Talk About Money: Seagate loss will hurt local business

Whose wallets will be lightened next year when Seagate moves its headquarters — and 400-plus jobs — out of Scotts Valley? Not Seagate employees’. They’ll still have jobs, because the move does not include layoffs.
No, the financial hurt of this move will be felt by surrounding businesses: restaurants, stores and others.
“It’s going to hit us really hard,” said Jorge Aragon, owner of the two Los Gallos taquerias in Scotts Valley.
He said customers wearing Seagate badges have been among his most loyal, and he’s seen a drop in business after job cuts in recent years.
“Some of them came in to say goodbye after they were laid off,” Aragon said.
Even though fewer than half of the disk-drive maker’s Scotts Valley employees live in the city, many of them go to lunch, have drinks, do their grocery shopping and see doctors in town.
Jason Clements, general manager of Scotts Valley Market, says lots of Seagate workers pick up lunch at his store’s deli or do their shopping before they commute home to Santa Clara Valley.
“Now, all those dollars will be spent in San Jose,” he said.
Luon Nguyen, office manager for dentist Wandy Tsai, says Tsai’s practice will be hurt directly and indirectly.
“If Seagate employees move their families out of Scotts Valley, we lose patients,” he said. “And if local businesses slow down and their incomes drop, one of the places where people sometimes feel they can cut back is on dentistry.”
For the owner of Malone’s Grille, the loss of Seagate’s headquarters recalls 30 years of memories.
“When we opened in 1980, we had a lot of loggers and truckers coming in,” recalled Patty Malone. “Then, all of a sudden, these suits start coming in, saying, ‘Hey, we opened a company down the street.’”
Malone’s became the after-work hangout for many Seagate workers.
“People would come in at 5 p.m. and stay till 11,” she said. “They’d have office parties here; they’d meet people here and end up getting married.”
Malone’s was mentioned in a Time magazine article as the watering hole of Seagate co-founder Al Shugart.
“Seagate put Scotts Valley on the map,” Malone said.
Seagate executives even had a phone installed at Malone’s with a direct line to the company’s facility in Singapore. When the Loma Prieta earthquake struck at 5:04 p.m. Oct. 17, 1989, Seagate workers who lived in Santa Clara Valley hung out at Malone’s, sharing sandwiches and drinks, until they could figure out how to get home.
“This was really a family spot for Seagate people,” Malone said.
Another bar and restaurant owner, Jason Revino of Jia Tella’s and JT’s Next Door, says he’s also saddened by the Seagate decision. But he hopes the City Council will entice another big employer to move in.
“I have confidence in (Mayor) Jim Reed and the gang,” Revino said. “They have a business mindset. They brought Easton Bell Helmets here, with 175 jobs. They’ve got a year to see if they can lure another big business here.”
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.