Jill Tucker and Matthai Kuruvila
SF Chronicle, November 7, 2011
Kevin Best and Misty Rasche remember when they had waiting lists for a Friday reservation at their bistro in the historic Old Oakland business district.
That was in 2007, before the recession hit and a series of angry protests that would come to define downtown Oakland.
Most recently, business at their B Restaurant & Bar has been harmed further since Occupy Oakland tents went up at City Hall on Oct. 10. Best and Rasche worry that the collateral damage from the protest may be the final blow for their restaurant.
“If we go two more months like this,” Best said, “it’s a wrap.”
Their restaurant is five blocks from the encampment. Businesses closer have suffered more, and not only from a loss of customers. Windows have been broken, street fires have been set, and graffiti has become part of the landscape, block after block.
Best and Rasche, West Oakland residents, don’t want to leave.
But as downtown business owners, they have been on a never-ending roller-coaster ride through the recession and the impact of high city unemployment rates, a series of high-profile protests and the disruptive demonstrations, and now Occupy Oakland, with its two tear-gassed melees in a little more than a week.
Despite it all, what may hurt most is the damage to the area’s image.
For a downtown that held such promise just a decade ago, it’s been painful journey.
“We own this restaurant because we love Oakland,” Rasche said. “You want to believe in it so bad.”
Since January 2009, the city has had three protests over the fatal police shooting of a BART passenger and one about cuts to higher education. The latest protest has been going for 27 days, including Wednesday’s general strike, which turned violent in the late-night hours.
The damage done by a small element of Occupy Oakland could have long-lasting effects on a downtown already struggling to overcome a bad reputation for business.
“Many, many Oakland residents … feel that this is disrupting every effort this city has made to have economic development,” said Councilwoman Pat Kernighan. “This has set us back 15 years.”
In the week before Wednesday’s general strike, three businesses pulled out of downtown lease negotiations, including one with 100 employees and another needing 35,000 square feet of space, said Joe Haraburda, president and CEO of Oakland Metropolitan Chamber of Commerce.
At the same time, the tents and civil unrest have pushed some restaurant receipts down 50 to 60 percent, he said.
Mayor Jean Quan, who grew up around her family’s restaurant in Livermore, said such businesses run on a 5 percent profit margin and have a hard time absorbing even one lost day.
She said she knows of two restaurants downtown that are closing because of recent losses.
In addition, workers have lost wages as stores have closed for safety reasons or to show support for the marches.
Some companies that might have considered Oakland’s downtown, with its lower rents and convenient access to transportation, are looking elsewhere.
“People are afraid to come downtown,” said retail consultant Helen Bulwik, president of New Market Solutions. “How do you sell it at this point? What you cannot sell is safety and security.”
Vacant storefronts line Broadway, the main downtown artery, despite a comparatively healthy 15 percent commercial vacancy rate inside the tall office buildings.
The Men’s Wearhouse and Whole Foods, both damaged during last week’s strike, moved into the neighborhood in recent years, but Oakland remains an urban city without a significant retail presence downtown, Bulwik said.
It wasn’t supposed to be this way.
In the late 1990s, revitalization efforts that tried to bring back the downtown area included refurbishing the Fox Theatre and bringing 10,000 new residents into the neighborhood.
A vision shelved
Restaurants, retailers and business would follow, reasoned then-Mayor Jerry Brown, who spearheaded the drive.
In 2005, the city promoted the revitalization efforts, noting new restaurants, residents and $7.3 million in updated streetscape.
“New sidewalks, street tree plantings, pedestrian amenities, historic lighting, street furniture and sidewalk widening will encourage downtown patrons to stroll and explore our vibrant downtown,” a Meet Downtown Oakland fact sheet said.
On paper, it looked like the city was on the cusp of a major renaissance, with Gap, Starbucks and other national retail chains buying into the plan.
Gap’s 2001 opening at the corner of 14th Street and Broadway offered a major vote of confidence in downtown Oakland, Brown said at the time.
Five years later, Gap was gone.
About the same time, the recession hit the new downtown residential projects hard, leaving some condominium developments more than a third empty, while others were pulled off the market entirely to wait out the economy.
With Brown’s “if you build it they will come” concept on hold, there is no strong retail base, especially downtown, to attract Oakland shoppers, who spend $3 billion outside the city every year, Bulwik said.
What Oakland needs is a boom of retail along upper Broadway – some 3 million square feet of space – which could bring the lost business back into the local economy, Bulwik said. That could be the game changer Oakland needs, she said. But that’s for another day.
To be sure, bright spots exist in other parts of Oakland, with the Temescal and Rockridge districts thriving.
In 2011, an estimated 1,200 jobs were added to the downtown and Lake Merritt communities, said Marco Li Mandri, consultant to the Downtown Oakland and Lake Merritt/Uptown District associations.
“Oakland has got this steady march forward,” he said, adding that it’s outsiders who are bringing it down.
“They believe the venue for demonstrations against the state in general is 14th and Broadway,” he said.
Choice of target questioned
Indeed, with only one Fortune 500 company and about a 16 percent unemployment rate, many residents wonder why their city is the target of an Occupy movement directed at the economic elite.
Why aren’t the protesters in San Ramon, where Chevron just announced a near-record profit of $7.83 billion, asked Bill Jackman, an independent statistician and programmer.
“Why pick on the city that’s down?” he said.
Oakland resident Jerry Bloodsaw called it a failure of leadership to stand tall against the tent encampment and the outsiders who make the city look bad.
“Oakland still is a good city,” the finance worker said during his lunch break downtown Thursday. “That fear factor, we need to get rid of it.”