.Will Box Stores Change the Culture of Scotts Valley?

On the popular My Scotts Valley social media page, some users characterized the cultural moment that was Target’s Sept. 25 arrival on Mount Herman Road as “impressive” and “amazing.” When they wrote that they “couldn’t wait,” or that they were experiencing a “feeling of giddiness,” you might’ve thought they were talking about the Fourth of July fireworks display that returned this summer rather than a store opening.

But others weren’t so ebullient. Graham Dittman wrote, “Perfect, another big box store to wipe out all the small family-owned businesses in the area. Exactly what we need,” followed by a thumbs-down emoji. And Kelly Pettit commented, “How podunk are we that we are excited that another corporate store peddling made in China stuff has opened its doors here?”

For the understated, upper-middle-class community with a former cop—the city’s first female police officer—currently serving as mayor, this was the biggest news in months.

But for Target corporate, it was just one of nearly 30 new stores it plans to roll out this year. It didn’t even hold an in-person media event to launch the location.

Still, the store’s quiet splashdown marked a key inflection point for a Silicon Valley and Santa Cruz bedroom community with a historically homogeneous population that’s begun to change.

Some of the most vocal naysayers have criticized the way the developer of Scotts Valley Square Shopping Center, which Target now anchors, has rolled out the upgrade.

As cement was drying just outside his storefront in August, Brett Aeck, the co-owner of Earthwise Pet Supply, said his small business could no longer afford to stay in its 266 Mt. Hermon Road location after the property manager, the Pratt Company, doubled their rent.

Aeck says he made an offer on the former Payless Shoe Store location—20% above what he was paying per square foot—but says this was rejected. (The Pratt Company contends Earthwise didn’t present a strong enough business plan for that larger space.)

“They’ve kicked six of us out,” Aeck said at the time.

The shop closed at the end of the month.

Landlord Kevin Pratt says the company tried to work with owners to come to agreements about how they could stay on.

“Target is going to up the game,” he says, noting he’s been fielding offers from parties willing to pay double what he’s been charging for rent. “The complicated reality is that we have had a wide variety of tenants in that center for a long time, some cycling even before this recent change.”

And he says some tenants had fallen behind on their obligations.

“This idea that somehow by definition that all mom-and-pop operators are just perfect businesses is just not true,” Pratt says, adding they did make concessions to some tenants. “We were very gradual in raising the rents. You know, it’s a tricky thing.”

This all rubbed some locals the wrong way, particularly since those mom-and-pop businesses had remained in the beleaguered shopping center in the dark days, as Kmart faltered and then shuttered. Many lamented the loss of Chubby’s Diner, which was a Scotts Valley institution, emblematic of the community’s All-American past.

The Pratt Company had attempted to entice the owners to renovate—and even brought one of the family members to the uber-profitable-but-bland Santana Row in San Jose to demonstrate their vision.

“I know with Chubby’s, they wanted them to expand and do dinner,” Mayor Donna Lind says. “Chubby’s didn’t want to do dinner and take that on.”

Lind, who grew up in Scotts Valley, says she empathizes with the proprietors, who decided not to buy into the new direction for the plaza.

“I totally get it,” she says. “They didn’t want to be bigger.”

But on the other hand, the community has been trying—and failing—for years to bring in a bigger chain restaurant like Applebee’s, she says.

“The restaurants kept saying, ‘Eh, the population’s only 12,000,’” she recalls, adding she thinks Scotts Valley will be able to develop while maintaining its small-town character. “We’ve grown in a way that’s still kept that.”

Like it or not, state officials want Scotts Valley to build. Even Lind—who remembers the first stoplight being put in along Mt. Hermon Road—says it’s not worth fighting new requirements to significantly increase housing in the coming years.

The state identified Scotts Valley as one of the California cities “that have historically been racially concentrated areas of affluence,” and is requiring the largely white municipality (86% white, 10% Hispanic, 18% over 65) to pave the way for hundreds of affordable homes to go in. The Association of Monterey Bay Area Governments—the regional body that, among other things, sets how much housing each community is responsible for—told Scotts Valley it had to plan for 392 “very low,” 257 “low,” 154 “moderate” and 417 “above moderate” housing units—for a total of 1,220—between June 30, 2023 and Dec. 15, 2031. 

The city must relay to the state how it plans to accommodate these units via an update to its Housing Element, a state-mandated land-use document that is due Dec. 15, 2023.

Past, Present and Future

Cedric Dendooven, 46, used to be a customer of Scotts Valley Cleaners, one of the businesses that will no longer be part of the new Target center. It’s just one more casualty of the direction the city is heading, the general contractor remarks while kicking back Monday night at Monty’s Log Cabin along Highway 9.

“They were there forever,” says Dendooven, who moved to Santa Cruz County from the southwest of France 15 years ago. “It’s certainly related to increase of lease or increase of rent. That’s why I bounced from Scotts Valley. I used to live there. I saw the development of houses nearby. I saw the change.”

He’s talking about tech money from over the hill permeating the Santa Cruz Mountains.

“It’s just pushing out the border of Silicon Valley toward here, which doesn’t give too much space for the local people to do what they used to do,” he says in his thick French accent.

He motions toward the hitching post in the bar’s parking lot, past the woman sleeping in the front seat of her packed-to-the-brim van.

“What happened to the rural, to the history and the culture that has come here before?” he asks, pointing out there are others less fortunate than he who may not have been able to remain in the area at all. “Where are the people who were living there?”

He says he was lucky because he was able to afford to buy in Felton before the price shot up. But these days, he says, he’s also feeling the pinch.

“Less and less small businesses can survive here—that’s a fact,” he says, referring to the pressure he expects the big box retailer will put on small businesses in the region. “They’re not competitive here. Because there’s the ‘Target price.’”

But for many stepping foot in Scotts Valley Target for the first time, this was precisely the moment they’d been waiting for.

Scotts Valley resident Lori Strusis, 71, headed to the location for the first time Monday, to prepare for an upcoming trip to the Middle East.

“I got a luggage scale,” she says. “This new look is really great. Right now, the shelves are nicely stocked.”

She also picked up a TSA-approved lock and a pair of earplugs.

With her was Shelley Neal, 69, a fellow Scotts Valley resident, who’d just purchased a pack of paper plates.

“I didn’t see anything lacking here,” she says, noting she usually relies on Target in Capitola for all her paper goods.

Ashley Baykin, 30, a manager at Glimmer and Glow Tanning Boutique a couple storefronts over, was at the front desk. And she was beaming.

“We can see the light at the end of the tunnel,” she says, although she says they’re a little nervous about the availability of parking. “We’re fixing to actually start some new specials for customers.”

Her boss, Sue Sonka, who owns the location with her husband, says the arrival of Target hasn’t been without its tribulations.

“It’s been a long road, I will tell you that,” she says, referring to accessibility for customers and construction dust. “We’re happy that it’s over—and beautiful.”

While other tenants of the center bailed as the Pratt Company jacked up rents, Sonka says they were able to come to an agreement with the landlord. In fact, they’ve decided to consolidate their locations, pulling out of Santa Cruz and going all-in on Scotts Valley.

“The overall hope is that there will be considerably more foot traffic,” she says. “I think there’s just going to be a lot more excitement.”

Mayor Lind says Target’s arrival is particularly good news for San Lorenzo Valley residents, who’ve had to travel further to buy many of the goods other county residents have close at hand.

“If they can’t get it in Scotts Valley, they wait and plan a trip once a month,” she says. “They really look to Scotts Valley for a lot of their shopping.”

Councilmember Derek Timm, currently up for reelection, says Target has already begun to breathe new life into what had become a struggling retail plaza.

“It was in trouble,” he says, reflecting on the situation after Kmart’s downfall. “It was a dying center.”

Studies show significant potential sales tax revenue—which Scotts Valley relies on disproportionately—has been bleeding down the hill to Santa Cruz or over to Silicon Valley, he notes.

Timm says that as a small business owner, he understands how frustrating it must be for small local businesses forced out during the upgrade process.

“I do wish the owner of the center and those businesses would have been able to put together new leases,” he says, noting businesses had to make a tough choice about whether extra customers would justify the higher rents. “The uptick in traffic is going to be amazing coming into that center.”

Vice Mayor Jim Reed, also on the ballot in November, says he’s been working for a decade-and-a-half to coax Target into town. He remembers when the big box business wanted to put a store next to where the Hilton hotel is located. Reed says the larger store Target had envisioned at the time was near a residential area and could have drawn traffic away from downtown.

“This is sort of a culmination of 15 years worth of effort to get them to a place where they are going to help other businesses rather than cannibalize them,” he says. “I believe this will exist synergistically much better.”

He believes Target’s opening bodes well for the future of the community.

“It’s the beginning of a new and strong phase of sustainable commercial growth for our city that will allow us to maintain our small-town character,” he says.

Councilmember Randy Johnson is optimistic, too.

He sees Target’s arrival as the first in a line of positive developments for Scotts Valley.

“Over the past six or eight years, we’ve had our ups and downs, and we’re looking pretty good,” he says, pointing to Mali LaGoe’s leadership as city manager and the impending launch of the Faultline Brewing bar and restaurant in the Hangar business complex. “All the moving parts are headed in the right direction.”

He says the way things are trending proves the time has come for the long-stymied Town Center project to move forward. Scotts Valley has been attempting to make progress on the mixed-use development for years, but has struggled to turn its designs into reality. Santa Cruz finally seems open to selling a piece of land it owns there, and is even going in with Scotts Valley on the cost of an appraisal, he says.

Target’s arrival has unlocked a new sense of possibility, according to Johnson, who adds it will be nice to have somewhere local he can shop for a men’s dress shirt.

“In some ways, it’s a microcosm of the city in general,” Johnson says. “Things are doing well. I’m always gratified when things come from darkness and, all of a sudden, they start blooming.”