Not enough stores? Nope. Not enough people

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WALLA WALLA -- Ask local residents what they dislike most about shopping in Walla Walla, and they're virtually united: not enough stores to please everyone.

But officials say the opposite is actually more true. There aren't enough people for the stores.

With the population moving at a snail's pace over the last decade, city and economic development officials say Walla Walla is a hard sell for chain businesses that rely on volume.

"Everyone wants a Target. Everyone wants an Olive Garden. Those things aren't going to happen because we're growing so slowly," said Port of Walla Walla Executive Director Jim Kuntz.

In the last 10 years the population of Walla Walla County has grown at less than 1 percent per year -- or an average of about 17 people per month -- according to the latest Census figures. That amount includes residents of the Washington State Penitentiary.

The picturesque community touted for its three colleges, storied history and agricultural landscape may have developed in recent years as a must-see for wine country tourists. But if it doesn't become a more permanent stop, a lack of new stores could be just the beginning of challenges ahead, Kuntz said.

"I really see implications," he said. "I think eventually we could lose the 16th Legislative District."

Kuntz clarified that slow, steady growth is best when he raised the issue during a Port of Walla Walla Economic Development Advisory Committee meeting at the end of July. Other officials have since said they're also concerned with the stunted population.

"There's an old saying that retail follows rooftops," said Walla Walla City Manager Nabiel Shawa. "If you really think we're going to get a lot of retail growth, it's not going to occur until you get the rooftops."

Though the Valley has always been considered a lower tier market for retailers on the hunt for expansion, residents have had every reason to believe it could finally have landed on the radar of chain businesses. After all, in the same decade that the population has inched along, a Wal-Mart, Home Depot and Applebee's have joined the landscape ¬?--all while tourism has made huge strides in bolstering the economy for hotels and restaurants.

But in the wake of the recession and the increased care in which businesses are approaching expansion, the population figures are an important barometer for companies considering a future here, Kuntz said.

"The really classic example is the Blue Mountain Mall," he explained. "There's no demand side. There's no retailers knocking on the door.

"You take a marginal market to begin with. Some retailer would say, 'Let's look at your population growth. It's less than 1 percent a year and you include your prison count, as well?' We just don't look very attractive for new retail investment."

Walla Walla County's population was estimated by the Census Bureau in 2000 at 55,180. In figures released by the state Office of Financial Management last April, the county's population was 59,600 -- a change of 4,420 people or about 8 percent over 10 years.

The numbers have a domino effect on development, officials say. With little pop ulation growth, the Office of Financial Management is not likely to increase the area's urban growth boundary by much. Without the boundary change, there's less room for development. With less space, fewer businesses may be able to find an appropriate location - even if they had the population base to thrive.

The upshot: More outshopping and less money in the local community for services.

"Retail sales tax is a critical component of the city budget and the general fund," Shawa said.

That's become increasingly true over the last decade with the approval of property tax limitations, he said. Cities that had previously built their financial architecture around property tax increases had to find new funding sources when property tax collections were capped across the state. Individual taxing districts are limited to tax increases of 1 percent annually. They can also receive any tax revenues generated by new construction added to their tax rolls over the year.

"The pot of gold that a lot of cities have gone after every years is retail sales tax," Shawa said.

For the city, that number hasn't fared so well in recent months. Late effects of the recession have shown up in sales tax collection.

Shawa said the city's projections for retail tax collection have been down by double-digit percentages in recent months. July's collection was down almost $50,000 from the same period in 2009 and about $47,000 down from the city's projection for the month. June's was up from 2009 by a little more than $30,0000, but down about $60,000 from the projected figure.

"We need job creation in order to stimulate demand," Shawa said. "Until we've got the jobs and people spend money again and confidence rises, it's declining."

He said it would be useless for the city to attempt to recruit new retail right now. "The fish aren't running," he said. "We can spend a lot of time out there casting nets and coming up empty."

What the city can do is slightly influence tourism by offering a clean, hospitable community, and establish the necessary infrastructure to accommodate growth.

Shawa, too, acknowledged that slow growth would be best. While the roughly eight-tenths of a percent of growth per year is too slow. He said 2 to 3 percent is preferred.

That's much more manageable than the 53 percent population growth that's taken place in the Pasco area of Franklin County over the last decade, officials said. That and the 21 percent growth in the same period for Pasco's neighboring Benton County, are supporting a development boom that's attracted massive retail - not to mention a huge portion of Walla Walla consumer dollars.

"I don't think any of us want to grow as quickly as Pasco or as Benton County," Kuntz said.

The population topic is one expected to be explored further by local business and development leaders.

"Is it a question that we don't want to (grow), or that we can't?" wondered Downtown Walla Walla Executive Director Elio Agostini during the Port's EDC meeting. "It's something to be discussed among many people and whether it should be changed."

Banner Bank executive Cindy Purcell said she worries the community's assets -- from the diverse university system to the recreational opportunities -- could be lost if more jobs aren't created. That's what she saw happen south of Walla Walla in Pendleton.

"There won't be any growth without the ability to have a fair wage," she said.

Kuntz said it could be a matter of tapping into new opportunities. The community identity is strong, he said. With a greater sense of how to grow and an eye on the clock, he believes the community still has time to overcome the slow growth that's taking away the attention of business and potential sales tax revenue.

"Walla Walla has got such a great name to it because of the wine industry and the beautiful downtown and the colleges," he said. "Its marquee is about as strong as it's been since I've been here."

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