Vacation town on Pacific coast takes big economic hits

by Dante Chinni | The Christian Science Monitor

LINCOLN CITY, ORE. - The life and times of this coastal community are determined by the summer season, when vacationers swell the population of 7,500. But the winters here can be telling, and the 2009 edition was extra tough.

The business herd always undergoes some thinning during the slow season, but this time was different. Not only did the weakest local shops go, but also some of the more popular restaurants and a relatively large group of others.

"January seemed really slow," says Allyson Longueira, editor of The News Guard, a weekly Lincoln City paper. "There were hotels with only one car in the lot. And the impact trickles down." When hotels don't need people to work as many hours, she says, the workers "don't spend money around town."

And that can have a big impact in Lincoln City, which has 3,300 hotel rooms near the beach.

Lincoln City represents "Service Worker Centers" for Patchwork Nation. Since our project began, we've found that these centers usually take the biggest economic hits among the 11 community types.

A closer look at Lincoln City - a picturesque and somewhat isolated community - helps explain why this is happening.

In 2008, the big summer season was slower than usual, and the fall that followed took a hit when the stock market plunged and people stopped spending money. The Christmas season was hammered by a major snowstorm that closed roads to the coast.

Add all that up, and you get a town that is a bit panicky. But a good summer could make a real difference and at least get some marginal businesses righted. A bad one, however, might mean serious trouble.

The service economy here is showing other signs of stress. Last year, revenues collected from city taxes on visitors staying in hotel rooms dipped slightly, says Mayor Lori Hollingsworth. While that was about a 3 percent drop, tax revenues from new construction fell off a cliff - dropping by about 25 percent.

Over the winter, more foreclosure properties have popped up in the newspaper classifieds here, as people who bought second homes on the coast can no longer make their mortgage payments.

Moreover, in a community where few have health insurance, the free health clinic has announced that it is scaling back service to only one day a week - and taking no new patients, says Colleen Hickey of Samaritan North Lincoln Hospital. Last winter, the clinic operated five days a week.

The politics of this town have changed in recent years, moving decidedly to the left - due to green issues and some frustration over being left behind economically. In November, Barack Obama captured about 60 percent of the vote in surrounding Lincoln County. Overall in the US, "Service Worker Centers" gave Mr. Obama 54 percent of their vote.

Still, in Lincoln City, political attitudes are not locked down. Above all, this is a town that's urgently feeling the need for an economic turnaround. Who gets credit for it in Washington is not as big a deal.