Stockton's potential bankruptcy would likely have little direct effect on Lodi, but it could shine a negative spotlight on the county, city leaders say.
Stockton is currently in confidential mediation with its major creditors, including its unions and retirees. The process is a state-mandated step before the city can file for bankruptcy.
If Stockton were to end up in bankruptcy, it would generate negative press for the region, City Manager Rad Bartlam said.
Lodi has no direct business relationships with Stockton, but Bartlam said Lodi often "gets painted with the same brush" because the cities are so close in proximity.
Lodi already has to emphasize to rating agencies that its foreclosure and employment numbers are in line with the more positive state average rather than the county average, Bartlam said.
"We often get lumped into the city of Stockton and the general county economic woes rather than our actual situation," he said.
One potential perk is that the city of Lodi has recently received two new employees from Stockton — a new police officer and the deputy Public Works director. Bartlam especially pointed to the police officer's 16 years of experience, because that is difficult to find.
"I don't mind cherry picking when possible. Both of these employees felt they would be much better off here, and they both took pay cuts to come here," he said.
Stockton's financial meltdown could encourage businesses to consider locations in Lodi, said Pat Patrick, president and CEO of the Lodi Chamber of Commerce. Lodi has the advantage of being close to the Stockton port, two railroads and the Stockton airport that can fly international shipments.
"If someone is making a decision on where to put a distribution center or manufacturing plant, they might say, 'We don't want to go to Stockton because they are in bankruptcy,'" Patrick said.
But Patrick said he worries that businesses interested in coming to the area could be turned away by the bankruptcy of the county's largest city.
"We don't need that much negativity. We are all trying to work with the hard economic condition, and we don't want the region to go downhill because of a bankruptcy," Patrick said.
From the city's perspective, Bartlam said the harm to the area outweighs any of these potential perks.
"Nobody wants to see the city of Stockton going through the kinds of financial difficulties they are. Those small benefits, we'll take advantage of them, but we don't wish that situation in Stockton," Bartlam said.