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Sun Valley Floral Farms, one of the nation’s largest producers of tulips, lilies, irises and other bulb flowers, has issued layoff notices to all of its employees in both Arcata and Oxnard.

Citing “a significant downturn in business,” the notice says Sun Valley Group expects layoffs to begin on July 23, which gives employees the minimum 60 days’ notice required under the federal Worker Adjustment and Retraining Notification (WARN) Act.

The notice tells employees that they should consider their layoffs to be permanent, though closure of the company’s Arcata and Oxnard facilities may not be a foregone conclusion, according to a statement provided to the Outpost by Sun Valley’s director of sales and marketing, Bill Prescott. [Disclosure: Prescott was formerly the general manager of Lost Coast Communications, Inc., the Outpost’s parent company.]

The statement says team members were recently notified about a potential mass layoff, though the text of the actual notice does not include such provisional language.

“This action was taken to comply with government laws while the Company continues to evaluate its strategic options,” reads the statement provided by Prescott. “We regret the uncertainty and confusion these notices will undoubtedly cause to our team members, vendors and customers and we will be privately communicating to all affected groups. We will provide further public comment as circumstances warrant. Please direct all questions to Bill Prescott 707-630-2994 or bprescott@tsvg.com.”

Scott Adair, the county’s director of economic development, said Sun Valley reached out months ago saying management was concerned about the prospect of mass layoffs.

“They mentioned that energy expenses, particularly electricity costs, were one of the main pressure points on their business,” Adair said. 

The county reached out to PG&E on the company’s behalf in hopes of negotiating a special discounted rate that’s available to businesses that meet certain criteria under the North American Industry Classification System (NAICS). But representatives from PG&E told the county that Sun Valley didn’t qualify.

“PG&E said they were only targeting industries that fell within the manufacturing category — agriculture did not qualify,” Adair said. County staff tried to convince the utility provider that Sun Valley Floral Farms is different than typical agricultural businesses, with elevated planter beds and more technically complex operations involving machinery. 

“It’s not like an artichoke farm with acres and acres of crops,” Adair said.

The county’s economic development team connected Sun Valley with the nonprofit California Manufacturing Technology Consulting (CMTC) in hopes that they could help the company change its NAICS designation to manufacturing in order to qualify for PG&E’s discounted rates, but that effort failed.

“It’s too bad,” Adair said. “We did try to provide them some support.” 

The company told county economic development staff that it employs up to 700 workers during its peak season, often filling hotels off Arcata’s Giuntoli Lane. Adair said the company is known for employing people who are otherwise disenfranchised, without much training or technical expertise. 

“It’s somewhat of a stepping stone,” he said, “a gateway professional opportunity for less skilled people.”

Sun Valley has shown signs of economic struggle for years now as wholesale cut flower producers in other countries flood the market with cheaper supplies. In 2021, Sun Valley applied for permits to convert up to 23 acres of its greenhouses to cannabis production. Amid pushback from neighboring property owners, the Board of Supervisors wound up approving a much smaller operation of just 5.7 acres. Of course, that industry has also gone south, and the conversion to weed hoop houses greenhouses never took place.

The layoff notice tells Sun Valley employees that they will not be provided with any severance benefits, and any workers who have health or dental insurance through the company will lose their coverage after July 23.

Reached via phone, Prescott said he could not provide any further information at this time.

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UPDATE, 2:15 p.m.:

Humboldt County Economic Development Director Scott Adair sent along the following message to employees impacted by these layoffs:

Affected workers can contact the Humboldt County job market at 707-441-5627 or email us at workforce@co.humboldt.ca.us. We have career advisors and vocational counselors who can assist laid off workers at no cost. We want to help.

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DOCUMENT: Sun Valley Group Notice of Layoff to Affected Employees