Turlock’s economy experienced plenty of turbulence in 2020, with COVID-related local business shutdowns dealing a heavy blow to major sources of City revenue.
Things aren’t as bleak as they seem, however, thanks to government aid and the promise of vaccinations in the new year. According to City of Turlock’s Assistant to the City Manager for Housing and Economic Development Maryn Pitt, 2020 has not been quite as devastating to Turlock, its sales tax revenue, unemployment rate or vacancy rate as the Great Recession, but has made a terrible impact nonetheless.
“I see us growing again next year. I think it will be a slow start, and part of it depends on the accessibility of the vaccine as well as reducing the COVID infection locally,” Pitt said.
Turlock’s unemployment rate rose and fell in sync with COVID restrictions and stay-at-home orders this year, though data is only available through the end of October. The most current data shows Turlock’s unemployment rate at 8.1%, down from almost 15% in May. In October of last year, the unemployment rate was 4.2% and had risen slightly to 4.7% by February 2020.
The unemployment situation could have been worse, Pitt said, if it weren’t for Turlock’s high number of industrial employers who have taken precautions during the pandemic without shutting down completely.
“We’ve had high employment in Turlock recently, from late 2018 to all of 2019 until the pandemic hit,” Pitt said. “We went from 4.7% unemployment in February to 14.7% in April.”
The jump in unemployment reflected the situation across the country as people were laid off due to COVID or were forced to close their businesses down for good due to lack of income. It’s hard to say what the unemployment numbers for the last two months of 2020 will look like, Pitt added, given the fact that many retailers still needed seasonal employees for the Christmas rush.
Whether or not Christmas shopping provided relief to the City’s sales tax income is still to be seen, but the two quarters of data available for 2020 so far paint a depressing picture — but not one that was unexpected.
“We’re down, for sure,” Pitt said of the City’s sales tax revenue, which serves as the largest contributor to Turlock’s General Fund. “We were anticipating being down a couple million dollars, and we’re actually down maybe $1.2 million. It’s bad, but not as devastating as we thought.”
Compared to the first quarter of 2019, the first quarter of 2020 saw an 18.4% drop in sales tax revenue, going from nearly $3.5 million last year to about $2.8 million this year. Turlock experienced the greatest drop in sales tax revenue for the first quarter out of all of the cities in Stanislaus County, excluding unincorporated areas. A majority of Turlock’s decrease was experienced in restaurants, department stores and retail.
There was improvement in the second quarter, but Turlock still experienced a decrease of 1.6% due to a loss of $6.9 million in taxable sales. How the third and fourth quarter reports look all depends on how well businesses were able to provide safe shopping experiences for their customers, Pitt said, rather than directing them to shop online.
“We always do really well at Christmas, but now it will depend on how well retailers pivoted,” she said. “When things are purchased locally instead of online, we don’t have to just take our piece out of the county pool — we get our share.
“We’ll just have to wait and see. Obviously, we’re going to be down from last Christmas, but how far down? I’m not sure.”
As sales fell, some businesses in Turlock had to close their doors for good. While Dust Bowl Brewing Co.’s downtown taproom, HomeTown Buffet, InShape Health Club on Geer Road and AR Workshop are just a few who were forced to close, Pitt said there is also new life in town when it comes to commercial development.
Popeye’s in the Turlock Town Center is expected to open soon, and across the street, a new Starbucks and shopping center are in the works. Different businesses have inquired about developing land near Countryside Drive and vacant storefronts in the downtown core will soon have new tenants moving in. When exactly that will be, however, is the question.
“We have commitments to repurpose spaces where other businesses have closed, but people aren’t moving forward yet because they won’t be able to open,” Pitt said. “We’ve got people poking around and inquiring because a lot of the major retailers are looking at the long view. They see the pandemic as a short-term thing.”
Pitt admitted that the pandemic has impacted small mom-and-pop shops harder than larger retailers in Turlock, which is why the City’s Small Business Relief Grant Program focused on awarding funding to locally-owned businesses.
“It’s those smaller businesses that may or may not have as robust plans. We’ll have to see what that’s going to mean for the downtown and Geer Road corridor,” Pitt said.
Despite the setbacks, federal funding has helped Turlock immensely, allowing the City to fully staff its fire departments and provide aid to businesses. In addition to vaccines, Pitt believes the return of 10,000 students to the Stanislaus State campus next fall will also help the City rebound in 2021.
“I think in 2021 we’ll climb out of this and really bounce back,” she said.