Construction strains Oakland businesses
Downtown shops lose visitors, fear rent hikes
A slab of steak sizzled on the grill at Molcajete, a Mexican restaurant in downtown Oakland, as Manuel Torres grabbed tortilla mix from the refrigerator. The rumble of construction outside drowned out the clanking of pots and pans and laughter from the staff.
Signs on the front door reading “Construction Worker Specials” were barely visible on Webster Street from across sidewalk barricades — and weren’t drawing many hard hats into the nearly empty restaurant.
“The construction is a big problem,” Torres said. “There is no sidewalk. The last three years, it hasn’t been very good. It’s very slow. Maybe when it’s finished, it will be better . ... A lot of people are coming soon.”
As Oakland makes an unprecedented push to boost housing with a wave of apart
ment building, small businesses like Molcajete that could eventually profit are paying a high price. Construction zones are eliminating foot traffic and parking, and shop owners say rents are going up.
The consequences of mass development are particularly acute in a pocket of downtown where some businesses have shuttered and others — like Molcajete — are hanging on, hopeful that the changes will play in their favor. City officials acknowledge the transition has displaced small retailers that helped contribute to Oakland’s culture and say they have plans to protect diversity. But some business owners worry that it’s too little, too late, and that the area will lose its vibrancy.
Within a halfmile radius of Molcajete, at least 1,000 housing units are under construction. Directly across from the restaurant, several workers stood in the street recently attaching a pulley to a crane to carry supplies up to a 25story tower. To the restaurant’s right, several workers stood on an electric scissor lift as they worked on a 206unit building.
“That area in particular, there has been so much development that has happened so quickly and so close together, it’s been difficult for their customers to sometimes get to their shops,” said Ed Manasse, interim director of the city’s planning department. “But luckily, now as everything starts to wrap up in construction, people will be able to benefit just from the new people coming in.”
Since construction started several years ago, a handful of businesses in downtown have shuttered, particularly minorityowned businesses, said Ayodele Nzinga, who represents black businesses through the Black Arts Movement Business District. Diva’s Closet, a blackowned women’s clothing boutique at 383 17th St., closed in 2017. An African luggage and imports store has also shut down, she said.
Some of the business owners have relocated to East Oakland for cheaper rent or left the Bay Area, Nzinga said.
“I think the city preferences the needs of development over the needs of their small retailers,” she said.
Before development swarmed downtown, the area was known for smallerscale buildings constructed in the 1920s and 1940s, said Annalee Allen, a tour coordinator for the city. She pointed to a historic building near Molcajete, the Howden & Sons Tile Showroom Building at 337 17th St. Once home to a familyowned business that sold kitchen and bathroom tile in the 1920s, it is adorned with blue tiles and orange awning.
“This building is a landmark, and it’s protected,” Allen said. “But some of the other buildings that have gone away because these new (developments) are coming in, that is a different story and it’s just happening so fast. There are some people who are really excited about all the new things, and there are others who say, ‘Hey, wait a minute, we like the traditional neighborhood and the older buildings and the smaller scale.’ ”
When Oakland City Hall opened in 1914, it was the tallest building in the West at 320 feet, Allen said. Now it’s being quickly rivaled by mass development taking form just outside Molcajete’s doors. What the neighborhood was known for is starting to disappear as clothing shops, jewelry stores and nail salons shut their doors, said Shawn Yackle, the owner of King Kog Bike Shop at 327 17th St.
“It was oldschool Oakland stuff,” Yackle said of the nowvacant shops. “And now people that are moving into these places have money, but they’re not really cool and they’re really cheap. They’re looking at Amazon while walking around looking at our stuff.”
Lorrin Webb works at Field Day and Friends, a clothing store that is operated by women and sells clothing made by women, around the corner from Molcajete. Webb said it has become harder to keep the doors open because the construction has driven away customers. Still, the owners of the building have doubled the store’s monthly rent because they “are projecting it’s going to be a more busy and lucrative space,” Webb said.
From 2016 to 2019, retail rents in Oakland climbed about 15%, from an average of $25 per square foot to more than $29 per square foot. Retail space will be part of the new downtown developments.
Manasse acknowledged that recent development has had a “disparate impact” on small businesses in downtown. That’s why, he said, the city plans to introduce a Downtown Oakland Specific Plan in 2020, a road map for how the city will invest in and approve development projects.
The city will take housing and affordability, economic opportunity, equity, community benefits and culturekeeping into consideration when granting permits to developers. The plan took four years to create, and a draft will be released Aug. 30, officials said.
“We are really responding to this incredible pressure that people have been under these last few years of intense development and this uncertainty of looking forward,” Manasse said. “We will look before going forward how particular projects will impact all populations and how we can be very intentional on how to maintain and nurture and help them thrive into the future.”
Some longtime businesses are hopeful as they wait for the construction to finish. On a recent summer day, Suteera Sermsakul, owner of Take It Easy, a Thai restaurant at 351 17th St., was cleaning up after a lunchtime rush. The restaurant has been open for 20 years, and Sermsakul said she thinks the newcomers will boost her business.
“We don’t have that much business during dinnertime,” she said, “but maybe after everything opens, we will.”