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Drawing Chiloquin traffic

Several cars sit parked at the Chiloquin Dollar General store off Highway 97 Thursday, Jan. 24. Dozens of customers came and went from the discount chain store between noon and 1 p.m.

Dollar General sells a variety of goods at prices most people can afford, but some say having the national chain convenience store in their town is an “economic boon,” while others call it a “cheap date.”

In the past three years, the discount chain store has increased its presence throughout Klamath County. With 52 stores in Oregon alone, the box chain retailer has more than 13,000 stores nationwide and four in Klamath County, with possibly one more on the way.

These discount stores often land in areas where most consumers cannot afford higher-priced goods, according to a Dec. 20, 2018 article from The Atlantic’s CityLab. A separate collection of 2017 and 2018 reports from the Institute of Local Self-Reliance (ILSR) claims that dollar discount stores offer fewer jobs than most local businesses, pay less and extract remaining wealth from impoverished communities.

In January, Dollar General announced the grand opening of a store in Stewart Lenox, a small subdivision on the edge of Klamath Falls.

Before that, the Klamath County Commission announced that the company signed contracts for land at the entrance of downtown Klamath Falls, though the deal is not final.

Up in the air

A “sidewalk closed” sign sits in front of a path along the intersection Esplanade Avenue and Spring Street, the former site of the old Medo-Bel creamery building Wednesday, April 25. It’s not yet clear what could eventually become of the site, though Klamath County commissioners discussed plans to sign on with Dollar General for a $285,000 contract in Dec. 2018.

When contacted, Dollar General spokeswoman Angela Petkovic said they “do not have plans” for another Klamath Falls location. Petkovic did not respond to inquiries on the ILSR report or to agree to an interview for this story.

By the numbers

Dollar General, and similar discount chain stores, often choose rural communities adjacent to state highways, which several national media reports and research say is due to their low-income populations and easy access to travelers.

This pattern holds throughout Oregon. In Benton County, a Dollar General sits in Philomath, a town of 4,500, but not Corvallis. In Deschutes, another set up shop in La Pine, a town of 1,800, but not Bend.

The company’s 2018 third quarter financial results boast several increases including a 8.7 percent spike in net sales from $5.9 billion to $6.4 billion.

The company also received a 20 percent effective income tax rate, a decrease of 15 percent from 35 percent, due to President Donald Trump’s Tax Cuts and Jobs Act from December 2017.

Even so, wages remain low for the average six-to-nine workers the company employs at each site.

As of Jan. 25, statistics from job seeker site Indeed list wages of Dollar General cashiers and clerks between $7.97 and $8.34 per hour, or about minimum wage in most states.

That means an Oregon Dollar General worker making minimum wage at $10.75 an hour would take in about $22,000 annually.

Low-income targets

A recent food assessment released by Oregon Institute of Technology and the Klamath-Lake Counties Food Bank dives deeper into health and wellness concerns in Klamath County, also covering cost issues.

Out of 400 individuals who took the survey, more than 40 percent say that locally produced meats, produce and other farm goods are too expensive. In addition, 20 percent say they do not know where to find these options.

The assessment also notes Hispanic and Native American populations as more vulnerable groups. There are more than 2,200 Native Americans in Klamath County and at least 7,800 Hispanic residents, according to the U.S. Census Bureau.

The research from ILSR says that these discount stores often use such factors as low-income to seek out profit, which can further impact minority populations.

Betty Riley, executive director of South Central Oregon Economic Development District, said the appeal of discount grocery stores makes them appear ideal for rural communities. SCOEDD is a regional economic development group that offers help to small businesses with startup solutions.

Filling a niche

In many cases, dollar stores arrive in an area where their products — which includes hardware and consumer electronics — were either not offered before or were too expensive for low-income shoppers.

For instance, Crescent, a town of less than 600, has no other major chain stores besides Dollar General.

Klamath County’s lower income base makes it an ideal locale for such chain stores as unemployment in the area remains at 6.6 percent. The state’s rate is 4 percent.

In addition, approximately 2,900 people work retail jobs in Klamath County, while another 3,000 work for food service and hospitality, according to the Oregon Employment Department. Combined, that’s about 32 percent of all jobs in the area.

More often than not, these positions typically pay no more than $6,600 in quarterly wages, Riley added.

“That’s $24,000 a year average in wages,” she said.

Riley also points to the struggles of trying to attract unique, higher-paying businesses into rural communities, adding that it is often a catch-22 in perpetuating a cycle of poverty.

It has become common, Riley said, for people to take on retail or service jobs as their sole source of income. In the past, they used to be for younger workers looking for extra spending cash.

“Unfortunately we have a lot of the population that this is how they’re trying to support themselves,” she said.

Not a done deal

In 2017, Dollar General expressed interest in a gateway property near downtown Klamath Falls.

Leaders of the Klamath Falls Downtown Association (KFDA) were not thrilled with the premise of a Dollar General occupying the former Medo Bel creamery site.

Nicholas Phair, KFDA president, said that travelers coming in from Highway 97 would see this corridor of downtown before anything else.

“The first retailer is a Dollar General,” Phair said at the time. “How does that present us?”

Gateway to downtown

From right: Nic Phair, Klamath Falls Downtown Association President, speaks with Klamath County Commissioners on Oct. 18, 2017 about the possibiliyt of Dollar Genreal coming to the entrance of downtown. The downtown association was initially against the chain store potentially setting up shop.

Months later, the building was scheduled for demolition, though Dollar General representatives said they would not comment on any potential plans for the area.

Talks of a downtown Dollar General faded from public view, though another company spokesperson said they were still going through a “due diligence” period.

Then, in December 2018, commissioners voted to move forward with the contract for the 1500 Esplanade Avenue store.

Though the company made an offer for the Esplanade property, Commissioner Derrick DeGroot says the deal is still up in the air.

“They had a period to do that due diligence,” DeGroot said. “And there are some issues they have with the site, so that may not work out.”

Open to new business ventures

KFDA Executive Director Darin Rutledge said that a newer board of downtown business owners and stakeholders have yet to discuss how they feel about chain dollar stores being in the area.

Rutledge says he and the association remain open to new business ventures. He said all of this had an element of “free enterprise and private property.” It was not his or the downtown association’s goal to discourage any business from coming in, regardless of intention.

“They’re the ones who are willing to put up the money to invest in our downtown,” Rutledge said. “It’s hard to discourage any businesses who are willing to make an investment and do their part to make downtown more vibrant.”

If they do arrive, the downtown association says it also has plans to work with Dollar General on how the store would be designed — the company has worked extensively with cities on building facades in the past.

“When it comes to that property, we’re sensitive to make sure whoever we do sell it to is willing to conform to the overall aesthetics to downtown,” DeGroot said.

Signs of progress

Meanwhile, on a blustery day in January, three illustrated banners with the company’s yellow logo wave in the wind outside the Chiloquin Dollar General store. They read “Save time, save money, every day.”

Dozens of cars come and go from the store between noon and 1 p.m. The parking lot stays mostly full.

There are other stores, businesses and a community center in the heart of downtown Chiloquin, though many properties on some side streets remain vacant or boarded up.

Chiloquin Mayor Mark Cobb sees Dollar General as a sign of progress. The town has two other grocery stores and a handful of small businesses, several of which Cobb said were against Dollar General coming into the city.

He also said that he hopes people stopping into the store off Highway 97 would then be more likely to stop in to see the town’s community center and other businesses.

“Chiloquin has been pretty stagnant for a long time,” Cobb said. “It was progress to have Dollar General come in.”

Other business owners in Klamath and Lake counties also shared their own experiences competing with Dollar General.

A quiet street

A series of properties remain vacant and boarded up along Chocktoot Street in Chiloquin Thursday, Jan. 24. Dollar General did not lead to this, though experts say the discount retailer often settles into already struggling communities in order to extract any remaining profits from low-income residents.

Shop owner Mike Beeson struggled to keep up when the Dollar General first arrived in Lakeview. His own store, the Warner Valley mercantile in Lakeview, sells several items at a variety of prices.

Previously called The 39er, Beeson said that he used to stock some lower-price items, though he had to move specifically to higher-end, “Made in the U.S.A.” products when the chain store entered town.

“We discovered in order to stay in business, we needed to change — so we did,” he said.

Beeson said that local stores could always help more in terms of community outreach efforts, donations and local school support.

“Dollar General doesn’t do a lot of that,” he said. “You don’t see a lot of giving back to the communities from them.”

Dollar General does often speak on its literacy improvement programs, which gave more than $159 million to areas nationwide, though it is unclear how much of it has gone to rural Oregon areas.

Welcoming the competition

Merrill, a small town of more than 800 off Highway 39, had a Dollar General store move in three years ago. Before then, Martin’s Food Center was the central food stop in town.

Martin Hicks owns and runs the store, which he first opened more than 37 years ago. A humble man with much love for his community, he views it as the way things are with fair competition.

He did, however, say that he lost at least 11 to 12 percent of his sales when the discount store first moved in. Hicks said he has since made up for the losses.

Welcome to Martin's

Martin Hicks, far right, stands with other workers at Martin's Food Center in Merrill Tuesday, Jan. 29. Hicks, who first opened shop more than 37 years ago, said he and his store often find ways to give back to the community.

Hicks has no personal concern with the store in Merrill, saying that he works hard to stay in business and offers a different kind of service than one can get at Dollar General.

“You just try to adjust and make it work,” Hicks said.

Another concern is business taken from Holiday Market in Klamath Falls, which recently opened the shuttered Safeway store downtown.

Right off the highway

Martin's Food Center sits right in the center of Merril off Highway 39. Several shoppers continued to stop in for food Tuesday, Jan. 29.

But Store Leader Jesse McAuliffe says he and others at the company are far from worried about the impacts.

Like Hicks, McAuliffe said he believes Holiday Market will continue to stand out because of its service and welcoming environment. McAuliffe also has experience working at prior Holiday stores that compete with similar dollar chains.

He has no concerns for Klamath Falls, but says that smaller communities often face the bulk of the impacts.

“You put in a second store, it’s probably going to take a bigger bite,” McAuliffe said.

Focusing on growth

Unlike smaller communities, Klamath Falls may be in a stronger position to choose what happens next.

With a population of 41,000 within the urban growth boundary, it continues to be the central hub for all things shopping and retail-related in Klamath County and parts of Northern California.

But the city has its own set of struggles, whether it be from a lack of affordable rental properties or new living wage jobs for those who want to stay in the area.

Several new businesses have set up shop either downtown or commercial district in the past two years, with more people trying their hand at the American dream. This includes Grocery Pub in the Mills Addition, a Farmers Market co-op store in the heart of downtown and several new restaurants along South Sixth Street.

Several initiatives have also worked to reinvent the community in terms of image, healthy choices and shopping options.

Dan Burden, a city planning and transportation design expert who has been to more than 40 other Blue Zones Project areas and 3,700 communities across the globe, visited Klamath Falls to work on such projects.

Burden, who founded Walkable Communities Inc., was not thrilled to hear about the fact that not one, but two Dollar General stores were setting up shop in town. Burden and the groups he serves work to make towns more pedestrian-friendly for the sale of boosting local economies.

In his own words, specifying that he did not speak on behalf of Blue Zones, he described the box chain retailers as a “blemish” in rural communities.

“When you’re bringing in a company like Dollar General, you’re basically accepting the cheap date,” Burden said. “You’re essentially degrading the quality you’re trying to build.”

Burden was in Klamath Falls Jan. 24 for a built-in environment workshop. He spoke extensively with Mayor Carol Westfall, City Engineer Scott Souders and many others on ways they could further strengthen their own local economies for the people who lived there.

He was optimistic overall. Still, he had faith in the strength of Klamath Falls’ leadership to keep its own mission moving forward, calling any potential Dollar General a “low point.”

“You’ve got strong enough city council, planning staff and folks — I think you’re going to get beyond it,” he said.

Correction: This story has been updated to clarify that a Dollar General was built in Crescent, not Chemult.