Local News

Tuesday, Jun 24 2014 06:09 PM

Gap's exit suggests Bakersfield may compete with Tejon outlets

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    An artist's rendering of The Outlets of Tejon Ranch, provided by The Outlets at Tejon Ranch.

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  2. 2 of 2

    An artist's rendering of The Outlets of Tejon Ranch, provided by The Outlets at Tejon Ranch.

    click to expand click to collapse
BY JOHN COX Californian staff writer jcox@bakersfield.com

A national retailer's decision to pull out of Valley Plaza and move in to The Outlets at Tejon a few months later is raising questions about whether the new shopping center will draw stores away from Bakersfield and threaten city sales tax revenues.

The Gap, a fixture at Valley Plaza for 20 years, closed its store there late last month. The company plans to open a new outlet store at the 320,000-square-foot shopping center scheduled to open in August near the foot of the Grapevine. A women's apparel store called Sasha is opening this fall in Gap's place at Valley Plaza.

Observers say it's too early to call Gap's move the start of a trend. But they agree the situation bears tracking.

"It's obviously something that we're going to monitor as best we can," Bakersfield's finance director, Nelson Smith, said Tuesday. He was unable to say how much sales tax Gap has generated for the city, which collects 1 percent of every taxable sale within city limits.

Any store moving from Bakersfield to the outlet mall essentially shifts that 1 percent from the city's budget to Kern County's, because the project by Tejon Ranch Co. is located in an unincorporated part of the county.

More than a dozen retailers with a presence in Bakersfield have signed leases at the outlet project. Of those, only Gap has recently left Bakersfield as it plans to open at the Tejon project.

Valley Plaza's marketing manager, Kristi Jackson, said Gap's departure for the outlet center is not much of a concern. She said shoppers tend to visit outlets when they first open but then they generally return to stores closer to home.

"We feel like our customers are going to continue to be our customers," she said.

Bakersfield commercial real estate broker Anthony Olivieri said Gap had been considering leaving Valley Plaza even before the outlet project was announced, probably because of weak sales. He was unaware of any other retailer in Bakersfield looking at leaving for the outlets.

Some retailers will want to be located in both areas, he said, noting outlet stores tend to serve customers that are wealthier, but more cost-conscious, than the average shopper in Bakersfield.

But he didn't rule out the possibility of more retailers moving from Bakersfield to the Grapevine.

"I don't see that happening," he said. "But I could be wrong."

Tejon Ranch's corporate spokesman, Barry Zoeller, said by email the company is not involved with corporate decisions about store locations.

"We're just concentrating on delivering a great shopping experience," he wrote.

Gap, whose San Francisco parent company also operates Banana Republic stores including the one at Valley Plaza, did not respond to a request for comment Tuesday.

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