CLEARLAKE – The true effect of corporate entities like Home Depot and Wal-Mart on local economies is a source of constant and passionate debate in communities across the nation, not just Lake County.
“Big box” stories such as Home Depot and Kmart are accused by local businesses of cannibalizing them, stealing market share and then forcing smaller businesses into closure. Such corporate stores have even been held responsible for urban sprawl.
Those aren't concerns shared by everyone. Clearlake city officials like outgoing Mayor Curt Giambruno believe that the city's Pierce Field airport property, located next door to the now-closed Outrageous Waters park, needs to be developed into a regional shopping center, with large retailers like Home Depot and others.
The business community doesn't necessarily agree with Giambruno, although some members, like Lori Peters, executive director of the Clear Lake Chamber of Commerce, said competition is good for merchants.
Peters said she has a lot of inquiries from visitors who ask for “big box” stores like Home Depot and Wal-Mart when coming to Clearlake. “We, of course, let them know who our members are.”
She said she hasn't heard concerns from chamber members over another big box like Home Depot coming to the city.
Peters said of Home Depot, “The only way you're going to see them is if they feel the market is right.”
She said she is confident that local businesses like Mendo Mill and Four Corners Builders Supply can meet the challenge, thanks to upgrades in their services and facilities.
“I can see them going head to head with a competitor like that and not having a problem,” she said.
Steve Wardall manages Four Corners Builders Supply, which his family has owned and operated for nearly 45 years. His son is the fourth generation to work at the store.
Wardall said he's heard about plans for Home Depot to come to Clearlake for about 15 years – well before Wal-Mart came in 1994.
“Eventually I think one might come in,” he said.
Four Corners has done some expansions at its one-acre location on Olympic Drive and continues to focus on hardware, tools, lumber, propane sales and rentals, with the propane and rental sales helping meet the challenges of the economic slowdown, he said.
Wardall said business is generally steady year-round, but there have been belt-tightening measures in response to the economy's troubles.
The business has 14 employees, and hours have been cut here and there, said Wardall.
Business, he said, “could always be better.”
And for that reason he's concerned that a big box competitor could hurt businesses like his.
“I don't think we have enough population to support all of us,” he said.
Home Depot could have ramifications for many businesses, said Wardall, since it doesn't just sell hardware – but carpet, appliances and nursery supplies.
Wardall said his business has been able to stay competitive on many products, and he's concerned about the common perception that big boxes always have the cheapest prices.
“Everybody thinks that everything that's in there is cheaper, and that's not always the case,” he said.
Terry Casey, co-owner of Highlands Nursery, shares Wardall's concerns about Home Depot's potential to hit local business.
She said Home Depot has started selling plants, one of her key products. “It would have a big, big impact” on Highlands Nursery, which has been in its same location off Olympic Drive for 25 years.
Regional shopping center with regional impacts
A regional shopping center isn't just worrying for Clearlake businesses. Entrepreneurs around the lake could expect to see big boxes draw from their customer base.
It's questions about the countywide business community that have Supervisor Rob Brown concerned that Clearlake officials haven't opened a dialog with the county about their plans.
“It's not going to be good for them at all,” Brown said of local businesses, in the event more big boxes enter the county.
If Home Depot or other big boxes go into the proposed airport property development, Brown said he expects repercussions for the business community similar to those that occurred after Wal-Mart and Kmart came into the county.
Brown said he saw both of those big stores put local companies out of business, and he doesn't want to see that repeated.
Local company bets on the community with a big expansion
One of the biggest local business expansions in the county is located in Brown's district.
The Borghesani family is set to open its new 80,000-square-foot Kelseyville Lumber store on the corner of Main Street and Merritt Road in February, with a grand opening planned for April.
The family has been operating Kelseyville Lumber since 1956, and is responding to the community's desire for more products and services.
Mark Borghesani said the $9.5 million expansion has been in the works for five years, with more than half of that time needed to get county approval on a rezone from agricultural land to commercial.
With the current operation now at around 60 employees for the slow winter season, Borghesani said he hopes to expand the payroll up to 100 staffers.
Borghesani has big hopes for his store, and big concerns if a Home Depot comes to the county.
He insists, however, that his concerns aren't just about him and his family, but about other local hardware and lumber suppliers.
As an example, he pointed to the work of Mendo Mill in Clearlake and Piedmont Lumber in Lakeport to expand and upgrade their offerings.
“So it's not just about me or my way of life,” he said. “It's a long, long legacy of lumber yards and building material suppliers and we've all upgraded, so it's not the argument of 'you can't get anything in this darn county.'”
Borghesani explains the big box impact this way.
Let's say, he suggests, that there is a hypothetical $50 million worth of home improvement business and home construction in Lake County.
“A certain percentage of it goes over the hill, and that's always going to be the case,” he said.
The rest of the business, which stays local, is currently divided among Kelseyville Lumber, Mendo Mill, Four Corners Builders Supply and Piedmont Lumber. But that would change radically if Home Depot came into the mix and forced those local suppliers out or significantly reduced their market share.
Borghesani said Home Depot, when it comes into a community, doesn't really create jobs, but picks up jobs other companies lose. They also don't carry a deep inventory of items.
He said it used to be that Home Depot wouldn't come into an area unless it could make $1 million a week in sales. “There's not even that much money in the industry in Lake County.”
He said the city of Clearlake's focus appears to be on sales tax dollars.
In 2004 and 2005, local officials held discussions about limiting the size of retail to 40,000 square feet in an effort to keep big box stores out. Borghesani said he supported that effort.
However, while it did get some traction at the Board of Supervisors, the county and the cities of Lakeport and Clearlake weren't able to agree at the time on accepting an overall policy.
“None of them wanted to give the other the advantage,” Borghesani asserted.
He said his business has a chief financial manager, an information technology staffer, plus sales and store managers and an entire accounting department. A Home Depot wouldn't have those kinds of higher-paying jobs locally.
Areas with larger populations aren't impacted as seriously as rural areas like Lake County, he added.
“We know through our industry it's not a good thing,” he said.
He said regardless of whether or not Home Depot or another large home improvement store arrives here, local lumber yards and similar businesses will have to work hard to offer pricing and services to keep customers local.
“At the end of the day we're always competitive, and you have to be,” he said.
No agreement from officials
Brown is critical of the city of Clearlake, whose officials he says haven't been willing to sit down and discuss their plans or the broader implications for the rest of the community.
Giambruno responded that he doesn't know why the city should have to ask permission for carrying out what he believes is needed development if the city is to survive and thrive.
But, Brown added, “It's not over yet.”
A big development at the airport property would require the county's approval to hook up to Lake County Sanitation District (LACOSAN).
“We, as LACOSAN, could still have some influence over that,” he said.
Said Giambruno, “There's a group of people out there that don't want growth.”
And then, he added, there's another group of people who say “we can't wait.”
He pointed to the recently opened Carl's Jr. on Dam Road Extension and Highway 53, and the people he said were lined up to patronize the business. “That's the kind of thing that we need,” he said.
Giambruno voiced support for big retailers going into the airport property, including Home Depot.
“What goes in there is another issue,” he said.
E-mail Elizabeth Larson at
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