For countless summers past, visitors to Orcas Island have streamed to Eastsound as a center for gourmet food, boutique shopping, groceries, souvenirs and more. It’s the thrumming hub of the island: jubilant 4th of July parades, scandalously clad Odd Fellows at Summer Solstice, concerts on the Village Green, summer farmers’ markets.

After a lean year in which Eastsound lost at least six prominent businesses – Vern’s Bayside Restaurant and Lounge, Portofino’s Pizzeria, the Sunflower Cafe, Aesthetica, Spirit of the Northwest, and Rhapsody  as well as the newly opened Dragonfruit Cafe – we’ve been hearing worried talk on the street: is the Eastsound core becoming a “ghost town”?

The Sounder conducted an unscientific survey, traipsing the streets to calculate a rough vacancy rate. As of this story, there were 26 vacant commercial spaces for rent and 113 businesses, which is about a 19 percent vacancy rate. We phoned 36 Eastsound businesses, speaking with 25, as well as Orcas Island Chamber of Commerce president Michell Marshall, director Lance Evans and seven Eastsound landlords.

To summarize the interviews: it is agreed that Eastsound is indeed struggling. It is true that some businesses are very close to their breaking point. The town will lose one more shop, Radio Shack, before the month is out, and many business folk connected to the Eastsound grapevine expect to see more closures by year’s end.

Many said this winter has been very, very tough – one old-timer said it was the worst of the past ten years. Most have seen lower volumes of sales over the past three years. Most have trimmed overhead by reducing staff hours, laying off employees, reducing inventory or cutting open hours. Some owners haven’t paid themselves for months; others are working 60-hour weeks or more. They say people are buying more conservatively priced goods and shying away from extravagant buys. Some businesses that stayed open this winter regretted purchasing winter inventory that did not sell and is now out of season.

But the news is not all dire.

The majority of Eastsound shops say they’re still clinging tight to the rock and looking forward to this coming summer with hopes of visitors to boost the bottom line. A handful of businesses said they were at sustainable levels, doing very well or even expanding.

“We are anything but closing,” said Bill Patterson of Chimayo’s, saying business is well up over last year, and growing.

Some owners say they see the economic downturn as an opportunity to reinvent themselves, to tug up the old bootstraps, get creative and start offering new product lines and new experiences, to re-evaluate and make double sure that customer service, food and products are as good as it gets.

“There’s a buzz among shop owners about how scary it is in town, and how to reinvent ourselves accordingly to adjust to the new economic situation,” said Amanda Sparks of The Clothes Horse. “It’s the summer of being very creative. We’re survivors – we live here in the wintertime. We’re very creative. Now’s the time to pull together and dust off those creativity juices and see what we can come up with.”

“People need to take responsibility and work a little bit smarter,” added another shop owner. “We can’t just sit back and expect people to throw money at us.”

Others said quite bluntly that it takes strong business acumen, a workaholic work ethic and a positive attitude to make it out here – and businesses that coast just won’t make the cut.

Marshall, who is also co-owner of the Office Cupboard, said business owners must be constantly on their feet to shift with the times.

“How can I change my business model to fit the economic situation today?” she said.

Lisa Nakamura of Allium Restaurant said becoming adept at social media marketing is now a huge part of staying competitive.

Rent is a factor

A few shop owners voiced concern about Eastsound commercial rents still reflecting 2007 boom prices, not the current trickle of income actually arriving on the island.

Eastsound rents currently run from a low of $1 to a high of $2.50 per square foot, per month on a single-net lease, said realtor and landlord Wally Gudgell.

“In a lot of instances around town, landlords are just being too hardnosed,” said Karen Speck, realtor and landlord. “I guess they’re wealthy and they’re comfortable, and the tenants just fall by the wayside. Our philosophy is, let’s discount where and when we need to, keep the island in business and keep the island flourishing. We’ve been very upset by the attitudes of owners who have been driving people out of business by not being willing to work with people … Do you want it to stand empty, or do you want some income?”

Speck estimated that 14 restaurants have been shuttered over the past three years (the Sounder was unable to verify this).

“Orcas used to be known as ‘the restaurant island,’” said Speck. “We’re not going to be known as that if we continue to lose restaurants.” She predicted “a huge number of foreclosures” during the coming year, saying, “I don’t think we’re on the upswing yet.”

She has also noticed a significant drop in demand in Eastsound’s long-term residential rental market, saying the 20-40 rentals advertised weekly mean word-of-mouth referrals are no longer filling those homes.

“Long-term renters are moving off the island,” she said.

Visitors are key

“Visitors are absolutely needed,” said Evans. “It’s absolutely clear that the economic engine is driven by visitors to the island.”

Most business owners concurred from personal experience.

The Washington state tourism department will shortly be a casualty of state budget cuts, and Evans said the Chamber is responding in part by doing radio advertising (technically sponsorship) for the first time with KPLU, hoping to lure more visitors to the island.

“When you put your time, money and energy into luring visitors here, you want them to see something welcoming,” said Michael Rivkin of Crow Valley Pottery. “My fear is with the high degree of vacancies, it’s not going to look very appealing.”

Nakamura said local businesses need to get “far more aggressive” in attracting visitors to the islands. She also cited concerns about ferry service cuts and ticket price hikes, saying limited ferry runs during the height of the season could be crippling: “That’s our lifeline,” she said.

Resident dollars count too

Although visitors provide a large portion of the income needed to keep local businesses thriving, how residents spend also determines which shops remain on Orcas. Owner Suzie Chapman cited web sales as Radio Shack’s chief competitor and the reason for its demise.

“Locals need to understand how much their support keeps shops open,” said Nakamura. “We’ve seen some establishments that have been around for quite a long time just shutter. Every sale counts; every dollar counts; every person counts, and that’s hugely important.”

When islanders need goods or services, Marshall said she’d like to see people asking, “Is there a place I can get this on the island, and feel good about it?”

“I think it hurts us all when businesses close,” said Deb Hanson of Pawki’s. “There are fewer amenities for visitors; every business that closes impacts everyone.”

When a business closes and a service is lost, residents have to make a special trip off island to get it.

“A good mix of local businesses is good for islanders and visitors,” added her husband Jeff, citing personalized service not offered at mainland chain stores. “We not only know most everyone’s name (well, at least we know the pet’s names), we also know their needs.” He also said higher sales volumes allow local businesses to keep prices more competitive.