Talk about money Impact of Bethany leaving

Scotts Valley grieves the closing of Bethany University after 92 years, but from a purely dollars-and-cents point of view, the loss probably won’t have a major impact on the local economy — and, in the long run, might even help the city’s finances.
Help? Dozens of jobs at the university will be lost, and hundreds of Bethany students will no longer be spending money at Scotts Valley businesses, reducing the city’s sales-tax revenue. That certainly won’t help.
True. But local business owners I spoke with say they don’t get a lot of business from the university.
The neighboring Best Western sometimes hosts visiting parents of Bethany students. But General Manager Jeff Shannon says they represent less than 5 percent of the hotel’s revenue.
“It’ll affect us,” he said, “but it’s not a huge piece of our business.”
Jorge Aragon, who owns nearby Los Gallos Taqueria, says customers from Bethany also make up than 5 percent of his business.
“We hope someone else will take over the buildings,” he said.
And then there’s how the city could benefit financially.
Along with sales tax, property tax is a key source of revenue for the city. Bethany, because of its nonprofit status, pays no property tax. The city would begin to receive property tax revenue if the campus were taken over by a for-profit college or a high-tech firm, or redeveloped for housing.
“If those properties come on to the property tax role, we would actually end up with more revenue coming in rather than less,” Mayor Dene Bustichi said.
Bustichi and Councilman Jim Reed explained why the city doesn’t derive a large amount of sales tax from Bethany.
“The nature of any university is they’re in their own little world, to some extent,” Reed said.
“Students don’t really have to leave campus,” Bustichi added. “If you’re a student, living on a budget, and you have a cafeteria card, why go out to dinner? I’ve eaten at their cafeteria, and the food is great.”
Even if the city is unlikely to suffer financially from the closure, the loss will be immense in other ways.
“Bethany has been a great neighbor to Scotts Valley,” Bustichi said, “a great labor pool for small businesses. At one time, there were 300 job requests coming in to Bethany from businesses wanting to hire students. They’re good people to work with, courteous students, and they’ve worked well with the art community.”
The Scotts Valley Performing Arts Association will sorely miss Bethany, because it performs its stage productions at the university’s theater. President Carolyn Dugger said the next show, “Annie Get Your Gun,” scheduled to open Sept. 30, might have to be performed outdoors at Skypark.
Bethany’s loss is another painful blow to a city that has been hurt by the loss of Seagate and other major employers.
Reed said his biggest concern is for the employees who depended on Bethany for a steady paycheck.
“When Seagate left, the affected employees still had jobs in Silicon Valley,” he said. “But for Bethany employees, those jobs aren’t moving; those jobs are gone.”
Reed said he hopes the campus won’t stay vacant for long.
“It’s an absolutely gorgeous campus, with several buildings that are state-of-the-art and a relatively large contiguous parcel of land that can accommodate a lot of people,” Reed said. “Hopefully, the financial loss to the city will only be a very slight downward blip.”
If all works out, the city’s finances won’t be hurt. But the closing of Bethany still marks a sad end to what Reed calls “a really involved community partner.”
n Mark Rosenberg is an investment consultant for Financial West Group in Scotts Valley, a member of FINRA and SIPC. He can be reached at 439-9910 or mr********@fw*.com.