Founded in 1923, the bake shop, originally named M&M Bakery, changed hands several times until Roe Wilde of Payson took over and renamed it Roe’s Bake Shop in 1938. Wilde’s son, Garth, took over the business in 1982 but closed it to focus on his other job as a concessions manager at Brigham Young University’s Dining Services Department.

But a state-funded downtown revitalization initiative and strong community support helped resurrect the beloved bake shop last October, said Lolly Penrod, Roe’s new owner and a Payson native who had grown up on the bake shop’s famed cake doughnuts and English meat pies.

Penrod and her husband, Paul, an accountant with Neways International, had intended initially to open an unfinished furniture retail business at the site of the Payson bakery.

“We wanted to go into the unfinished furniture business because my husband used to do carpentry and refinish furniture for an antique dealer,” Penrod said. “Also, Payson is a very unique town; people here are very creative and typically like to do a lot of handcrafting work.”

But the Penrods, who initially dismissed the idea of taking over the bakery, took a gamble, bought its recipes and equipment from the Wildes in May 2002, and reopened the bake shop along with their unfinished furniture business, The Naked Chair, on Oct. 31, 2002.

“We initially had the idea of just managing the bakery and letting our baker run the business. But the bake shop took up so much of our time that now our focus is on the bake shop, where 99 percent of our revenues come from, rather than the furniture shop,” Penrod said. “And my husband will be taking over the baking next month.”

The Penrods, who had no experience as bakers when they bought the business, said their biggest initial challenge was learning to work with the recipes’ different temperatures and requirements to achieve the taste and quality to which their customers were accustomed.

“Getting the product to what people were used to, and getting the word out there and letting people know we are open again were challenges,” Penrod said. “But our first baker, Ryan Ringger, who used to work for Garth Wilde, was instrumental in helping us set up the business.”

Today, the bake shop churns out 800 doughnuts daily, along with birthday and wedding cakes, brownies, meat pies, cheesecake, muffins and chicken salad croissants.

Also helping Roe’s is a joint effort by the city of Payson and Utah Mainstreet, a state resource program, to revitalize downtown Payson and attract new businesses to the area. American Fork and Springville are also partnering with Utah Mainstreet to revitalize their downtown areas.

“Over the last 10 years, there’s been a gradual decline in downtown Payson. And when Roe’s left, everyone thought that was the end of downtown since the bake shop has been there for so long,” Penrod said.

“But the city has been very proactive in attracting new businesses to the downtown area. The opening of the City Library on Main Street, which brought in a lot of traffic, was one reason why we were willing to run the bakery,” she said.

Bim Oliver, state coordinator of Utah Mainstreet, agreed.

“When we started working with the city of Payson three to four years ago, the downtown area was in bad shape. There were a lot of vacancies, buildings had degenerated,” he said.

“But now at least five to six buildings in the area that were once vacant are now occupied. Sales tax revenues have increased and we’re now working on a promotion strategy for downtown Payson,” he said.

Roe’s Bake Shop received a grant from Utah Mainstreet’s program, in which some $220,000 in state funds were available annually to help owners of historic downtown commercial buildings rehabilitate their properties.

“The state would provide us 50 percent matching grants if we followed certain guidelines on how to finish the buildings’ fronts,” Penrod said. Roe’s received about $2,500 in grants.

But Oliver said the grant program ended in July because of budget cuts.

The Penrods used a U.S. Small Business Administration-backed loan that’s underwritten by Central Bank to buy the bakery, recipes and equipment. To obtain working capital for building improvements, they took advantage of the low-interest-rate environment to refinance mortgages on their home.

But the biggest perceived threat to downtown businesses like Roe’s is the arrival of a Wal-Mart in the area, Penrod said. A new Wal-Mart supercenter is scheduled to open in the spring in Payson.

“Wal-Mart can sell their frozen doughnuts dirt-cheap. But our product is made fresh, hands-on, which means we have to add in labor costs. But the flavor and taste is far superior to Wal-Mart’s,” she said. “For shops like ours to survive, the consumer has to have a desire not to buy into the convenience of a frozen product.”

“Even though we compete with grocery stores like Smith’s and Payson Market, they’re part of Payson long enough that they’re willing to give us some room,” she said. “Whenever we’re low on a product, say a cake kit, and there isn’t a shipment coming in immediately, we’ll get it from the stores.”

Indeed the bake shop, famed for its raisin-filled cookies, has a following from as far away as Idaho and Wyoming.

“We also have customers from Nevada and California visiting family in Payson at least once a month who will make it a point to come to our bakery for our raisin-filled cookies,” Penrod said.

Brian Hulet, president of Downtown Historic Payson, which runs the city’s downtown revitalization project, said its strategy to counteract Wal-Mart’s influence is to attract businesses that don’t compete directly with the world’s largest retailer.

“Most of our downtown businesses are niche businesses like quilt shops, craft shops, computer repair stores, restaurants and salons that don’t compete directly with Wal-Mart,” he said.

This story appeared in The Daily Herald on page E1.