News - Local

Published: Thursday, Jun. 11, 2009

Economic forecast: Paso Robles expected to rebound sooner than others

Economist Bill Watkins says tourism and population growth put the city in a better position than the county and the state

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Paso Robles’ economy is “mildly declining” but is still better off than the county at large and state, for both of which total goods and services are undergoing a sharper slump, according to a forecast released Wednesday.

“You’ll have a little bit of a recession,” economist Bill Watkins told a mostly full room at the Paso Robles Inn Ballroom for the city’s annual economic forecast event. “But you’ll bounce back quicker than anybody.”

The Paso Robles Chamber of Commerce hosted Watkins, who is with California Lutheran University in Thousand Oaks, as he presented an outlook for how the city could fare through 2010.

Other speakers represented education, retail and marketing fields.

Total goods and services in Paso Robles are forecast to dip from $2 billion in 2008 to $1.9 billion this year, according to Watkins, and continue with no growth into 2010.

Even so, that economic measure, adjusted for inflation, shows that Paso Robles is “remarkably strong” for a Central Coast city, he said.

Paso Robles’ tourism and population growth are among the strong points that will likely lead the city into a quicker economic recovery than the rest of the county, he said.

While the state is experiencing an 11 percent decline in tourism, “Paso Robles isn’t seeing any of that,” Watkins said, thanks to its wine and proximity to tourists looking for trips close to home.

Retail sales were among the bad news, as Watkins predicted a tough year ahead for merchants.

On the plus side, the city’s population growth “has been remarkably robust,” Watkins said, suggesting a good quality of life for residents.

In 2004, Paso Robles had more than 27,000 residents. Today the population is estimated to be 31,000 and is expected to grow by 300 by 2010. Paso Robles’ general plan, according to the city, accommodates up to 44,000 residents by 2025.

As the second-largest retail market in the county after San Luis Obispo, the city saw its best recent year in 2006, when taxable sales were about $720 million. Since then, revenues have dropped by about 6 to 7 percent each year.

“Paso Robles’ per-capita retail sales are in the midst of a multiyear decline,” Watkins said.

He forecast that sales tax revenues would again dip this year but start to build in 2010 to an estimated $649 million. Three retail sectors in Paso Robles — other sales, food stores and eating/drinking — saw gains in 2008.

“Virtually all of Paso Robles’ new construction has been retail space,” Watkins said in the report. In 2008, the city received an estimated $16.7 million in retail building permit value, which is expected to increase this year by about $600,000.

Barry Harcharufka, regional vice president for Lowe’s Home Improvement, said his company — an anchor tenant in the future Golden Hill Plaza shopping center on Highway 46 on Paso Robles’ east side — will provide new jobs. The national retailer, slated to open its store in September or October, will supply 120 permanent jobs with 30 seasonal positions to set up the store in July.

City Manager Jim App said the most notable part of the forecast was the message to “invest in developing our community’s human capital.” Education is one way to do that, he added, so the city strives to partner with schools and colleges.