VALLECITO – The Rusty Shovel Saloon, a bar and restaurant at Vallecito Reservoir, has closed after operating for five years in the small, lakeside community northeast of Durango.

The saloon, known as a gathering place for motorcyclists, opened an establishment in Durango this summer. While customers said goodbye to the Vallecito location, residents questioned the closure’s economic significance. Some said restaurant turnover is normal in the area; others said the closure is a sign of a continued economic struggle at the lake.

“We want to take this time to let everyone know that with heavy hearts we are choosing to close The Rusty Shovel Saloon Vallecito location,” co-owner Robert Wilson wrote Aug. 18 on Facebook.

The owners were not available for comment. Thursday on Facebook, the owners clarified that the Rusty Shovel Saloon in Durango would participate in the Four Corners Motorcycle Rally over Labor Day weekend, but no events would be held at the former Vallecito location.

The owners said their main challenges were an unreliable workforce, high rent, rising taxes, the cost of permits and the cost of water, electric and gas, according to the Facebook post.

“We are no longer willing to compromise our brand and our standards,” Wilson wrote. He thanked customers for their support.

Paul Eckenrode, president of the Vallecito Lake Chamber of Commerce, said the closure was a symptom an economic downturn since the 2002 Missionary Ridge Fire.

“The economic condition of Vallecito Lake pales in comparison to what it once was in the early 2000s,” Eckenrode said. “When you talk about staff shortages, an unstable workforce, things of that nature, we have less in the way of economic generation going on.”

The area has lost 15 businesses since the early 2000s, leaving 16 current tourism businesses, according to a 2019 economic report by the chamber. Fewer businesses, lower sales tax revenues, fewer recreational visits – the current economic generation can’t support a more stable workforce, Eckenrode said.

Businesses in the community support one another, and the saloon’s departure was a loss. Out of more than 100 comments, many people recalled how the business contributed by hosting community events and live music or supporting other businesses.

Almost every commenter thanked the saloon owners for being part of the community. Some shared memories, like lighting candles on the bar during a power outage or being welcomed into the private staff party on Christmas. Many wished the owners well in Durango.

“It’s been a really pumping hot spot,” said Carrie Van Hoesen, a Vallecito resident, especially because it brought motorcyclists to town. “It brings people to the community, unlike other places that don’t really attract that crowd.”

In Vallecito, the saloon was one of four restaurant/bars. Some residents, like Rolland Healy, owner of Vallecito Lake Country Market, didn’t see the closing as a bad sign for the local economy. In his personal experience, he said about four restaurants came and went in the building over the past 20 years.

“Perhaps it didn’t blossom for them like they wanted it to,” Healy said. For the Durango location, “maybe they’re hoping because of its location that it’ll blossom even more.”

Healy said the community is growing. The economy survived the Missionary Ridge Fire in 2002 and the 2008 recession. Now, the busy season has expanded beyond the summer to include spring and fall months.

“Vallecito is no longer a dead community beyond the summer,” Healy said.

Eckenrode is still concerned about the decrease in recreation visits.

“Recreation visits are the lifeblood of the economy up there, and that’s what we’ve got to have,” he said. “I’m currently working with county management and staff to put together an economic report because there are no economic reports to this point.”

smullane@durangoherald.com