By Jessica Ferguson – June 12, 2012
Empty worn down buildings dot the scenery in Glenwood, Oregon. Signs callingcustomers in still hang above abandoned businesses with empty parking lots. “For Lease” signs hang in dirty windows, complimenting the peeling paint and the darkness that lies inside the front doors.
John Tamulonis, Community Development Manager for the City of Springfield, can list off failed Glenwood businesses one by one while pointing to their previous locations on his laminated map: Tom’s Tapper Tavern, The Furniture Store, a couple used car dealerships; all now empty buildings waiting to be used.
The most recent recession that began at the end of 2007 and continued through 2009 hit every town across the country, causing businesses to close and, in Oregon, sent unemployment rates as high as 11.1% in 2009, according to the United States Department of Labor’s Bureau of Labor Statistics (BLS). Glenwood may have fared better than most places. It could be because of its history, it could be because of the strength of its business owners.
Dan Egan, Director of the Springfield Chamber of Commerce, said Glenwood isn’t an area where new business owners look to start up. It has a history of being primarily industrial and dangerous because of flooding in the past, making it unattractive. “[The businesses there are] tough businesses and [they] tended to survive this better than others,” said Egan. Many long-time businesses of the area, like Sanipac, Lane Transit District, and Farwest Steel, have already gone through several recessions. Egan said that if they could make it through the ’80s, which is when Oregon’s unemployment rate was at its all time high (BLS), then they can make it through anything.
Since Glenwood is mostly industrial, it’s “not like downtown with cafes and boutiques that got clobbered,” said Egan. “It’s the smaller companies that lost more through the recession.” Glenwood does have several small businesses, though. Many of them closed. Some survived.
The Snack Shack is one of only two restaurants in Glenwood and is one of the few smaller businesses that managed to hold its own. It has survived for the last 40 years despite many recessions. Kathie Knight is its current owner and she bought it from a friend in August, 2007, only two months before the market bottomed out. “Right after we purchased the restaurant, the large manufacturers and others in the area began making drastic employee cuts or completely went out of business,” said Knight. “There was a pipe business that had 200 employees that completely closed its doors. Pretty much the 11 a.m. to Noon business for our 8 table restaurant. But we were tenacious.”
Today, the Snack Shack is a popular location for Glenwood residents, visitors, and the hundreds of people who work in the area. During the lunch hour all of the tables are filled, including the outdoor seating, sending the small staff into a frenzy, making sure every customer is served with a smile every time. The inside walls are lined with knick-knacks, art, and books, all for sale, a small addition to the business by Knight. The windows, lined by red and yellow curtains custom made by Knight, advertise a variety of food specialties including burgers, breakfast, BBQ, and ice cream.
The Snack Shack has gone through a few different names through its history, but has been a restaurant since the day it opened. It has only been closed for a one month period for renovations. Knight has made only a few changes to the Shack, like selling used goods off the walls, a few aesthetic upgrades, and using almost 100% local, all fresh, and all natural food. She loves playing a part in the local economy and tries to do so as much as possible. Other than that, she’s kept the place the same as it has been. “We pride ourselves on being ‘old fashioned’ and use the same recipes from the ’60s to make our food,” said Knight.
Knight said the recession was difficult, but she made it through due to hard work, sacrifice, and something she learned from the previous owner: never use credit. “We had always worked on a cash basis, so we had very little debt,” Knight said. “While we had several part-time employees in those early days, we started laying them off and working ourselves in order to save the overhead. Frankly, it saved our business.”
Knight has great plans for her business and its future, knowing that it may not include her. “I am 60 years old and am looking forward to retiring in the next 10 years,” she said. “As the economy improves so will business and the value of the restaurant. And we will sell, and someone younger will do wonderful new things to make it even better.” Until then, she will work to upgrade and increase the popularity of the Snack Shack, leaving a legacy for the next owner to continue.
Brad Averill, owner of Grizzlies Granola, saw the downturn coming and was able to prepare for it. “I decided it was more important to be profitable, even if it meant not growing or even shrinking some,” Averill said. “So I just put things in place, like being very careful about pricing, being real cost conscious, to make sure that we were profitable. so even in those years when our revenues were down, we actually were profitable.”
Averill bought Grizzlies Granola from its original owner in 2002 and since then has been steadily growing the company. Grizzlies began in 1981 and its owner did all of his production and distribution out of a house on Concord Street, a residential neighborhood in Glenwood. Today, they deliver their product nationwide, primarily in the Pacific Northwest. They’ve moved their sales and administration to a different office in Eugene, making more room for production and storage in the small house on Concord. Averill looks forward to the day he can also move his production and storage, which he hopes to be in the next couple years. “Frankly, the building we have is far from ideal for a business,” he said. The previous owner expanded the house room by room and the company grew. The poor structure makes it difficult to keep the work areas clean and sealed which is necessary for food production.
Averill said an important part of running his business is developing strong personal relationships with his customers. He does so by keeping constant contact and by doing all of his own distribution. “Also, I don’t have any customer that constitutes probably even 5% of my business. So I’m really spread out,” said Averill. “In some ways it’s nice to have five or six really big customers … But the trouble is, if one leaves it can just be devastating. So I have purposely really tried to keep the customer base quite diversified.” Grizzlies Granola survived the recession, not only by good business sense, but also because of what Averill gained from its previous owner; a diverse customer base and good employee relations.
“In the last quarter of ’08 and the first quarter of ’09, we definitely saw a big drop in sales, and that was stressful,” said Averill. “But, things did start to pick up after that.” In fact, Averill said the most scary part of owning his business wasn’t the recession, but was his first year of ownership when he was making changes to the way the business was run. Things have leveled out since then, creating a successful business that Averill plans to continuously expand. The future of Grizzlies Granola holds product packaging, new product lines, more control over the supply chains, and, hopefully, a new building.
Some businesses that didn’t make it through the recession in Glenwood didn’t simply shut down. Some had layoffs, some relocated out of the area, and some moved to lower rent facilities on the same block. A local veterinary clinic was forced to close because its owner passed away. The property has been purchased by another party, but has yet to be used. Tamulonis said it is because the design of the property makes it hard to utilize. In the case of Tom’s Tapper Tavern, the owner wanted to retire. He tried selling during the downturn but found it impossible. The city has bought the property and plans on using the space for upgrades to Franklin Boulevard. Until that happens, it will remain vacant.
Omlid & Swinney, Rally Coffee Roasters, and Papé are all companies that expanded into Glenwood before the recession. Tamulonis said when the economy bottomed out they needed to downsize and that meant closing their Glenwood locations. Papé still owns property up next to the steel mill, but it remains unused. “The City would, of course, like to see additional firms locate in Glenwood,” said Tamulonis. However, “it is private owners who decide if a rent proposal or user is suitable for a lease proposal,” and “long-term changes we would like to see may take several years to get in place.”
Slowly but surely, new businesses are moving into the vacant buildings and Glenwood is recovering. Stovetec, a not-just-for-profit company that sells stoves meant for those who are forced to cook over open flames, has taken over the Rally Coffee Roasters building last June and is steadily growing. “This space was selected due to my instincts on infrastructure,” said Todd Albi, managing director of Stovetec. “It has loading docks, of course, and it has retail capacity in the front end.”
Stovetec makes most of its profits from national sales and most of its building is filled with pallets ready to be shipped out. “This is my bread and butter that pays our salaries,” said Albi. “We wouldn’t be able to exist here if it wasn’t for the national market.” Even so, they still get enough traffic through the door to pay the rent and Albi is planning on expanding his retail end, bringing in new products for his customers.
The Glenwood Garden Spot, a retail garden center, is also a new business in the area, only a little more than a year old. “I chose [Glenwood] because there’s no better area really to try to beautify from a garden center standpoint,” said Gordon Crisman, the owner. “I think the reputation of Glenwood’s a lot worse than it really is. … For me, personally, I’m from this area. … This is really my backyard. For me, it’s not just a labor of love, but this is my neighborhood. My ‘hood.’”
Crisman has high hopes for his “hood.” He knows that right now, since he’s only in his second year, he can’t quite judge the success of his business venture. “You hope for the best,” Crisman said, “but you’re really at the mercy of everybody’s pocket books at this level.” He’s observed the other businesses in the area, noting the success of the Snack Shack across the street, the expansion of Big B Tires, and the larger companies like Franz Bakery and UPS who, he said, keep the commerce moving. “I think this area, to be quite honest, over the years, it’s going to be a bridge between the two cities,” Crisman said. “The area, I think – I think it will change.”
This chart, provided by the U.S. Bureau of Labor Statistics, shows the large amount of business closures during the ’07-’09 recession. An “establishment birth” is when a business is started. An “establishment death” is when a business is closed. In that last three months of March, 2009, the chart shows that there was a net change of -63,000 businesses in the United States. This is the biggest decrease since the beginning of the data series which is 1992.
Big Plans for the Future of Glenwood
Currently, the City of Springfield is working on building up Glenwood, economically and visually. The plan in place is called “The Refinement Plan,” making Glenwood an “urban renewal district.” This plan includes expanding Franklin Boulevard, adding a new Emx line to LCC, building new housing and streets on the waterfront, and bringing in more residents. The hope is that this will create a place that people will want to visit instead of simply driving through. Neil Obringer, Local Works Supervisor at NEDCO, said they want Glenwood to be an area that compliments the work that is being done on downtown Springfield.
“The underuse of property is a drag on property values and the redevelopment of the area,” said John Tamulonis, Community Development Manager for the City of Springfield. “Such blighted conditions are a primary reason for the City’s forming an urban renewal district in 2005 to help the area transition to more private investment and greater economic improvement over the next several years.” The city’s purchase of Tom’s Tapper Tavern is a step in that direction because the current building is in the line of the Franklin Boulevard expansion.
The Refinement Plan includes many phases to work through so it is a very long process. “We’d like to bypass all the grain grinding necessary to make Glenwood into a new loaf,” said Tamulonis, “but the steps are necessary before we can be happy bakers with a great product!”
Today, the city is working on many different assessments for the area including an environmental assessment and studies on residential possibilities. Proposed ideas include student housing for the university and the community college or workforce housing. Either way, Tamulonis said, the goal is to create nice residential areas that are safe and easily accessible.