The lumber mill closed five years ago, and so many families moved out that the town can no longer even field a high school football team.
But McCloud is hoping to turn things around by exploiting the other natural resource in abundance along the icy flanks of Mount Shasta — water.
The town of 1,300 people in far Northern California struck a deal with Nestle in 2003 under which the Swiss company would build the nation's largest water bottling plant to tap three of the many springs on the mountainside and bottle up to 521 million gallons of water a year.
The project is still awaiting an environmental review from the county and could be several years away from approval, having run into opposition from scientists, fishermen, conservationists and some members of the community 280 miles northeast of San Francisco.
But others in town are growing frustrated by the delays and want to see something, anything, to replace the lumber mill that was driven out of business by the logging restrictions that have hurt the timber industry across the Pacific Northwest.
"When they had the mill, this town was jumping," said homeowner Paula Kleinhans. "As soon as the mill closed down, people moved, they lost their jobs, and now there are no children here. It really needs industry here."
Similar disputes are playing out elsewhere around the country as water becomes an increasingly precious commodity — and a major source of legal and political controversy — because of drought, booming population and the popularity of bottled water.
From California to New Hampshire and Florida, corporate giants such as Nestle, Coca-Cola and Crystal Geyser are looking for new sources of water and running into resistance.
Supporters of bottling plants see them as a vital source of jobs and revenue. Others fear that pumping large amounts of water from the ground will drain wells, creeks and streams.
"It's no longer this limitless resource," said Elaine Renich, a commissioner in Lake County, Fla., where California-based Niagara Bottling LLC wants to pump water from the region's shrinking aquifer. "It's beyond me how you can expect people to conserve water and you turn around and say a water bottling plant is OK."
In New Hampshire, residents are trying to block New Hampshire-based USA Springs from pumping more than 300,000 gallons a day from 100 acres it bought.
"They are people who want to bully their way in and take our water," said Barrington, N.H., resident Denise Hart.
Opposition in Wisconsin forced Nestle to abandon plans by its Perrier subsidiary to build a $100 million bottling plant near Wisconsin Dells. In Michigan, about 200 miles northwest of Detroit, residents are engaged in a similar legal dispute against Nestle.
Last September, Napa, in the heart of Northern California's wine country, rejected Crystal Geyser's application to tap into the city's aquifer to bottle mineral water.
Bottled water is a $10.8 billion-a-year industry in the U.S., with demand growing 8 percent a year. California is home to an estimated 40 percent of the nation's 300 water bottling operations.
Room for third bottler?
McCloud sits in the shadow of 14,162-foot Mount Shasta in a forested region crisscrossed with trout streams. The dozens of springs breaking through the crust of Mount Shasta's lower reaches are so pure that residents drink directly from them, filling bottles to take back home. Coca-Cola and Crystal Geyser already run bottling operations nearby.
Under the agreement negotiated by McCloud's sole governing body, an elected board that oversees water, roads and sewers, Nestle is promising 240 jobs and payments of as much as $390,000 a year, depending on how much water is removed.
The company and the board say the town will still have more than enough water for itself. And preliminary reviews have shown that the pumping plant would have minimal environmental effect.
"We're all working to the same goal: sustainability and protection of the environment," said Nestle's Northern California natural resource manager, David Palais. "We're not going to come in and invest money and deplete the resource."
Opponents say not enough study has been done. Among other things, they say, it is not clear what the pumping would do to the streams. Some could become slower or warmer, perhaps harming the trout, scientists say.
"These are small streams. Individually, they don't count for much, but it's always the cumulative effect you worry about," said Peter Moyle, a biologist with the University of California at Davis.
In town, some residents and community leaders believe the project could bring some energy back to McCloud, which had 2,000 people before the lumber mill closed.
Nowadays, the McCloud Soda Shoppe & Cafe, the bookstore and the general store close by 5:30 p.m., and the only place to get a meal on Monday, Tuesday and Wednesday nights is the bar at the Veterans of Foreign Wars hall.
Randy Prinz, 52, said he might support the bottling operation if the town renegotiated to get more money. His grandparents settled in McCloud at the height of the timber industry, and he watched it go from boom to bust.
"Now all you have is your memories and your house," he said. "And no job."