West Oakland houses 28,000 people and does not have even one full-service grocery store. Residents with access to a car or near the Emeryville border can shop at Pak ‘n’ Save, but most of the area’s food needs are met at one of West Oakland’s 53 liquor stores, where produce is scarce and prices for staples tend to be significantly higher than at real grocers. (A 2005 UCSF School of Medicine study found that in Hunter’s Point liquor stores, a loaf of bread averaged $1.94 versus $1.09 in grocery stores elsewhere in San Francisco.) This places a serious burden on an area where the average income is only $12,000/year. Despite wonderful efforts by local groups to make produce more readily available, the food access and food security situation in the area is dire.
Enter Mandela Foods Cooperative. Mandela Foods Cooperative is going to be a worker-owned full service grocery store that will sell fresh, locally-grown organic food at affordable prices. It will also feature a health education center that provides nutrition training resources and events. It will provide job training, employ only local residents, and its worker-ownership model will provide opportunities for low-income Oaklanders to build wealth. The cooperative is going to share its profits with the community via matched savings accounts at the People’s Community Partnership Credit Union and funding other local start-up businesses.
It all sounds amazing, doesn’t it?
Okay, let’s step back. The Mandela Gateway, um, “transit village,” opened in 2004. It’s a 168 unit development that replaced a distressed 46 unit public housing project. It was financed partly with federal HOPE VI funds and has 21,000 square feet of retail space, which is doing…well, it could probably be doing better.
A woman named Dana Harvey decided that she wanted to use that retail space for a cooperative community market that would revitalize West Oakland, and told the Oakland Housing Authority Board in August of 2004 that her group, the West Oakland Food Project Collaborative, would like to own the retail space (PDF!) in the development. Since the Housing Authority wasn’t legally allowed to sell the space, they said no. Harvey then asked to lease the space, but claimed that the market rents being charged by the development’s operator, Bridge Housing were too high for her business. When Harvey failed to produce a business plan, Bridge moved on and began looking for other tenants, hoping to recruit a Walgreens or another pharmacy as their anchor tenant. Harvey objected to the idea of Walgreens coming to West Oakland, saying “OHA and Bridge were determined to create a Pseudo-Emeryville at the foot of a community visioned Mandela Transit Village project. We believe that they in fact know that they will make a considerable profit on this space by enticing outside businesses, that cause social and economic degradation in the community.”
Lucky for Harvey, Walgreens wasn’t interested in West Oakland, and neither was anyone else. Bridge entered into an exclusive negotiating agreement with Mandela Foods to lease 11,000 square feet at Mandela Gateway in 2005. Since Harvey had no experience in the grocery business, Bridge placed conditions on their agreement, asking the group to raise $500,000 to guarantee their rent for the first three years, and in return, promised to contribute $250,000 to their start-up costs. In February 2006, the West Oakland Project Area Committee (WOPAC) approved a grant of $200,000 to the co-op and agreed to guarantee an additional year’s rent, and District 3 Councilmember Nancy Nadel contributed $100,000 of her project priority funds to assist them. By March, they were promising to open by in the summer of 2006, but as Harvey’s pleas for donations grew more desperate, some people (well, me, at least) began to think that seemed unlikely. From a message she sent out in April 2006:
IF EVERYONE ON THIS LIST SENDS IN $100, WE WILL RAISE OVER $300,000! Please consider this an important investment in your community, your health, and in building strong and healthy neighborhoods. Let’s set a new model for community business…
If everyone who attended last night donated $100, we would have raised over $200,000. Please look into your hearts and pockets to see if you can increase your donation to meet that goal.
The cooperative was unable to raise the remainder of the money, and in the summer of 2006, instead of opening, as promised, Bridge cancelled their agreement after they had missed multiple deadlines and failed to provide progress reports. Bridge suggested the cooperative take a smaller, more manageable space in the development, but Harvey wasn’t interested.
Bridge went back to the drawing board and started looking for a new anchor tenant, and in December 2006, announced that they were close to an agreement with the Southern California chain, 99 Cents Only. Unsurprisingly, this did not make Nancy Nadel happy:
Oakland City Councilwoman Nancy Nadel (Downtown-West Oakland) said such a store would offer cheap merchandise nobody wants and do nothing to help the residents.
“I told (Galante) that I wish she would rethink it,” Nadel said. “The whole mission of getting people out of poverty is to build their own wealth through their own businesses. I think she doesn’t have the confidence in Mandela Foods to do it, but I hope she changes her mind.”
Harvey didn’t like it much either, telling the Trib “There is nothing redeeming about the 99 Cent store.” Harvey and a group of neighbors protested Bridge’s decision to the Oakland Housing Authority, who owned the property, but the Housing Authority board declined to stop the lease.
The WOPAC was extremely displeased with Bridge’s decision, and at their December 2006 meeting, decided to complain to Barbara Lee (PDF!) about misappropriation of federal funds by Bridge, for not leasing the space to Mandela Foods. Things were a little sunnier the following month, thanks to a $220,000 grant from the California Endowment and a New Year’s Eve fundraiser that brought in $10,000, and Mandela Foods reported to the WOPAC (PDF!) that they were considering the smaller space in Mandela Gateway after all. Project manager Wells Lawson returned to the WOPAC in February of 2007, telling the Committee that they had finally decided to lease the smaller space. The Committee decided to not pursue a complaint against HUD (PDF!), but agreed to send a letter to Bridge requesting lease restrictions on the 99 Cent store that would limit food sales, particularly dairy and produce which might compete with Mandela Foods.
It looked briefly like things were on track, but then when Eugene Market in the Jack London Gateway center closed in March, suddenly freeing up a large space, they decided that they might prefer that location. In May of 2007, they came back to the WOPAC asking for $770,000 (PDF!) to cover tenant improvements and their first year of rent in the new space at Jack London Gateway. The WOPAC agreed that since this spot wasn’t even in the West Oakland redevelopment area (it’s part of the Acorn redevelopment area), it was probably not appropriate to spend their money on it, and scheduled the request for further discussion the next month. When the June meeting rolled around, the WOPAC didn’t need to worry much about it, since Mandela Foods reported they were no longer looking at Eugene Market and were back to the Mandela Gateway spot They told the WOPAC that their start-up costs were $598,000 and they had a $200,000 gap. The WOPAC approved the $200,000 grant(PDF!).
The group grew a little more conservative with their money during summer 2007, advertising for a General Manager at only $75,000/year, $10,000 less than they were offering in 2005. Mandela Foods finally signed their lease with Bridge for a 2,300 sf space at Mandela Gateway in early September 2007. On September 18, 2007, the City Council approved WOPAC’s recommendation and voted to give Mandela Foods Cooperative $200,000 from West Oakland Redevelopment Funds. At that time, Mandela Foods Cooperative said that with the grant, they would be open by November of 2007. In December, they came back to the WOPAC to give an update, saying that the store’s opening date had been pushed back to March (PDF!)
By February 2008, the store was behind schedule, but reported to that they were expecting to submit their store plans to the City in March and hoping to open the store by June 2008. Messages posted in late April to the Mandela Marketplace Board of Directors Yahoo! Group indicate that the funding remains a serous problem, with Lawson recently telling the incubator that they need to raise $40,000 immediately in order to pay their General Manager’s salary, but have only been able to collect $1,025 towards that goal over the past few months.
The 99 cents store opened in Mandela Gateway in January, and people seem to love it. Residents praised the affordable produce selection at the store to the Trib, even though the store’s entire produce, dairy, and meat section was restricted to 50 square feet at the behest of Mandela Foods.
Meanwhile, the People’s Grocery is also working on opening a market, and unlike Mandela Foods, they actually embrace competition. They have explored creative methods of financial support, including getting sponsorship for Whole Foods. The People’s Grocery has been providing food to West Oakland since 2002. They hope to open their store in early 2009.
At both the League of Women Voters forum and the HarriOak candidate forum, Nancy Nadel used Mandela Foods Cooperative as an example of something she’s doing to improve West Oakland. I’m sorry, but this is not impressive. I have no problem with worker-ownership and I certainly support access to local, organic produce and meat and all that. But having access to fresh food at all should the priority. I find it disgusting that Mandela Foods and WOPAC intentionally limited the availability of fresh food to the residents of West Oakland because they didn’t want the competition. I have absolutely no problem with subsidizing grocers in underserved neighborhoods if that’s what it takes to make food available. But it appears increasingly clear, and it should have been clear by 2006, that what we’re doing with Mandela Foods is simply throwing money away. These people just can’t get their act together and appear to lack even the tiniest clue about how to operate a business. Nancy Nadel should not be pointing to her continued support of Mandela Foods as an accomplishment. It’s an embarrassment.
- 05.05.08 Still waiting for Mandela Foods
- 04.30.08 Fresh & Easy update in the Trib. Also, shame on you, Nancy Nadel!
- 04.28.08 Finally, a clear answer on Fresh & Easy
- 04.01.08 West Oakland is not getting a grocery store anything soon
- 02.01.08 Green jobs, Fresh & Easy
- 11.14.07 Look out Whole Foods, here comes Fresh & Easy