West Oakland Property Prices Threaten a Food Activist’s Dream

kqednews8.27.15

By  posted in KQED News

The property market in West Oakland is booming, but from the corner of West Grand Avenue and Market Street you can’t tell that.

“We looked at that site. That one. That one. The one that’s now been demolished,” says Brahm Ahmadi. There are seven sites he points to, all of which he’s failed to purchase. The cost is just too high, he says.

Ahmadi has worked for years to bring a full-service grocery store to West Oakland — where most food sales in the neighborhood are apparently at liquor and corner stores. Meanwhile, wealthier people are moving in, causing rents and property prices to rise.

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Ahmadi says West Grand and Market would be ideal for the market he envisions. It’s one of West Oakland’s major intersections, is served by public transportation and already has plenty of potential customers living nearby. But Ahmadi hasn’t been able to swing a deal with potential sellers.

“We were almost every time floored by the counteroffer and how dramatically more they were asking for their properties,” he says.
Some land in the area is going for three times the amount he offered — well above its assessed value, he says.

Ahmadi’s offers were sad, says George Kim, who helps manage the West Grand Shopping Center owned by his parents — one of the seven properties Ahmadi tried and failed to purchase.

Kim sympathizes with Ahmadi and agrees that the neighborhood needs a grocery store, but Ahmadi’s offers weren’t even close to what Kim wanted, he says. Recently, he says he was offered more than $9 million for the land. Ahmadi couldn’t offer even half of that.

A housing development is going up across the street from his shopping center, and Kim says he will probably wait until it’s finished before deciding whether to sell.

Ahmadi says he doesn’t blame property owners for holding out for more cash. He says that’s the “American way.”

“The problem is, it has a greater negative impact on the community,” he says.

It Seemed Like a Good Idea at the Time
The idea for Ahmadi’s People’s Community Market spun off of a West Oakland community food organization he founded called People’s Grocery. The organization focuses on food justice programs and has brought cooking classes, produce deliveries and a community garden to West Oakland.

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Opening a full-service grocery store looked like a promising venture in 2011. Ahmadi raised $1.2 million from nearly 400 Californians, most of whom were East Bay residents, he says. His efforts were even featured in the New York Times.

The Times article was written in the summer of 2013. Ahmadi’s fundraising campaign successfully ended later that year, around the time West Oakland property prices and rents were just taking off. Ahmadi has been trying for the last 18 months to find property to buy or lease, but he has failed. It was just bad timing, he says.

“What we did was shift to accepting that we’re going to have to pay an exorbitant price to get a piece of land in this neighborhood,” he says.

The City’s Role
The city could help pay for a site. But that would be controversial, says Renee Roy Elias, a volunteer with the Oakland Food Policy Council.

“Do we want taxpayer dollars to go towards this very, very overpriced piece of land?” she asked.

Elias would like to see the city get creative with how it supports equitable access to food and possibly offer more incentives, like tax breaks, to local healthy food projects.

“That would set an amazing precedent for future projects like Brahm’s project,” she says.

The city could also assume a stronger role as mediator between entrepreneurs and property owners, says Elias. A few years ago the city worked aggressively to get a large Foods Co. store to move into West Oakland. The City Council even voted to use eminent domain to secure property from owners who wouldn’t sell. The deal never panned out. But Ahmadi says he would like the city to work just as hard to help his project.

If Not the Government, Then Who?
The city has to be careful about what steps it takes to help local businesses and can’t take too many risks, says Ben Mangan, who teaches at UC Berkeley’s Haas School of Business.

“That’s good sometimes and that’s deeply frustrating at other times,” he says.

Mangan has researched the types of people who do take these risks. They’re called impact investors, and they’re usually philanthropists or others willing to put their money on the line for the public good, even though it could involve making a risky investment.

“You’re often competing in a marketplace where you may be the only one seeking that extra bottom line, and you have to work harder to achieve social impact while your competitors are just looking for a return on investment,” says Mangan.

Ahmadi says he thinks he’s found his impact investor — a former Oakland resident who went to Wall Street, made some cash, retired young and now is back and wants to help. Ahmadi won’t name him, but he says this potential partner, who would act as landlord until he’s repaid, is willing to pay well above market rate for land the grocery store needs. But it would be in a cheaper location than Ahmadi’s dream spot at West Grand and Market.

About a half-mile from that ideal location, at San Pablo Avenue and 32nd Street, Ahmadi is looking at a couple of properties where his market might be built.

But the area comes with more risk. Across the street, there’s St. Andrews Plaza, a compact concrete triangle sporting a few eucalyptus trees. Ahmadi says there is drug use, prostitution and violence around the park. Community groups have been trying to work with the city to find a solution to clean up the area, he says.

“I feel if this problem is here and we try to open our doors, the sense of a lack of safety will be a major deterrent to a lot of people shopping here,” he says.

Still, this is his best shot, he says. There are two property owners he needs to convince to sell in order to have enough space for his grocery store. One deal may be signed this week, he says.

The second property hasn’t been easy. He’s had no luck contacting the owner, and the city isn’t helping out, he says. If he fails to secure the second property, Ahmadi says, his longtime campaign to bring a full-service grocery to a community that badly needs one could be over.

 

Business Advice from Peter’s Kettle Corn

Peter Ngu started Peter’s Kettle Corn with his brother John at the Laney College Flea Market in 2007.  After a while, they started doing festivals, pop-ups and catering, and now their kettle corn can be found in local grocery stores in Oakland, Alameda and San Francisco.  I met Peter last year, right before his family opened a retail location on MacArthur Boulevard in the Laurel District.

If you’re thinking about starting a food business, we encourage you to take the next step because a strong local economy benefits everyone.  Since our goal is to reach out to small business owners that we can learn from, I thought he would be a great person to interview.  Peter told me about who first inspired his family to start a business, how they saved enough money to launch and what he wishes they’d known from the beginning.

Why did you decide to start your business?

​Before the business end of things, the initial goal was to figure out how to make the product in order to satisfy personal cravings. It was local business owners (street food vendors) that inspired us to turn our obsession into a business and decided Laney College Flea Market would be the ideal location to launch PKC.

Describe the process of starting your business.

We were fortunate enough to have guidance and feedback from local business owners. With that, we learned a lot from their trial and errors and in turn, helped us shape and form to what our business is today. Online researching also played a vital part of the start of the business.

What obstacles did you face?

Saving enough working capital to launch the business was our biggest obstacle.

How did you overcome it?

​Well, in short, we saved every penny we had. We spent a lot of time at the local flea markets so it was second nature when it came to selling off personal items. Also, we took side jobs helping others load and unload their trucks. It wasn’t something I would call overnight success; however, everything ended up working out in the end.

What do you wish you would have known when you were starting your business?

The importance behind branding and marketing.

What advice do you have for someone who might be thinking about starting a business?

Never give up.

Did you know that you can turn your home kitchen into a bakery?

I met Ren Buenviaje at a Kitchener pop-up a few years ago.  She’s the pastry chef/owner of Renby’s Sugar Shoppe, a gluten-free bakery based in Emeryville. It’s a Cottage Food Operation, which means she runs the business out of her home.  This can be a good way to start a small business relatively fast, without a lot of overhead costs – click here for the pros and cons.

We are asking small business owners about how they got started and the obstacles they overcame in the hopes that we can all learn from each other.   Ren told us about her process for testing recipes, how she’s partially responsible for a wedding and why she started a gluten-free bakery even though she’s not gluten-free.

Why did you decide to start your business?
A friend of mine, with whom I used to swap baking tips, was diagnosed with celiac a few years ago.
It inspired me to try making gluten-free baked goods that even gluten-tolerant folks would enjoy.
About two dozen attempts later, I had a solid chocolate chip cookie recipe.
People loved it, and they would say, “That was gluten-free?? You should sell that!”
So I did!

Describe the process of starting your business.
I knew I needed more than just one solid recipe, so I started a monthly series of gatherings
called Sugar Socials. I would make large batches of four or so new recipes, then have people
come try them out and give me feedback. At first it was just a few friends, and then they started
bringing their friends who brought their friends. By the tenth one, I had half a dozen recipes
and a pretty good number of potential customers. (Side note, I’m actually making wedding cupcakes
this weekend for a couple who met at one of my Sugar Socials!)

What obstacles did you face? / How did you overcome them?
Running a gluten-free bakery comes with a very unique set of challenges.
For one, I had to overcome people’s biases toward gluten-free food.
It’s very tricky marketing gluten-free to people who don’t need to follow that diet.
In the end, I opted to put the emphasis on taste. Lots of free samples go a long way!
To this day, 9 out of 10 of my customers don’t even have a gluten intolerance.

There was also the matter of kitchen space. Minimizing gluten cross-contamination was a top priority
and that gets tricky in commercial kitchens with shared equipment. I found some pretty creative workarounds but thankfully I didn’t have to do that for long. The cottage food law passed about a year after I officially started Renby’s Sugar Shoppe, and now I have a lot more control over the presence of gluten in my home kitchen.

What do you wish you would have known when you were starting your business?
People have become much more discerning eaters in recent years. Nowadays I get queries like, “You’re gluten-free, but do you do paleo? Are you GMO-free? How local are your ingredients?” These are things I wish I’d been able to plan for early on. Instead, I find myself with a new challenge: How do I prioritize and address these needs in a cost-effective way? Should I address them at all?

What advice do you have for someone who might be thinking about starting a business?
Have a solid idea and formulate a plan around it. And if your plans don’t initially work out, don’t be afraid to take a step back. It’s better to have a clear vision of what you want to achieve instead of rushing out of fear of losing momentum. Also don’t be afraid to ask for help. Ask your family or ask your friends, but don’t burn yourself out too early — there’s lots of work to do!