mart has been operating under protection of the bankruptcy laws for almost one year. The company, which hopes to emerge from Chapter 11 by the end of April, had already closed some stores, and their latest cutback closes another 300 stores out of a nationwide total of 1800 stores.
It would be easy to dismiss the pending closure as proof that the company had lost its way and was unable to compete with Wal-Mart or with Target. In the three years we have lived in Morgan Hill, the store was often less than clean, short on stock and understaffed. That has changed in recent months. Displays were rearranged, shelves were fuller and there were plenty of employees in the store and at the cash registers.
But all that misses the real impact of K-Mart’s closing.
The real impact is the loss of sales tax revenues. Sales tax revenues that comprise almost 40 percent of the city’s budget. A city budget that funds police and fire protection, that pays for the upkeep of streets and the development of recreation facilities.
The real impact is the empty store. It is a big space, in a key city-shopping complex. Big spaces are difficult to rent when times are good. In the bad times we currently live in, it will be almost impossible. If you doubt this, drive by Tennant Station. While that shopping center will soon see new life, how many years have there been blocks of vacant stores there? How long has the space once housing Long’s Drugs been empty? Empty stores also mean the value of the overall property declines, and that has an eventual impact on the property taxes that provide a funding basis for our public schools.
The closing of Morgan Hill’s K-Mart store shouldn’t be considered on the basis of whether it was a place you liked to shop, but instead on how difficult it will be to replace the benefits that the store provided the community.
David Cohen is a public relations consultant in Morgan Hill.
