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Corporate pulling plug on Smart & Final

It appears visitors aren’t the only transients in town.

Smart & Final will likely close next month, marking the end of a decade-old tradition of wholesaling in South Lake Tahoe. Its 10-year lease is up in the first week of September, with the option of renewal on two five-year leases.

There’s a strong possibility the Los Angeles-based corporate office won’t bother to renegotiate a lease, spokesman Randall Oliver said.



“In our case, there are specific things driving our decision. The store has not been traditionally a strong performer, and we’d have to put in a number of capital investments,” he said.

Corporate management, which handles 228 stores under the Smart & Final and Cash and Carry names, has leaned toward not making those investments — especially with its lease expected to go up in price at the Bijou Center.



The 12,000-square-foot store on 2.6 acres of prime property leases from a four-way partnership — led by owners William and Karen Converse of Grover Beach, according to the El Dorado County Assessor’s Office. The couple didn’t return phone calls.

The store employs four people full time and a dozen part-timers. Oliver said the company tries to relocate displaced workers to other stores.

Manager Rob Gonzalez, who’s lived on the South Shore and worked for the store since it opened, may end up in a Central Valley store. He’s unsure which one.

Gonzalez points to a few factors as contributing to the store’s decline.

Wholesale giant Costco dented Smart & Final’s business in the first year the Carson City store opened, but that’s not the only reason.

He also cited the fluctuating customer base that ebbs and flows with the seasons. Then there’s the permanent population.

“I think a lot of the businesses here are hurt by people moving off the hill. A lot of people are moving. There’s no incentive to do business here. And it costs a fortune to expand,” he said, also taking aim at building regulations.

Maintaining and cultivating business is the topic the city wants to take up Tuesday at the City Council meeting. The mission is spun out of the council’s recent team-building retreat.

“The thing that strikes me with business here is that one of the five most important things we do are all economic- development related,” City Manager Dave Jinkens said Thursday.

The city has a vested interest in keeping business grounded. Sales tax accounts for about a fifth of the general fund.

“We need to quit allowing the leakage of sales tax outside the city limits,” he said, urging businesses to take part in the discussion. “We all have to walk the talk now. Otherwise, they’re going to get eaten up by the competition. If (Smart & Final) leaves, it will be a loss.”

Ditto, said Ted Wiberg, the wholesaler’s assistant manager.

“This will be a huge hardship on our customers. Now they’ll have to go elsewhere. And there are things here you can’t buy anywhere else,” said the Carson City resident, who’s vying to work at a Reno Smart & Final.

Penny Johnson, who’s lived in South Lake Tahoe for a dozen years, didn’t view the news favorably.

“Now I’m really in a funk,” she said, strolling through the store.

Johnson works for Body Essentials at the Marriott-anchored complex off Park Avenue and buys her janitorial supplies from Smart & Final.

Black Bear Inn owner Jerry Birdwell was just as disappointed, contemplating where to buy ham and eggs for his guests.

“This is not good,” he said.

Many have said that South Lake Tahoe, or even California for that matter, can be a tough place to do business.

Video Maniacs on Emerald Bay Road closed a few months ago because the owner said movie buffs split their loyalty between his store and the nearby Blockbuster. He was unable to sustain the business on the limited clientele.

“New people tend to go to Blockbuster,” he said, explaining the familiarity of the competitor’s name left him out in the cold.

He also cited the national and regional economic downturns which were exacerbated by the Sept. 11 terrorist attacks.

“The reality is, as a whole in South Lake Tahoe, it’s hard to do business. But I don’t think it’s any one thing. I think the whole community is having a tough run of it,” the part-time Bay Area resident said.

Despite businesses coming and going like they have on the South Shore for years, the South Lake Tahoe Chamber of Commerce reports membership “is as strong as it (has) ever been,” President Ken Daley said. Daley attributes the increase to a circling of the wagons in a tough business climate.

“I know it sounds cliche, but there really is strength in numbers. Most people cannot deal with issues on their own,” Daley said. He advocates businesses pool their resources and become a lobby force so they can piece through the complexities of high health-care costs and regulations.

Meanwhile, some eyes have turned to Strange Brew. The coffeehouse has closed its doors in the last week or so, with no message on its machine. A note on the door said it will reopen soon.

Susan Wood can be reached at (530) 542-8009 or via e-mail at swood@tahoedailytribune.com


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