Gillette, or bust

GILLETTE, Wyo. (AP) — Some are saying now may be one of the nation's worst energy downturns, with oil, natural gas and coal all seeing historically low prices at the same time.

While how severe the economic crunch is related to history, there's no denying the energy sector decline that has been rolling downhill for more than a year has hit Gillette hard. Layoffs, bankruptcies and closures — all things recently scarce in Campbell County — are becoming more common, the Gillette News Record reported (http://bit.ly/1SyLRC6).

But it's not just in the oil fields and at the coal mines. The downturn has created a ripple effect that's impacted nearly all of Gillette.

A closure

On Gillette Avenue in late March, Susan Kiplinger was preparing to permanently close the doors to her business, Avenue Mall, by the end of the month.

It's a store Kiplinger and her business partner, Candace Crimm, opened four years ago to help women sell their products.

"This was sort of my baby," she said.

The store is set up to allow vendors to rent space to sell their wares. It sells everything from baby clothes to health care products.

But with more energy job layoffs, many of Kiplinger's vendors are leaving town.

"Some of the vendors that have left, their husbands were laid off," Kiplinger said. "I just haven't been able to fill those spots quick enough."

None of Kiplinger's vendors left her shop to do business at other stores in town, she said. They all moved or weren't able to sell their products.

"We at one point had four people selling handmade jewelry, now I don't have any," she said.

Kiplinger also owns AAA Solution, which sells and services pressure and parts washers and infrared heaters. That business, too, has felt the pinch of a weakening economy, she said.

"It's a trickle-down effect," she said. "When the coal mines tell the contractors to go home, then we have to lay off people."

Kiplinger grew up in Upton and has lived in Gillette since the 1980s. This is the first time oil and coal have experienced downturns at the same time, she said

"We've always been able to rely on the other one," she said.

The decline felt from the one-two punch of both industries being hit has been too much for her Gillette Avenue store to handle.

So it closes.

Hospitality hurting

Other businesses have fared better, but are by no means out of the storm. Area hotels are feeling the sting of the downturn as well.

A recent search on Expedia showed a number of hotels charging and average of $85 night. In 2014, many were more than $200 a night.

Because of lower rates and reduced occupancy, lodging tax collections are down significantly compared to previous years, said Mary Silvernell, executive director for the Campbell County Convention and Visitors Bureau.

In February, $18,876 in lodging tax was collected. During February last year — a record year — $42,915 was collected. Even 2013's collection of $29,735 beats this year by a long shot.

Silvernell said she hasn't seen a check that low since 2012.

The checks are about two months behind, and she expects they'll continue to be small.

"In December, everyone was dead," she said. "Moving into this year, we'll feel the effect of lower room rates and lower occupancy."

At Tower West, owner Aftab Khan said business is down.

Khan has lived in Gillette 16 years and has been through busts before. He said the city is in the grip of another one.

During the last few years, Khan said stable oil prices helped create a lot of activity in the area and his hotel. But then the downturn hit, and it's so far worse than others he can remember.

"I haven't seen Gillette this bad," he said. "Like any other bust, we try to conserve cash and try to keep the properties going as much as possible to persevere through downturns."

He said he first noticed troubled waters in November, but the sharp nosedive caught him off guard.

"It was surprising of how forceful a downward trajectory it was," he said. "It was a lot more than we ever anticipated."

In previous busts, Khan's hotel took a hit of 20 to 30 percent, but now business is down 30 to 40 percent, he said.

Khan also owns Silver Creek Lounge and Silver Creek Steakhouse, which are a bar and restaurant on the property. Both businesses are down about 10 percent, he said.

The impact is less severe because the local customer base is still strong, Khan said, adding he's lowered room rates as well as prices for meals and drinks.

"We've tried to cut our pricing as much as we can," Khan said. "We don't want to lose on any sales, so we try to keep it reasonable."

He's also had to make other kinds of cuts, he said. The worst kind — employees.

Khan said he's been forced to lay off about 25 percent of his workforce.

Food feeling the slump

It's not just business or discretionary or leisure spending that's down. Even staple businesses that sell items everyone needs are feeling the pinch.

Troy McKeown, owner of Don's Supermarket, said business has been down for his store as well.

McKeown's been operating in Gillette for eight years. While he said he's been through busts before, none have been this bad.

"It's probably as slow as I've ever seen," he said. "But I would say that about the whole town."

He noticed the slump in September, adding he expected it would trickle down given the new and proposed federal regulations on coal.

McKeown's had to reduce hours, but hasn't had to lay anyone off yet.

"We're doing everything we can to keep everybody," he said.

While McKeown's been able to retain his staff, he can't hire any new employees, and people have been dropping off "tons of applications."

Don's has been emphasizing customer service and carrying a different product mix to help retain customers, he said.

Time will tell if it's enough.

At the airport

Even the area's only commercial airport for miles around has seen a decline.

Though passenger counts are up for the year, they are down compared to last year, according to the Gillette-Campbell County Airport.

In the first two months of 2015, passenger counts were up by 15 percent compared to 2014. The airport experienced a 12 percent increase from January and February at that time. However this year, flights are almost flat at a 3 percent increase as of February. Passenger counts dropped by 10 percent since January.

Flights to Denver are up 7 percent, but down 26 percent from January. This time last year, they were up double-digits at 14 percent and up 22 percent since January.

But the airport has taken its biggest hit on flights to Salt Lake City.

Last year by February, flights to Salt Lake City had increased by 5 percent compared to 2014. This year, they are down 16 percent, up from January's 33 percent drop.

As to how long they will be up, Jay Lundell, airport executive director, said he can't be sure, but "we're holding our own."

A busy bust

Though the downturn has negatively affected most business in Gillette, some are actually busier because of it.

The troubles wracking Gillette's economy has led to an increase of people at the local library.

Campbell County Public Library Director Terri Lesley said she's noticed the library has been busier lately, especially at the computer terminals. That's because more people are going to the library to use computers for job searches.

Elsewhere, Kristene Partlow, owner of KP Management U-Haul and Storage, said that her business has been good. The transient nature of Gillette's population has made the business consistent.

That is, until last summer.

"I don't know what defines a bust. I just know we had a lot of people moving out of Gillette," she said. "A lot come and go with energy. It was a great business to be in. Now it's lopsided and there are a lot more people moving out every week than moving in."

Partlow wasn't sure exactly how many, but said it has been a "significantly higher amount."

"Today should be the day I check in all new equipment and there are no trucks," she said. "Anyone that makes a reservation online I won't even see."

During a recent week in March, she said that "sadly ... (the system) let people make reservations and we literary had nothing to offer people."

Because there are no local trucks, Partlow said she's had to send customers elsewhere, sometimes as far away as Rapid City.

"In Wyoming that's a significant problem because it's so far to the next town," she said. "It is a struggle every week trying to find out how we're going to take care of our customers."

But the downturn has been regional, and Partlow said U-Haul locations in Sheridan, Buffalo, Newcastle and Hulett are also often out of trucks.

"The bust started and people were laid off," she said. "U-Haul couldn't keep up. It's not a Gillette U-Haul problem, it's a regional problem, this whole side of the country."

Partlow said she was set to have a record-breaking year, but demand is so high she's actually lost business because she's not able to keep up with the exodus.

She said it is unfortunate her business is doing so well while the rest of the town is hurting.

"I wish it wasn't like that," she said. "My business is good, but if everyone leaves town, that won't be good either. We're used to people coming in a saying, 'I got a job' and leaving with no notice. Now it's because, 'I got laid off today. I'm going back home.'"

Down, but not out

While business is down across the board, residents are hopeful the good times will return.

"We do have reason to be optimistic during the downturn, but that's hard to convey to people that have lost their jobs," Khan said. "As bad as it's been, I still think there's room for optimism."

Khan said he thinks oil could make a comeback.

"We're down, but we feel there are some positives with potential oil exploration in the area," he said. "I think that's why we're seeing new hotels and stores come into town."

McKeown said supporting locally owned business would help because the money stays in town.

He also said residents shouldn't count Gillette out of the fight.

"Somehow we always pull out of it," he said. "I don't know if it will be where it was, but I don't think it will stay where it's at now."

Partlow agreed.

"I'm a believer that Gillette will be back," he said. "It's going to have a tough year, we all know that, but it'll come back."

If history is any indication, Gillette will turn around, Khan said.

"There's a point where the negativity bottoms and things start improving," Khan said. "If you ask people who have been here longer, they can tell you how bad it was at times and things have improved."

For everyone's sake, residents are hoping he's right.

___

Information from: The Gillette (Wyo.) News Record, http://www.gillettenewsrecord.com

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Related topics